THIRD AMENDMENT
                                     to the
                                AMP INCORPORATED
                            PENSION RESTORATION PLAN

     The AMP Incorporated Pension Restoration Plan (the "Plan"), as amended and
restated in its entirety effective January 1, 1995, and thereafter amended on
two occasions is hereby further amended effective as of April 23, 1997 to add
new Sections 9.2 and 9.3, as follows:

          9.2. Notwithstanding the foregoing, upon a Change of Control of AMP
Incorporated, all rights of all then active Employees who have accrued a benefit
under the Plan shall be fully vested.

          9.3. For the purposes of this Section 9, a "Change of Control" of AMP
Incorporated shall mean:

          (a) any Person (as defined below) is or becomes the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), directly or indirectly, of securities of AMP Incorporated
("AMP"), not including in the securities beneficially owned by such Person any
securities acquired directly from AMP or its affiliates, representing 30% or
more of either the then outstanding shares of common stock of the Corporation or
the combined voting power of the Corporation's then outstanding securities; or

          (b) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the date
hereof, constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of AMP) whose appointment or election by the Board
or nomination for election by AMP's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either were
directors on the date hereof or whose appointment, election or nomination for
election was previously so approved; or

          (c) there is consummated a merger or consolidation of AMP with any
other corporation or the issuance of voting securities of AMP in connection with
a merger or consolidation of AMP (or any direct or indirect subsidiary of AMP)
pursuant to applicable stock exchange requirements, other than (A) a merger or
consolidation that would result in the voting securities of AMP outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof) at least 50% (effective on and after
July 23, 1997, at least 66-2/3%) of the combined voting power of the voting
securities of AMP, or such surviving entity or any parent thereof, outstanding
immediately after such merger or consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of AMP (or similar transaction) in
which no Person is or becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of AMP (not
including in the securities beneficially owned by such Person any securities
acquired directly from AMP or its affiliates)representing 30% or more of either
the then outstanding shares of common stock of AMP or the combined voting power
of AMP's then outstanding securities; or

          (d) the stockholders of AMP approve a plan of complete liquidation or
dissolution of AMP or there is consummated an agreement for the sale or
disposition by AMP of all or substantially all of AMP's assets, other than a
sale or disposition by AMP of all or substantially all of AMP's assets to an
entity, at least 70% of the combined voting power of the voting securities of
which are owned by Persons in substantially the same proportions as their
ownership of AMP immediately prior to such sale.

          (e) For the purpose of this Section, "Person" shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not include:

               (i) AMP or any of its subsidiaries;

               (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of AMP or any of its subsidiaries;

               (iii) an underwriter temporarily holding securities pursuant to
an offering of such securities; or

               (iv) a corporation owned, directly or indirectly, by the
stockholders of AMP in substantially the same proportions as their ownership of
stock of AMP.

     Executed this 6th day of August, 1997.

                                AMP Incorporated

                                By:  /s/   J. E. Marley
                                     ----------------------------

                                Title:  Chairman of the Board
                                     ----------------------------