CSS INDUSTRIES INC, DEF 14A, 1996-03-27

CSS INDUSTRIES INC
DEF 14A, 1996-03-27
GREETING CARDS

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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

[Amendment No. ]

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

CSS INDUSTRIES, INC
-----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

STEPHEN V. DUBIN, Secretary
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:

----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*

----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:

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*Set forth the amount on which the filing fee is calculated and state how it
was determined.

/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:_______________________________________________

2) Form Schedule or Registration Statement No.:__________________________

3) Filing Party:_________________________________________________________

4) Date Filed:___________________________________________________________

<PAGE>

CSS INDUSTRIES, INC.

1845 Walnut Street
Philadelphia, Pennsylvania 19103

------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

------

The 1996 Annual Meeting of Stockholders of CSS Industries, Inc. (the
"Company") will be held at The Locust Club of Philadelphia, 1614 Locust Street,
Philadelphia, PA 19103 on Tuesday, May 7, 1996, at 11 o'clock a.m. local time,
for the following purposes:

1. To elect a board of eleven directors;

2. To consider approval of the 1995 Stock Option Plan for Non-Employee
Directors;

3. To consider approval of an amendment to the 1994 Equity Compensation
Plan; and

4. To transact such other business as may properly come before the
meeting and at any adjournments thereof.

The board of directors has fixed March 11, 1996 as the record date for the
meeting. Accordingly, only stockholders of record at the close of business on
such date will be entitled to notice of the meeting and to vote at the
meeting and any adjournments thereof. A list of the stockholders of the
Company entitled to vote at the meeting will be available for inspection at
the Company's offices during normal business hours by any stockholder for the
ten days prior to the meeting.

By order of the board of directors,

STEPHEN V. DUBIN
Secretary

Philadelphia, Pennsylvania
March 28, 1996

Regardless of whether or not you plan to attend the meeting, you are urged to
complete, sign and return the enclosed proxy in the envelope provided.
<PAGE>

CSS INDUSTRIES, INC.
1845 Walnut Street
Philadelphia, Pennsylvania 19103

------

PROXY STATEMENT
1996 Annual Meeting of Stockholders

------

This proxy statement is furnished in connection with the solicitation of
proxies by the board of directors of CSS Industries, Inc. ("CSS" or the
"Company") for use at the 1996 annual meeting of stockholders of the Company
(the "Meeting") to be held at The Locust Club of Philadelphia, 1614 Locust
Street, Philadelphia, Pennsylvania 19103 on Tuesday, May 7, 1996, at 11:00
a.m. local time, and at any adjournments thereof. The approximate date on
which this proxy statement and the accompanying form of proxy are first being
sent to stockholders is March 28, 1996.

The cost of solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by telephone by
officers, directors or employees of the Company or its subsidiaries who will
not be specially compensated for such services. Arrangements will also be
made with banks, brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the beneficial
owners of shares held of record by such persons, and the Company will
reimburse such persons for reasonable out-of-pocket expenses incurred in that
regard.

Arthur Andersen LLP served as the Company's independent public accountants
for 1995 and has been selected to serve as the Company's independent public
accountants in 1996. The Company has requested that a representative of
Arthur Andersen LLP attend the Meeting. Such representative will have an
opportunity to make a statement, if he or she desires, and will be available
to respond to appropriate stockholders' questions.

VOTING AT THE MEETING

Stockholders of record at the close of business on March 11, 1996 are
entitled to vote at the Meeting. As of that date, there were outstanding
10,714,016 shares of common stock, par value $.10 per share ("Common Stock"),
of the Company. Each share of Common Stock is entitled to one vote on all
matters.

The holders of a majority of the shares entitled to vote, present in
person or represented by proxy, constitute a quorum. Directors are to be
elected by a plurality of the votes cast at the Meeting. The affirmative vote
of the holders of a majority of the shares present in person or represented
by proxy entitled to vote at the Meeting is required to approve the adoption
of the 1995 Stock Option Plan for Non-Employee Directors (the "1995
Directors' Plan") and to approve the adoption of an amendment to the 1994
Equity Compensation Plan (the "1994 Plan") or to take action with respect to
any other matter that may properly be brought before the Meeting. Shares
cannot be voted at the Meeting unless the holder of record is present in
person or by proxy. The enclosed proxy is a means by which a stockholder may
authorize the voting of his or her shares at the Meeting. The shares of
Common Stock represented by each properly executed proxy card will be voted
at the Meeting in accordance with each stockholder's direction. Stockholders
are urged to specify their choices by marking the appropriate boxes on the
enclosed proxy card; if no choice has been specified, the shares will be
voted as recommended by the board of directors. If any other matters are
properly presented to the Meeting for action, the proxy holders will vote the
proxies (which confer discretionary authority to vote on such matters) in
accordance with their best judgment.

With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect, other than for purposes of determining the presence of a
quorum. Abstentions may be specified on the proposals to approve the adoption
of the 1995 Directors' Plan and to approve the adoption of an amendment to
the 1994 Plan (but not for the election of directors). Abstentions will be
considered present and entitled to vote at the Meeting, but will not be
counted as votes cast in the affirmative. Abstentions on the proposals to
approve the adoption of the 1995 Directors' Plan and to approve the adoption
of an amendment to the 1994 Plan will have the effect of a negative vote
because these proposals require the affirmative vote of a majority of the
<PAGE>

shares present in person or represented by proxy at the Meeting and entitled to
vote. Brokers that are member firms of the New York Stock Exchange ("NYSE") and
who hold shares in street name for customers, but have not received instructions
from a beneficial owner, have the authority under the rules of the NYSE to vote
those shares with respect to the election of directors but not with respect to
the proposals to approve the adoption of the 1995 Directors' Plan and to approve
the adoption of an amendment to the 1994 Plan. A failure by brokers to vote
those shares will have no effect on the outcome of the proposals to approve the
adoption of the 1995 Directors' Plan and to approve the adoption of an amendment
to the 1994 Plan because such shares will not be considered shares present and
entitled to vote with respect to such matters.

Proxies may be revoked at any time prior to the time that the vote is
taken at the Meeting. Proxies may be revoked by filing with the Secretary of
the Company a written revocation or another form of proxy bearing a date
later than the date of the proxy previously furnished. A proxy may also be
revoked by attending the Meeting and voting in person. Attendance at the
Meeting will not in and of itself constitute revocation of a proxy.

Your proxy vote is important. Accordingly, you are asked to complete, sign
and return the accompanying proxy whether or not you plan to attend the
Meeting.

CSS SECURITY OWNERSHIP

The following table sets forth certain information (as of March 11, 1996,
except as otherwise noted), with respect to shares of Common Stock
beneficially owned by owners of more than five percent of the outstanding
Common Stock, by all current directors, by the executive officers of the
Company named in the Summary Compensation Table included elsewhere in this
proxy statement and by all current directors and executive officers of the
Company as a group.

<TABLE>
<CAPTION>
Number
of Shares
Beneficially Percent of
Beneficial Owner Owned(1) Class(2)
---------------- ----------------- ------------
<S> <C> <C>
Fenimore Asset Management, Inc. ............................... 656,775(3) 6.1%
Nicholas Company, Inc. ........................................ 601,700(4) 5.7%
T. Rowe Price Associates, Inc. ................................ 561,000(5) 5.1%
James G. Baxter ............................................... 213,271(6) 2.0%
Willard M. Bright ............................................. 10,400(7) *
James H. Bromley .............................................. 543,898(8) 5.1%
John R. Bunting, Jr. .......................................... 11,200(9) *
Stephen V. Dubin .............................................. 323,823(10) 3.0%
Jack Farber ................................................... 3,164,480(11) 29.5%
Richard G. Gilmore ............................................ 12,000(12) *
Leonard E. Grossman ........................................... 225,282(13) 2.1%
James E. Ksansnak ............................................. 11,200(12) *
Michael L. Sanyour ............................................ 10,077(12) *
William C. Warren ............................................. 44,000(12) *
Richard D. Barton ............................................. 11,803(14) *
John A. Pinti ................................................. 15,000(15) *
All current directors and executive officers of the Company as
a group 15 persons, including the individuals named above) ... 4,635,346(11)(16) 43.3%
</TABLE>

- ------
(1) In accordance with Securities and Exchange Commission regulations, the
table lists all shares as to which such persons have or share the power
to vote or to direct disposition. The number of shares indicated
includes shares issuable upon the exercise of outstanding stock options
held by each individual or group to the extent exercisable at March 11,
1996 or within 60 days thereafter. Unless otherwise indicated, each
person has the sole power to vote and to direct disposition of the
shares listed as beneficially owned by such person.

(2) Percentage calculated with reference to an aggregate of 10,714,016
shares of Common Stock outstanding at March 11, 1996. Percentages of
less than 1% have not been indicated.

2
<PAGE>

(3) This information is as of December 31, 1995 and is based upon Schedule
13G, dated January 31, 1996, filed with the Securities and Exchange
Commission by Fenimore Asset Management, Inc., which is located at 118
N. Grand Street, Box 310, Cobleskill, NY 12043.

(4) This information is as of December 31, 1995 and is based upon Schedule
13G, dated January 26, 1996, filed with the Securities and Exchange
Commission by Nicholas Company, Inc., Nicholas Fund, Inc. and Albert O.
Nicholas. These filers are located at 700 North Water Street, Milwaukee,
WI 53202.

(5) This information is as of December 31, 1995 and is based upon Amendment
3 to Schedule 13G, dated February 14, 1996, filed with the Securities
and Exchange Commission by T. Rowe Price Associates, Inc. ("Price
Associates") which is located at 100 E. Pratt Street, Baltimore, MD
21202. These securities are owned by various individual and
institutional investors which Price Associates serves as investment
adviser with power to direct investments and/or sole power to vote the
securities. For purposes of the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), Price Associates
is deemed to be a beneficial owner of such securities; however, Price
Associates expressly disclaims that it is, in fact, the beneficial owner
of such securities.

(6) The shares shown in the table include options to purchase 67,500 shares
of Common Stock granted under the CSS 1985 Incentive Stock Option Plan,
as amended (the "1985 Plan") and options to purchase 8,750 shares of
Common Stock granted under the 1994 Plan.

(7) The shares shown in the table include options to purchase 8,000 shares
of Common Stock granted under the CSS 1991 Stock Option Plan for
Non-Employee Directors (the "1991 Plan").

(8) The shares shown in the table include options to purchase 23,500 shares
of Common Stock granted under the 1985 Plan and options to purchase
3,750 shares of Common Stock under the 1994 Plan. At March 11, 1996, Mr.
Bromley also owned 35,000 shares of Class B common stock of Rapidforms,
Inc. ("Rapidforms"), a subsidiary of the Company, which shares represent
50% of such class of stock, 4% of the overall capital stock and 1% of
the aggregate voting rights in the election of directors of such
subsidiary.

