Amp Supplemental Benefit Trust Agreement

AMP INCORPORATED


SUPPLEMENTAL BENEFIT TRUST AGREEMENT


THIS TRUST AGREEMENT is made and entered into as


of April 1, 1997 by and between AMP Incorporated, a


corporation organized and existing under the laws of the


Commonwealth of Pennsylvania ("AMP") and Dauphin Deposit


Bank and Trust Company, a banking association organized and


existing under the laws of the Commonwealth of Pennsylvania


(the "Trustee").


WITNESSETH:


WHEREAS, AMP and certain of its direct


and indirect subsidiaries (collectively, with AMP, the


"Company") have established certain supplemental retirement


and life insurance plans, deferred compensation plans and


severance arrangements, listed on Exhibit A attached hereto


as of the date hereof or, thereafter, added as designated by


the President and Chief Executive Officer of AMP (the


"CEO") (hereinafter referred to collectively as the "Plan"


or the "Plans" as applicable);


WHEREAS, each Plan provides for the Company to pay


all benefits from its general revenues and assets;


WHEREAS, the Company wishes to establish separate


individual trusts (individually, a "Trust" and collectively,


the "Trusts") for certain designated Participants, as


defined below, in the Plan, though, prior to a Change of


Control, as defined in Section 16.3 hereof, any such Trust


may not necessarily hold sufficient assets to satisfy all of


the benefits to be provided under the Plan;


WHEREAS, the Company also wishes to establish a


Trust fund to provide a source for payment of any fees,


including legal fees, incurred by the Trustee in the


administration of the Trusts or by Participants in enforcing


their rights hereunder (the "Fee Trust") and a Trust fund to


provide a source of payment of any benefits under a Plan to


the extent that the assets of an individual Trust


established for a Participant are insufficient to provide


all benefits due (the "Shortfall Trust");


WHEREAS, the Company wishes to contribute to the


Trusts assets or a letter of credit, or both, either on the


date hereof or thereafter as determined by the CEO, that


shall be held therein, to serve as a source of funds to


assist it in meeting its liabilities under the Plans,


subject to the claims of Company's creditors in the event of


Company's Insolvency, as defined below, until paid to Plan


Participants and their beneficiaries in such manner and at


such times as specified hereunder or in the Plans;


WHEREAS, contributions to the Trusts shall be held


by the Trustee and invested, reinvested and distributed in


accordance with the provisions of this Trust Agreement;


WHEREAS, each Trust established by this Trust


Agreement is intended to be a "grantor trust" with the


result that the corpus and income of the Trusts are treated


as assets and income of the Company pursuant to Sections 671


through 679 of the Internal Revenue Code of 1986, as amended


(the "Code").


NOW, THEREFORE, in consideration of the mutual


covenants contained herein, the Company and the Trustee,


intending to be legally bound, declare and agree as follows:


ARTICLE I


ESTABLISHMENT


1.1 AMP hereby establishes with the Trustee a


separate, and subject to Section 16.2 hereof, irrevocable


Trust on behalf of each Participant in the Plan designated


by CEO and listed on Exhibit B hereto or added thereafter as


designated by the CEO (the "Participant"). AMP also hereby


establishes with the Trustee the Shortfall Trust and the Fee


Trust. Each separate Trust so established shall be governed


by the terms of this Trust Agreement. Each Trust is


intended to be exempt from substantially all of the


provisions of ERISA by reason of the provisions of Sections


201(2), 301(a)(3) and 401(a)(1) thereof, as applicable, and


AMP shall immediately notify the Trustee should such exempt


status change for any reason.


1.2 Each Trust may consist of such sums of money,


other property acceptable to the Trustee or a letter of


credit against which the Trustee may obtain funds to be


credited to the Trusts as of the date hereof and as from


time to time shall be paid or delivered to the Trustee by


AMP immediately following the date hereof or from time to


time in the future, as determined by the CEO. The Fee Trust


and the Shortfall Trust shall be irrevocable and each other


Trust, subject to the provisions of Section 16.2 hereof,


shall be irrevocable for the Participant for which it is


established. Except as provided in Sections 4.2 and 16.2


hereof, the Company shall have no right to direct the Trus


tee to return or divert any Trust assets before the payment


of all benefits under the Plan to the Participant. All such


money and other property, all investments and reinvestment


made therewith or proceeds thereof and all earnings and


profits (less losses) thereon, less all payments and charges


as authorized herein, for each of the Trusts are hereinafter


collectively referred to as the "Trust Fund." The Trust


Fund shall be held by the Trustee and shall be dealt with in


accordance with the provisions of this Trust Agreement as a


single trust fund for purposes of investing the assets of


each Trust but the Company (or its designee) shall maintain,


or cause to be maintained records sufficient to determine


the interest of each Trust in the Trust Fund.


