<PAGE>
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 Paragraph 240.14a-11(c)
or Paragraph 240.14a-12
CROWN CORK & SEAL COMPANY, INC.
_____________________________________________________________
(Name of Registrant as Specified In Its Charter)
_____________________________________________________________
(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: (1)
______________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________
(1) 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>
<PAGE>1
CROWN CORK & SEAL COMPANY, INC.
9300 Ashton Road
Philadelphia, Pennsylvania 19136
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF COMMON STOCK
1994
----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of Common Stock of CROWN CORK & SEAL COMPANY,
INC. will be held at the Corporation's Office located at 9300
Ashton Road, Philadelphia, Pennsylvania, on the 28th day of
April, 1994, at 11:00 A.M., to elect Directors, to consider
and act upon a proposal by shareholders that the Company
adopt a code of conduct regarding the Company's South African
operations, which proposal the Board of Directors unanimously
opposes, to consider and act upon management's proposal to
adopt the Crown Cork & Seal Company, Inc. Stock Purchase Plan
for eligible employees of the Company, and to transact such
other business which may properly come before the meeting.
The stock transfer books of the Company will not be closed
prior to the Meeting, but only shareholders of Common Stock
of record as of the close of business on March 18, 1994 will
be entitled to vote.
By Order of the Board of
Directors
RICHARD L. KRZYZANOWSKI
Executive Vice President,
Secretary & General Counsel
Philadelphia, Pennsylvania 19136
March 25, 1994
WE CORDIALLY INVITE YOU AND HOPE THAT YOU WILL ATTEND THE
MEETING IN PERSON, BUT, IF YOU ARE UNABLE TO ATTEND, THE
BOARD OF DIRECTORS REQUESTS THAT YOU SIGN THE PROXY AND
RETURN IT, WITHOUT DELAY, IN THE ENCLOSED ENVELOPE.
1
<PAGE>
<PAGE>2
CROWN CORK & SEAL COMPANY, INC.
9300 Ashton Road
Philadelphia, Pennsylvania 19136
------------------
PROXY STATEMENT - MEETING, April 28, 1994
To All Shareholders:
The accompanying Proxy is solicited by the Board of
Directors of the Company for use at the Annual Meeting of
Shareholders to be held on April 28, 1994 and, if properly
executed, shares represented thereby will be voted by the
named proxies or attorneys at such meeting. The expense for
such solicitation will be borne by the Company. Certain
officers and employees of the Company may also personally
solicit proxies by mail, telephone, telegraph or personally,
without any extra compensation. A Proxy may be revoked by a
shareholder's voting in person at the meeting, or by giving
written notice of revocation to the Secretary of the Company,
or by executing and delivering a later-dated Proxy.
The persons named as Proxies were selected by the Board of
Directors of the Company, and all are Directors and Officers
of the Company.
On February 24, 1994, there were 88,820,663 outstanding
shares of Common Stock.
The following information sets forth the beneficial
ownership of the Company's Common Stock as of March 18, 1994
by each person or institution known to the management to have
been the beneficial owner of more than 5% of the Company's
Common Stock:
The Connelly Foundation of 1 Tower Bridge, West
Conshohocken, Pennsylvania was the owner of 8,554,700 shares
of Common Stock, constituting 9.63% of the class outstanding.
J. P. Morgan Co. Incorporated of 60 Wall Street, New York,
New York reported that as of December 31, 1993, it was the
owner of 10,137,748 shares of Common Stock, constituting
11.4% of the class outstanding. Based on information
contained in filings made with the Securities and Exchange
Commission, J. P. Morgan has sole voting power with respect
to 5,628,453 shares, sole dispositive power with respect to
9,916,315 shares, and shared dispositive power with respect
to 210,833 shares.
The Company has, to the best of its knowledge, no other
beneficial owner of more than five percent of the Common
Stock outstanding.