(9) The shares shown in the table include options to purchase 9,000 shares
of Common Stock granted under the 1991 Plan. Mr. Bunting shares the
power to vote and to direct disposition of 400 shares included in this
table.

(10) The shares shown in the table include options to purchase 67,500 shares
of Common Stock granted under the 1985 Plan and options to purchase
6,250 shares of Common Stock granted under the 1994 Plan.

(11) The shares shown in the table do not include 74,028 shares held by Mr.
Farber's wife, as to which Mr. Farber disclaims beneficial ownership. In
addition to the shares of the Company's capital stock directly owned by
Mr. Farber and his wife, the Farber Foundation, Inc., a charitable
foundation in which Mr. Farber and certain officers and directors of the
Company are officers and directors (the "Farber Foundation") and the
Farber Family Foundation, Inc., a charitable foundation in which Mr.
Farber is an officer and director (the "Farber Family Foundation") own
142,784 and 234,000 shares of Common Stock, respectively. The beneficial
ownership of shares by Mr. Farber shown in the table does not include
shares of Common Stock held by the Farber Foundation or Farber Family
Foundation, as to which Mr. Farber and the directors and officers of the
Company who are members, directors or officers of the foundations
disclaim beneficial ownership.

(12) The shares shown in the table include options to purchase 10,000 shares
of Common Stock granted under the 1991 Plan.

(13) The table does not include 6,000 shares of Common Stock held by Mr.
Grossman's wife, as to which Mr. Grossman disclaims beneficial
ownership. The shares shown in the table include options to purchase
10,000 shares of Common Stock granted under the 1991 Plan.

(14) The shares shown in the table include options to purchase 11,250 shares
of Common Stock granted under the 1994 Plan.

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<PAGE>

(15) The shares shown in the table include options to purchase 10,000 shares
of Common Stock granted under the 1985 Plan and options to purchase
5,000 shares of Common Stock granted under the 1994 Plan.

(16) The table reflects beneficial ownership of a total of 293,500 shares of
Common Stock pursuant to stock options granted under the 1985 Plan, the
1994 Plan and the 1991 Plan.

ELECTION OF DIRECTORS

The Company's board of directors currently has eleven members. Directors
are to be elected by a plurality of the votes cast to hold office for a term
of one year and until the election and qualification of their respective
successors. The board of directors has nominated for election as directors
the persons whose names are listed below, all of whom are presently directors
of the Company with terms expiring in 1996. All nominees have consented to be
named and to serve if elected. Except as indicated below, the board of
directors believes all nominees will be able to serve as directors; if this
should not be the case, however, the proxies may be voted for one or more
substitute nominees to be designated by the board of directors or the board
of directors may decide to reduce the number of directors.

The board of directors recommends a vote FOR the election of all nominees.

The following paragraphs set forth certain information regarding each of
the eleven nominees for directors, the positions and offices with the Company
or its subsidiaries held by each, the year he was first elected a director of
the Company, a brief account of his principal occupations during not less
than the past five years, certain directorships held by him, and his age.

<TABLE>
<S> <C>
James G. Baxter ........ Mr. Baxter has been President -- Consumer Products Group of the Company since
November 1995 and Chief Financial Officer of the Company since 1986. From 1986
to November 1995 he also served as Vice President -- Finance of the Company.
Mr. Baxter has been a director of the Company since November 1995. Age: 48.

Willard M. Bright ...... Mr. Bright has been Chairman of ZOLL Medical Corporation, a health care
product company, since 1983. He is also a director of Macrochem Corporation.
He has been a director of the Company since 1976. Age: 82.

James H. Bromley ....... Mr. Bromley has been President of Rapidforms, a subsidiary of the Company,
since 1979 and its Chief Executive Officer since 1987. He has been a director
of the Company since 1989. Age: 57.

John R. Bunting, Jr. ... Mr. Bunting has been Chairman of Bunting-Rubinsohn Associates, Inc./John R.
Bunting, Inc., financial management consultants, since 1980. He has also been
Chairman of B.R. Parking Corp. since 1982. He has been a director of the
Company since 1966. Age: 70.

Stephen V. Dubin ....... Mr. Dubin has been Vice President, Secretary and General Counsel of the
Company since 1978. He has been a director of the Company since November 1995.
Age: 57.

Jack Farber ............ Mr. Farber has been Chairman, President and Chief Executive Officer of the
Company since 1979. He is also a director of Hunt Manufacturing Company and
Pennsylvania Real Estate Investment Trust. Mr. Farber has been a director of
the Company since 1978. Age: 62.
</TABLE>

4
<PAGE>

<TABLE>
<S> <C>
Richard G. Gilmore ..... Mr. Gilmore has been an independent consultant since 1991. He was Senior Vice
President and Chief Financial Officer of Philadelphia Electric Company from
1986 to 1991. He is also a director of Philadelphia Electric Company and
seventeen mutual funds sponsored by Legg Mason Wood Walker, Inc. and
subsidiaries. Mr. Gilmore has been a director of the Company since 1984. Age:
68.

Leonard E. Grossman .... Mr. Grossman has been a private investor since 1989. He was Chairman and Chief
Executive Officer of TAB Electric Supply Co., Inc., an electrical equipment
and supplies distributer from 1984 to 1989. Mr. Grossman has been a director
of the Company since 1982. Age: 61.

James E. Ksansnak ...... Mr. Ksansnak has been Chief Financial Officer of ARAMARK Corporation, a
service management company, since 1987. He has been an Executive Vice
President of ARAMARK Corporation since 1991 and was a Senior Vice President of
ARAMARK Corporation from 1986 to 1991. He is also a director of Advanta Corp.
and Roy F. Weston, Inc. Mr. Ksansnak has been a director of the Company since
1988. Age: 56.

Michael L. Sanyour ..... Mr. Sanyour has been a Principal of CMS Companies, a financial services and
insurance concern, since 1987. He has been a director of the Company since
1980. Age: 65.

William C. Warren ...... Mr. Warren is Dean Emeritus and Kent Professor of Law Emeritus of Columbia
University Law School. He is Counsel to Roberts & Holland, a law firm. He is
also a director of Barnwell Industries, Inc. and Sterling Bancorp. Mr. Warren
has been a director of the Company since 1973. Age: 87.
</TABLE>

GENERAL INFORMATION REGARDING THE CSS BOARD OF DIRECTORS AND ITS COMMITTEES.

The board of directors of the Company held six meetings in 1995. In
November 1995, the board of directors of the Company voted to increase the
size of the board from nine to eleven directors and elected Mr. Baxter and
Mr. Dubin to fill the two newly created vacancies. The by-laws of the Company
provide that the board of directors, by resolution adopted by a majority of
the entire board, may designate an Executive Committee and other committees,
each of which shall consist of three or more directors. The board of
directors annually elects from its members the Executive, Audit and Human
Resources Committees. The Company has no nominating committee. Each director
attended at least 75% of the total number of meetings of the board of
directors and committees of the board of directors on which he served.

The Executive Committee is composed of Messrs. Farber, Bunting and
Sanyour. The Executive Committee may exercise all of the authority of the
board of directors in the business and affairs of the Company with certain
exceptions. The Executive Committee is intended to serve in the event that
action must be taken by the board of directors at a time when convening a
meeting of the entire board is not feasible. The Executive Committee held one
meeting and acted once by unanimous consent in 1995.

The Audit Committee of the board of directors, which consists of Messrs.
Bunting, Gilmore, Grossman and Ksansnak, held two meetings during 1995. It
meets with the Company's independent accountants to review the scope of audit
procedures, the Company's accounting procedures and controls, and any
non-audit engagement.

The Human Resources Committee (the "H.R. Committee"), which performs
functions that include those normally performed by a compensation committee,
and which consists of Messrs. Bright, Ksansnak and Warren, held three
meetings and acted six times by unanimous consent in 1995. No member of the
H.R. Committee is a former or current officer or employee of the Company or
any of its subsidiaries. The H.R. Committee is responsible for developing and

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<PAGE>

administering the Company's executive compensation policies, plans and programs.
In addition, the H.R. Committee (1) determines on an annual basis the
compensation to be paid to the Chairman, President and Chief Executive Officer
of the Company, (2) determines the appropriate level of compensation for the
Company's corporate level executive officers and certain other senior corporate
level management personnel following receipt of the recommendations of the
Chairman, President and Chief Executive Officer of the Company, (3) reviews
decisions by the executive committee or executive compensation committee of the
boards of directors of the Company's principal operating subsidiaries as to the
compensation of the chief executive officers of such subsidiaries, and (4) makes
grants and has general administrative authority under the 1994 Plan.

Each director of the Company who is not a full time employee of the
Company or its subsidiaries receives a fee of $12,000 per annum, plus $750
for attendance at each meeting of the board or its committees or for each
consultation with management, and, subject to stockholder approval, will be
entitled to participate in the 1995 Directors' Plan. The 1995 Directors' Plan
succeeds the 1991 Plan and provides for the automatic annual grant of
nonqualified stock options to purchase 4,000 shares of Common Stock to each
of the non- employee directors of the Company as of the last business day of
November in each year, covering 1996 through 2000. See "Approval of the 1995
Stock Option Plan for Non-Employee Directors" for a description of the 1995
Directors' Plan. In accordance with the terms of the 1991 Plan, each of the
non-employee directors of CSS received an automatic grant of additional
options to purchase 4,000 shares of Common Stock on November 30, 1995 at an
exercise price of $21.00 per share.

APPROVAL OF THE 1995 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

THE PROPOSAL

At the Meeting, there will be presented to the stockholders a proposal to
approve the adoption of the CSS Industries, Inc. 1995 Stock Option Plan for
Non-Employee Directors (the "1995 Directors' Plan"). The 1995 Directors' Plan
was adopted by the board of directors on November 14, 1995, as modified on
January 23, 1996, subject to stockholder approval, and will terminate on
December 31, 2000. The board of directors adopted the 1995 Directors' Plan as
a replacement for the Company's 1991 Stock Option Plan for Non-Employee
Directors which expired on December 31, 1995. The purpose of the 1995
Directors' Plan is to increase the ownership interest in the Company of the
non-employee directors, individuals whose services are considered essential
to the Company's continued progress, and to provide an additional incentive
for these individuals to continue to serve as directors.

VOTE REQUIRED FOR APPROVAL

Approval of the proposal to adopt the 1995 Directors' Plan requires the
affirmative vote of the holders of a majority of shares present in person or
represented by proxy at the Meeting. Abstentions may be specified on the
proposal and will be considered present at the Meeting, but will not be
counted as affirmative votes. Abstentions, therefore, will have the practical
effect of voting against the proposal because the affirmative vote of a
majority of the shares present at the Meeting with respect to this matter is
required to approve the proposal. Broker non-votes are considered not present
at the Meeting with respect to this matter and, therefore, will not be voted
or have any effect on the proposal.

The board of directors unanimously recommends a vote FOR the proposal.

