EXHIBIT 99.3
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
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ALLIEDSIGNAL CORPORATION, :
a Delaware Corporation,
P.O. Box 3000 :
Morristown, NJ 07962-2496
Plaintiff, :
- against - : C.A. No. 98-CV-4058
AMP, INC., :
a Pennsylvania Corporation,
470 Friendship Road :
Harrisburg, PA 17111
Defendant. :
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COMPLAINT FOR
DECLARATORY AND INJUNCTIVE RELIEF
---------------------------------
Plaintiff AlliedSignal Corporation ("AlliedSignal"), by its
undersigned attorneys, as and for its Complaint, alleges upon knowledge
with respect to itself and its own acts, and upon information and belief as
to all other matters, as follows:
Nature of the Action
--------------------
1. AlliedSignal has today announced that it will commence a
tender offer for the stock of defendant AMP, Inc. ("AMP") at $44.50 per
share, a price representing a premium of approximately 50% over the closing
trading price of AMP common stock on August 3, 1998. This action for
injunctive and declaratory relief is brought to ensure that AlliedSignal's
statutory and constitutional rights to make its tender offer to AMP
stockholders and to exercise its rights under the federal proxy rules are
protected, while also ensuring the rights of all AMP stockholders to
consider AlliedSignal's offer. AlliedSignal also seeks to prevent AMP from
manipulating or otherwise subverting the process of corporate democracy by
impermissibly taking action to frustrate the consent solicitation that
AlliedSignal will have to conduct to gain majority representation on the
AMP Board of Directors if AMP attempts to obstruct AlliedSignal's tender
offer. This action also seeks relief declaring AMP's so-called "dead hand"
poison pill to be inapplicable or legally impermissible.
Parties
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2. Plaintiff AlliedSignal is a Delaware corporation with its
principal executive offices in Morristown, New Jersey. AlliedSignal is a
manufacturing company with operations in the aerospace, automotive and
engineered materials businesses. AlliedSignal's 1997 revenues were nearly
$15 billion. AlliedSignal is the beneficial owner of 100 shares of AMP
common stock.
3. Defendant AMP is a Pennsylvania corporation with its principal
executive offices in Harrisburg, Pennsylvania. AMP designs, manufactures
and markets electronic, electrical and electro-optic connection devices,
interconnection systems and connector-intensive assemblies.
Jurisdiction and Venue
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4. This Court has jurisdiction over this action pursuant to 28
U.S.C. ss.ss. 1331, 1332 and 1367. The amount in controversy is in excess
of $75,000.
5. Venue is proper in this District under 28 U.S.C. ss. 1391 (b)
and (c).
AlliedSignal's Offer
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6. On July 29, 1998, AlliedSignal Chairman and Chief Executive
Officer ("CEO") Larry Bossidy telephoned AMP's CEO and President, William
J. Hudson, to determine whether AMP would be interested in pursuing a
business combination with AlliedSignal. Mr. Hudson was unavailable to speak
with Mr. Bossidy, and he did not thereafter return Mr. Bossidy's telephone
call.
7. On July 30, 1998, Mr. Bossidy sent a letter to Mr. Hudson
proposing a combination of AlliedSignal and AMP. The letter stated that
AlliedSignal was prepared to offer $43.50 per share in cash for all of
AMP's outstanding shares, at a premium of approximately 50% over the market
value.
8. AMP has not responded to Mr. Bossidy's July 30 letter.
9. On August 4, 1998, AlliedSignal announced that it will
commence within five (5) business days a tender offer for the stock of
defendant AMP at $44.50 per share (the "Tender Offer"), which, as stated in
Mr. Bossidy's July 30, 1998 letter, represents approximately a 50% premium
over the closing trading price of AMP common stock on August 3, 1998. The
Tender Offer gives AMP shareholders the opportunity to accept the Offer if
they determine it is in their best interests. Upon consummation of the
Tender Offer, AlliedSignal intends to acquire the remaining shares of AMP
in a second-step merger in which AMP shareholders will receive $44.50 in
cash for each AMP share they own.
10. AlliedSignal's Tender Offer and second-step merger cannot be
consummated unless the AMP Board -- voluntarily or by direction of a court
- -- removes or makes inapplicable various anti-takeover devices, including
AMP's "poison pill" and certain provisions of the Pennsylvania Business
Corporation Law ("PBCL").