1.3 AMP may contribute such sums of money or property


to the Trust Fund, or a letter of credit against which the


Trustee may obtain funds, from time to time, as the CEO


determines appropriate in his sole discretion. Participants


and their beneficiaries shall have no preferred claim on, or


any beneficial ownership interest in, any assets of the


Trust Fund. Any rights created under the Plans and this


Trust Agreement shall be mere unsecured contractual rights


of Participants and their beneficiaries against the Company.


Any assets held by the Fund will be subject to the claims of


AMP's general creditors under federal and state law in the


event of Insolvency, as defined in Section 4.2 herein.


ARTICLE II


TRUSTEE ACCEPTANCE


2.1 The Trustee accepts each Trust established under


this Trust Agreement on the terms and subject to the


provisions set forth herein, and it agrees to discharge and


perform fully and faithfully all of the duties and


obligations imposed upon it under this Trust Agreement.


ARTICLE III


PLANS AS PART OF TRUST AGREEMENT


3.1 The Plans are expressly incorporated herein and


made a part hereof with the same force and effect as if


fully set forth at length. Copies of each of the Plans


shall be attached hereto as Exhibit C on or before any


amounts are contributed hereunder by AMP to provide funding


with respect to that Plan. All terms defined in the Plans


shall have the same meanings when used herein unless


expressly provided to the contrary herein. The Company will


promptly deliver to the Trustee copies of all amendments and


exhibits to the Plans and copies of any additional plans to


be covered by this Agreement after the date first above


written.


3.2 The terms of the Plans shall govern the amount,


form and timing of benefit payments under the Plans to which


a Participant is entitled but the Trustee shall not be


responsible for enforcing the terms of any Plan.


3.3 Subject to the provisions of Section 12.3 hereof,


the incorporation of the Plans into this Trust Agreement


shall not cause the Plans to become irrevocable under the


provisions of Section 1.2 of this Trust Agreement.


3.4 The Trustee shall have no right or obligations


with respect to any of the provisions of the Plans relating


to the funding of benefits or the funding of the Fee Trust


or the Shortfall Trust except to draw upon any letter of


credit contributed to the Trust Fund when funds are needed


to pay benefits under a Trust and there are insufficient


other assets in the Trust and in the Shortfall Trust to make


the payment(s) due.


ARTICLE IV


TRUST FUND


4.1 It is intended that each Trust constitute a


grantor trust under Code Sections 671 through 679, with the


assets of the Trust Fund being treated as assets of AMP for


purposes of Federal, state and local income tax laws. The


creation of the Trust Fund shall not cause any of the Plans


to be treated as funded plans for purposes of Title I of


ERISA.


4.2. The assets of each Trust shall at all times be


subject to the claims of the general creditors of AMP under


Federal and state law. The Trustee shall suspend payments


to each Participant from the Trust Fund if the Trustee


receives timely written notification from AMP's Board of


Directors (the "Board") and its CEO that AMP is (a)


Insolvent or (b) subject as a debtor to a pending proceeding


under the Federal Bankruptcy Code. It shall be the duty of


the Board and its CEO to provide the Trustee with timely


written notification of such events. For purposes of this


Article IV, the term "insolvent" means the inability of the


Company to pay its debts when they mature. Under any such


circumstance, the Trustee shall suspend payments from the


Trust Fund to the Participants and shall pay the assets held


in the Trust Fund only as a court of competent jurisdiction


shall direct to satisfy claims of general creditors of AMP.


It is intended that the rights of the general creditors of


AMP to enforce the provisions of this Article in the event


of AMP's Insolvency be enforceable with respect to the Trust


Fund at the time of Insolvency under both Federal and state


law. It is also intended that no provision of this Trust


Agreement shall in any way affect the Participants' rights


as general creditors of AMP.


4.3 If a person claiming to be a creditor of AMP


alleges in writing to the Trustee that AMP has become


Insolvent, the Trustee shall determine whether AMP is


Insolvent and, pending such determination, in accordance


with Section 4.4, the Trustee shall discontinue payment of


benefits to Participants or beneficiaries.


4.4 Unless the Trustee has actual knowledge of AMP's


Insolvency, or has received notice from AMP or a person


claiming to be a creditor alleging that AMP is Insolvent,


the Trustee shall have no duty to inquire whether AMP is


Insolvent. The Trustee may in all events rely on such


evidence concerning AMP's Insolvency as may be furnished to


the Trustee and that provides the Trustee with a reasonable


basis for making a determination concerning AMP's


Insolvency.


4.5 The Trustee shall resume the payment of benefits


to the Participants or beneficiaries in accordance with


Article VII of this Trust Agreement only after the Trustee


has determined that AMP is not Insolvent (or is no longer


Insolvent) based on such evidence as the Trustee determines


to be sufficient for such purpose such as a report from


AMP's independent auditors or certification to the Trustee


from AMP's Chief Financial Officer, if AMP is not subject to


a bankruptcy proceeding, or if AMP is subject to a


bankruptcy proceeding, an order from a court of competent


jurisdiction.