DESCRIPTION OF THE 1995 DIRECTORS' PLAN

General. The 1995 Directors' Plan authorizes up to 300,000 shares of
Common Stock to be available for option grants. If and to the extent options
granted under the 1995 Directors' Plan terminate, expire or are canceled
without being exercised, the shares subject to such option or award again
will be available for purposes of the 1995 Directors' Plan.

Administration of the 1995 Directors' Plan. The 1995 Directors' Plan is to
be administered by a committee (the "Committee") of the board of directors
consisting of all of the directors who are not eligible to participate in the
1995 Directors' Plan. The Committee is authorized to interpret the 1995

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<PAGE>

Directors' Plan, and to establish, amend and rescind any rules and regulations
relating to the 1995 Directors' Plan. The Committee does not have discretion,
however, regarding the eligibility or selection of directors to receive options,
the number of shares subject to such options, or the purchase price or the
frequency of option grants. In addition, the Committee may not take any action
to make any determination that would materially increase benefits accruing to
participants under the 1995 Directors' Plan.

Grants of Stock Options. Grants under the 1995 Directors' Plan consist of
so called "non-qualified stock options" that are not intended to qualify
under section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").

Eligibility for Participation. Directors of the Company who are not
employees of the Company or any subsidiary or affiliate of the Company
("Eligible Directors") are eligible to participate in the 1995 Directors'
Plan. There are currently seven directors eligible to participate under the
1995 Directors' Plan. No options have been granted under the 1995 Directors'
Plan. On November 30, 1996, subject to stockholder approval of the 1995
Directors' Plan, each Eligible Director will receive an option to purchase
4,000 shares on the terms described herein.

Stock Options. The purchase price upon exercise of an option granted under
the 1995 Directors' Plan shall be equal to the fair market value of the stock
subject to the option on the date the option is granted. Fair market value is
determined by the closing price of the Common Stock on the date of the option
grant or, if not traded on such date, on the last day preceding the date of
the option grant that the Common Stock was traded or, if the Common Stock is
not listed on a national securities exchange or NASDAQ, the average of the
closing bid and asked prices for the Common Stock on such date. The purchase
price of the stock issued pursuant to the exercise of an option must be paid
in full at the time of exercise. The purchase price may be paid (i) in cash
or check, (ii) by delivering shares of Common Stock already owned by the
holder and having a fair market value equal to the option price, or (iii) a
combination of (i) and (ii).

Options to purchase 4,000 shares of the Common Stock are granted
automatically on the last day of November that the Common Stock is traded, in
each year from 1996 through 2000. Such options are granted to each Eligible
Director. Each option expires five years after the date the option is
granted. Options may not be exercised at all during the first year after
their grant; thereafter, options may be exercised in installments to the
extent of 25% of the number of shares covered by the option during the second
year and to the extent of an additional 25% of the number of shares covered
by the option during each of the next three subsequent years. The
installments are cumulative and exercisable during the remainder of the term
of the option.

Options granted under the 1995 Directors' Plan may be exercised during the
lifetime of an optionee only by the optionee. Options which became
exercisable prior to the termination of an optionee's service on the board of
directors, other than by reason of death or commencement of employment with
the Company, may be exercised up to three months after such termination (but
not later than the termination date of the option), but only to the extent
that they were exercisable upon termination. In the event of the death of an
optionee, all then outstanding options will immediately vest and such
optionee's legal representative shall have the right to exercise the
optionee's options at any time within a period of six months following the
date of death.

In the event of any reclassification, recapitalization, stock split or
other change in the corporate structure of the Company, which in the
Committee's opinion materially affects the value of the Common Stock,
adjustments may be made, if necessary, in the number and kind of shares
issuable under the 1995 Directors' Plan or covered by the outstanding options
and in the option price of the then outstanding options.

An optionee may exercise an option upon payment of the option price. The
optionee may pay the option price in cash, or by delivering shares of Common
Stock already owned by the optionee and having a fair market value on the
date of exercise equal to the option price or with a combination of cash and
shares of Common Stock. The Committee reserves the right not to permit
payment by delivering shares of Common Stock if it determines that it would
not be in the best interest of the Company.

Amendment and Termination of the 1995 Directors' Plan. The board of
directors of the Company may amend or terminate the 1995 Directors' Plan at

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<PAGE>

any time; provided, however, that no such amendment may adversely affect the
rights of directors who hold outstanding options and provided further that any
stockholder approval necessary or desirable to comply with Rule 16b-3 under the
Exchange Act will be obtained. In addition, amendments to (i) the requirements
for eligibility to participate in the 1995 Directors' Plan, and (ii) the terms
of the grants under the 1995 Directors' Plan may not be made more than once
every six months. The 1995 Directors' Plan will terminate on December 31, 2000
unless terminated earlier by the board of directors of the Company (although
options granted under the 1995 Directors' Plan prior to its termination will
remain outstanding until exercised or the end of the term of such options).

Certain Corporate Changes. In the event of a disposition of all or
substantially all of the assets of the Company, the dissolution of the
Company, a business combination in which the Company is not the surviving
entity or the making of a tender or exchange offer to purchase all or
substantially all of the Common Stock, all outstanding options under the 1995
Directors' Plan shall become exercisable in full immediately prior to such
event and such options shall be canceled by the Company, which shall then
remit to each holder a cash payment equal to the difference between the then
fair market value of all shares of Common Stock subject to the unexercised
portion of such options less the aggregate exercise price of such unexercised
options.

Federal Income Tax Consequences. Set forth below is a general description
of the federal income tax consequences relating to options granted under the
1995 Directors' Plan. Optionees are urged to consult with their personal tax
advisors concerning the application of the principles discussed below to
their own situations and the application of state and local tax laws.

Options granted under the 1995 Directors' Plan are considered
non-qualified stock options for Federal income tax purposes. Generally, the
granting of a nonqualified stock option is not a taxable event. Upon the
exercise of a non-qualified option, the optionee will realize ordinary income
in an amount equal to the excess of the fair market value of the shares
purchased over their option price, and the Company will be entitled to a
deduction in an equal amount. Upon the sale of shares of Common Stock
acquired by exercise of a non-qualified stock option, an optionee will have
a capital gain or loss (long-term or short-term depending upon the length of
time the shares were held) in an amount equal to the difference between the
amount realized upon the sale and the optionee's adjusted tax basis in the
shares of Common Stock (the exercise price plus the amount of ordinary income
recognized by the optionee at the time of exercise of the option).

Accounting Consequences. There is no charge to the income of the Company
in connection with the grant or exercise of an option under the 1995
Directors' Plan. Earnings per share may be affected by the 1995 Directors'
Plan by the effect on the calculation, as prescribed under generally accepted
accounting principles, of the number of outstanding shares of Common Stock.
The earnings per share calculation reflects the potential dilutive effect,
using the treasury stock method, assuming the exercise of outstanding stock
options. At the time shares are actually issued as a result of the exercise
of stock options, additional dilution of earnings per share could result.

As noted above, pursuant to the terms of the 1995 Directors' Plan, subject
to stockholder approval of the 1995 Directors' Plan, each director of the
Company who is not employee of the Company or any subsidiary or affiliate of
the Company will receive an automatic grant of an option to purchase 4,000
shares of the Common Stock on the last day of November that the Common Stock
is traded, in each year from 1996 through 2000. The following table provides
information relating to Grants that will be made to Eligible Directors on
November 30, 1996 (it is assumed for these purposes that the seven directors
currently eligible to participate under the 1995 Directors' Plan will be
elected at the Meeting and will continue to be eligible to participate under
the 1995 Directors' Plan on November 30, 1996).

NEW PLAN BENEFITS

CSS Industries, Inc. 1995 Stock Option Plan for Non-Employee Directors

Number of Shares
Name and Position Subject to Stock Options
----------------- ------------------------
Non-Executive Director Group 28,000

8
<PAGE>

APPROVAL OF AMENDMENT TO THE 1994 EQUITY COMPENSATION PLAN

PROPOSAL

At the Meeting, a proposal will be presented to the stockholders to
approve the adoption of an amendment to the Company's 1994 Equity
Compensation Plan (the "1994 Plan"). On January 23, 1996 the Company's board
of directors adopted, subject to approval by the Company's stockholders, an
amendment to the 1994 Plan.

Under the proposal, the primary changes to the 1994 Plan include: (i) the
establishment of a maximum amount of shares of Common Stock that may be
granted to any individual during the term of the 1994 Plan in an amount equal
to 50% of the number of shares of Common Stock available for issuance under
the 1994 Plan, (ii) the establishment of a requirement that the Committee
appointed to administer the 1994 Plan be comprised solely of "outside
directors" as defined under section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), and (iii) the authorization of the Committee,
in its sole discretion, to accept a promissory note, payable by the grantee
to the Company, as partial or full satisfaction of the option price for
options granted after January 23, 1996 under the 1994 Plan.

Section 162(m) of the Code, enacted in August 1993, disallows the Company
a federal income tax deduction for total remuneration in excess of $1,000,000
paid to the chief executive officer or to any of the other four most highly
compensated officers in any one year. An exception does exist, however, for
"performance-based compensation," including amounts received upon the
exercise of stock options pursuant to a plan approved by stockholders that
meets certain requirements. The Company has been advised that grants made
under the 1994 Plan prior to the proposed amendment would not be qualified
"performance-based compensation." The board of directors took action
specified in clauses (i) and (ii) to satisfy the requirements of Code section
162(m); therefore, grants of stock options or stock appreciation rights
thereunder will qualify as "performance-based compensation."

The board of directors took action specified in clause (iii) above to
provide an additional method by which grantees may satisfy payment of the
option price, and to give the Committee the flexibility to accept a
promissory note when the grantee does not have sufficient cash or stock
available to satisfy the exercise price.

VOTE REQUIRED FOR APPROVAL

Approval of the proposal to amend the 1994 Plan requires the affirmative
vote of the holders of a majority of shares present in person or represented
by proxy at the Meeting. Abstentions may be specified on the proposal and
will be considered present at the Meeting, but will not be counted as
affirmative votes. Abstentions, therefore, will have the practical effect of
voting against the proposal because the affirmative vote of a majority of the
shares present at the Meeting with respect to this matter is required to
approve the proposal. Broker non-votes are considered not present at the
Meeting with respect to this matter and, therefore, will not be voted or have
any effect on the proposal.

The board of directors unanimously recommends a vote FOR the proposal.

DESCRIPTION OF THE 1994 PLAN

General. The 1994 Plan provides for the grant of stock options, stock
appreciation rights ("SARs"), restricted stock grants or any combination
thereof to officers and other employees of the Company and its subsidiaries
at the discretion of the H.R. Committee. Employees will be designated from
time to time by the H.R. Committee for grants under the 1994 Plan based upon
their position and value to the Company and its subsidiaries. The 1994 Plan
was created to promote the interests of the Company by providing incentives
to officers and employees of the Company and its subsidiaries, to encourage
them to acquire a proprietary interest, or to increase their proprietary
interest, in the Company, and thus, more closely link the interests of such
officers and employees to the interests of the Company's stockholders.

