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

                             ALLIEDSIGNAL INC.
                        PMA ACQUISITION CORPORATION
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                                                                  Exhibit I
                        UNITED STATES DISTRICT COURT
                  FOR THE EASTERN DISTRICT OF PENNSYLVANIA

- ------------------------------------------------x
AMP INCORPORATED,                               :
                                                :
                                Plaintiff,      :
                   - against -                  :  C.A. No. 98-CV-4405
                                                :
ALLIEDSIGNAL INC.,                              :
PMA ACQUISITION CORPORATION,                    :
                                                :
                                Defendants.     :
- ------------------------------------------------x

          MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS' CROSS-MOTION
           FOR PARTIAL SUMMARY JUDGMENT AND IN OPPOSITION TO THE
          MOTION OF AMP INCORPORATED FOR PARTIAL SUMMARY JUDGMENT
                  IN THE NATURE OF A DECLARATORY JUDGMENT
                  ---------------------------------------

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

                      ATTORNEYS FOR ALLIEDSIGNAL INC.

Dated:  September 18, 1998

                             TABLE OF CONTENTS

                                                                  PAGE

PRELIMINARY STATEMENT................................................1

STATEMENT OF FACTS...................................................5

ARGUMENT............................................................11

I.   SUMMARY JUDGMENT STANDARDS.....................................11

II.  ALLIEDSIGNAL IS ENTITLED TO JUDGMENT AS A MATTER OF LAW ON 
     AMP'S SECOND CLAIM FOR RELIEF..................................12

     A.   UNDER PENNSYLVANIA LAW, AMP SHAREHOLDERS HAVE THE 
          UNQUALIFIED RIGHT TO DECIDE WHO SITS ON AMP'S BOARD.......13

     B.   PENNSYLVANIA FIDUCIARY AND AGENCY LAW REQUIRES 
          DISMISSAL OF AMP'S CONFLICT OF INTEREST CLAIMS............19

     C.   THE PUBLIC POLICY UNDERLYING THE PBCL REQUIRES 
          DISMISSAL OF AMP'S CONFLICT OF INTEREST CLAIMS............21

CONCLUSION..........................................................24

                            TABLE OF AUTHORITIES
                            --------------------

                                   CASES

Astarte, Inc. v. Pacific Ind. System, 865 F. Supp. 693 
   (D. Colo. 1994)  ....................................................5 n.2

Biesenbach v. Guenther, 588 F.2d 400 (3d Cir. 1978)  ..................13 n.6

Celotex Corp. v. Catrett, 477 U.S. 317 (1986)  ............................11

Hannex Corp. v. GMI, Inc., 140 F.3d 194 (2d Cir. 1998)  ..............20 n.10

Kaiser v. Stewart, 1997 WL 476455 (E.D. Pa. Aug. 19, 1997)  ..........19 n.10

Kas v. Financial General Bankshares, Inc., 796 F.2d 508 
   (D.C.Cir. 1986)  ................................................5 n.2, 18

Landy v. Amsterdam, 815 F.2d 925 (3d Cir. 1987)  ...................4 n.2, 16

Valley National Bank v. Westgate-California Corp., 609 F.2d 1274
   (9th Cir. 1979)  ................................................5 n.2, 18

Claughton v. Bear Sterns & Co., 156 A.2d 314 (Pa. 1959)  ..................20

                                  STATUTES

Fed.R.Civ.P. 56............................................................11

PBCL ss. 1504.......................................................7 n.3, 14

PBCL ss. 1521.........................................................22 n.12

PBCL ss.ss. 1571-1580.......................................................9

PBCL ss. 1712.........................................................22 n.11

PBCL ss. 1715..........................................3, 11, 17, 21, 22 n.11

PBCL ss. 1717.........................................................22 n.11

PBCL ss. 1721..........................................................22, 23

PBCL ss. 1722..........................................................14 n.7

PBCL ss. 1725..........................................3, 13, 21, 22 n.12, 23

PBCL ss. 1728...........................................3, 11, 12, 15, 19, 21

PBCL ss. 1729.........................................................22 n.12

PBCL ss. 1731.........................................................22 n.12

PBCL ss. 1766...........................................................7 n.3

PBCL ss. 1930...............................................................9

PBCL ss. 2524...........................................................7 n.3

PBCL ss. 2538...............................................3, 11, 12, 17, 21

PBCL ss.ss. 2551-2556.................................................22 n.11

PBCL ss.ss. 2561-2568.................................................22 n.11

                               MISCELLANEOUS

William H. Clark, Jr., What the Business World is Looking for 
   in an Organizational Form: The Pennsylvania Experience, 
   32 Wake Forest L. Rev. 149 (1997)..................................22 n.12

Shawn C. Lee, Preventing Control from the Grave: A Proposal 
   for Judicial Treatment of Dead Hand Provisions in Poison 
   Pills, 96 Colum. L. Rev. 2175 (1996).................................4 n.1

Model Bus. Corp. Act Ann.ss.8.61 (1997 Supp.)  ............................17

Model Bus. Corp. Act Ann. (1997 Supp.), Introductory Comment to
   Subchapter F............................................................18

          In connection with its recent tender offer for the shares of AMP
Incorporated ("AMP"), AlliedSignal Inc. ("AlliedSignal") has placed the
question of who should sit on AMP's board where it belongs -- in the hands
of AMP's shareholders. AlliedSignal's current consent solicitation (the
"Consent Solicitation") allows shareholders to vote, after full disclosure,
on a slate of nominees proposed by AlliedSignal for election to AMP's board
(the "Nominees"). AMP has filed a lawsuit challenging AlliedSignal's
Consent Solicitation and its proposed directors, and has also filed a
Motion for Partial Summary Judgment in the Nature of a Declaratory Judgment
(the "Motion"). AMP's lawsuit and related Motion are nothing more than a
continuation of AMP's transparent efforts to prevent shareholders from
exercising their voting rights. Not only do the undisputed facts require
denial of AMP's Motion, but they establish that AlliedSignal is entitled to
judgment as a matter of law.

                           PRELIMINARY STATEMENT

          AMP's lawsuit is nothing less than a full-fledged assault on the
statutory right of AMP shareholders to elect AMP's board of directors. The
relief that AMP seeks is unprecedented -- AMP wants this Court to intervene
in the process of corporate democracy and take away from shareholders their
basic right to decide who sits on the board of the company that they own.
AMP cites no case law or statutory authority supporting such intrusive
judicial intervention into a corporate election where, as here,
shareholders have been given the benefit of full disclosure of all material
information concerning the candidates for the board. The cases on general
agency and fiduciary duty principles upon which AMP relies are either
beside the point or support dismissal of AMP's claims.

          AMP's entire Memorandum in support of its Motion (the "Summary
Judgment Brief") was plainly crafted to distract attention from the fact
that AMP is asking the Court to deprive shareholders of the fundamental
right to elect directors of their choice without any authority for such
extraordinary relief. AMP's Summary Judgment Brief is strangely silent on
the statutory role of shareholders in the election of directors. Instead,
AMP characterizes this dispute as a battle between AMP's current board and
AlliedSignal in which shareholders have no say. That is not the law in
Pennsylvania.

          Similarly, by ignoring the role of shareholders in the voting
process, AMP creates the impression that the Consent Solicitation somehow
enables AlliedSignal, on its own, to "take control of AMP." AMP's Consent
Solicitation, however, merely proposes a slate of Nominees. Those Nominees
cannot join AMP's board unless AMP's shareholders consent. Thus, when AMP
complains about the possibility that the Nominees may be seated on AMP's
board, it is complaining about the potential actions of its own
shareholders -- actions that they are lawfully entitled to take.

          As much as AMP's board may wish it were otherwise, the
shareholders' right to elect directors is unqualified. The Pennsylvania
Business Corporation Law ("PBCL") expressly states, without reservation,
that directors of a business corporation "shall be elected by the
shareholders." PBCL ss.1725 (all sections of the PBCL cited herein are
collected at Tab 1). The PBCL provides no limitation on this unqualified
right simply because a proposed director is also affiliated with an
acquiror. To the contrary, the PBCL expressly recognizes that shareholders
may elect as directors individuals who were nominated by, and/or affiliated
with, a potential acquiror. See PBCL ss.ss.1715(e)(1), 1728, 2538.

          Perhaps most important, this is not a case in which shareholders
are unable to make an informed decision on whether or not to consent to
adding the Nominees to AMP's board. Although AMP suggests that AlliedSignal
is trying somehow to sneak allegedly conflicted directors onto AMP's board,
AlliedSignal has disclosed to AMP shareholders the Nominees' affiliations
with AlliedSignal, the position that the Nominees intend to take on
AlliedSignal's tender offer and the fact that, under certain hypothetical
circumstances, the Nominees may have a potential "conflict of interest."
See Tab 2 at 9. With these disclosures, AMP's shareholders are in a
position to make an informed decision on whether or not they want the
Nominees, with their alleged conflict of interest, to sit on AMP's board.

          The Nominees are running on a very clear platform for positions
on the AMP board -- if elected, they will approve a transaction with
AlliedSignal. Thus, AMP shareholders know what they are getting if they
vote for the Nominees and can decide whether or not to do so. In fact,
fully aware of AlliedSignal's intentions and the intransigence of AMP's
board and management, AMP's shareholders have already spoken on this point
- -- as of midnight on September 11, 1998, 72% of AMP's shareholders tendered
their shares to AlliedSignal in response to its initial tender offer. Knox
Aff. at paragraphs 11-12 (Tab 3).

          Although AMP has characterized AlliedSignal's Consent
Solicitation as unprecedented, AlliedSignal has done nothing more unusual
than nominate a slate of directors for seats on AMP's board, a common part
of standard corporate practice.(FN1) AlliedSignal's nomination of
individuals affiliated with the company is similarly a regular occurrence
in proxy fights. AlliedSignal's review of proxy contests in connection with
hostile takeover bids in the last five years revealed at least 18
situations in which an acquiror nominated directors affiliated with it for
election to the target's board.(FN2)  See Tab 5. Despite the fact that this
practice is commonplace, research has revealed no case in which a target
challenged a corporate election on the grounds that the acquiror-nominated
directors had a conflict of interest. There is a good reason that no target
has raised such a challenge -- it is wholly without merit.

