Exhibit 85
August 20, 1998
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AMP Incorporated
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Dear ▇▇▇▇:
This Letter Agreement is being entered into to evidence our agreement that,
as of the date hereof, you shall step down from your position as President
and Chief Executive Officer of AMP Incorporated (the "Company") and shall
be employed as Vice Chairman of the Company through the Company's 1999
Annual Meeting of Shareholders, after which you shall remain employed as
Former President and Chief Executive Officer through June 1, 1999, your
normal retirement date (your "Retirement Date"). During the period
commencing on your Retirement Date through the end of your Chairmanship of
the National Association of Manufacturers, you shall have the title of
Retired President and Chief Executive Officer. During your remaining
period of employment, your annual salary and employee benefits shall remain
unchanged from those in effect as of the date hereof; however, you shall
not be eligible for participation in any of the Company's equity- and cash-
based incentive compensation programs. In addition, you shall be entitled
to continued office space, secretarial support, and reasonable access to
corporate support services to facilitate your activities as Chairman of the
National Association of Manufacturers through the end of that Chairmanship
in the Fall of 1999.
With respect to the effect of the foregoing actions on the terms of your
Executive Severance Agreement, dated as of October 22, 1997, as amended
through the date hereof (your "Executive Severance Agreement"), you and the
Company agree as follows, which agreements shall supersede any provisions
of the Executive Severance Agreement inconsistent therewith (capitalized
terms used below but not defined herein shall have the meaning ascribed to
such term in the Executive Severance Agreement):
The Term of the Executive Severance Agreement shall continue until your
Retirement Date.
You agree that, notwithstanding the provisions of Section 4(a) of the
Executive Severance Agreement, which gives you the right to terminate your
employment for Good Reason during a Pending Change of Control and thereby
trigger certain Executive Severance Agreement benefits if a Change of
Control occurs within one year of the last event that constituted the
Pending Change of Control, you shall not so act to terminate your
employment for Good Reason unless and until there occurs a Change of
Control during the term of your Executive Severance Agreement.
The Company acknowledges that in the event a Change of Control occurs on or
prior to your Retirement Date (a) the occurrence of the Change of Control
will entitle you to the benefits set forth in Section (2) of your Executive
Severance Agreement, and (b) you have the right to terminate your
employment during the period from the date of such Change of Control
through and including your Retirement Date, which termination will
constitute a termination for Good Reason following a Change of Control
entitling you to the benefits set forth in Sections 1(a) and 3 of your
Executive Severance Agreement (and without limitation to any other benefits
to which you are entitled under such Agreement).
In keeping with the consistent practice followed by the Compensation and
Management Development Committee (the "Committee), any Company stock
options held by you at your Retirement Date will vest in accordance with
their terms and will remain outstanding for the full remaining portion of
each option's original 10-year exercise period. Also in keeping with the
Committee's consistent prior practice, any such options held by you at your
date of death prior to your Retirement Date will vest immediately and will
remain outstanding for a period of two years beyond your date of death or,
if shorter, for the remaining portion of the option's original 10-year
exercise period. The option treatment described in the two prior sentences
is contingent upon your full compliance with the terms of your
confidentiality, intellectual property, and limited non-competition
agreements with the Company and upon your refraining from engaging in any
conduct deemed by the Committee to be materially adverse to the best
interests of the Company.
If you are in agreement with the foregoing, please execute both copies of
this Letter Agreement and return one to ▇▇▇▇ ▇▇▇▇▇▇▇▇.
Very truly yours:
AMP Incorporated
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Chairman, Compensation and Management
Development Committee
ACKNOWLEDGED AND AGREED:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
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