Subject to adjustment in certain circumstances as discussed below, the
1994 Plan authorizes up to 1,000,000 shares of Common Stock for issuance
pursuant to the terms of the 1994 Plan. If and to the extent options granted
under the 1994 Plan terminate, expire or are canceled without being
exercised, or if any shares of restricted stock are forfeited, the shares
subject to such option or award again will be available for purposes of the
1994 Plan.

9
<PAGE>

Administration of the 1994 Plan. The 1994 Plan, as proposed to be amended,
is administered and interpreted by the H.R. Committee, which consists of not
less than three persons appointed by the board of directors from among its
members, all of whom are "disinterested persons" as defined by Rule 16b-3
under the Exchange Act and all of whom are "outside directors" as defined
under section 162(m) of the Code and related Treasury regulations. After
receiving recommendations from management of the Company, the H.R. Committee
has the sole authority to determine (i) the employees to whom stock options
and/or SARs and/or restricted stock grants (collectively, "Grants") are to be
granted under the 1994 Plan, (ii) the type, size and other terms and
conditions of each Grant, (iii) the time when the Grants are to be made and
the duration of the exercise or restriction period, (iv) any restriction on
resale applicable to the shares to be issued or transferred pursuant to the
Grant and (v) any other matters arising under the 1994 Plan.

Grants. All Grants are subject to the terms and conditions set forth in
the 1994 Plan and to those other terms and conditions consistent with the
1994 Plan as the H.R. Committee deems appropriate and as are specified in
writing (the "Grant Instrument") by the H.R. Committee to the designated
individual. Grants under any section of the 1994 Plan need not be uniform as
among the designated individuals receiving the same type of Grant.

Eligibility for Participation. Officers and other employees of the Company
and its subsidiaries are eligible to participate in the 1994 Plan ("Eligible
Participants"). The H.R. Committee may, in its discretion, select the persons
to receive Grants ("Grantees") from among the Eligible Participants and
determine the number of shares of Common Stock subject to a particular Grant.
The H.R. Committee may base its decision on the recommendations from the
management of the Company or on such other factors as it shall deem
appropriate. The number of Grantees may vary from year to year. As of March
11, 1996, the Company employed approximately 2,743 individuals who were
eligible to participate in the 1994 Plan. As of February 21, 1996, incentive
stock options to purchase 672,000 shares of Common Stock have been granted
under the 1994 Plan but not exercised.

Pursuant to the proposed amendment to the 1994 Plan, no individual may
receive Grants for more than 50% of the number of shares of Common Stock
available for issuance under the 1994 Plan.

Stock Options. The H.R. Committee may grant options intended to qualify as
incentive stock options ("ISOs") within the meaning of section 422 of the
Code, or so-called "non-qualified stock options" that are not intended to so
qualify ("NQSOs"), in accordance with the terms and conditions set forth in
the 1994 Plan, or any combination of ISOs or NQSOs (collectively, "Stock
Options").

The option price per share of an ISO is the fair market value of a share
of Common Stock on the date of Grant. However, if the Grantee of an ISO is a
person who holds more than 10% of the combined voting power of all classes of
outstanding stock of the Company, the option price per share of an ISO must
be at least 110% of the fair market value of a share of Common Stock on the
date of Grant. To the extent that the aggregate fair market value of shares
of Common Stock, determined on the date of Grant, with respect to which ISOs
are exercisable for the first time by a Grantee during any calendar year
exceeds $100,000, such ISOs shall be treated as NQSOs. The option price per
share of an NQSO is determined by the H.R. Committee, at its discretion, but
unless approved by the board of directors of the Company, such option price
cannot be less than the book value of a share of Common Stock on the date of
Grant. The measure for fair market value is the closing price of the Common
Stock on the New York Stock Exchange on the last day that the Common Stock
was traded immediately preceding the date of Grant. The fair market value of
the Common Stock on March 11, 1996 was $21.50 per share.

The H.R. Committee determines the term of each Stock Option; provided,
however, that in no event can such term exceed ten years from the date of
Grant, and, if the Grantee of an ISO is a person who holds more than 10% of
the combined voting power of all classes of outstanding stock of the Company,
such term may not exceed five years from the date of Grant. The vesting
period for Stock Options commences on the date of Grant and ends on such date
as is determined by the H.R. Committee, in its sole discretion, which is
specified in the Grant Instrument. A Grantee may exercise a Stock Option by
delivering notice of exercise to the Secretary of the Company with
accompanying payment of the option price. The 1994 Plan, as amended, provides
that the Grantee may pay the option price (i) in cash, (ii) with the consent

10
<PAGE>

of the H.R. Committee, in its sole discretion, by delivering shares of Common
Stock already owned by the Grantee and having a fair market value on the date of
exercise equal to the option price, (iii) with the consent of the H.R Committee,
in its sole discretion, with the proceeds of a promissory note payable by the
Grantee to the Company and issued pursuant to a loan program to be established
by the H.R. Committee and bearing interest at a rate not less than the
applicable federal rate prescribed by section 1274 of the Code, or (iv) with a
combination of (i), (ii) or (iii). The Grantee must pay, at the time of
exercise, the option price and the amount of any federal, state or local
withholding tax due in connection with such Stock Option exercise. Shares of
Common Stock are not to be issued or transferred upon any purported exercise of
the Stock Option until the option price and the withholding obligation are fully
paid.

Restricted Stock Grants. The H.R. Committee may issue or transfer shares
of Common Stock under a Grant (a "Restricted Stock Grant") pursuant to the
1994 Plan. Shares of Common Stock issued pursuant to a Restricted Stock Grant
are issued for or in consideration of cash or services rendered having a
value, as determined by the H.R. Committee, at least equal to the par value
thereof. The Grant Instrument may provide for a period during which the Grant
will remain subject to certain restrictions including restrictions on
transferability (the "Restriction Period"). During the Restriction Period, a
Grantee may not sell, assign, transfer, pledge or otherwise dispose of the
shares of Common Stock to which such Restriction Period applies, except to a
successor grantee in the event of the Grantee's death. If a Grantee's
employment terminates during the Restriction Period, the Restricted Stock
Grant terminates with respect to all shares covered by the Grant as to which
the restrictions have not lapsed, and those shares of Common Stock must be
immediately returned to the Company. All restrictions imposed under the
Restricted Stock Grant lapse upon the expiration of the applicable
Restriction Period. In addition, the H.R. Committee may determine as to any
or all Restricted Grants that all restrictions will lapse under such other
circumstances as it deems appropriate.

Stock Appreciation Rights. The H.R. Committee may grant SARs to any
Grantee in tandem with any Stock Option, for all or a portion of the
applicable Stock Option. In the case of a NQSO, such rights may be granted
either at or after the time the Stock Option is granted. In the case of an
ISO, such rights may be granted only at the time the Stock Option is granted.
The SARs granted to a Grantee which are exercisable during any given period
of time may not exceed the number of shares of Common Stock which the Grantee
may purchase upon the exercise of the related Stock Option during such period
of time. Upon a Grantee's exercise of some or all of his SARs, the Grantee
receives in settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised, payable in cash, Common Stock
or a combination thereof, as determined by the H.R. Committee. The stock
appreciation for an SAR is the difference between the option price specified
for the related Stock Option and the fair market value of the underlying
Common Stock on the date of exercise of the SAR. The 1994 Plan provides that
the exercise price of an SAR is (i) the option price of the related Stock
Option or (ii) the fair market value of a share of Common Stock as of the
date of grant of such SAR, if the SAR is granted after the Stock Option and
the option price under (i) would result in the disallowance of the Company's
expense deduction upon exercise of the SAR under Section 162(m) of the Code.
An SAR is exercisable only during the period when the Stock Option to which
it relates is also exercisable. No SAR may be exercised, in whole or in part,
by any person who is subject to Section 16 of the Exchange Act except in
accordance with Rule 16b-3(e) under the Exchange Act. Upon the exercise of a
Stock Option, the SARs relating to the Common Stock covered by such Stock
Option terminate. Upon the exercise of SARs, the related Stock Option
terminates to the extent of an equal number of shares of Common Stock.

Amendment and Termination of the 1994 Plan. The board of directors of the
Company may amend or terminate the 1994 Plan at any time; provided, however,
that any amendment that materially increases the benefits accruing to
Eligible Participants under the 1994 Plan, increases the aggregate number of
shares of Common Stock that may be issued or transferred under the 1994 Plan,
increases the maximum number of shares of Common Stock for which any Grantee
may be granted options under the 1994 Plan, materially modifies the
requirements as to eligibility for participation or modifies the provisions
for determining fair market value of a share of Common Stock will be subject
to approval by the stockholders of the Company and approval by the H.R.
Committee. The 1994 Plan will terminate on November 15, 2004 unless
terminated earlier by the board of directors of the Company although options
granted under the 1994 Plan prior to its termination will remain outstanding
until exercised or the end of the term of such options.

11
<PAGE>

Amendment and Termination of Outstanding Grants. A termination or
amendment of the 1994 Plan that occurs after a Grant is made will not result
in the termination or amendment of the Grant unless the Grantee consents;
provided, however, that the H.R. Committee may (i) revoke any Grant if it is
contrary to applicable law or (ii) modify any Grant to bring it into
compliance with any then applicable government regulation. The termination of
the 1994 Plan will not impair the power and authority of the H.R. Committee
with respect to outstanding Grants.

Certain Corporate Changes. If the Company sells all or substantially all
its assets, is dissolved or liquidated or is not the surviving corporation in
a merger or consolidation, then, at least ten days prior to such event, the
Company must give each Grantee with outstanding Grants notice of such event
and must indicate in such notice one of the following determinations made in
the exercise of the sole and absolute discretion of the H.R. Committee, which
determination is binding on the Grantee: (i) the Grantee will have the right
within ten days after such notice is sent by the Company to exercise in full
any installments of Grants not previously exercised (whether or not the right
to exercise such installments has become vested), and any such installments
not so exercised will thereafter lapse and be of no further force or effect;
(ii) the Grantee will receive new Grants in substitution for any outstanding
Grants under the terms set forth in such notice; or (iii) any successor to
the Company will assume any then unexpired Grants in accordance with their
terms. The H.R. Committee, in its sole discretion, will determine the nature
of the notice to such Grantees. If the Company is to be the surviving
corporation in a merger or consolidation, then, the H.R. Committee may, in
its sole discretion, give each Grantee with outstanding Grants written notice
of such event. If such notice is given, each such Grantee will have the right
to exercise in full any installments such of Grants not previously exercised
(whether or not the right to exercise such installments has become vested),
within ten days after such notice is sent by the Company. Any installments of
such Grants not so exercised will thereafter lapse and be of no further force
or effect.