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

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

2    Directors often sit on the boards of both acquiring and the acquired
     corporations in merger transactions. See e.g., Landy v. Amsterdam, 815
     F.2d 925 (3d Cir. 1987) (trustees of acquiring corporation also on the
     board of acquired real estate investment trust); Kas v. Financial
     General Bankshares, Inc., 796 F.2d 508, 510 (D.C.Cir. 1986) (two
     directors of acquired company were attorneys for, and directors of,
     acquiror) Valley Nat'l Bank v. Westgate California Corp., 609 F.2d
     1274, 1282 (9th Cir. 1979) (three directors of acquired bank were
     either trustees or directors of acquiring corporation); see also
     Astarte, Inc. v. Pacific Ind. Sys., 865 F. Supp. 693, 705 (D. Colo.
     1994) (upholding merger in which director of acquiror was also
     attorney for acquired corporation and citing Colorado's interested
     director statute as demonstrating that "[t]he law thus recognizes that
     there are some instances when a director may advance the best
     interests of himself or a third party without violating the fiduciary
     duties owed to the corporation.").

          AMP, on the other hand, is asking this Court to prevent
shareholders from exercising their statutory right to elect members of
AMP's board. Thus, it is AMP's claim for relief, not AlliedSignal's Consent
Solicitation, that lacks precedent as well as legal or factual support.
Accordingly, AMP's Motion should be denied and summary judgment should be
granted in favor of AlliedSignal.

                             STATEMENT OF FACTS

          The material facts relevant to AlliedSignal's Cross-Motion and
AMP's Motion are not subject to reasonable dispute. On August 4, 1998,
AlliedSignal announced that it would commence a tender offer for all of the
outstanding shares of AMP at a price of $44.50 per share (the "Initial
Offer"). See Verified Amended Complaint ("Compl.") paragraph 10. On August
21, 1998, AMP's board of directors rejected the Initial Offer. Id. at
paragraph 62. Yet, by midnight of September 11, 1998, the expiration date
of the Initial Offer, shareholders tendered 72% of AMP's outstanding shares
to AlliedSignal, an overwhelming indication of support for a transaction
with AlliedSignal. Tab 3 at paragraphs 11-12.

          On September 14, 1998, AlliedSignal revised the Initial Offer and
is now offering to purchase up to 40 million shares of AMP stock at $44.50
per share (the "Amended Offer"). Compl. paragraph 12. If successful, the
Amended Offer would give AlliedSignal a serious financial stake in AMP.
Moreover, AlliedSignal will purchase the 40 million shares of AMP before a
single Nominee is seated or voted on. Upon acceptance of the shares for
payment under the Amended Offer, AlliedSignal intends to commence a second
offer for the remaining shares on substantially the same terms (the "Second
Offer"). Id. at paragraph 12.

          In conjunction with its tender offer, AlliedSignal has been
forced to initiate a Consent Solicitation as well. Because AMP's board of
directors refused to meet with AlliedSignal to discuss a business
combination, but chose instead to stand behind AMP's poison pill, on August
12, 1998, AlliedSignal filed a preliminary Consent Solicitation Statement
to give AMP shareholders the opportunity to vote to change the composition
of AMP's board.(FN3) Specifically, AlliedSignal's Consent Solicitation
proposes that, among other things, shareholders vote to add the 17 Nominees
to AMP's board. See Tab 2 at 9-13.(FN4) Twelve of the 17 proposed Nominees
are outside directors of AlliedSignal and do not hold any officer positions
within the company.

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

3    Shareholders of Pennsylvania corporations are entitled to use their
     voting power to effect immediate corporate change by written consent.
     PBCL Section 2524(a) provides that, if a registered corporation's
     articles of incorporation permit it, corporate "action may be
     authorized by the shareholders [of such corporation] without a meeting
     by less than unanimous written consent." Under PBCL ss.ss. 1504(c) and
     1766(b), if permitted by a corporation's articles or bylaws, the
     corporation's shareholders may take "any action" permitted to be taken
     at a shareholders' meeting "upon the written consent of shareholders
     who would have been entitled to cast the minimum number of votes that
     would be necessary to authorize the action at a meeting at which all
     shareholders entitled to vote thereon were present and voting."
     Shareholder action by written consent is authorized for AMP's
     shareholders by Article IX of AMP's Articles of Incorporation (Tab 6).

4    On September 14, 1998, AlliedSignal amended the Consent Solicitation,
     adding a proposed bylaw amendment on which it is seeking shareholder
     consent. AlliedSignal's proposal to add the 17 Nominees to AMP's board
     remains in the Consent Solicitation, as amended.

          The 17 Nominees -- now accused of being ready and willing to
breach fiduciary duties -- are all individuals of character and integrity:

          .    All 17 have held corporate positions of responsibility. Id.

          .    Most of the Nominees have held executive and board positions
               with large U.S. companies such as Bell Atlantic Corporation,
               General Electric Corporation, The Prudential Insurance
               Company of America, American Home Products Corporation, CVS
               Corporation, Kraft Foods, Inc., Bankers Trust Company, GTE
               Corporation, Merrill Lynch & Co., Viacom, Inc.,
               Schering-Plough Corporation, The Chase Manhattan
               Corporation, Deere & Company and The Federal Home Loan
               Mortgage Corporation. Id.

          .    Ten are current or former chief executive officers. Id.

          .    One is a former member of the Joint Chiefs of Staff. Id.

          To aid shareholders in their efforts to assess the Nominees,
AlliedSignal's Consent Solicitation includes (1) a listing of the identity
of each Nominee and (2) for each Nominee, a description of his or her
professional background, including any affiliation with AlliedSignal. Id.
In addition, AlliedSignal has disclosed that, subject to their fiduciary
duties:

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

Id. at 3. AlliedSignal's Consent Solicitation, as amended, also explains to
shareholders that "AlliedSignal's primary purpose in seeking to elect the
Nominees to the [AMP] board is to facilitate the consummation of the Second
Offer and Proposed Merger." Id. at 9. With this information, AMP's
shareholders are in a position to make an informed decision on whether or
not they want the Nominees to sit on AMP's board.

          Moreover, AlliedSignal's disclosures do not end with the facts
concerning the professional affiliations of the Nominees. AlliedSignal's
Consent Solicitation, as amended, also spells out for shareholders that the
Nominees may, in certain hypothetical circumstances, have a potential
"conflict of interest." Id. at 9. AlliedSignal has further disclosed that
the Nominees do not have any plans with respect to the actions they may
take in such circumstances, but that the Nominees will discharge their
obligations owing as directors of AMP:

          In these circumstances, while the Nominees currently do
          not have plans with respect to actions they would take,
          they intend to discharge their obligations owing to
          [AMP] under Pennsylvania law and in light of then
          prevailing circumstances, taking into account the
          effects of any actions taken on [AMP's] shareholders
          and other stakeholders.

Id. Again, AMP's shareholders will be able to take this information into
account in reaching their decision on whether or not to vote for the
proposed Nominees.

          Even if the Nominees are elected by AMP shareholders, they cannot
effect a merger with AlliedSignal without a further shareholder vote.
Indeed, under AMP's Articles of Incorporation, unless an acquiror owns 80%
or more of AMP's shares, any merger agreement entered into by AMP requires
the affirmative vote of 66 2/3% of the votes cast by AMP shareholders
entitled to vote. In addition, if a merger is consummated involving all or
part cash consideration (and AlliedSignal's Tender Offer is all cash), the
PBCL provides a specific procedure for a shareholder to object to the
merger and obtain the rights and remedies of a dissenting shareholder,
including the right to demand payment of the "fair value" of his or her
shares. See PBCL ss.ss.1571-80, 1930(a).

          Finally, AMP suggests that AlliedSignal's proposal to add the
Nominees to AMP's board is some type of new and nefarious corporate scheme.
To the contrary, the Nominee Election Proposals in the Consent Solicitation
are nothing more unusual than a proxy fight over competing slates of
directors, a standard corporate practice. Indeed, there have been at least
18 proxy contests in the last five years in which an acquiror has nominated
directors affiliated with it for election to the target's board and, in 12
of those situations, the acquiror-affiliated directors would have made up a
majority of the target's board if elected.(FN5) See Tab 5.

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

5    For example:

          .    In Emeritus Corporation's 1998 bid for ARV Assisted Living,
               Inc., Emeritus nominated eight proposed directors, all of
               whom were affiliated with Emeritus, for ARV's nine member
               board. See Tab 5.

          .    In SPX Corporation's 1998 bid for Echlin, Inc., SPX proposed
               five directors for Echlin's nine seat board, three of whom
               were also affiliated with SPX. SPX also proposed amending
               the Echlin bylaws to reduce the size of the board to five
               members. Id.

          .    In Harnischfeger Industries Inc.'s 1997 bid for Giddings &
               Lewis, Inc., Harnischfeger proposed three directors, all of
               whom were also affiliated with Harnischfeger. Harnischfeger
               also proposed to decrease the board of directors to three
               members. Id.

          .    In SoftKey International Inc.'s 1995 bid for The Learning
               Company, SoftKey nominated three proposed directors, all of
               whom were also affiliated with SoftKey, to The Learning
               Company's five member board. Id. SoftKey also proposed
               amending The Learning Company's bylaws to reduce the size of
               the board to three members. Id.

          .    In Alliance Gaming Corporation's 1995 tender offer for Bally
               Gaming International, Inc., Alliance nominated six
               directors, all of whom were affiliated with Alliance, to
               Bally's seven member board. Id. Alliance also proposed
               amending Bally's bylaws to reduce the size of the board to
               six members. Id.