Shareholders of record as of March 18, 1994 are entitled
to one vote for each share then held. The presence, in person
or by proxy, of shareholders entitled to cast a majority of
votes will be necessary to constitute a quorum for the
transaction of business. Any shareholder giving a Proxy has
the power to revoke it by written revocation delivered to the
Company Secretary at any time before it is voted. Proxies
solicited herein will be voted, and if the person solicited
specifies by means of the ballot provided in the Proxy a
choice with respect to matters to be acted upon, the shares
will be voted in accordance with such specification. Under
Pennsylvania Law and the Company's By-Laws, abstentions and
broker non-votes are not considered to be "votes" and,
therefore, will not be given effect either as affirmative or
negative votes. Votes that are withheld will be excluded
entirely from the vote and will have no effect.
The Annual Report for the year ended December 31, 1993,
containing audited financial statements, is being mailed to
shareholders at the same time as this Proxy Statement, i.e.,
on or about March 25, 1994.
2
<PAGE>
<PAGE>3
ELECTION OF DIRECTORS
The persons named in the proxy will vote the shares for
the nominees listed below, all of whom are now Directors of
the Company, to serve as Directors for the ensuing year or
until their successors shall be elected. None of the persons
named as nominees for Directors have indicated that he or she
will be unable or will decline to serve. In the event any of
the nominees are unable or decline to serve, which the
Nominating Committee does not believe will happen, the
persons named in the proxy will vote for the remaining
nominees and others who may be selected by the Nominating
Committee. The By-Laws of the Company provide for a variable
number of Directors from 10 to 18. For 1994, the Board of
Directors has fixed the number of Directors at 15. It is
intended that the proxies will be voted for the election of
the fifteen nominees named below as Directors, and no more
than fifteen will be nominated by the Nominating Committee.
None of the nominees were, during the last five years,
involved as a defendant in any legal proceedings which could
adversely affect his or her capacity to serve as a member of
the Board of Directors. On December 27, 1993, Mr. Frank N.
Piasecki notified the Board that for personal reasons he was
unable to stand for reelection to the Board of Directors. The
principal occupations stated below are the occupations which
the nominees have had during the last five years. The names
of the nominees and information concerning them and their
associations as of February 24, 1994, as furnished by the
nominees, follows:
<TABLE>
<CAPTION>
Amount and Percentage
of Securities of the
Company Owned
Beneficially, Directly or
Indirectly
-----------
Year First
Became Common
Name Age Principal Occupation Director Shares Percentage
- ------------------- --- -------------------- --------- ------ ----------
<S> <C> <C> <C> <C> <C>
William J. Avery*,****(1) 53 Chairman of the Board, President 1979 183,466 0.207%
and Chief Executive Officer.
Also, a Director of West Company
Henry E. Butwel*,** 65 Former Executive Vice President 1975 126,900 0.143%
Administration and Chief Financial
Officer, Retired
Charles F. Casey 67 Former Chairman of the Board of 1992 1,000 0.001%
CONSTAR International Inc., now a
wholly-owned subsidiary of the
Company
Francis X. Dalton 70 Former Treasurer, Retired 1987 71,841 0.081%
Francis J Dunleavy **,*** 79 Director of Bird, Inc., Quaker 1980 6,600 0.007%
Chemical, AEL, Scan Graphics
and Selas Corp.
Chester C. Hilinski *,***, 76 Of Counsel, Dechert Price & 1984 2,000 0.002%
**** Rhoads, Attorneys
Richard L. Krzyzanowski*(2) 61 Executive Vice President, Sec- 1983 143,260 0.161%
retary and General Counsel
</TABLE>
3
<PAGE>
<PAGE>4
<TABLE>
<CAPTION>
Amount and Percentage
of Securities of the
Company Owned
Beneficially, Directly or
Indirectly
----------
Year First
Became Common
Name Age Principal Occupation Director Shares Percentage
- ---------------- --- --------------------- --------- ------- ----------
<S> <C> <C> <C> <C> <C>
Josephine C. Mandeville(3) 53 President and Chief Executive 1991 235,600 0.265%
Officer of The Connelly Founda-
tion, a non-profit charitable
foundation
Owen A. Mandeville, Jr.(3) 59 President of Mandeville Insur- 1975 93,000 0.105%
ance Associates, Inc., real estate
and insurance consultants
Michael J. McKenna*(4) 59 Executive Vice President; Presi- 1987 124,186 0.140%
dent, North American Division
Alan W. Rutherford(5) 50 Executive Vice President, Chief 1991 21,621 0.024%
Financial Officer
J. Douglass Scott 73 Former Chief Executive Officer 1973 12,000 0.014%
of Crown Cork & Seal Canada
Inc., Retired
Robert J. Siebert 73 Director and Retired President 1966 54,370 0.061%
of CRC Chemicals Inc., a mar-
keter of chemical specialties;
management consultant
Harold A. Sorgenti*** 59 Managing Partner of The 1991 4,800 0.005%
Freedom Group. Also, a Direc-
tor of Corestates Financial Corp.