11. In light of AMP's failure to respond to AlliedSignal's July
30, 1998 letter, the current AMP Board cannot be expected to facilitate
AlliedSignal's Tender Offer and second-step merger, but can be expected,
instead, to maintain AMP's anti-takeover devices in place and actively
oppose the Tender Offer and merger. For this reason, AlliedSignal is
preparing to conduct a consent solicitation (the "Consent Solicitation") to
gain majority representation on the AMP Board of Directors by electing
individuals nominated by AlliedSignal who will support a sale of AMP to
AlliedSignal, subject to their fiduciary duties to AMP shareholders.
AMP's Anti-Takeover Devices
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12. The "Dead Hand" Poison Pill. Foremost among the numerous
anti-takeover devices at AMP's disposal is its shareholders' "rights plan,"
better known as a "poison pill" (the "Poison Pill"). As part of the Poison
Pill, the Board authorized and declared a dividend of one common share
purchase right (a "Right") per outstanding share of common stock of AMP,
payable to shareholders of record as of the close of business on November
6, 1989.
13. The Poison Pill provides that the Rights do not become
exercisable until ten business days following the first public announcement
that a person (an "Acquiring Person") has acquired beneficial ownership of
20% or more of the outstanding shares of AMP common stock (the "Stock
Acquisition Date"), at which time each holder of a Right, other than an
Acquiring Person, is entitled, upon exercise of the Right, to receive
common stock having a market value equal to two times the Purchase Price.
The effect of this provision (the "Flip-In Provision") thus would be a
massive dilution of the value of the holdings of an unwanted acquiror like
AlliedSignal.
14. The Dead Hand Restriction. The Board may redeem the Poison
Pill until 10 business days after a person becomes an Acquiring Person. The
Board's ability to redeem the Rights, however, is purportedly restricted by
a provision of the Poison Pill that serves no purpose other than to
entrench the current Board (the "Dead Hand Restriction").
15. Under the Dead Hand Restriction, redemption of the Poison
Pill requires the approval of a majority of Continuing Directors (i.e.,
members of the Board who are not Acquiring Persons or representatives of an
Acquiring Person, and either (x) were directors prior to the institution of
the Poison Pill or (y) are nominated by a majority of Continuing Directors)
if effected (i) after a person becomes an Acquiring Person but prior to the
expiration of a ten business day period, or (ii) after a change (resulting
from a proxy or consent solicitation) in a majority of the directors in
office at the time of the commencement of a proxy or consent solicitation.
Furthermore, the Dead Hand Restriction provides that the Poison Pill can be
amended only by Continuing Directors.
16. Under the Dead Hand Restriction, directors, other than
Continuing Directors, elected pursuant to a consent or proxy solicitation
in which an Acquiring Person (or a person who intends to become an
Acquiring Person) participates, are purportedly without power or authority
to redeem the Rights so that the Tender Offer may go forward.
17. Because the Dead Hand Restriction purports to prevent
newly-elected, insurgent-nominated directors from redeeming the Poison Pill
and thus removing a key obstacle to the accomplishment of the very purpose
for which they were elected, the Dead Hand Restriction effectively
disenfranchises shareholders. In effect, it denies the shareholders of AMP
the opportunity to replace the current Board and prevent any person
intending to become an Acquiring Person, such as AlliedSignal, from
soliciting votes to replace the current Board. It represents an intentional
effort by the Board to manipulate the corporate machinery so as to prevent
the effectiveness of a shareholder vote.
18. The Pennsylvania Anti-Takeover Statutes. Among other
provisions, Defendant AMP also has the anti-takeover protections PBCL ss.
ss. 2551-2556 (the "Business Combination Statute").
19. Under the Business Combination Statute, an interested
shareholder cannot engage in a business combination with AMP for five years
unless the acquisition of the shares or the business combination is
approved by the AMP Board before an "Interested Shareholder" becomes the
beneficial owner, directly or indirectly, of at least 20% of AMP's shares.
20. The Business Combination Statutes will delay or make more
difficult acquisitions or changes of control of AMP, have the effect of
preventing changes in the management of AMP, and make it more difficult to
accomplish transactions which AMP shareholders may otherwise deem to be in
their best interests.
21. Fixing the Consent Solicitation Record Date. AlliedSignal
cannot obtain shareholder consents to its proposals without a record date
for the determination of the shareholders entitled to vote on the
proposals. AMP's by-laws (the "By-laws") provide that any shareholder
seeking to have shareholders take action by consent must, by written
notice, request that the Board fix a record date. The By-laws require the
Board to fix the record date no later than 10 days after receipt of the
request. (If not fixed within 10 days, the record date will be the day on
which the first consent is received by the company.)