          In fact, Pennsylvania law specifically contemplates situations in
which directors sit on the boards of both an acquiror and a target. For
example, ss. 2538 of the PBCL, which covers transactions with interested
shareholders, makes specific reference to directors of a target who are
also directors or officers of, or have a material equity interest in, an
acquiror. See also PBCL ss.ss. 1715(e)(1), 1728. Similarly, courts
considering federal disclosure claims have developed specific disclosure
rules for these situations. Neither the PBCL sections discussing interested
directors nor the federal disclosure rules would be necessary if
shareholders were per se prohibited from electing such directors to their
board.

                                  ARGUMENT
                                  --------

I.   SUMMARY JUDGMENT STANDARDS
     --------------------------

          Summary judgment may be granted where "the pleadings,
depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as a matter
of law." Fed.R.Civ.P. 56(c). Rule 56(c) mandates summary judgment "against
a party who fails to make a showing sufficient to establish the existence
of an element essential to that party's case, and on which that party will
bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317,
322 (1986). A party moving for summary judgment need merely show that there
is an absence of evidence to support the non-moving party's case. Id. at
325.

          Here, the factual record is, for the most part, not in dispute.
It is plain, however, that there is an absence of evidence to support AMP's
case. Indeed, as AMP's claims are premised on events that have yet to
occur, and may never occur, they are based on pure speculation, not facts.
Moreover, to the extent AMP relies on any facts, they fail to support any
claim for relief. Accordingly, AlliedSignal is entitled to judgment as a
matter of law.

II.  ALLIEDSIGNAL IS ENTITLED TO JUDGMENT AS A MATTER OF LAW ON AMP'S 
     SECOND CLAIM FOR RELIEF
     -----------------------

          The thrust of AMP's Second Claim for Relief, and the focus of its
Motion, is its assertion that the shareholders should not be allowed to
elect the Nominees because they have an inherent conflict of interest. This
claim conflicts with the shareholders' statutory right to elect AMP's board
and is expressly rejected by ss.1728 of the PBCL (the "Interested Director
Statute") and ss. 2538 of the PBCL. Moreover, the public policy underlying
the PBCL and general agency law -- two areas which AMP looks to for support
- -- actually mandate dismissal of its claims.

     A.   UNDER PENNSYLVANIA LAW, AMP SHAREHOLDERS
          HAVE THE UNQUALIFIED RIGHT TO ELECT AMP'S BOARD
          -----------------------------------------------

          The only fact that AMP relies on in support of its Motion and the
Second Claim For Relief is that the Nominees are officers and/or directors
of AlliedSignal. AMP asserts that this single fact creates an inherent
conflict of interest that per se disqualifies them from sitting on the AMP
board. Put another way, AMP argues that even if its own shareholders
overwhelmingly support the Nominees, the shareholders should be precluded
from electing them to AMP's board for no other reason than their
affiliation with AlliedSignal.(FN6) AMP's argument is not only without
precedent; it is directly contradicted by the law and public policy of
Pennsylvania.

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

6    AMP's arguments are premised on nothing more than speculation that the
     Nominees will, in the future, breach their fiduciary duties to the
     corporation. Such speculation about events that have yet to occur is
     insufficient to support AMP's claims. See Biesenbach v. Guenther, 588
     F.2d 400, 402 (3d Cir. 1978) ("The unclean heart of a director is not
     actionable, whether or not it is disclosed, unless the impurities are
     translated into actual deeds or omissions both objective and
     external").

          Under Pennsylvania law, shareholders enjoy an absolute right to
vote for directors of their own choosing. PBCL ss. 1725(a) confers on the
shareholders the right to elect the directors of a business corporation:

          Except as otherwise provided in this section, directors
          of a business corporation, other than those
          constituting the first board of directors, shall be
          elected by the shareholders.

Id. This rule is so fundamental to the corporate law of Pennsylvania that
it is not subject to modification, even in a corporation's own articles or
bylaws. In fact, AMP's Bylaws embody this right. See AMP Bylaws ss. 1.11
(Tab 7). That Bylaw itself may not be amended except by a vote of the
shareholders themselves. PBCL ss. 1504; AMP Bylaws ss. 9.1.

          AMP is seeking to add a "disinterestedness" element to the
requirements for an individual to serve on a corporate board, but there is
no legal or factual support for such a requirement.(FN7) Nothing in
Pennsylvania law or AMP's Articles or Bylaws remotely suggests that
shareholders' fundamental right to elect directors may be limited or taken
away simply because a nominee is affiliated with a potential acquiror and,
thus, may be interested in a transaction on which he may be called to vote
if elected to the board. While it is commonplace for acquirors to nominate
affiliated individuals as directors of a target, research has revealed no
case -- in any United States jurisdiction -- in which a target challenged
the election of a director on the basis of such an affiliation, let alone a
case in which a target prevailed in such a challenge. AMP itself concedes
the unprecedented nature of its claims. Summary Judgment Brief at 11 n.3.

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

7    Here, there is no issue that the Nominees meet the minimal
     requirements to serve as a director under Pennsylvania law and AMP's
     Bylaws. Indeed, under Pennsylvania law, any "natural person of full
     age" is qualified to serve as the director of a corporation, subject
     to any additional qualifications prescribed in the bylaws. PBCL ss.
     1722(a). AMP's Bylaws impose no additional qualifications, providing
     only that "[d]irectors shall be at least 18 years of age and need not
     be United States citizens or residents of Pennsylvania or shareholders
     of the Corporation." Bylaws ss. 2.1.

          The PBCL, in direct contradiction to AMP's claims, expressly
rejects the notion that a director who has an interest in a potential
transaction is disqualified from serving on a corporation's board.
Pennsylvania's Interested Director Statute explicitly recognizes that
directors of one corporation may also be directors of another and that such
"interested" directors may vote to authorize transactions between the two
corporations on whose boards they serve. PBCL ss.1728. The Interested
Director Statute provides that a transaction between two corporations "in
which one or more of [the first corporation's] directors or officers are
directors or officers" of the second "shall not be void or voidable solely
for that reason," or solely because the "votes [of those interested
directors] are counted" in authorizing that transaction, as long as:

          (1) The material facts as to [the Interested
          Directors'] relationship or interest and as to the
          contract or transaction are disclosed or are known to
          the board of directors and the board authorizes the
          contract or transaction by the affirmative votes of a
          majority of the disinterested directors even though the
          disinterested directors are less than a quorum; or

          (2) The material facts as to [the Interested
          Directors'] relationship or interest and as to the
          contract or transaction are disclosed or are known to
          the shareholders entitled to vote thereon and the
          contract or transaction is specifically approved in
          good faith by vote of those shareholders; or

          (3) The contract or transaction is fair as to the
          corporation as of the time it is authorized, approved,
          or ratified by the board of directors or the
          shareholders.

Id. (emphasis added). The text of the Interested Director Statute is
incorporated almost verbatim into AMP's own Bylaws at ss.2.12.(FN8)

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

8    Although the Interested Director Statute is the clearest expression of
     governing Pennsylvania law on AMP's claims, AMP relegates discussion
     of the statute to a brief paragraph in a footnote. Summary Judgment
     Brief at 16 n.6. In that footnote, AMP argues that the Interested
     Director Statute does not apply here because it is "transactionally
     oriented." AMP's interpretation is simply wrong. Even accepting AMP's
     "transactional" limitation on the scope of the Interested Director
     Statute, the alleged "inherent" conflict arises entirely from the
     Nominees' expressed position on a single transaction - AlliedSignal's
     proposed offer to purchase AMP. Indeed, AMP's entire argument is that
     the Nominees are so "permeated" by their "dual" loyalties as to make
     it per se impossible for them to satisfy their fiduciary obligations
     in the context of the proposed transaction between AlliedSignal and
     AMP.

          Case law interpreting Pennsylvania's Interested Director Statute
flatly rejects AMP's contention that directors are prohibited from serving
on the boards of two corporations contemplating a merger. In Landy v.
Amsterdam, 815 F.2d 925 (3d Cir. 1987), for example, the Third Circuit
Court of Appeals held that a plaintiff could not maintain a cause of action
merely by showing that two corporations involved in a merger were
controlled by the same trustees. Id. at 930. The court held that fact alone
was insufficient to prove an actionable conflict of interest, stating that
it did not believe that "the Pennsylvania Supreme Court would permit the
plaintiff to avoid a directed verdict merely by proving self-dealing
alone." Id.

          Here, the uncontradicted evidence establishes that the
requirements of the Interested Director Statute are satisfied. First, as
explained above, the Consent Solicitation materials disclose "the material
facts as to [the Nominees'] relationship or interest and as to the contract
or transaction." Moreover, the election of the Nominees necessarily
involves ratification by a majority of AMP's shareholders and a merger with
AlliedSignal requires shareholder approval. Thus, under the Interested
Director Statute, the Nominees' alleged inherent conflict does not justify
prohibiting AMP shareholders from voting for the Nominees.

          Other provisions of the PBCL also specifically contemplate
situations in which shareholders may elect directors affiliated with a
tender offeror to the board of the target. For example, PBCL ss. 2538
requires a majority vote of a corporation's disinterested shareholders to
approve certain control transactions, including mergers. That section
specifically discusses the effect of votes by directors of the target who
are also "directors or officers of, or have a material equity interest in"
the acquiring corporation, or who "were nominated for election as a
director by" the acquiring corporation. PBCL ss. 2538(b)(1). Similarly,
PBCL ss. 1715(e)(1) -- a provision on which AMP relies in its Summary
Judgment Brief -- explicitly recognizes that a board may contain directors
who have an interest in an acquiror and/or who were nominated by an
acquiror. If such interested directors were per se barred from board
positions, there would be no need for these statutory provisions.