4.6 Provided that there are sufficient assets, if the


Trustee discontinues the payment of benefits from the Trust


Fund pursuant to this Article and subsequently resumes such


payments, the first payment following such discontinuance


shall include the aggregate amount of all payments due to


the Participants or beneficiaries under the terms of the


Plans for the period of such discontinuance, less the


aggregate amount of any payments made to the Participants or


beneficiaries by AMP in lieu of the payments provided for


hereunder during any such period of discontinuance.


ARTICLE V


INVESTMENTS


5.1 If a Plan provides for the designation of invest


ments by AMP in accordance with instructions of each


Participant, the investment powers of the Trustee shall be


governed by this Section 5.1. The Trustee shall invest and


reinvest the principal and income of the Trust Fund and keep


the Trust Fund invested, without distinction between


principal and income, only in those investment vehicles that


have been selected by AMP as being consistent with the


investments specifically designated by each Participant


pursuant to the applicable provisions of the Plan; provided,


however, that any such designation shall be solely for the


purpose of determining the amount to be paid to the


Participant under the Plan and shall in no way alter the


characterization of the assets of Trust Fund as assets of


AMP in accordance with Section 4.1 hereof.


5.2 (a) If a Plan does not provide for the designation


of investments by the Participants, or following a Change of


Control if no such directions have been given, the


investment powers of the Trustee shall be governed by this


Section 5.2. The Trustee shall invest and reinvest the


principal and income of the Trust Fund as directed by AMP in


writing, which directions may be changed from time to time;


provided, however, that any such directions from AMP may not


be changed on or after a Change of Control of AMP, as


defined in Article XVI hereof. In the absence of direction,


the Trustee shall invest and reinvest the principal and


income of the Trust Fund as it shall determine in its sole


discretion subject to the overall objective of the Trust


Fund which is the preservation of capital. In such event,


the Trustee shall keep the Trust Fund invested, without


distinction between principal and income, in any property,


whether real, personal or mixed, and wherever situated and


whether or not productive of income, including without


limitation capital, common and preferred stocks, and


personal, corporate and governmental or other obligations,


whether secured or unsecured, and including any collective


part interest therein; mortgages, leaseholds, fees and other


interests in realty; oil, gas or mineral properties and


rights, royalties, payments or other interests in such


properties; contracts, choses in action, trust and


participation certificates or other evidences of ownership,


part ownership or part interest; all without being limited


or restricted to investments of a character authorized for


trustees or other fiduciaries under any present or future


laws and, except as otherwise required by Federal law


without regard to the proportion any such property may bear


to the entire amount of the Trust Fund.


(b) Specifically, but not by way of limitation,


the Trustee is authorized and empowered to invest all or any


part of the Trust Fund in any common or collective trust


fund or pooled investment fund presently or hereafter


maintained by the Trustee as the same may be amended from


time to time; and the declaration of trust establishing such


common or collective fund is hereby made a part hereof as if


set forth at length herein, the assets of the fund invested


in said common or collective trusts shall be held and


administered by the Trustee strictly in accordance with the


terms of the instrument, and the combining of assets of the


Trust Fund with assets of other trusts in such common or


collective trust fund is specifically authorized hereby.


(c) The Trustee in its discretion may keep such


portion of the Trust Fund in cash or cash balances or hold


all or any portion of the Trust Fund in savings accounts,


certificates of deposit, and other types of time or demand


deposits with any financial institution or quasi-financial


institution, either domestic or foreign (including any such


institution operated or maintained by the Trustee in its


corporate capacity) as the Trustee may from time to time


determine to be in the best interests of the Trust Fund.


5.3 If any portion of the Trust Fund is invested in a


life insurance policy on the life of the Participant, the


owner of the policy shall be the Trustee.


ARTICLE VI


ADDITIONAL POWERS AND DUTIES OF THE TRUSTEE


6.1 The Trustee shall have the following additional


powers and authority with respect to all property


constituting part of the Trust Fund:


(a) To sell, exchange, convey or transfer any such


property at public or private sale for cash or on credit and


grant options for the purchase or exchange thereof;


provided, however, that in no event may the Trustee invest


in securities (including stock or rights to acquire stock)


or obligations issued by AMP, other than a de minimis amount


held in common investment vehicles in which the Trustee


invests. No person dealing with the Trustee shall be bound


to see to the application of the purchase money or other


property delivered to the Trustee or to inquire into the


validity, expedience or propriety of any such sale or other


disposition.


(b) To participate in any plan of reorganization, con


solidation, merger, combination, liquidation or other


similar plan relating to any such property, and to consent


to or oppose any such plan or any action thereunder, or any


contract, lease, mortgage, purchase, sale or other action by


any corporation or other entity.