and Provident Mutual Life
Insurance Co.
Edward P. Stuart**,**** 80 Management Consultant 1964 236,153 0.266%
<FN>
* Member of the Executive Committee.
** Member of the Audit Committee.
*** Member of the Executive Compensation Committee.
**** Member of the Nominating Committee.
(1) Included in these are 9,000 shares owned by a charitable
foundation of which Mr. Avery is one of three trustees, and
48,475 shares subject to presently exercisable options held
by Mr. Avery.
(2) Included in these are 16,100 shares owned by a
charitable foundation of which Mr. Krzyzanowski is one of
five trustees, and 20,425 shares subject to presently
exercisable options held by Mr. Krzyzanowski, and 15,000 held
by a charitable remainder trust of which Mr. Krzyzanowski is
a trustee.
(3) Mr. Owen A. Mandeville, Jr. and Mrs. Josephine C.
Mandeville are husband and wife. In 1993, the Company
obtained insurance with various insurers through Mandeville
Insurance Associates, Inc., insurance brokers, of which Mr.
Mandeville is President and the majority shareholder. The
premiums paid for this insurance in 1993 were approximately
$4,100,000. In the opinion of the Management of the Company,
the insurance was obtained on terms fair and reasonable and
as favorable to the Company as could have been obtained from
others.
(4) Included in these are 3,300 shares owned by a charitable
foundation of which Mr. McKenna is one of eight trustees, and
22,300 shares subject to presently exercisable options held
by Mr. McKenna.
(5) Includes 10,000 shares subject to presently exercisable
options held by Mr. Rutherford.
</TABLE>
4
<PAGE>
<PAGE>5
In addition, Mark W. Hartman, Executive Vice President,
Corporate Technologies, is beneficial owner of 63,648 shares
of Common Stock or 0.072% and Ronald R. Thoma, Executive Vice
President, Procurement and Traffic, is beneficial owner of
62,622 shares of Common Stock or 0.071%.
All Executive Officers and Directors of the Company as a
group of 19 including the above are beneficial owners of
1,463,735 shares of common stock or 1.648%.
Not included in the table above are 8,554,700 shares of
Common Stock owned by the Connelly Foundation, a private
charitable foundation. Messrs. Avery, Hilinski, Mandeville
and Mrs. Mandeville, his spouse, are four of thirteen
Trustees of this Foundation and disclaim any beneficial
ownership of these shares. Also not included are 77,068
shares of Common Stock held in the Josephine C. Connelly
Trust, of which Mrs. Mandeville is one of the Trustees and
36,942 shares of Common Stock held in a trust under the will
of John F. Connelly, of which Mr. and Mrs. Mandeville and Mr.
Hilinski are Trustees. Mr. and Mrs. Mandeville and Mr.
Hilinski disclaim any beneficial ownership of these shares.
The Officers and Directors of the Company, in respect to
the securities of the Company described above, have sole
voting and investment power, except as to the shares held in
the aforementioned trusts and charitable foundations, with
respect to which the Trustees have shared voting and
investment power.
BOARD MEETINGS AND COMMITTEES
In 1993, there were five regular meetings and one special
meeting of the Board of Directors.