Federal Income Tax Consequences. Set forth below is a general description
of the federal income tax consequences relating to Grants under the 1994
Plan. Grantees are urged to consult with their personal tax advisors
concerning the application of the principles discussed below to their own
situations and the application of state and local tax laws.

There are no federal income tax consequences to Grantees or to the Company
upon the grant of an NQSO under the 1994 Plan. Upon the exercise of NQSOs,
Grantees will recognize ordinary compensation income in an amount equal to
the excess of the fair market value of the shares at the time of exercise
over the exercise price of the NQSO, and the Company generally will be
entitled to a corresponding federal income tax deduction. Upon the sale of
shares of Common Stock acquired by exercise of an NQSO, a Grantee will have a
capital gain or loss (long-term or short-term depending upon the length of
time the shares were held) in an amount equal to the difference between the
amount realized upon the sale and the Grantee's adjusted tax basis in the
shares of Common Stock (the exercise price plus the amount of ordinary income
recognized by the Grantee at the time of exercise of the NQSO).

A Grantee of an ISO will not recognize taxable income for purposes of the
regular income tax, upon either the grant or exercise of the ISO. However,
for purposes of the alternative minimum tax imposed under the Code, in the
year in which an ISO is exercised, the amount by which the fair market value
of the shares of Common Stock acquired upon exercise exceeds the Stock Option
price will be treated as an item of adjustment and included in the
computation of the recipient's alternative minimum taxable income in the year
of exercise. A Grantee will recognize long-term capital gain or loss on a
disposition of the shares acquired upon exercise of an ISO provided that the
Grantee does not dispose of such shares within two years from the date the
ISO was granted and within one year after such shares were transferred to
him. If the Grantee satisfies the foregoing holding periods, then the Company
will not be allowed a deduction by reason of the grant or exercise of the
ISO. As a general rule, if a Grantee disposes of the shares acquired upon
exercise of an ISO before satisfying both holding period requirements (a
"disqualifying disposition"), the gain recognized on such a disposition will
be taxed as ordinary income to the extent of the difference between the fair
market value of such shares on the date of exercise and the option price, and
the Company will be entitled to a deduction in that amount. The gain, if any,
in excess of the amount recognized as ordinary income on such a disqualifying
disposition will be long-term or short-term capital gain, depending upon the
length of time the Grantee held the shares prior to the disposition.

12
<PAGE>

A Grantee normally will not recognize taxable income upon the award of a
Restricted Stock Grant, and the Company will not be entitled to a deduction,
until such stock is transferable by the Grantee or no longer subject to a
"substantial risk of forfeiture" for federal tax purposes, whichever occurs
earlier. When the Common Stock is either transferrable or is no longer
subject to a substantial risk of forfeiture, the Grantee will recognize
ordinary compensation income in an amount equal to the fair market value of
the Common Stock at that time and the Company will be entitled to a deduction
in the same amount. A Grantee may, however, elect to recognize ordinary
compensation income in the year the Restricted Stock Grant is awarded in an
amount equal to the fair market value of the Common Stock at that time,
determined without regard to the restrictions. In such event, the Company
will be entitled to a deduction in the same year, provided the Company
complies with the applicable withholding requirements for federal tax
purposes.

The Grantee will not recognize any income upon the grant of an SAR. Upon
the exercise of an SAR, the Grantee will recognize ordinary compensation
income in the amount of both the cash and the fair market value of the shares
of Common Stock received upon such exercise, and the Company is entitled to a
corresponding deduction, provided the Company complies with the applicable
withholding requirements for federal tax purposes.

Tax Withholding. The acceptance, exercise or surrender of a Grant will
constitute a Grantee's full consent to whatever action the H.R. Committee
deems necessary to satisfy any federal, state and local income and employment
withholding tax obligations arising under the 1994 Plan. The Company may
require Grantees who exercise NQSOs or who possess shares of Common Stock as
to which the restrictions on transfer have lapsed to remit an amount
sufficient to cover the Grantee's federal, state and local withholding tax
obligations associated with the exercise of such Grants or lapse of
restrictions on transfer. If acceptable to the H.R. Committee, Grantees may
deliver Common Stock or cash in order to satisfy any such withholding
obligations.

Section 162(m) of the Code. The 1994 Plan, as proposed to be amended, is
intended to qualify grants of Stock Options and SARs under the 1994 Plan as
"performance-based compensation."

Accounting Consequences. There is no charge to the income of the Company
in connection with the grant or exercise of an option under the 1994 Plan as
long as the exercise price is not below the market price on the date of
grant. Earnings per share may be affected by the 1994 Plan by the effect on
the calculation, as prescribed under generally accepted accounting
principles, of the number of outstanding shares of Common Stock. The earnings
per share calculation reflects the potential dilutive effect, using the
treasury stock method, assuming the exercise of outstanding stock options. At
the time shares are actually issued as a result of the exercise of stock
options, additional dilution of earnings per share could result.

The fair market value on the date of a Restricted Stock Grant of the
Common Stock issued pursuant to the Restricted Stock Grant will be charged to
the income of the Company as a compensation expense. The compensation expense
will be recognized for accounting purposes ratably over the vesting period,
if any, set forth in the Restricted Stock Grant.

The assumed value of an SAR (generally, the excess of the market value of
the underlying shares over the option price at the end of each accounting
period) is treated as compensation expense that is accrued over the period
that the SAR is outstanding. Deferred tax expense may also be created if the
related tax deduction occurs in a period later than the one in which the
compensation expense is recognized for accounting purposes.

No additional Grants would be received by or allocated to Eligible
Participants as a result of the proposed amendment to the 1994 Plan. Future
benefits to be received by or allocated to Eligible Participants pursuant to
the 1994 Plan are not presently determinable and are subject to the
discretion of the H.R. Committee which selects Grantees from among the
Eligible Participants and determines the number of shares of Common Stock
subject to a particular Grant.

EXECUTIVE OFFICERS OF CSS

Set forth below is certain information regarding each of the current
executive officers of CSS. See "ELECTION OF DIRECTORS" for further
information about Messrs. Farber, Dubin, Baxter and Bromley. Executive
officers of CSS are elected annually by the board of directors to serve in
their respective capacities until their successors are duly elected and
qualified or until their earlier resignation or removal.

13
<PAGE>

<TABLE>
<CAPTION>
<S> <C>
Jack Farber ............... Mr. Farber has been Chairman, President and Chief Executive Officer of CSS since
1979. Age: 62.

Stephen V. Dubin .......... Mr. Dubin has been Vice President, Secretary and General Counsel of CSS since 1978.
Age: 57.

James G. Baxter ........... Mr. Baxter has been President - Consumer Products Group of CSS since November 1995
and the Chief Financial Officer of CSS since 1986. From 1986 to November 1995 he
was also Vice President - Finance of CSS. Age: 48.

Clifford E. Pietrafitta ... Mr. Pietrafitta has been Vice President - Finance of CSS since November 1995 and
Treasurer and Assistant Secretary of CSS since 1991. From 1989 to 1991 Mr. Pietrafitta
was Director - Operational and Financial Controls with CSS. Age: 34.

James H. Bromley .......... Mr. Bromley has been President of Rapidforms, a subsidiary of CSS, since 1979 and
its Chief Executive Officer since 1987. Age: 57.

Richard D. Barton ......... Mr. Barton has been President of The Paper Magic Group, Inc. ("Paper Magic"), a
subsidiary of CSS, since 1993. Since 1994 he has also served as Chief Executive
Officer of Paper Magic. From 1991 to 1993 Mr. Barton was Senior Vice President of
Newsbank, Inc., a private publisher of newspaper reference information on computer
platforms. From 1990 to 1991 he was President of Hach Associates, a private supplier
of educational products. Age: 48.

Marc A. English ........... Mr. English has been President and Chief Executive Officer of Cleo Inc. ("Cleo"),
a subsidiary of CSS, since CSS acquired Cleo in November 1995. From June 1994 to
November 1995 he was Senior Vice President of Marketing for Cleo. From 1990 to June
1994 he was Senior Vice President of Marketing and Sales of CPS Corp., a manufacturer
and distributor of seasonal gift wrap. Age: 43.

John A. Pinti ............. Mr. Pinti has been President and Chief Executive Officer of Berwick Industries,
Inc. ("Berwick"), a subsidiary of CSS, since 1992. From 1990 to 1992 he was a Director
of Business Reorganization Services with Coopers & Lybrand. Age: 52.
</TABLE>

14
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth the total compensation of the chief
executive officer and the four other most highly compensated executive
officers of the Company for services rendered in all capacities to the
Company or its subsidiaries for the fiscal year ended December 31, 1995, as
well as the total compensation earned by each such individual for the
Company's two previous fiscal years.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
---------------------- --------------
Name Securities
and Underlying All Other
Principal Options Compensation(1)
Position Year Salary($) Bonus($) (#) ($)
------------------------- ------ --------- --------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Jack Farber 1995 337,000 380,160 0 64,258(2)
Chairman President and 1994 327,000 222,726 0 62,063(2)
Chief Executive Officer 1993 320,000 283,000 0 67,268(2)
of the Company

James G. Baxter 1995 203,000 275,420 35,000 16,942
President - 1994 192,000 135,355 10,000 24,397
Consumer Products 1993 183,000 148,000 30,000(4) 24,310
Group and Chief
Financial Officer
of the Company

John A. Pinti(3) 1995 300,000 150,000 0 7,653
President and Chief 1994 280,771 150,000 40,000 7,090
Executive Officer of 1993 178,943 0 0 0
Berwick

Stephen V. Dubin 1995 211,000 179,580 25,000 16,942
Vice President, 1994 205,000 97,548 10,000 24,397
Secretary 1993 200,000 116,000 30,000(4) 24,310
and General Counsel of
the Company

Richard D. Barton 1995 205,021 102,841 0 7,500
President and 1994 185,614 0 45,000 6,899
Chief Executive Officer 1993 80,789 17,000 0 0
of Paper Magic
</TABLE>

- ------
(1) All of the operating subsidiaries have qualified profit sharing plans
providing for discretionary contributions by such companies related to
their financial performance. In addition, corporate level officers of the
Company participate in the Rapidforms, Inc. Profit Sharing Plan. In
general, contributions to the profit sharing plans are based upon a
percentage, determined by the board of directors of the applicable
company, of the participant's compensation, not exceeding the applicable
Internal Revenue Code maximum contribution base. Contributions vest under
specified schedules requiring from six to seven years of service, and are
paid to participants, along with earnings thereon, upon retirement or
other separation from service or, in the case of one such plan, certain
other events. The Company established an unfunded non-qualified
Supplemental Executive Retirement Plan (the "SERP") effective January 25,
1994 to provide all corporate level officers of the Company (except Mr.
Farber who has entered into the deferred compensation arrangements
referred to below) additional retirement benefits. In addition, the
Company has entered into supplemental retirement agreements with Messrs.