22. It is anticipated that the Board will seek to delay
shareholder consent action on AlliedSignal's proposals by fixing a record
date outside the required time period to impede its shareholders from
exercising their franchise.
First Claim for Relief
----------------------
(Declaratory Judgment and Injunctive Relief)
23. Plaintiff repeats and realleges the allegations contained in
each of the preceding paragraphs as if fully set forth herein.
24. Fixing a record date beyond the required ten (10) days would
violate AMP's Articles and By-laws and constitute an illegal interference
with the shareholder franchise, in violation of the PBCL and fundamental
principles of corporate governance.
25. Plaintiffs have no adequate remedy at law.
Second Claim for Relief
-----------------------
(Declaratory Judgment)
26. Plaintiff repeats and realleges the allegations contained in
each of the preceding paragraphs as if fully set forth herein.
27. The Dead Hand Restriction is invalid per se under
Pennsylvania statutory law, in that it purports to limit the discretion of
future Boards of AMP by denying any directors other than the Continuing
Directors the power or authority to redeem the Poison Pill so that the
Tender Offer and Merger may go forward. PBCL ss. 1721 requires that any
such limitation on Board discretion be set forth in a by-law adopted by the
shareholders. Since the shareholders of AMP have adopted no such by-law
provision, the Board was without power to so limit the discretion of future
Boards of AMP by adopting the Dead Hand Restriction.
28. Moreover, PBCL ss. 1729 provides that unless otherwise
provided in a by-law adopted by the shareholders, every director shall be
entitled to one vote. The Dead Hand Restriction creates different classes
of directors with different voting rights -- those who have the power to
redeem the Poison Pill, and those who do not. Since the shareholders of AMP
have adopted no by-law provision creating such distinctions in the voting
powers of directors, the Board was without power to adopt the Dead Hand
Restriction.
29. Additionally, the Dead Hand Restriction is invalid under
AMP's By-laws. Under Section 2.1 of AMP's By-laws, the power to manage the
business and affairs of the Corporation is broadly vested in its duly
elected board of directors. Insofar as the Dead Hand Restriction purports
to restrict the power of AMP's Board to redeem or amend the Poison Pill, it
conflicts with Section 2.1 of AMP's By-laws and is therefore of no cause or
effect.
30. Furthermore, the Dead Hand Restriction purposefully
interferes with the shareholder voting franchise without any compelling
justification. Moreover, the Dead Hand Restriction is an unreasonable and
disproportionate defensive measure, because it either precludes or
materially abridges the shareholders' rights to receive tender offers and
wage proxy contests to replace the Board.
Third Claim for Relief
----------------------
(Declaratory Judgment)
31. Plaintiff repeats and realleges the allegations contained in
each of the preceding paragraphs as if fully set forth herein.
32. To the extent that the Dead Hand Restriction and other
anti-takeover devices that preclude tender offers and consent solicitations
are permitted under Pennsylvania law, such law is unconstitutional under
the Commerce Clause because it impermissibly burdens interstate commerce
far in excess of local benefits. The Dead Hand Restriction renders futile
the Consent Solicitation and other contests for corporate control, because
the shareholders will be powerless to elect a board that is both willing
and able to accept an insurgent's bid. If Pennsylvania law is deemed to
permit the Dead Hand Restriction, such law thus gives a Pennsylvania
corporation's pre-existing board of directors a de facto veto power over
tender offers and mergers, and therefore thwarts shareholder democracy and
impermissibly burdens interstate commerce.
33. To the extent the Dead Hand Restriction is permissible under
Pennsylvania law, such law injures and will continue to injure Plaintiff
because it deprives Plaintiff of its right to proceed with its Proposed
Business Combination.
Fourth Claim for Relief
-----------------------
(Declaratory Judgment)
34. Plaintiff repeats and realleges the allegations contained in
each of the preceding paragraphs as if fully set forth herein.
35. To the extent that the Dead Hand Restriction and other
anti-takeover devices that preclude tender offers and consent solicitations
are permitted under Pennsylvania law, such law is preempted by the Williams
Act and thereby violates the Supremacy Clause of the United States
Constitution. It frustrates the full purpose and objectives of Congress in
enacting the Williams Act by: (a) giving intransigent management the
ability to defeat a noncoercive proposal without a vote by shareholders,
(b) impermissibly tilting the balance between management and a potential
acquirer in the context of a noncoercive proposal, and (c) depriving
Plaintiff of its right to have AMP shareholders consider the Proposed
Business Combination under federal law.
36. To the extent the Dead Hand Restriction is permissible under
Pennsylvania law, such law injures and will continue to injure Plaintiff
because it deprives Plaintiff of its right to proceed with its Proposed
Business Combination as contemplated by the Williams Act and other
applicable law.