In 1993, the Audit Committee had three meetings. The Audit
Committee provides assistance to the Board of Directors in
discharging its responsibilities in connection with the
financial accounting practices of the Company and the
internal controls related thereto and represents the Board of
Directors in connection with the services rendered by the
Company's independent accountants. The Executive Compensation
Committee met four times in 1993 and is responsible for the
review of the executive compensation program. The Nominating
Committee recommends nominees for election to the Board of
Directors and had one meeting in 1993.
Directors who are not employees of the Company are paid
$15,000 annually as Director's fees, and $750 per meeting
attended. In addition, a non-employee Director who is a
chairman of a committee is paid $10,000 annually and
committee members are paid $7,000 annually with an attendance
fee of $1,000 per meeting. In addition, in 1991 each
non-employee Director was granted 3,000 shares of Company
restricted stock released in five annual installments of 600
shares. Restrictions are removed as to each installment
annually. Each incumbent Director of the Company attended at
least 75% of the aggregate meetings held by the Board of
Directors and by the Committees on which they served.
5
<PAGE>
<PAGE>6
EXECUTIVE COMPENSATION
The following table sets forth certain information
regarding compensation paid during each of the Company's last
three fiscal years to the Company's five highest paid
Executive Officers during 1993:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation(A) Long Term Compensation
---------------------- ----------------------
Securities Underlying All Other
Name & Principal Salary Bonus Options Compensation
Position Year ($) ($) (#) ($) (B)
- ----------------- ---- ------ ----- ----------------- ----------
<S> <C> <C> <C> <C> <C>
William J. Avery 1993 650,000 323,423 43,400 4,497
- -Chairman, President 1992 500,000 286,239 43,900 4,394
& Chief Executive 1991 460,000 0 0
Officer
Michael J. McKenna 1993 275,000 120,881 16,000 4,125
- -Executive Vice 1992 248,050 123,405 14,200 3,721
President; President 1991 225,500 25,000 0
North American Div.
Mark W. Hartman 1993 240,000 86,988 10,500 2,397
- -Executive Vice 1992 217,800 99,705 9,300 2,186
President, Corporate 1991 198,000 25,000 0
Technologies
Alan W. Rutherford 1993 225,000 85,298 13,000 3,375
- -Executive Vice 1992 158,038 110,119 10,000 2,370
President, Chief 1991 119,281 7,500 7,500
Financial Officer
Ronald R. Thoma 1993 200,000 66,902 7,000 3,000
- -Executive Vice 1992 154,998 62,359 6,700 1,163
President, Procure- 1991 142,200 25,000 0
ment & Traffic
<FN>
(A) The amount of perquisite and other personal benefits, as
determined in accordance with the rules of the Securities and
Exchange Commission relating to executive compensation, did
not exceed the materiality threshold of the lesser of $50,000
or 10% of the total of annual salary plus bonus, if less than
$50,000.
(B) The amounts shown in this column for the last fiscal year
represent amounts contributed to the 401(k) Savings and
Employees' Stock Ownership Plan (KSOP) by the Company.
Disclosure is not required for 1991.
</TABLE>
6
<PAGE>
<PAGE>7
Aggregated Option Exercises in the Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised In-The-
Options Money Options
Number Of Value (A) At 12/31/93 At 12/31/93 (B)
Shares Acquired Realized Exercisable/ Exercisable/
On Exercise ($) Unexercisable (#) Unexercisable ($)
--------------- --------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
William J. Avery 1990 Plan 37,500 760,939 10,975/151,325 37,040/2,066,675
Michael J. McKenna 1990 Plan 18,750 413,282 3,550/64,150 11,981/1,022,320
Mark W. Hartman 1990 Plan 18,750 385,157 2,325/54,975 7,847/978,917
1984 Plan 11,250 284,063 0/0 0/0
Alan W. Rutherford 1990 Plan 9,375 200,860 2,500/41,125 8,438/544,361
Ronald R. Thoma 1990 Plan 0 0 39,175/49,525 940,029/965,335
<FN>
(A) Value Realized is the difference between the price of the
stock on the date exercised less the option purchase price.
(B) Value of Unexercised Options is the difference between
the stock price at December 31, 1993 and the option purchase
price.