15
<PAGE>

Baxter and Dubin to provide them with certain deferred benefits upon death
or retirement in addition to certain benefits in the SERP. See "Supplemental
Executive Retirement Benefits" below. The amounts shown in this column
represent, for all of the years indicated, the contributions by the
applicable company to a profit sharing plan and the SERP in respect of the
named person, and, in the case of Mr. Farber, to a profit sharing plan plus
the deferred compensation arrangement referred to below.

(2) Mr. Farber, as a result of being ineligible to participate in the profit
sharing plan for employees of the Company, entered into a deferred
compensation agreement with Philadelphia Industries, Inc. ("PII"), which
was merged with and into the Company on January 21, 1993. This agreement
was assumed by CSS and provides, upon retirement or other separation from
service, the same benefits as participation in the profit sharing plan
and the SERP for the Company's corporate level officers would have
provided. In 1993, Mr. Farber became eligible to and did participate in
the Rapidforms, Inc. Profit Sharing Plan. Mr. Farber was also provided
with additional benefits under the deferred compensation agreement for
earnings in excess of the applicable maximum contribution base under the
Rapidforms, Inc. Profit Sharing Plan. The obligation to Mr. Farber under
the deferred compensation agreement has been accrued on the books of the
Company and represents an unsecured debt of the Company. The amounts
shown in this column represent, for all of the years indicated, the
amount charged to CSS or PII in respect of any profit sharing plan and
the deferred compensation agreement.

(3) In connection with the acquisition of Berwick by the Company in May 1993,
the Company assumed an employment agreement between Mr. Pinti and
Berwick, as amended in May 1993. Under the provisions of the employment
agreement, Mr. Pinti serves as President and Chief Executive Officer of
Berwick and will receive $300,000 base salary per annum in 1996. Due to
automatic renewal provisions, the employment agreement now expires
January 31, 1997, unless further extended.

(4) The securities indicated have been adjusted to reflect the effect of a
two-for-one stock split in August 1993.

No individual named above received perquisites or non-cash compensation
during the years indicated exceeding the lesser of $50,000 or an amount equal
to 10% of such person's salary and bonus.

The following table sets forth certain information regarding options
granted by the Company or its subsidiaries to the chief executive officer and
four other most highly compensated executive officers of the Company during
the fiscal year ended December 31, 1995.

OPTION GRANT TABLE

<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------------- Potential Realizable
Number of Percent of Value at Assumed
Securities Total Options Annual Rates of Stock
Underlying Granted Exercise Price Appreciation for
Options Under Plan or Base Option Term(2)
Granted(1) in Fiscal Price Expiration ----------------------
Name (#) Year ($/Sh) Date 5%($) 10%($)
---- ---------- --------------- ---------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Jack Farber ...... 0 -- -- -- -- --
James G. Baxter .. 35,000 15.4% 16.00 1/23/00 154,718 341,886
John A. Pinti .... 0 -- -- -- -- --
Stephen V. Dubin . 25,000 11.0% 16.00 1/23/00 110,513 244,204
Richard D. Barton . 0 -- -- -- -- --
</TABLE>

- ------
(1) The options indicated were granted under the 1994 Plan. Such options may
not be exercised during the first year after their grant and thereafter
may be exercised in installments to the extent of 25% of the number of
shares covered during the second year and to the extent of an additional
25% of the number of shares covered during each of the next three
subsequent years. However, the H.R. Committee may accelerate the period
over which the options become exercisable. Such options are not
exercisable after the expiration of five years from the date of option
grant. See "Approval of Amendment to the 1994 Equity Compensation Plan"
for a description of the 1994 Plan.

16
<PAGE>

(2) The dollar amounts under these columns are the result of the 5% and 10%
rates set by the rules promulgated by the Securities and Exchange
Commission and are not intended to forecast possible future appreciation,
if any, of the stock price of the Company. The Company did not use an
alternative formula for a grant date valuation, as the Company is not
aware of any formula which will determine with reasonable accuracy a
present value based on future unknown or volatile factors. There can be
no assurance that the dollar amounts reflected in these columns will be
achieved. Actual gains, if any, on stock option exercises are dependent
on the future performance of the Common Stock and overall market
conditions, as well as the executive officer's continued employment
through the vesting period.

The table below sets forth certain information regarding options exercised
during the fiscal year ended December 31, 1995 and the value of unexercised
options at December 31, 1995 held by the five most highly compensated
executive officers of the Company.

OPTION EXERCISE TABLE

<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
Shares December 31, 1995 (#)(2) at December 31, 1995 ($)
Acquired on Value -------------------------------- --------------------------------
Name Exercise (#)(1) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------ ----------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Jack Farber ...... 0 -- -- -- -- --
James G. Baxter .. 40,000 540,000 47,500 67,500 305,938 387,188
John A. Pinti .... 0 -- 10,000 30,000 40,000 120,000
Stephen V. Dubin . 20,000 267,500 47,500 57,500 305,938 327,188
Richard D. Barton . 0 -- 11,250 33,750 67,500 202,500
</TABLE>

- ------
(1) Options exercised relate to options to acquire Common Stock granted under
the 1985 Plan, as adjusted to reflect the effect of the Stock Split in
August 1993.

(2) Includes exercisable and unexercisable options to acquire Common Stock
granted under the 1985 Plan, as adjusted to reflect the effect of the
Stock Split in August 1993, and under the 1994 Plan.

SUPPLEMENTAL EXECUTIVE RETIREMENT BENEFITS

Under applicable provisions of the Code, the Company is required to
disregard an employee's annual compensation in excess of a specified dollar
amount (subject to cost of living adjustments) in determining the
profit-sharing plan contribution the Company makes on behalf of such employee
under the Rapidforms, Inc. Profit Sharing Plan (the "Profit Sharing Plan").
The Omnibus Budget Reconciliation Act of 1993 ("OBRA '93") reduced this
compensation limit from $235,840 in 1993 to $150,000 in 1994 and such limit
remained at $150,000 in 1995. The Company established the SERP to provide
additional retirement benefits to corporate level officers without regard to
the compensation limit specified by the Internal Revenue Service.

Under the SERP, all corporate level officers of the Company (except Mr.
Farber) are entitled to have an amount credited for their benefit on the
books of the Company equal to the difference between the amount that would
have been contributed on the officer's behalf under the Profit Sharing Plan
prior to OBRA '93 (calculated by using the percentage of compensation
contributed for the year and the compensation limit prior to OBRA '93) and
the amount that actually was contributed to the Profit Sharing Plan for the
year on behalf of such officer. These amounts are adjusted to reflect
earnings and losses based on the investment performance of the Profit Sharing
Plan as if such amounts had been contributed to the Profit Sharing Plan at
the time they were credited and were invested in the same manner as the
employee's account under the Profit Sharing Plan. All amounts payable by the
Company to any officer for whose benefit amounts have been credited represent
an unsecured debt of the Company.

Under agreements dated March 3, 1993, Messrs. Baxter and Dubin are
eligible for certain unfunded non-qualified annual retirement benefits and
death benefits which are in addition to the benefits to which they may be
entitled under the Profit Sharing Plan and the SERP. Although the Company has
no obligation to fund the benefits provided by those agreements, the Company
has purchased life insurance policies to provide funding for such benefits.
These additional retirement benefits are intended to compensate Messrs.
Baxter and Dubin for the loss of benefits under the Profit Sharing Plan by

17
<PAGE>

reason of the pre-OBRA '93 limitations on the amount of compensation that may be
considered in calculating contributions under the Profit Sharing Plan. Benefits
are payable upon termination of active employment and are reduced if such
termination occurs prior to age 65. A pre-retirement death benefit is also
available under these agreements. The annual retirement benefit is a fixed
annual payment for fifteen years. Assuming that Messrs. Baxter and Dubin
continue employment with the Company until age 65, their annual benefits will be
$130,987 and $58,123, respectively.

HUMAN RESOURCES COMMITTEE REPORT

The H.R. Committee is comprised of three non-employee directors. Under its
supervision, compensation policies, plans and programs have been developed
and implemented which seek to enhance the profitability of the Company, and
thus stockholder value, by aligning closely the financial interests of the
Company's senior management with those of its stockholders. The H.R.
Committee also is responsible for the administration of grants that have been
made under the 1985 Plan and administers and makes grants under the 1994
Plan. In furtherance of these goals, annual and longer term incentive
compensation is provided to attract and retain senior management of
outstanding abilities and to motivate them to perform to the full extent of
their abilities.

The Company's compensation program for senior management is comprised of
base salary, annual performance bonuses, longer term incentive compensation
in the form of Stock Options, Restricted Stock Grants and SARs, benefits
available generally to the Company's employees (including retirement benefits
under profit sharing plans), and supplemental retirement plans or deferred
compensation agreements to provide benefits in excess of those permitted to
be paid under the profit sharing plans because of annual Internal Revenue
Code contribution limitations. The "at risk" portion of the compensation
program is significant relative to overall compensation.

Base salary levels for the Company's executive officers are set generally
to be competitive with other companies of comparable size and geographic
location, taking into consideration the position's complexity, responsibility
and need for special expertise. Individual salaries also take into account
individual experience and performance. The H.R. Committee establishes salary
levels for corporate level officers, while salary levels for the chief
executive officers of the Company's principal operating subsidiaries other
than Rapidforms are established by the executive committee of the boards of
such subsidiaries, which consist of the chief executive officer of the
Company, the chief financial officer of the Company and the chief executive
officer of the respective operating subsidiary. The salary level for the
chief executive officer of Rapidforms is set by the executive compensation
committee of the board of Rapidforms, which consists of the chief executive
officer of the Company and the chief executive officer of Rapidforms. The
salary levels for the chief executive officers of the principal operating
subsidiaries are subject to periodic review by the H.R. Committee.

Annual incentive compensation is based upon the achievement of certain
threshold and target levels of earnings by the operating subsidiaries, the
achievement of a target level of fully diluted earnings per share of Common
Stock by the Company for corporate level executive officers, and the
attainment of specifically defined individual goals and objectives. At the
beginning of each year, performance goals are established for Rapidforms by
the executive compensation committee of the board of Rapidforms and for
Berwick, Paper Magic and Cleo by the executive committee of the respective
boards of such subsidiaries (to be used in determining annual performance
bonuses for the officers of each such subsidiary) and for the Company as a
whole by the H.R. Committee (to be used in determining annual performance
bonuses for corporate level officers). The formulae permit the executive
compensation committee of the board of Rapidforms, the executive committee of
the boards of the other three principal operating subsidiaries or the H.R.
Committee, as applicable, discretion in determining the size of the bonus
pool, subject to certain parameters based upon the achievement of the
performance goals, and discretion in allocating the bonus pool among
participants.