          Pennsylvania's clear rejection of AMP's argument that some type
of inherent conflict of interest prevents the shareholders from electing
the Nominees is consistent with the corporate law of most U.S.
jurisdictions. Indeed, Pennsylvania's Interested Director Statute is
modeled after the Model Business Corporation Act of 1984, ss. 8.31(a), a
version of which has been adopted in at least thirty-six jurisdictions.
Model Bus. Corp. Act Ann. (MBCAA) ss. 8.61 at 8-406 (1997 Supp.) (Tab 8).
Such statutes reject the idea of a per se conflict of interest prohibition
in favor of allowing such "interested" transactions after full disclosure
and ratification by disinterested directors or shareholders, recognizing
that "the corporation and the shareholders may secure major benefits from a
transaction despite the presence of a director's conflicting interest."
MBCAA Introductory Comment to Subchapter F at 8-370 (1997 Supp.) (Tab 8).
Here, the potential benefit to AMP from the transaction with AlliedSignal
is the opportunity for a business combination under a proven management
team, allowing both companies to perform better together than they could
alone, as well as the opportunity for AMP's shareholders to realize
AlliedSignal's offer to purchase their shares for $44.50 in cash.

          AMP's inherent conflict of interest claim is also inconsistent
with federal disclosure law. Cases interpreting federal disclosure
requirements recognize that full disclosure of the underlying facts that
purportedly create a conflict of interest is all that is required to allow
shareholders to decide intelligently whether to elect an "interested"
director or approve an "interested" transaction.(FN9) See, e.g., Kas v.
Financial General Bankshares, Inc., 796 F.2d 508, 510 (D.C.Cir. 1986)
(holding that proxy statement adequately disclosed material facts relating
to directors' joint positions on boards of acquiror and target and
dismissing shareholder class action challenging merger); Valley Nat'l Bank
v. Westgate-California Corp., 609 F.2d 1274, 1281-83 (9th Cir. 1979)
(holding that proxy material adequately disclosed dual positions of
directors on both acquiror's and acquired's board and refusing to undo
merger transaction). If it were true that the law required that
shareholders be prevented from voting for allegedly "conflicted" directors,
then these cases would be superfluous -- there would be no need to require
that a nominee's dual roles be disclosed to shareholders if those roles
disqualified the nominee from being a director.(FN10)

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

9    AMP has also asserted a federal disclosure law claim in its First
     Claim for Relief. This claim must fail as a matter of law for much the
     same reasons as the conflict of interest claim -- there has been full
     disclosure of all material facts. AlliedSignal will move for summary
     judgment on AMP's First Claim For Relief in due course. Because there
     is no particular urgency for the resolution of the federal claim and
     the Court already has a number of issues before it, AlliedSignal is
     not moving for summary judgment on AMP's First Claim for Relief at
     this time.

10   AMP also argues in its Motion that the Consent Solicitation interferes
     with directors' ability to fulfill their fiduciary duties and/or
     constitutes an aiding or abetting of a breach of fiduciary duties.
     AMP's arguments are premised on nothing more than speculation that the
     Nominees will, in the future, breach their fiduciary duties to the
     corporation. As there has been no actual breach of fiduciary duty,
     AMP's arguments on this point must fail as a matter of law. See, e.g.,
     Kaiser v. Stewart, 1997 WL 476455 at *16 (E.D. Pa. Aug. 19, 1997) (a
     required element of an aiding and abetting claim is "a breach of a
     fiduciary duty owed to another"); Hannex Corp. v. GMI, Inc., 140 F.3d
     194 (2d Cir. 1998) (a claim for tortious interference with fiduciary
     duties requires a showing of a breach by a fiduciary of obligations to
     another).

     B.   PENNSYLVANIA FIDUCIARY AND AGENCY LAW REQUIRES DISMISSAL  
          OF AMP'S CONFLICT OF INTEREST CLAIMS
          ------------------------------------

          AMP's Summary Judgment Brief relies heavily on its reading of the
Pennsylvania common law of agency and fiduciary duty. That common law is
not applicable here because Pennsylvania's statutory law, through PBCL ss.
1728, has established the conditions under which a director may "serve two
masters." Nonetheless, even under Pennsylvania agency law, AlliedSignal is
entitled to judgment as a matter of law.

          As AMP itself recognizes, it is well-settled that a principal can
always consent to an agent's alleged conflict of interest, if provided with
the material facts relevant to the conflict. See, e.g., Claughton v. Bear
Sterns & Co., 156 A.2d 314, 320 (Pa. 1959) (affirming judgment for
defendant because the relevant facts on which the allegation of conflict
was based were disclosed to the principal). Applying agency law to this
case, the shareholders are the principals of the corporation and the board
members are agents of the shareholders. Here, there can be no reasonable
dispute that AlliedSignal has disclosed to the principals (i.e., AMP's
shareholders), the material facts related to the alleged conflict of
interest of the Nominees (i.e., the proposed agents). Indeed, in discussing
this issue, AlliedSignal's Consent Solicitation, as amended, even uses the
term "conflict of interest." See Tab 2 at 9. In deciding how to respond to
AlliedSignal's Consent Solicitation, the principals/shareholders will
decide whether or not to consent to the agents/Nominees' alleged conflict
of interest. Ironically, it is that very process of deciding whether or not
to consent that AMP seeks to enjoin in this suit.

          AMP devotes exactly two sentences of its brief to the consent
exception, arguing that there could be consent only if the Nominees were
"allowed to override the determination of AMP's disinterested directors as
to what course best serves AMP's interest" and that this would "swallow"
the rule. Summary Judgment Brief at 27-28. AMP appears to believe that only
AMP's incumbent directors can consent to the election of directors with
alleged conflicts of interest. AMP can point to no authority for this
extraordinary position, which is tantamount to granting incumbent board
members -- agents themselves -- veto power over any challengers who can be
accused of a conflict of interest. To the contrary, Pennsylvania law is
clear that shareholders, not incumbent directors, elect directors. PBCL ss.
1725(a). Accordingly, the shareholders, and not the incumbent board, have
the right to consent to directors allegedly subject to potential conflicts
of interest.

     C.   THE PUBLIC POLICY UNDERLYING THE PBCL REQUIRES DISMISSAL 
          OF AMP'S CONFLICT OF INTEREST CLAIMS
          ------------------------------------

          In its Summary Judgment Brief, AMP argues that the public policy
of Pennsylvania requires an injunction preventing the election of directors
through the Consent Solicitation process. AMP cannot explain, however, how
the public policy of Pennsylvania can prohibit the election of directors
affiliated with an acquiror when at least three sections of the PBCL
specifically contemplate that such elections may occur. See PBCL ss.ss.
1715(e)(1), 1728, 2538. It simply makes no sense to argue, as AMP does,
that Pennsylvania's public policy prohibits shareholders from electing
directors affiliated with a bidder when, for example, ss. 2538 of the PBCL
explicitly refers to directors who are also "directors or officers of, or
have a material equity interest in" a bidder, or who "were nominated for
election as a director by" a bidder. PBCL ss. 2538(b)(1).

          Moreover, in making its public policy argument, AMP cites only to
the sections of the PBCL granting a board of directors broad authority over
the acceptance and rejection of takeover bids. Summary Judgment Brief at
20-22. AMP's argument, however, misses the point. The Nominee Election
Proposals challenged in AMP's lawsuit are not about what powers the board
may exercise once elected. They are about who elects the members of the
board in the first place. On this question, the underlying public policy of
Pennsylvania, as reflected in the PBCL, is clear: once informed,
shareholders -- and only shareholders -- have the basic right to place
directors of their choosing on the board.

          AMP's tunnel-vision focus on the so-called anti-takeover
provisions of the PBCL(FN11) also ignores the fundamental underlying
philosophy of the PBCL -- to allow shareholders maximum flexibility in
deciding how, and by whom, the affairs of the corporation ought to be
governed. Numerous provisions of the PBCL make clear that, in Pennsylvania,
shareholders decide the fundamental issues of corporate governance,
including what corporate rights are to be exercised by the board and who
will sit on the board.(FN12) Indeed, under section 1721 of the PBCL, all of
the powers of the board of directors are subject to the ultimate authority
of the shareholders to remove, limit, or otherwise modify them through a
shareholder-adopted bylaw.

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

11   See Summary Judgment Brief at 20-22 citing PBCL ss.ss. 1712, 1715,
     1717 (directors have fiduciary duties to corporation, not to
     shareholders); ss.ss. 2551-2556, 2561-2568 (limiting voting rights of
     interested directors and interested shareholders in certain control
     transactions).

12   See, e.g., ss.1521(c) (providing that shareholders may adopt bylaws
     setting forth "additional provisions regulating or restricting the
     exercise of corporate powers"); ss. 1725(a) (providing board of
     directors is to be elected by shareholders); ss.1729(a) (allowing
     shareholders to modify directors' voting rights through a bylaw
     amendment); ss.1731 (providing that corporate bylaws may restrict the
     powers of board committees); see also William H. Clark, Jr., What the
     Business World is Looking for in an Organizational Form: The
     Pennsylvania Experience, 32 Wake Forest L. Rev. 149, 169 (1997)
     (article by one of the draftsmen of the PBCL, noting that the PBCL is
     unique among state corporate codes in the degree of flexibility it
     grants to shareholders "to control the internal affairs of their
     corporation by contract.").

          In short, although AMP is correct that the PBCL gives a
Pennsylvania board of directors broad authority to erect (and remove)
takeover defenses, it also gives Pennsylvania shareholders the ultimate
authority (1) to choose those who will exercise that power as a member of
the board, PBCL ss. 1725(a); and (2) to remove powers granted to the board
through a shareholder enacted bylaw, PBCL ss. 1721. AMP's reliance on the
PBCL's anti-takeover provisions as grounds for invalidating the consent
solicitation is, therefore, misplaced. The fundamental rules of corporate
democracy apply in Pennsylvania as they do in other states; indeed, in many
respects, Pennsylvania is even more protective of the shareholder
franchise.