Fifth Claim for Relief
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(Injunctive Relief)
37. Plaintiff repeats and realleges the allegations contained in
each of the preceding paragraphs as if fully set forth herein.
38. The effect of AMP's anti-takeover devices is to frustrate and
impede the ability of AMP shareholders to decide for themselves whether
they wish to receive the benefits of the AlliedSignal Tender Offer and
proposed second-step merger. These devices unreasonably and inequitably
frustrate and impede the ability of AlliedSignal to proceed with its Tender
Offer and Consent Solicitation. The failure of AMP and its board to (i)
redeem the AMP Poison Pill or to amend the Poison Pill by removing the Dead
Hand Restriction, and (ii) adopt a resolution approving the AlliedSignal
Tender Offer for purposes of the Business Combination Statute is clearly a
breach of their fiduciary duty and thus a violation of Pennsylvania law.
39. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff respectfully requests that this Court enter
judgment against Defendant, as follows:
A. Declaring pursuant to the Declaratory Judgment Act, 28 U.S.C.
ss. 2201(a), that:
(a) if the Board should fail to fix a record date for
the Consent Solicitation within 10 days of its receipt of AlliedSignal's
written notice requesting such a record date, the record date for the
Consent Solicitation shall be the date such written notice is delivered to
AMP in accordance with AMP's By-laws;
(b) the fixing of a record date more than ten (10) days
after the date of AlliedSignal's written notice is impermissible because it
would effectively prevent AMP's shareholders from exercising their
franchise;
(c) the Dead Hand Restriction is inapplicable or, to
the extent applicable, is in violation of Pennsylvania law and the
fiduciary duties owed to AlliedSignal and all other AMP shareholders;
(d) to the extent Pennsylvania law authorizes the Dead
Hand Restriction, it (i) constitutes an impermissible burden on interstate
commerce in violation of the Commerce Clause of the United States
Constitution, and (ii) is preempted by the Williams Act and therefore
unconstitutional under the Supremacy Clause of the United States
Constitution; and
(e) AlliedSignal's tender offer and consent
solicitation comply with all applicable laws, obligations and agreements.
B. Preliminarily and permanently enjoining the Defendant, its
directors, officers, partners, employees, agents, subsidiaries and
affiliates, and all other persons acting in concert with or on behalf of
the Defendant directly or indirectly, from:
(a) fixing a record date for determining the
shareholders entitled to vote on the proposals in AlliedSignal's Consent
Solicitation more than ten (10) days after the date of AlliedSignal's
written notice;
(b) increasing the size of AMP's Board and filling the
new seats with Board nominees after commencement of AlliedSignal's Consent
Solicitation;
(c) refusing to redeem AMP's Poison Pill or amending
the Poison Pill so as to make the Rights inapplicable to AlliedSignal's
Tender Offer, and refusing to grant prior approval of the Tender Offer and
Merger for purposes of the Pennsylvania Business Combination Statute;
(d) amending its By-laws to in any way impede the
effective exercise of the stockholder franchise; or
(e) taking any other steps to impede or frustrate the
ability of AMP's shareholders to consider or make their own determination
as to whether to accept the terms of AlliedSignal's Tender Offer and the
proposals in AlliedSignal's Consent Solicitation, or taking any other
action to thwart or interfere with the Tender Offer or Consent
Solicitation.
C. Granting compensatory damages for all incidental injuries
suffered as a result of defendant's unlawful conduct.
D. Awarding plaintiff the costs and disbursements of this action,
including attorney's fees.
E. Granting plaintiff such other and further relief as the court
deems just and proper.
/s/ Alexander R. Sussman/JAOC
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Alexander R. Sussman
Barry G. Sher
Fried, Frank, Harris, Shriver &
Jacobson
One New York Plaza
New York, NY 10004
(212) 859-8000
and
/s/ Mary A. McLaughlin/JAOC
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Mary A. McLaughlin
George G. Gordon
Dechert, Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
(215) 994-4000
Attorneys for Plaintiff
DATED: August 4, 1998
CERTIFICATE OF SERVICE
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I hereby certify that I caused this day the foregoing Complaint
for Declaratory and Injunctive Relief to be served on the following by
Federal Express:
Charles Goonrey, Esq.
General Counsel
AMP Incorporated
47 Friendship Road
Harrisburg, PA 17111
/s/ Joseph A. O'Connor
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Dated: August 4, 1998 Joseph A. O'Connor, Esq.