During each fiscal year, the H.R. Committee has considered the
desirability of granting to officers and other employees of the Company and
the Company's principal operating subsidiaries stock options, restricted
stock grants and stock appreciation rights under the 1994 Plan. The objective
of the 1994 Plan is to align senior management and stockholder long-term
interests by creating a strong and direct link between the executive's
accumulation of wealth and stockholder return and to enable executives to
develop and maintain a significant, long-term stock ownership position in the
Company's common stock. In furtherance of this goal, the stock options and
restricted stock grants made under the 1994 Plan are not registered with the

18
<PAGE>

Securities and Exchange Commission, although shares of restricted stock may be
used, upon exercise of stock options, to pay the exercise price of the stock
options. Individual grants of stock options under the 1994 Plan are based upon
individual performance. The H.R. Committee believes that its past grants of
stock options have successfully focused the Company's executive officers and
other members of senior management on building profitability and shareholder
value.

Section 162(m) of the Code limits the deduction that may be claimed by a
"public company" for total compensation in excess of $1 million paid to the
chief executive officer or to any of the other four most highly compensated
officers except to the extent that any compensation in excess of $1 million
qualifies as "performance-based compensation." This provision became
effective January 1, 1994 with respect to the Company. Subject to stockholder
approval of the proposed amendment to the 1994 Plan, grants of Stock Options
and SARs made under the 1994 Plan will qualify as "performance-based
compensation."

In determining the compensation of Mr. Farber, the H.R. Committee has
taken into consideration pay levels of chief executive officers of other
companies of comparable size, his contributions to the profitable growth and
increased return on equity of the Company over the past several years and Mr.
Farber's overall management strengths and business acumen. The fully diluted
earnings per share of Common Stock has increased at a compound rate of 18%
over the last year (27% excluding the impact of Cleo which was acquired in
November 1995), 11% over the last two years and 14% over the last five years.
The return to stockholders as measured by the December 31 closing price of
the Common Stock has increased 28% in 1995, increased at a 3% compound annual
rate for the two years ended December 31, 1995 and increased at a 17%
compound annual rate for the five years ended December 31, 1995. Mr. Farber's
total annual compensation increased 29%, 8% and 8%, respectively, over the
same periods.

HUMAN RESOURCES COMMITTEE
James E. Ksansnak, Chairman
Willard M. Bright
William C. Warren

19
<PAGE>

PERFORMANCE GRAPH

The graph below compares the cumulative total stockholders' return on
Common Stock for the period from January 1, 1991 through December 31, 1995,
with (i) the cumulative total return on the Standard and Poors 500 ("S&P
500") Index and (ii) the Standard and Poors Conglomerate ("S&P Conglomerate")
Index over the same period (assuming the investment of $100 in Common Stock,
S&P 500 Index and S&P Conglomerate Index on January 1, 1991 and reinvestment
of all dividends).

COMPARISION OF FIVE-YEAR CUMULATIVE TOTAL RETURN

250 |------------------------------------------------------------------|
| |
| *&# |
| |
200 |-------------------------------------*----------------------------|
| # |
| *# |
| & & |
150 |-------------------------*----------------------------------------|
| & |
| *& # |
| |
100 |---*&#---------#--------------------------------------------------|
| |
| |
| |
50|----|----------|---------|-----------|-----------|-----------|----|
1990 1991 1992 1993 1994 1995

* = CSS INDS INC & = S & P 500 # = S & P Conglomerates

Z-TRAC - ZACKS TOTAL RETURN ANNUAL COMPARISON - PAGE 1
- ------------------------------------------------------------------------------
PREPARED FOR -------------------------: CSS INDS INC
PREPARED ON --------------------------: JANUARY 16, 1996
5 YEAR CUMULATIVE TOTAL RETURN SUMMARY
- ------------------------------------------------------------------------------
STARTING
BASIS
DESCRIPTION 1990 1991 1992 1993 1994 1995
- -------------------------------------------------------------------------------
CSS INDS INC (%) 28.05 15.24 36.36 -16.36 27.54
CSS INDS INC ($) $100.00 $128.05 $147.56 $201.22 $168.29 $214.63

S & P 500 (%) 30.47 7.62 10.08 1.32 37.20
S & P 500 ($) $100.00 $130.47 $140.41 $154.56 $156.60 $214.86

S & P Conglomerates (%) 8.40 23.25 32.53 -5.11 29.87
S & P Conglomerates ($) $100.00 $108.40 $133.61 $177.07 $168.03 $218.22

NOTE: Data complete through last fiscal year.

NOTE: Corporate Performance Graph with peer group uses peer group only
performance (excludes your company).

NOTE: Peer group indices use beginning of period market capitalization
weighting.

20
<PAGE>

CERTAIN TRANSACTIONS

In October 1995, the Company loaned James G. Baxter, a director and
executive officer of the Company $180,000 at an interest rate of 6% per annum
payable on demand and secured by a pledge of 7,942 shares of Common Stock of
the Company owned by Mr. Baxter. The proceeds of the loan were used to pay
taxes related to the exercise of stock options granted to Mr. Baxter under
the 1985 Plan which were expiring in November 1995. On March 1, 1996, Mr.
Baxter repaid $70,000 of this loan.

PROPOSALS FOR 1997 ANNUAL MEETING

Consideration of certain matters is required at the annual meeting of
stockholders, such as the election of directors. In addition, pursuant to
applicable regulations of the Securities and Exchange Commission,
stockholders may present resolutions that are proper subjects for inclusion
in the proxy statement and for consideration at the annual meeting by
submitting their proposals to the Company on a timely basis. In order to be
included for the 1997 annual meeting, resolutions must be received by
November 28, 1996 and addressed to the Company's Secretary at the address set
forth on the cover page of this proxy statement.

CSS INDUSTRIES, INC.

By: Stephen V. Dubin,
Secretary

Philadelphia, Pennsylvania
March 28, 1996

21
<PAGE>

THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF

CSS INDUSTRIES, INC.

The undersigned hereby appoints Jack Farber, Leonard E. Grossman and
Michael L. Sanyour, and each of them acting singly, proxies of the
undersigned stockholder with full power of substitution to each of them, to
vote all shares of Common Stock of CSS Industries, Inc. (the "Company") which
the undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company to be held at The Locust Club of
Philadelphia, 1614 Locust Street, Philadelphia, PA 19103, on Tuesday, May 7,
1996, at 11:00 a.m. (local time) and any adjournments thereof.

This Proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder and in the discretion of the holders of
this Proxy upon such other matters as may properly come before the annual
meeting or any adjournments thereof. With respect to the election of
directors, where a box is not completed, this Proxy will be voted "FOR ALL
NOMINEES."

THIS PROXY IS CONTINUED ON THE REVERSE SIDE. PLEASE SIGN AND
DATE THIS PROXY ON THE REVERSE SIDE AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.

o FOLD AND DETACH HERE o

ANNUAL MEETING OF STOCKHOLDERS
OF
CSS INDUSTRIES, INC.

TUESDAY, MAY 7, 1996; 11:00 A.M.

THE LOCUST CLUB OF PHILADELPHIA
1614 LOCUST STREET
PHILADELPHIA, PENNSYLVANIA

===============================================================================

AGENDA

1. Declaration of quorum.
2. Proof of Notice of Meeting.
3. Reading of the Minutes of the Annual Meeting of Stockholders held on
May 2, 1995 or waiver thereof.
4. Introduction of representative of independent public accountants -
Arthur Andersen LLP.
5. Nomination and election of Directors.
6. Consideration of 1995 Stock Option Plan for Non-Employee Directors.
7. Consideration of Amendment to 1994 Equity Compensation Plan.
8. Presiding Officer's remarks.
9. Stockholders' questions and responses.
10. Adjournment.
===============================================================================
<PAGE>

Please mark
your votes as /X/
indicated in
this example

Election of the following FOR ALL AUTHORITY WITHHELD
nominees as Directors: NOMINEES FOR ALL NOMINEES
James G. Baxter, Richard G. Gilmore,
Willard M. Bright, Leonard E. Grossman, / / / /
James H. Bromley, James E. Ksansnak,
John R. Bunting, Jr., Michael L. Sanyour,
Stephen V. Dubin, William C. Warren.
Jack Farber,

The Board of Directors recommends a vote "FOR ALL NOMINEES."

Authority withheld for the following only:
(write the name(s) of the nominee(s) on the line below)

- -------------------------------------------------------
FOR AGAINST ABSTAIN

Approval of 1995 Stock Option / / / / / /
Plan for Non-Employee Directors

The Board of Directors recommends a vote FOR the proposal.

FOR AGAINST ABSTAIN
Approval of an Amendment to 1994 / / / / / /
Equity Compensation Plan

The Board of Directors recommends a vote FOR the proposal.

Signature(s) Date
----------------------------------------------- ----------------
(Please mark your vote, date and sign as your name appears above and return
this Proxy in the enclosed postpaid envelope. If acting as executor,
administrator, trustee, guardian, etc., you should so indicate when signing. If
the signer is a corporation, please sign the full corporate name, and indicate
title as duly authorized officer.)

o FOLD AND DETACH HERE o

<PAGE>

APPENDIX A

AMENDMENT 1995-1
TO THE CSS INDUSTRIES, INC.
EQUITY COMPENSATION PLAN

1. Section 1 of the Plan is amended by adding the following
clause to the end of the first sentence thereof:

"and all of whom shall be "outside directors" as defined under
section 162(m) of the Code and related Treasury regulations."

2. Section 3 of the Plan is amended by adding a sentence after
the first sentence to read, in its entirety, as follows:

"The maximum aggregate number of shares of Company Stock that
shall be subject to options or restricted stock grants under the Plan to any
single individual shall be 50% of the aggregate number of shares specified in
the preceding sentence."

3. Section 5(g) of the Plan is amended to read, in its
entirety, as follows:

(g) Satisfaction of Option Price. The Grantee shall pay the
option price specified in the Grant Letter in (i) cash, (ii) with the consent of
the Committee in its sole discretion, by delivering shares of Common Stock
already owned by the Grantee and having a fair market value on the date
immediately preceding the date of exercise equal to the option price (iii) with
the consent of the Committee in its sole discretion, with the proceeds of a
promissory note payable by the Optionee to the Company, but only in accordance
with the provisions of a Loan Program established by the Company, or any
successor program as in effect from time to time, (A) in a principal amount of
up to 100% of the payment due upon the exercise of the Stock Option, or such
applicable lower percentage as may be specified by the Committee pursuant to the
Loan Program, and (B) bearing interest at a rate not less than the applicable
Federal rate prescribed by Section 1274 of the Code, or such higher rate as may
be specified by the Committee pursuant to the Loan Program or (iv) through any
combination of (i), (ii) or (iii). The Optionee shall pay the option price and
the amount of withholding tax due, if any, at the time of exercise. Shares of
Company Stock shall not be issued or transferred upon exercise of a Stock Option
until the option price is fully paid.

4. This Amendment 1995-1 shall be effective as of January 23,
1996, with respect to all options granted after such date; provided, however,
that if stockholder approval is not obtained within twelve months of adoption of
this Amendment, this Amendment shall be null and void. Except to the extent
amended herein, the Plan shall remain unchanged and shall remain in full force
and effect. The Committee may, in its discretion, incorporate this Amendment
1995-1 in an Amended and Restated CSS Industries, Inc. Equity Compensation Plan
without any further required approval.