          Just as in our political democracy, where elected representatives
with broad discretion to introduce and enact legislation remain subject to
the ultimate authority of the people to vote them out of office, so too
under principles of corporate democracy, directors remain subject to the
ultimate authority of shareholders to choose them and, in Pennsylvania, to
circumscribe their power.

                                 CONCLUSION
                                 ----------

          AMP lacks any authority for the extraordinary relief that it
requests. Indeed, its claims are contrary to Pennsylvania corporate law and
are, at bottom, based on nothing more than mere speculation. Accordingly,
AlliedSignal respectfully requests that AMP's Motion be denied and that
summary judgment be entered in AlliedSignal's favor.

                                            Respectfully submitted,

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

                                                      and

                                            /s/ Mary A. McLaughlin
                                            ------------------------
                                            Mary A. McLaughlin
                                            George G. Gordon
                                            DECHERT PRICE & RHOADS
                                            4000 Bell Atlantic Tower
                                            1717 Arch Street
                                            Philadelphia, PA  19103
                                            (215) 994-4000
                                            Attorneys for Defendants
Dated: September 18, 1998

                                                                 Exhibit II

                          ALLIEDSIGNAL'S RESPONSE:
              AMP'S LEGISLATIVE INITIATIVE SHOULD BE REJECTED
              -----------------------------------------------

                           SUMMARY OF KEY POINTS
                           ---------------------

 .    AMP'S PROPOSED LEGISLATION WOULD CHANGE A LONGSTANDING, SALUTARY RIGHT
     OF SHAREOWNERS OF A PENNSYLVANIA CORPORATION TO VOTE BY WRITTEN
     CONSENT. IT IS DISINGENUOUS FOR THE AMP BOARD OF DIRECTORS TO
     CHARACTERIZE THIS RIGHT AS "AN UNINTENDED LOOPHOLE" WHEN THE CONSENT
     RIGHT (I) WAS SPECIFICALLY INCLUDED BY THE DIRECTORS IN AMP'S ARTICLES
     OF INCORPORATION IN 1989 WHEN THE ARTICLES WERE PRESENTED TO
     SHAREOWNERS FOR APPROVAL IN CONNECTION WITH THE REINCORPORATION OF AMP
     IN PENNSYLVANIA AND (II) WAS CONSCIOUSLY PRESERVED BY THE LEGISLATURE
     AT THE TIME OF THE 1990 ANTI-TAKEOVER AMENDMENTS.

 .    THE "CONSENT PROCEDURE," BECAUSE IT MUST BE CONDUCTED IN COMPLIANCE
     WITH THE FEDERAL PROXY RULES, ENSURES A "FULL AND FREE EXCHANGE" OF
     POSITIONS AND A "FAIR VOTING PROCESS" THAT WILL BE CONDUCTED OVER AT
     LEAST A TWO-MONTH PERIOD. THE AMP BOARD OF DIRECTORS, IF IT PREFERS
     THAT THE VOTE BE CONDUCTED AT A MEETING OF THE SHAREOWNERS, HAS THE
     POWER TO CALL ONE. ALLIEDSIGNAL WOULD WELCOME A MEETING OF SHAREOWNERS
     IF IT WERE CALLED AS SOON AS POSSIBLE.

 .    THE DECISION WHETHER TO ACCEPT ALLIEDSIGNAL'S ALL-CASH, ALL-SHARES
     TENDER OFFER, OR TO REJECT THE OFFER AND "TRUST" MANAGEMENT TO DELIVER
     ON ITS "PROFIT IMPROVEMENT PLAN" AND PROMISE OF GREATER VALUE, NOW
     LIES WHERE IT SHOULD: SQUARELY IN THE HANDS OF THE SHAREOWNERS. BY
     TENDERING 72% OF THE OUTSTANDING SHARES TO ALLIEDSIGNAL, THE
     SHAREOWNERS EXPRESSED THEIR OVERWHELMING SUPPORT FOR ALLIEDSIGNAL'S
     OFFER. IT WAS A CLEAR VOTE OF "NO CONFIDENCE" IN AMP'S MANAGEMENT AND
     ITS RESTRUCTURING PLAN.

 .    IN THE FACE OF THIS LANDSLIDE VOTE, AMP MANAGEMENT WANTS THE
     LEGISLATURE TO "BAIL" IT OUT. THE CONSENT PROCEDURE IS A LAWFUL
     PROCESS, PREVIOUSLY ADOPTED BY THE LEGISLATURE, RECOMMENDED TO THE
     SHAREOWNERS BY AMP'S BOARD OF DIRECTORS, AND APPROVED BY THE
     SHAREOWNERS AS PART OF THE DECISION TO REINCORPORATE IN PENNSYLVANIA.
     SIMPLY PUT, THE LEGISLATURE SHOULD NOT GET INVOLVED IN THIS DISPUTE
     BETWEEN AMP MANAGEMENT AND AMP SHAREOWNERS.

                            FACTUAL BACKGROUND:
             ALLIEDSIGNAL'S OFFER AND AMP MANAGEMENT'S RESPONSE
             --------------------------------------------------

 .    On August 4, 1998, AlliedSignal made an unsolicited offer to acquire
     all of the oustanding shares of AMP for $44.50 per share in cash. This
     offer represented a premium of more than 55% over the $29 trading
     price of AMP stock immediately before the offer was announced, or more
     than $4 billion in excess of AMP's market value.

 .    Since the time of AlliedSignal's offer, the S&P 500 Stock Index has
     declined 8.4%. If AlliedSignal were forced by the legislature to
     forego its offer, where would AMP's stock be trading now?

 .    Fearing that AMP management would refuse to redeem AMP's "poison pill"
     and stop at nothing to prevent the sale of the company and entrench
     themselves, AlliedSignal also began a consent solicitation to elect a
     majority of AlliedSignal nominees to AMP's Board of Directors. The
     consent solicitation is specifically authorized by Pennsylvania law
     and AMP's corporate charter.

 .    The AlliedSignal nominees would have been able to redeem AMP's poison
     pill and were committed to present to the AMP shareowners a merger
     proposal that could not have been consummated without a two-thirds
     vote of AMP shareowners.

 .    The response of AMP's Board was swift: it amended the poison pill to
     provide that, if the AMP shareowners voted to change control of the
     Board of Directors, the pill immediately would become non-redeemable.
     This was a blatant attack on the right of the shareowners to decide
     for themselves whether to accept AlliedSignal's offer.

 .    AlliedSignal then amended its consent solicitation, again as expressly
     permitted by Pennsylvania law and AMP's charter, to include a proposal
     that all powers with respect to AMP's poison pill be removed from the
     Board of Directors and placed in the hands of "agents" appointed by
     the shareowners. The agents would amend the poison pill to provide
     that it did not apply to any offer or merger approved by a majority of
     the shareowners.

 .    The AMP Board again reacted swiftly to forestall a shareowner vote: it
     amended its pill for the second time to provide that it would become
     non-redeemable if the shareholders changed the bylaws of the company
     to take power over the pill away from the board of directors. This
     amendment turned the basic principles of corporate governance on their
     head - the Board of Directors sought to make it impossible for
     shareowners to vote on the future course of the corporation.

 .    Finally, in its most egregious assault on the rights of shareowners,
     AMP management is asking the Pennsylvania legislature to bail AMP
     management out of its predicament. An overwhelming majority of AMP's
     shareholders (72% of the outstanding shares) tendered their shares to
     AlliedSignal. In election terms, this is a landslide vote in favor of
     AlliedSignal's offer and against management's restructuring program.
     AMP management now wants the legislature, in the middle of the contest
     for control of the company, to prohibit AlliedSignal from going
     forward with its consent solicitation.

 .    AlliedSignal is now contesting the Board of Director' actions in court
     as a violation of the shareowners' voting rights, and the AMP Board of
     Directors in the same court is challenging AlliedSignal's consent
     solicitation as invalid under Pennsylvania law.

                                  ANALYSIS
                                  --------

     THE LEGISLATURE, AS A MATTER OF PUBLIC POLICY AND THE FUNDAMENTAL
        RIGHT OF SHAREOWNERS, SHOULD NOT INTERVENE IN THIS DISPUTE
                 TO DEPRIVE AMP'S SHAREOWNERS OF THE RIGHT
                         TO VOTE ON AMP'S FUTURE.
     -----------------------------------------------------------------

A. AMP'S PROPOSED LEGISLATION WOULD CHANGE A LONGSTANDING, SALUTARY RIGHT
OF SHAREOWNERS OF A PENNSYLVANIA CORPORATION TO VOTE BY WRITTEN CONSENT. IT
IS DISINGENUOUS FOR THE AMP BOARD OF DIRECTORS TO CHARACTERIZE THIS RIGHT
AS "AN UNINTENDED LOOPHOLE" WHEN THE CONSENT RIGHT (I) WAS SPECIFICALLY
INCLUDED BY THE DIRECTORS IN AMP'S ARTICLES OF INCORPORATION IN 1989 WHEN
THE ARTICLES WERE PRESENTED TO SHAREOWNERS FOR APPROVAL IN CONNECTION WITH
THE REINCORPORATION OF AMP INTO PENNSYLVANIA AND (II) WAS CONSCIOUSLY
PRESERVED BY THE LEGISLATURE AT THE TIME OF THE 1990 ANTI-TAKEOVER
AMENDMENTS.

 .    Section 2524 of the Pennsylvania Business Corporation Law (PBCL)
     expressly provides that shareholders of a public corporation may act
     by written consent without a meeting if permitted by the corporation's
     articles of incorporation. Subsection (b) specifically provides that
     any action is "effective immediately."

 .    This provision, which was readopted by the legislature in 1990 when
     the anti-takeover provisions of Pennsylvania were last amended, is
     consistent with the law of most jurisdictions.