(c) To deposit any such property with any protective,


reorganization or similar committee; to delegate


discretionary power to any such committee; and to pay part


of the expenses and compensation of any such committee and


any assessments levied with respect to any property so


deposited.


(d) To exercise any conversion privilege or


subscription right available in connection with any such


property; to oppose or to consent to the reorganization,


consolidation, merger or readjustment of the finances of any


corporation, company or association, or to the sale,


mortgage, pledge or lease of the property of any


corporation, company or association any of the securities of


which may at any time be held in the Fund and to do any act


with reference thereto, including the exercise of options,


the making of agreements or subscriptions and the payment of


expenses, assessments or subscriptions, which may be deemed


necessary or advisable in connection therewith, and to hold


and retain any securities or other property which it may so


acquire.


(e) To commence or defend suits or legal proceedings


and to represent the Trusts and the Trust Fund in all suits


or legal proceedings; to settle, compromise or submit to


arbitration any claims, debts or damages due or owing to or


from the Trust Fund; and to pay all reasonable expenses


arising from any such action from the Fee Trust if not paid


by AMP, or, to the extent that the Fee Trust is


insufficient, on a pro rata basis from the other Trusts.


(f) To exercise, personally or by general or limited


power of attorney, any right, including the right to vote,


appurtenant to any securities or other such property.


(g) If AMP consents, to borrow money from any lender


in such amounts and upon such terms and conditions as shall


be deemed advisable or proper to carry out the purposes of


the Trusts and to pledge any securities or other property


for the repayment of any such loan; provided, however, that


in the event that AMP contributes a letter of credit to the


Trust Fund to be used as a source of funds, no further


authorization shall be needed from AMP for the Trustee to


draw funds against that letter of credit for the purpose of


making payments due under this Trust Agreement to the extent


that the assets of a Trust or the Shortfall Trust are


insufficient to make the payment(s) due.


(h) To engage any legal counsel, including inside


counsel, reasonably satisfactory to AMP, or any other


suitable accounting, clerical or other agents, reasonably


satisfactory to AMP, to consult with such counsel or agents


with respect to the construction of this Trust Agreement,


the duties of the Trustee hereunder, the transactions contem


plated by this Trust Agreement or any act which the Trustee


proposes to take or omit, to rely upon the advice of such


counsel or agents, and to pay the reasonable fees, expenses


and compensation from the Fee Trust if not paid by AMP, or,


to the extent that the Fee Trust is insufficient, on a pro


rata basis from the other Trusts.


(i) To register any securities held by it in its own


name or in the name of any custodian of such property or of


its nominee, including the nominee of any system for the


central handling of securities, with or without the addition


of words indicating that such securities are held in a


fiduciary capacity, to deposit or arrange for the deposit of


any such securities with such a system and to hold any secu


rities in bearer form; provided, that the books and records


of the Trustee shall show that all such investments are part


of the Trust Fund.


(j) To make, execute and deliver, as the Trustee, any


and all deeds, leases, notes, bonds, guarantees, mortgages,


conveyances, contracts, waivers, releases or other


instruments in writing necessary or proper for the


accomplishment of any of the foregoing powers.


(k) To do all other acts although not specifically


mentioned herein, as the Trustee may deem necessary to carry


out any of the foregoing powers and the purposes of this


Trust Agreement.


ARTICLE VII


PAYMENTS BY THE TRUSTEE


7.1 If a Participant or beneficiary does not receive a


payment(s) to which he believes he has become entitled under


the Plan, he shall notify the Trustee in writing of such


entitlement.


7.2 The Trustee shall make payments to a Participant


or beneficiary in accordance with written instructions given


at the time of payment or in advance of such payment,


consistent with the terms of the Plan, to the Trustee from


the CEO as to the manner and timing of payments hereunder


and the Trustee shall have no responsibility to determine


the amount of such payments. The instructions in effect on


the date of this Trust Agreement shall be attached hereto as


Exhibit D, as the same may be changed from time to time


prior to a Change of Control. No Company may change such


instructions on or after notification or knowledge of a


Change of Control of AMP with respect to benefits accrued to


date, as defined in Article XVI hereof.


7.3 If the CEO has not provided instructions to the


Trustee, as set forth in Section 7.1 hereof, by the time a


payment is due, or payments are due to commence, under the


Plan, the Trustee shall determine, within 30 days of its


receipt of a notice from the Participant (or beneficiary),


whether the terms of the Plan dictate that the Participant


or beneficiary is entitled to a payment. If the Trustee


determines that a payment is required, the Trustee shall


make the payment (or commence payments) to the Participant


or beneficiary within such 30 day period. The Trustee shall


provide AMP with written confirmation of the fact that it


determined a payment(s) is due and amount of ...