<PAGE>

APPENDIX B

CSS INDUSTRIES, INC.

1995 STOCK OPTION PLAN

FOR NON-EMPLOYEE DIRECTORS

1. Purpose. The purpose of this 1995 Stock Option Plan for Non-Employee
Directors (the "Plan") of CSS Industries, Inc. (the "Company") is to increase
the ownership interest in the Company of Non-Employee Directors whose services
are considered essential to the Company's continued progress and to provide a
further incentive to serve as a Director of the Company.

2. The Plan. The Plan shall consist of options to acquire Shares of the Common
Stock of the Company, $.10 par value (the "Shares").

3. Administration. The Plan shall be administered by a Committee of the Board of
Directors consisting of Directors who are not eligible to participate in the
Plan (the "Committee"). Subject to the provisions of the Plan, the Committee
shall be authorized to interpret the Plan, to establish, amend and rescind any
rules and regulations relating to the Plan, and to make all other determinations
necessary or advisable for the administration of the Plan; providing, however,
that the Committee shall have no discretion with respect to the eligibility or
selection of Directors to receive options under the Plan, the number of Shares
subject to any such options, other than by reason of an adjustment pursuant to
Section 8 hereof, or the purchase price of options or the frequency of option
grants thereunder, and provided further that the Committee shall not have the
authority to take any action to make any determination that would materially
increase the benefits accruing to participants under the Plan. The determination
of the Committee in the administration of the Plan, as described herein, shall
be final and conclusive and binding upon all persons including, without
limitation, the Company, its stockholders and persons granted options under the
Plan. The Secretary of the Company shall be authorized to implement the Plan in
accordance with its terms and to take such actions of a ministerial nature as
shall be necessary to effectuate the intent and purposes thereof. The validity,
construction and effect of the Plan and any rules and regulations relating to
the Plan shall be determined in accordance with the laws of the State of
Delaware.

4. Participation in the Plan. Directors of the Company who are not employees of
the Company or any subsidiary or affiliate of the Company shall be eligible to
participate in the Plan ("Eligible Directors").

5. Shares Subject to the Plan. Subject to adjustment as provided in Section 8,
an aggregate of Three Hundred Thousand (300,000) Shares shall be available for
issuance upon the exercise of options granted under the Plan. The Shares
deliverable upon the exercise of an option may be made available from unissued
Shares not reserved for any other purpose or Shares reacquired by the Company,
including Shares purchased in the open market or in private transactions. If any
option granted under the Plan shall expire or terminate for any reason without
having been exercised in full, the Shares subject to, but not delivered under,
such option may again become available for the grant of other options under the
Plan.

6. Non-Statutory Stock Options. All options granted under the Plan shall be non-
statutory options not intended to qualify under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").

1
<PAGE>

7. Terms, Conditions and Forms of Options. Each option granted under this Plan
shall be evidenced by a written agreement with the Company in such form as the
Committee shall from time to time approve, which agreements shall comply with
and be subject to the following terms and conditions:

(i) Option Grant Dates. Options to purchase 4,000 Shares (as
adjusted pursuant to Section 8) shall be granted automatically to each Eligible
Director on the last day that the Company's Shares are traded on the New York
Stock Exchange or other national securities exchange upon which the shares are
traded or if the Shares are not then listed on a national securities exchange
and are not traded over-the-counter on the date of the last trade as reported by
NASDAQ or, if not reported by NASDAQ, the last trade which was reported, in each
November through 2000, except that any such grant shall be subject to and
contingent upon approval of the Plan by the stockholders of the Company at the
1996 Annual Meeting of Stockholders.

(ii) Purchase Price. The purchase price of Shares upon
exercise of an option shall be 100% of the fair market value of the Shares on
the date of grant of an option; which shall be: (i) if the Shares are then
listed on a national securities exchange, the closing price of the Shares on
such date; provided, however, if on such date the Shares were traded on more
than one national securities exchange, then the closing price on the exchange on
which the greatest volume of Shares were traded on such day; (ii) if the Shares
are not then listed on a national securities exchange and are traded
over-the-counter, the last sale price of the Shares on such date as reported by
NASDAQ or, if not reported by NASDAQ, the average of the closing bid and asked
prices for the Shares on such date; and (iii) if the Shares are neither then
listed on a national securities exchange nor traded in the over-the-counter
market, such value as the Committee shall in good faith determine. If the Shares
are then listed on a national securities exchange or are traded over-the-counter
but are not traded on the date of grant, then the purchase price of such shares
shall be the closing price on the last day prior thereto on which such Shares
were traded.

(iii) Exercisability and Term of Options. Each option granted
under the Plan will become exercisable and mature in four equal installments,
commencing on the first anniversary of the date of grant and annually
thereafter. Each option granted under the Plan shall expire five years from the
date of the grant, and shall be subject to earlier termination as hereinafter
provided.

(iv) Termination of Service. In the event of the termination
of service on the Board by the holder of any option, other than by reason of
death as set forth in Paragraph (v) hereof or by reason of such holders
commencement of employment with the Company, the then outstanding options of
such holder may be exercised only to the extent that they were exercisable on
the date of such termination and shall expire three months after such
termination, or on their stated expiration date, whichever occurs first.

2
<PAGE>

(v) Death. In the event of the death of the holder of any
option, each of the then outstanding options of such holder will immediately
mature in full and become exercisable by the holder's legal representative at
any time within a period of six months after death, but in no event after the
expiration date of the term of the option.

(vi) Payment. Options may be exercised only upon payment to
the Company in full of the purchase price of the Shares to be delivered. Such
payment shall be made (a) in cash or check at the time of purchase, (b) by
delivering Shares already owned by the holder and having a fair market value (as
defined in Section 7(ii)) on the date immediately preceding the date of exercise
equal to the option price, or a combination of (a) and (b). Notwithstanding the
foregoing, the Committee reserves the right not to permit such payment to be
made by delivering Shares already owned by the holder if it determines that the
same would not be in the best interests of the Company.

8. Adjustment upon Changes in Shares; Acceleration and Cancellation of Options.

(i) In the event of any reclassification, recapitalization,
merger, consolidation, reorganization, issuance of warrants, rights or
debentures, stock dividend, stock split or reverse stock split, extraordinary
cash dividend, property dividend, combination or exchange of shares, repurchase
of shares or any other change in corporate structure which in the judgment of
the Committee materially affects the value of Shares, the Committee may
determine the appropriate adjustments, if any, to the number and class of Shares
available for issuance upon the exercise of options granted under the Plan, the
number and class of Shares and the exercise price per Share set forth in any
option theretofore granted.

(ii) In the event of (a) the disposition of all or
substantially all of the assets of the Company, (b) the dissolution of the
Company, (c) the merger or consolidation of the Company with or into any other
entity or the merger or consolidation of any other entity into the Company in
each case whereby the Company is not the surviving entity, or (d) the making of
a tender offer or exchange offer to purchase all or substantially all of the
Shares of the Company, all outstanding options awarded under the Plan shall
become exercisable in full immediately prior to such event and such options
shall be canceled by the Company, which shall remit to each Eligible Director a
cash payment equal to the difference between (y) the aggregate fair market value
of all Shares subject to the unexercised portion of such options less (z) the
aggregate exercise price of such unexercised options above.

9. Options Non-Assignable and Non-Transferable. Each option and all rights
thereunder shall be non-assignable and non-transferable other than by will or
the laws of descent and distribution and shall be exercisable during the
holder's lifetime only by the holder or the holder's guardian or legal
representative.

10. Limitations of Rights.

(i) No Right to Continue as a Director. Neither the Plan nor the
granting of an option nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that an Eligible Director has a right to continue as a Director for any period
of time, or at any particular rate of compensation.

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(ii) No Stockholders' Rights for Holders of Options. A holder of
options shall have no rights as a stockholder with respect to the Shares covered
by options granted hereunder until the date of the issuance of a stock
certificate therefor, and no adjustment will be made for any cash dividend
distributions for which the record date is prior to the date such certificate is
issued.

11. Effective Date and Duration of Plan. The Plan is effective upon its adoption
by the Board of Directors, subject to approval by the stockholders of the
Company at the 1996 Annual Meeting of Stockholders. The period during which
option grants shall be made under the Plan shall terminate on December 31, 2000
(unless the Plan is extended or is terminated on an earlier date by action of
the stockholders), but such termination shall not affect the terms of any then
outstanding options.

12. Amendment, Suspension or Termination of the Plan. Subject to the limitations
described in this Section, the Committee may amend, suspend or terminate the
Plan; provided, however, that no such action shall adversely affect the rights
of Directors who hold outstanding options previously granted hereunder and,
provided further, however, that any stockholder approval necessary or desirable
in order to comply with Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, shall be obtained in the manner required therein. Amendments to
Sections 4 and 7(i) and (ii) shall not be effected more than once every six
months, unless such amendments are implemented to comport with changes in the
Code or regulations thereunder.

13. Notice. Any notice to the Company required by any of the provisions of this
Plan shall be in writing and addressed to the Secretary of the Company at the
Company's then Executive Offices and shall become effective when it is received.

14. Use of Proceeds. Proceeds from the sale of Shares pursuant to options
granted under the Plan shall constitute general funds of the Company.

15. No Fractional Shares. No fractional Shares shall be issued pursuant to
options granted hereunder.

16. Expenses of the Plan. All of the expenses of administering the Plan shall be
paid by the Company.

17. Compliance with Applicable Law. Notwithstanding anything herein to the
contrary, the Company shall not be obligated to cause to be issued or any
certificate for Shares to be delivered pursuant to the exercise of an option
unless and until the Company is advised by its counsel that the issuance and
delivery of such certificate is in compliance with all applicable laws,
regulations or governmental authority and the requirements of any exchange upon
which Shares are traded. The Company shall in no event be obligated to register
any securities pursuant to the Securities Act of 1933 (as now in effect or as
hereafter amended) or to take any other action in order to cause the issuance
and delivery of any such certificate to comply with any such law, regulations or
requirement. The Committee may require, as a condition of the issuance and
delivery of any such certificate and in order to insure compliance with such
laws, regulations and requirements, such representations as the Committee, in
its sole discretion, deems necessary or desirable. Each option shall be subject
to the further requirement that if at any time the Committee shall determine in
its discretion that the listing or qualification of the Shares subject to such
option, is required under any securities exchange or association requirements or
under any applicable law, or that the consent or approval of any governmental
regulatory body is necessary as a condition of, or in connection with, the
granting of such option or the issuance of Shares thereunder, such option may
not be exercised in whole or in part unless such listing, qualification, consent
or approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.

18. Governing Law. Except to the extent pre-empted by federal law, this Plan
shall be construed and enforced in accordance with, and governed by, the laws of
the State of Delaware.