 .    Section 1721, also readopted by the legislature in 1990, provides that
     the shareholders have the right through a bylaw adopted by the
     shareholders to restrict the powers of the board of directors and vest
     some or all of those powers in agents designated by the shareholders.

 .    These provisions are an affirmation by the Pennsylvania legislature
     that the ultimate decision on the future of a corporation, including
     whether the corporation should be sold, resides in the owners of the
     corporation, not their elected directors. Indeed, the anti-takeover
     provisions of the PCBL do not bar unsolicited offers, but establish
     certain requirements to make sure that those offers are fair to the
     shareholders. They uniformly leave the final decision on corporate
     action in the takeover context in the hands of the shareowners.

 .    Far from being "an unintended loophole in the PBCL" as suggested by
     AMP management, these provisions, which were carefully reexamined and
     amended in 1990, were a result of a considered decision of the
     legislature consistent with the basic policy underlying the
     anti-takeover provisions. As a draftsman of the Pennsylvania
     anti-takeover legislation explained in justifying the broad (but not
     unlimited or sole) discretion given to directors to oppose unsolicited
     offers: "[S]hareholders have exclusive access to the corporate
     election machinery. If the shareholders do not agree with how the
     corporation is run, they are empowered to replace the directors." In
     short, the shareholders are the ultimate check on the exercise of
     discretion by the directors in opposing takeovers.

 .    Moreover, the AMP Board of Directors is being duplicitous with its
     shareholders and the legislature. In fact, the "action by consent
     provision" now found in Article IX of AMP's Articles of Incorportion
     was consciously included in the Articles by the Board of Directors
     (including four current directors) when the Articles were presented to
     the shareowners for approval in connection with AMP's reincorporation
     in Pennsylvania.

 .    AMP, until 1989 a New Jersey corporation, specifically reincorporated
     in Pennsylvania in order to take advantage of Pennsylvania's
     anti-takeover provisions. In seeking shareholder approval for the
     reincorporation, the Board of Directors pointed out in the proxy
     materials submitted to the shareowners that "a new article had been
     added that permits action to be taken by [the shareowners] by
     less-than-unanimous consent in lieu of convening a meeting."

 .    The Board evidently made this commitment to the shareowners to
     preserve this fundamental voting right when it served the Board's
     interests to do so, because they needed shareholder approval to
     reincorporate in Pennsylvania and to subject the shareowners to the
     limitations on unsolicited offers contained in Pennsylvania law. Now,
     when the shareowners want to exercise this right and when the right no
     longer serves the interests of the Board, the Board disingenuously
     chooses to characterize the provision as "an unintended loophole."

B. THE "CONSENT PROCEDURE," BECAUSE IT MUST BE CONDUCTED IN COMPLIANCE WITH
THE FEDERAL PROXY RULES, ENSURES A "FULL AND FREE EXCHANGE" OF POSITIONS
AND A "FAIR VOTING PROCESS." THE BOARD OF DIRECTORS, IF IT PREFERS THAT THE
VOTE BE CONDUCTED AT A MEETING OF THE SHAREHOLDERS, HAS THE POWER TO CALL
ONE. ALLIEDSIGNAL WOULD WELCOME A MEETING OF SHAREOWNERS IF IT WERE CALLED
AS SOON AS POSSIBLE.

 .    The consent procedure must be conducted in strict compliance with the
     SEC's proxy rules, which require full and fair disclosure of all
     material facts and which give each interested party the opportunity to
     make its views known. Those rules ensure that there will be a "full
     and free exchange of opinions" about AlliedSignal's proposed
     acquisition of AMP and that there will be a "fair voting process."

 .    Promptly after announcing its intent to conduct a consent
     solicitation, AlliedSignal filed with the SEC preliminary consent
     solicitation materials, describing the consent proposals, explaining
     the factual context in which the proposals are being made and setting
     forth the reasons for consenting to the proposals. The record date for
     the proposals is October 15, and no definitive vote can occur until
     then.

 .    Within twenty-four hours after AlliedSignal's filing, the AMP Board of
     Directors filed its preliminary materials with the SEC, setting forth
     its opposition to the AlliedSignal solicitation.

 .    In light of this continuous exchange of written materials, which will
     go on for over two months, the vote here should be far more informed
     than any election in most other contexts. Indeed, since more than 85%
     of AMP's shares are owned by institutional investors, an extremely
     high percentage, the decision here will be made by particularly
     sophisticated investors fully capable of assessing the respective
     positions of the parties.

 .    In proposing the legislation, however, AMP's Board of Directors
     complains that the consent procedure, because "it avoids the holding
     of a shareholders' meeting," does not permit "a full and free exchange
     of opinions" and is not "a fair voting process that involves taking
     only one voted on a fixed day."

 .    The decision whether to hold a shareowners' meeting, however, lies
     solely with the control of the AMP Board of Directors and its Chief
     Executive Officer. The shareowners have no right to call such a
     meeting and, hence, if they want to take action, must resort to the
     consent procedure.

 .    AlliedSignal has no objection to the Board of Directors calling a
     special meeting and, indeed would welcome one, so long as the meeting
     is held as soon as permissible under applicable laws and regulations.

 .    We are confident, however, that the AMP Board of Directors will not
     avail themselves of this alternative, because the real reason that
     they want the legislation is that it would allow them to delay the
     vote of shareowners for long as possible.

                                 CONCLUSION
                                 ----------

THE DECISION WHETHER TO ACCEPT ALLIEDSIGNAL'S ALL-CASH, ALL-SHARES TENDER
OFFER, OR TO REJECT THE OFFER AND "TRUST" MANAGEMENT TO DELIVER ON ITS
"PROFIT IMPROVEMENT PLAN" AND PROMISE OF GREATER VALUE, NOW LIES WHERE IT
SHOULD: SQUARELY IN THE HANDS OF THE SHAREOWNERS. BY TENDERING 72% OF THE
OUTSTANDING SHARES TO ALLIEDSIGNAL, THE SHAREOWNERS EXPRESSED THEIR
OVERWHELMING SUPPORT FOR ALLIEDSIGNAL'S OFFER. IT WAS A CLEAR VOTE OF "NO
CONFIDENCE" IN AMP'S MANAGEMENT AND ITS RESTRUCTURING PLAN.

IN THE FACE OF THIS LANDSLIDE VOTE, AMP MANAGEMENT WANTS THE LEGISLATURE TO
"BAIL" IT OUT. THE CONSENT PROCEDURE IS A LAWFUL PROCESS, PREVIOUSLY
ADOPTED BY THE LEGISLATURE, RECOMMENDED TO THE SHAREOWNERS BY AMP'S BOARD
OF DIRECTORS, AND APPROVED BY THE SHAREOWNERS AS PART OF THE DECISION TO
REINCORPORATE IN PENNSYLVANIA. SIMPLY PUT, THE LEGISLATURE SHOULD NOT GET
INVOLVED IN THIS DISPUTE BETWEEN AMP MANAGEMENT AND AMP SHAREOWNERS.
                                                            EXHIBIT III

                        UNITED STATES DISTRICT COURT
                  FOR THE EASTERN DISTRICT OF PENNSYLVANIA

- -----------------------------------------------x
ALLIEDSIGNAL INC.,                             :
                                               :
                               Plaintiff,      :
                                               :
                   - against -                 :  C.A. No.  98-CV-4058
                                               :
AMP INCORPORATED,                              :
                                               :
                               Defendant.      :
- -----------------------------------------------x

            MEMORANDUM IN SUPPORT OF ALLIEDSIGNAL'S SUPPLEMENTAL
              MOTION FOR SUMMARY JUDGMENT AND FOR AN IMMEDIATE
              DECLARATORY JUDGMENT AND PRELIMINARY INJUNCTION

          AMP has now openly declared war on its shareholders.

          On Friday, September 18, 1998, AMP Incorporated ("AMP") announced
its most direct attack yet on AMP's shareholders' fundamental right to
control the affairs of their corporation. To prevent a meaningful vote on
AlliedSignal Inc.'s ("AlliedSignal's") recent Shareholder Rights Proposal,
AMP has amended its Shareholder Rights Agreement (the "poison pill") so
that, if the Shareholder Rights Proposal is approved, no one -- not
existing directors, not newly elected directors, not the shareholders or
their agents -- would be able to redeem or amend the pill.(FN1) This
"nullification provision" is illegal both because it attempts to abrogate
the shareholders' right to vote and also because it is fundamentally and
irreconcilably in conflict with Article VII of AMP's Articles of
Incorporation and Section 1721 of the Pennsylvania Business Corporation Law
(the "PBCL"), each of which gives clear and unfettered authority to AMP's
shareholders to reallocate the authority and responsibility of AMP's board
of directors, including the board's authority and responsibility with
respect to a poison pill.

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

1    AMP's newly announced amendments to its poison pill are attached 
     hereto at Exhibit A.

          AMP has repeatedly used its poison pill to limit the rights of
its shareholders to elect directors and to amend the bylaws. When
AlliedSignal initially made its tender offer and announced its consent
solicitation to permit shareholders to add 17 additional, new directors to
AMP's board, AMP amended its poison pill so that the pill could not be
amended or redeemed if the nominees were elected. This was a direct attack
on the voting rights of shareholders who overwhelmingly support
AlliedSignal's acquisition of AMP -- by September 11, 72% of AMP's
outstanding shares had been tendered.

          When AlliedSignal amended its consent solicitation to include a
Shareholder Rights Proposal that would vest all powers with respect to the
poison pill in agents approved by the shareholders, AMP amended the poison
pill again -- this time to provide that the poison pill would not be
amendable and the rights would not be redeemable if AMP's own shareholders
voted to amend the bylaws in the manner proposed by AlliedSignal.

          In addition, on September 18, 1998, AMP reduced the "trigger
percentage," i.e., the percentage of outstanding shares that must be owned
by a potential acquiror to trigger the poison pill, from 20% to 10%. This
"trigger reduction" is yet another example of how AMP continues to change
the rules of the game to manipulate the outcome of AlliedSignal's tender
offer and consent solicitation.(FN2)

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

2    The trigger reduction gave AlliedSignal no choice but to reduce the
     amount of its planned purchase from 18% to 9% of AMP's shares. AMP
     timed its action in such a way that AlliedSignal could not obtain
     judicial relief on the trigger reduction in time to buy and become the
     record owner of the shares before the October 15 record date for its
     consent solicitation. AlliedSignal, therefore, is not asking for a
     specific declaration of illegality with respect to the trigger
     reduction. AMP's conduct in this regard is relevant, however, to the
     balance of the equities that the Court must consider in deciding
     whether a preliminary injunction should issue. See below at pp. 13-15.

          On September 14, 1998, AlliedSignal filed a motion seeking
summary judgment on its claims concerning AMP's original nonredemption
provision.(FN3) AlliedSignal is now filing this Supplemental Motion seeking a
declaratory judgment that AMP's nullification provision is also unlawful
or, in the alternative, a preliminary injunction preventing enforcement of
that provision.

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

3    AlliedSignal's Motion for Summary Judgment and for an Immediate
     Declaratory Judgment and Preliminary Injunction ("AlliedSignal's
     Initial Motion"). AlliedSignal's Memorandum in support of its Initial
     Motion will be referred to throughout as "AlliedSignal's Initial
     Brief."

                           PRELIMINARY STATEMENT

          In AMP's battle with its shareholders for control of the company,
AMP's board has arrogated to itself the purported authority to limit the
powers that can be exercised by its shareholders and is attempting to
manipulate the shareholder vote on AlliedSignal's Consent Solicitation.
AMP's board has it backwards. Under Pennsylvania law and fundamental
corporate governance principles, the shareholders have the power to elect
directors and to limit, modify or even remove their powers, not the other
way around. Indeed, directors have the authority to make decisions
regarding a company owned by the shareholders (and not the directors)
because the directors are the shareholders' agents and elected
representatives. See IBS Financial Corp. v. Seidman & Assoc. L.L.C., 136
F.3d 940, 949 (3d Cir. 1998) (under corporate governance theory, the
shareholder franchise is what "legitimates the exercise of power by
[directors and officers] over vast aggregations of property that they do
not own.") (internal quotation omitted).

          Pennsylvania law could not be clearer on this point. Section 1721
of the PBCL provides that ALL of the powers of the board, including those
relating to poison pills, are subject to the ultimate authority of the
shareholders to limit or otherwise modify these powers through a
shareholder-adopted bylaw. The PBCL similarly makes clear that shareholders
can remove powers from the board and place them in the hands of "such
person or persons as shall be provided in the bylaws." PBCL ss. 1721.

          Pursuant to this authority, AlliedSignal recently proposed that
AMP's shareholders vest all powers with respect to AMP's poison pill in
shareholder-approved agents who would amend the poison pill to make it
inapplicable to any transaction approved by a majority of the shareholders
(the "Shareholder Rights Proposal"). Thus, the Shareholder Rights Proposal
gives AMP's shareholders a choice: (1) if they are dissatisfied with the
board's decisions on the poison pill, they can exercise their statutory
authority and vote for the Shareholder Rights Proposal; or (2) if they are
satisfied with the board's decisions, they can vote against the Shareholder
Rights Proposal.

          The nullification provision, however, operates to take from
shareholders the statutory authority to choose which persons will exercise
corporate powers. Under the nullification provision, if shareholders vote
to vest all powers with respect to the poison pill in shareholder-approved
agents, at that moment, those agents will become powerless to amend or
redeem the pill. In essence, AMP's directors have told the shareholders
that if the board does not have the right to make decisions on the poison
pill, no one will. Under the express provisions of Pennsylvania law as set
forth in Section 1721 of the PBCL and as set forth in the Company's
Articles, the shareholders, not the directors, determine such an allocation
of power between the shareholders and the directors.

          Moreover, by effectively abrogating any vote on the Shareholder
Rights Proposal, the nullification provision disenfranchises AMP's
shareholders. Indeed, AMP's nullification provision is particularly
draconian because it not only nullifies the shareholder vote, but
effectively punishes AMP's shareholders if they vote for the Shareholder
Rights Proposal by precluding a merger with AlliedSignal or anyone else for
the remaining life of the poison pill.

          AMP's nullification provision and poison pill trigger reduction
are merely the latest tactics in the board's unrelenting campaign to wrest
control of the company from its rightful owners:

     .    THE DEAD HAND POISON PILL. When AlliedSignal made its initial
          tender offer to pay $44.50 in cash for all outstanding AMP
          shares, AMP's directors would not even talk to AlliedSignal about
          the offer. They chose instead to stand behind AMP's "dead hand"
          poison pill, which they hoped would end AlliedSignal's efforts to
          obtain control of the company.

     .    DELAY OF THE SHAREHOLDERS' RIGHT TO ACT BY CONSENT. When
          AlliedSignal made a formal request for an August 31, 1998, record
          date for the shareholders to vote on AlliedSignal's tender offer
          and consent solicitation, AMP chose instead, and for no
          legitimate reason, to provide a record date of October 15, 1998,
          thereby delaying any shareholder action for 45 days.

     .    THE NONREDEMPTION PROVISION. When AlliedSignal announced its
          consent solicitation to allow shareholders who were dissatisfied
          with the current board to add 17 new directors (the "Nominees"),
          AMP implemented the "nonredemption provision" so that its poison
          pill could not be amended or redeemed if the Nominees were
          elected.

     .    THE NULLIFICATION PROVISION. When AlliedSignal amended its
          consent solicitation to add the Shareholder Rights Proposal, AMP
          expanded the nonredemption provision so that the poison pill
          could not be amended or redeemed if the Shareholder Rights
          Proposal was approved.

     .    THE TRIGGER REDUCTION. When AlliedSignal amended its tender offer
          so that it could pay shareholders $44.50 for 18% of their shares
          now without triggering the poison pill, AMP reduced the trigger
          percentage from 20% to 10%. In doing so, AMP effectively cut in
          half the number of shares AlliedSignal can buy without triggering
          the pill and took away from shareholders approximately $900
          million, that they would have received within two weeks.

          In short, at each step in this process, AMP has changed the rules
of the game by unilaterally amending the poison pill to deprive its own
shareholders of any meaningful choice. The cumulative effect of AMP's
conduct has been to entrench AMP's current board and to eliminate its
accountability to shareholders. See Steven M.H. Wallman, The Proper
Interpretation Of Corporate Constituency Statutes And Formulation Of
Director Duties, 21 Stetson L. Rev. 163, 190 (1991) (draftsman of the
antitakeover provisions of the PBCL explains that the discretion granted to
directors by the antitakeover provisions is ultimately checked by the
shareholder franchise: "[S]hareholders have exclusive access to the
corporate election machinery. If the shareholders do not agree with how the
corporation is run, they are empowered to replace the directors.").

          In discussing the Shareholder Rights Proposal, AlliedSignal's
Initial Brief predicted that, based on its conduct to date, AMP's board
would "go to any length necessary, including actions that are clearly ultra
vires, to deprive shareholders of their right to cast a meaningful vote and
determine the future of the company they own." AlliedSignal's Initial Brief
at 33. That prediction has now proven true.

                                  ARGUMENT

I.   ALLIEDSIGNAL IS ENTITLED TO SUMMARY JUDGMENT DECLARING THAT THE 
     NULLIFICATION PROVISION IS INVALID

          AlliedSignal is entitled to summary judgment declaring that AMP's
nullification provision is illegal and invalid. The material facts, which
are not subject to dispute, establish that AlliedSignal is entitled to
judgment as a matter of law on a number of independent grounds. First, the
nullification provision strips shareholders of powers expressly granted to
them by the PBCL. Second, as an extension of the nonredemption provision
that is the subject of AlliedSignal's Initial Motion, the nullification
provision is unlawful for the same reasons: it deprives shareholders of
their voting rights and limits the discretion of future boards of
directors.

     A.   THE NULLIFICATION PROVISION IS AN ATTEMPT TO TAKE RIGHTS FROM 
          AMP SHAREHOLDERS THAT ARE EXPRESSLY GRANTED TO THEM BY AMP'S 
          ARTICLES AND BYLAWS AND THE PBCL

          The PBCL explicitly grants to shareholders the authority to
remove powers from the board of directors and place them in the hands of
other persons. See AlliedSignal's Initial Brief at 3, 15-16, 30-33. Section
1721 of the PBCL provides that the powers of a business corporation are to
be exercised by the corporation's board of directors "[u]nless otherwise
provided in...a bylaw adopted by the shareholders." The statute further
provides that the corporate powers are to be exercised by the board or "by
such person or persons as shall be provided in the bylaws." See also AMP's
Articles of Incorporation, Art. VII (stating that "[e]xcept as otherwise
provided . . . by Bylaws as the same may be amended from time to time, all
corporate powers may be exercised by the Board of Directors").

          This same right is guaranteed to the shareholders by AMP's
Articles of Incorporation. In 1989, AMP changed its state of incorporation
from New Jersey to Pennsylvania, it did so expressly to take advantage of
the antitakeover provisions of the PBCL. See 1989 Notice of Annual Meeting
and Proxy Statement at 14, 32-33, attached at Exhibit B. To persuade its
shareholders to approve this move from New Jersey to Pennsylvania, AMP's
board assured shareholders that the new Articles of Incorporation and
Bylaws would "continue provisions presently applicable to the Corporation
under New Jersey law." Id. at 15. In particular, the directors proposed
that the new Pennsylvania Articles of Incorporation specifically preserve
the right given AMP's shareholders under New Jersey law to act by
non-unanimous written consent through a consent solicitation. Id. at 16,
18. Now that AMP's shareholders are actually exercising their right to
conduct a consent solicitation, AMP's board seeks to change the rules
because it does not like the results.

          Thus, the PBCL and AMP's own Articles give shareholders -- and
only shareholders -- the right to decide who should exercise the powers of
the corporation. Here, with no authority to do so, AMP's board has acted to
seize that right from its shareholders. In essence, the board has taken for
itself the exclusive right to make decisions with respect to the poison
pill. Although the shareholders may have the right to give such exclusivity
to the board, the board has no basis to take it without a
shareholder-adopted bylaw. Accordingly, AlliedSignal is entitled, as a
matter of law, to a judgment declaring that the nullification provision is
illegal.

     B.   THE NULLIFICATION PROVISION IS AN ILLEGAL INTERFERENCE WITH 
          AMP SHAREHOLDERS' RIGHT TO VOTE AND IS AN ILLEGAL RESTRAINT 
          ON THE DISCRETION OF FUTURE AMP BOARDS

          As an extension of the nonredemption provision that was the
subject of AlliedSignal's Initial Motion and Brief, the nullification
provision is unlawful for the same reasons: it effectively disenfranchises
AMP's shareholders, and it improperly restricts the discretion of AMP's
board of directors.

          1.   THE DISENFRANCHISEMENT OF AMP'S SHAREHOLDERS

          The nullification provision disenfranchises shareholders by
effectively preventing them from voting for the Shareholder Rights
Proposal. Just as the original nonredemption provisions disenfranchised
shareholders by preventing them from voting for directors who were willing
and able to redeem the pill, the nullification provision similarly deprives
shareholders of a meaningful choice. Under the nullification provision, a
vote for the Shareholder Rights Proposal is meaningless because all power
to amend or redeem the poison pill will be lost if and when that power is
removed from the current board. In short, even if the Shareholder Rights
Proposal is approved, the shareholder-appointed agents will not be able to
do what shareholders appointed them to do -- amend the poison pill.

          As discussed in AlliedSignal's Initial Brief, neither
Pennsylvania law nor general principles of corporate democracy permit
directors to manipulate a shareholder vote or deny shareholders an
effective choice. Indeed, under Pennsylvania law, AlliedSignal is entitled
to relief to prevent the "fundamental unfairness" that results from any
efforts by AMP to interfere with shareholders' voting rights. See PBCL ss.
1105; Norfolk Southern Corp. v. Conrail, Inc., Civ. Act. No. 96-7167 (E.D.
Pa. Dec. 17, 1996) (enjoining conduct that created a "sham election" and
deprived shareholders of a meaningful vote as "fundamentally unfair" under
Pennsylvania law) (App. Ex. A-6 at 68-69); see also AlliedSignal's Initial
Brief at 14-21, 28-29.

          Here, the nullification provision is just such an effort to
interfere with the shareholders' franchise -- the board has deprived
shareholders of any meaningful ability to vote on the Shareholder Rights
Proposal. Such a direct disenfranchisement of AMP's shareholders is
repugnant to Pennsylvania law and basic principles of corporate democracy.

          2.   THE UNLAWFUL RESTRAINT ON THE DISCRETION OF THE BOARD

          By enacting the nullification provision, AMP's present directors
have illegally attempted to prevent anyone but the present directors from
exercising power over the poison pill. Just like the nonredemption
provision challenged in AlliedSignal's Initial Brief, the nullification
provision, if triggered, removes all power to redeem or amend the poison
pill from the board, or any other body vested with the board's powers.
Thus, it effectively prevents consideration of any tender offer or merger
proposal for as long as the poison pill remains in effect. As explained in
AlliedSignal's Initial Brief (at 21-24), such an absolute bar to the
consideration of future tender offers or merger proposals violates
Pennsylvania law.(FN4)

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

4    See ss. 1712(a) (imposing a duty of "reasonable inquiry, skill and
     diligence" upon directors). This same duty is imposed upon any other
     body that exercises the board's power pursuant to a
     shareholder-adopted bylaw. See Amended Committee Comment to ss. 1721
     ("persons performing the duties of directors are to be treated in all
     respects as directors while performing those duties").

II.  ALLIEDSIGNAL IS ENTITLED TO A PRELIMINARY INJUNCTION AGAINST 
     ENFORCEMENT OF THE NULLIFICATION PROVISION

          AlliedSignal's Initial Brief explains how the actions of the AMP
board cause irreparable harm to AlliedSignal and to AMP's own shareholders
as well as why the balance of the equities and the public interest favor an
injunction. See AlliedSignal's Initial Brief at 24-30. Those points apply
with even greater force to the nullification provision. In particular, the
repeated attempts by AMP's board to interfere with the shareholder
franchise create a real and irreparable risk that AMP shareholders will be
discouraged from participating in AlliedSignal's consent solicitation.

          In addition, in balancing the equities, the Court should consider
AMP's conduct in reducing its poison pill trigger from 20% to 10%. First,
AMP's trigger reduction is illegal as a manipulation of the voting pool for
the pending consent solicitation. AMP's board reduced the trigger to its
poison pill less than four days after AlliedSignal announced its intention
to amend its tender offer to purchase 18% of AMP's common stock. The
trigger reduction gave AlliedSignal no choice but to reduce the amount of
its planned purchase from 18% to 9% of AMP's shares (from 40 million shares
to 20 million shares), taking away from AMP shareholders approximately $900
million.

          The result of the trigger reduction, however, is not only the
loss of money to AMP shareholders, but also the manipulation of the
shareholder vote. By changing the ground rules regarding the ownership of
AMP shares before the October 15 record date for the consent solicitation,
AMP's board effectively alters the electorate for the solicitation and
interferes with the outcome of the vote.

          Indeed, courts have struck down amendments that reduce a poison
pill trigger when they were "adopted in the heat of a proxy contest." See,
e.g., Dynamics Corp. of America v. CTS Corp., 637 F. Supp. 389, 418 (N.D.
Ill. 1986), aff'd, 794 F.2d 250 (7th Cir.), rev'd on other grounds, 481
U.S. 69 (1987). In Dynamics, for example, the court enjoined a trigger
reduction from 20% to 15% that was "designed with the proxy contest in
mind." Id. at 417.(FN5) See also Cooperstock v. Pennwalt Corporation, 820
F. Supp. 921, 924 (E.D. Pa. 1993) (citing with approval the Seventh
Circuit's conclusion in Dynamics that poison pills such as the one at issue
in that case "are suspect and subject to close scrutiny.") (citing
Dynamics, 714 F.2d at 253-55). Here, AMP's reduction of the trigger from
20% to 10% is particularly egregious as the legislature has determined as a
matter of policy that a 20% threshold is sufficient for antitakeover
provisions.(FN6)

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

5    Although the claim in Dynamics was that the directors had breached
     their fiduciary duties in reducing the poison pill trigger (a claim
     that AlliedSignal is not making in this case), the dispositive factor
     in the court's decision to issue an injunction was that the trigger
     was "adopted in the heat of a proxy battle, with no identifiable
     threat other than . . . vague fears" of a loss of corporate control.
     Dynamics, 637 F. Supp. at 418.

6    First, only a 20% shareholder (or a group acting in concert who in the
     aggregate hold 20% or more of the shares) is deemed a "controlling
     person or group" for purposes of subchapter E of the PBCL regulating
     control transactions. PBCL ss. 2543(a). Second, only a 20% shareholder
     of a corporation (or an affiliate of that corporation who was a 20%
     shareholder within the past five years) is an "interested shareholder"
     whose ability to engage in business combinations with the corporation
     is regulated by subchapter F of the PBCL. PBCL ss. 2553(a)(1). Third,
     only a transaction by which a person would acquire for the first time
     voting control of 20% or more (or various specified higher
     percentages) of a corporation's stock is a "control-share acquisition"
     regulated by subchapter G of the PBCL. PBCL ss. 2562.

          Not only is the trigger reduction unlawful, but AMP deliberately
timed it to deprive AlliedSignal of an opportunity to seek judicial relief.
AlliedSignal had a pending tender offer for 18% of AMP's shares. When AMP
reduced the trigger to 10%, AlliedSignal was forced to reduce the number of
shares it was seeking to buy at this stage to 9% (to avoid triggering the
amended pill). Given the timing of AMP's trigger reduction, under federal
law governing tender offers, AlliedSignal could not obtain judicial relief
on the trigger reduction, amend its tender to buy additional shares, and
accomplish the administrative tasks necessary to effectively become the
record owners of these shares before the October 15 record date for its
consent solicitation. Thus, AMP has successfully altered the voting
population on the consent solicitation without this Court having an
opportunity to issue appropriate relief.

          Indeed, by seeking to frustrate, first the election of new
directors, and now the Shareholder Rights Proposal, AMP's board is trying
to convince its shareholders that their votes are useless. If left
unchecked, such coercion threatens to taint the voting process and work
fundamental unfairness upon AMP's shareholders and AlliedSignal.
Accordingly, for these reasons and those set forth in AlliedSignal's
Initial Brief, AlliedSignal requests a preliminary injunction prohibiting
AMP from enforcing the nonredemption provision and the nullification
provision.

                                 CONCLUSION

          For the reasons set forth herein and in AlliedSignal's Initial
Brief, AlliedSignal respectfully requests that its Initial Motion and
Supplemental Motion be granted and that this Court enter summary judgment
declaring that the nonredemption provision and the nullification provision
are invalid. In the alternative, AlliedSignal respectfully requests that
this Court enter a preliminary injunction, enjoining the effectiveness of
the nonredemption provision and the nullification provision.

                                               Respectfully submitted,

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

                                                         and

                                                 /s/ Mary A. McLaughlin
                                               ---------------------------
                                               Mary A. McLaughlin
                                               George G. Gordon
                                               Joseph A. O'Connor
                                               DECHERT PRICE & RHOADS
                                               4000 Bell Atlantic Tower
                                               1717 Arch Street
                                               Philadelphia, PA  19103
                                               (215) 994-4000

Dated: September 18, 1998                      Attorneys for Plaintiff