</TABLE>
Option Grants In Last Fiscal Year
The Company's 1990 Stock Option Plan is administered by
the Executive Compensation Committee appointed by the Board
of Directors. The following table provides information
related to Stock Options granted in the last fiscal year to
the five named executive officers at Potential Realizable
Values at Assumed Price Appreciation for the Option Terms
Compounded Annually.
<TABLE>
<CAPTION>
Potential Realizable Value
% Of Total At Assumed Annual
Options Granted Rates of Stock
Option To Employees Exercise Price Appreciation
Granted # In Fiscal Or Base Expiration For Option Term
(A) (B) (C) Year Price Per Share Date 5% 10%
----------- ---------- --------------- --------- --------------------
<S> <C> <C> <C> <C> <C> <C>
William J. Avery 43,400 5.7% $39.875 12/22/03 $1,088,342 $2,758,070
Michael J. McKenna 16,000 2.1% $39.875 12/22/03 $401,232 $1,016,800
Mark W. Hartman 10,500 1.4% $39.875 12/22/03 $263,309 $667,275
Alan W. Rutherford 13,000 1.7% $39.875 12/22/03 $326,001 $826,150
Ronald R. Thoma 7,000 0.9% $39.875 12/22/03 $175,539 $444,850
<FN>
(A) Options become exercisable with respect to 25% of the
shares covered thereby on each December 22 of the years,
1994, 1995, 1996 and 1997. Options are fully vested on
December 22, 1997. The Option Exercise Price may be paid in
shares of Common Stock owned by the executive officer or in
cash.
(B) The term of an option shall not be greater than ten years
and cannot be exercised sooner than six months from date of
grant.
(C) The Executive Compensation Committee administering the
1990 Stock Option Plan has the discretion, subject to plan
limits, to modify terms of outstanding options and to reprice
the options.
</TABLE>
7
<PAGE>
<PAGE>8
Retirement Program
The Company maintains its Salaried Pension Plan, which is
a qualified defined benefit retirement plan providing pension
benefits for all non-union salaried employees meeting minimum
eligibility requirements. The Plan provides normal retirement
benefits at age 65 based on the average of the five highest
consecutive years of earnings in the last 10 years. These
average earnings are multiplied by 1.25%, and by an
additional 1.25% of average earnings if the employee elects
to contribute to the supplemental portion of the plan. This
result is then multiplied by years of service, which yields
the annual pension benefit. Under federal law, benefits from
a qualified plan are limited to $118,800 per year. Also, for
years beginning in 1994, benefits may be based only on the
first $150,000 (adjusted for cost of living increases) of an
employee's annual earnings.
For illustration purposes, the following table shows
estimated maximum aggregate annual retirement benefits
payable from the qualified plan to employees who retire at
age 65, assuming the employees contribute to the supplemental
portion of the plan during all the years of service and
receive their benefit as a single life annuity, without
survivor benefits:
<TABLE>
<CAPTION>
Final Years of Service
Average
Earnings 15 20 25 30 35
- --------- ----- ----- ----- ------ -----
<S> <C> <C> <C> <C> <C>
$50,000 $18,750 $25,000 $31,250 $37,500 $43,750
$100,000 $37,500 $50,000 $62,500 $75,000 $87,500
$150,000 $56,250 $75,000 $93,750 $112,500 $118,800
$200,000 $75,000 $100,000 $118,800 $118,800 $118,800
$250,000 $93,750 $118,800 $118,800 $118,800 $118,800
$300,000 $112,500 $118,800 $118,800 $118,800 $118,800
</TABLE>
The Company also maintains the Senior Executive
Retirement Plan ("SERP") in which seven key executives,
including the five named executive officers, participate. The
fixed annual retirement benefits for four of the named
executives who were first eligible to participate in the SERP
before 1993 are as follows: Mr. Avery - $800,000; Mr. McKenna
- - $275,000; and Messrs. Hartman and Thoma - $250,000 each.
Benefits for executives first eligible to participate in
the SERP in 1993, including Mr. Rutherford, are based upon a
formula equal to (i) 2% of the average of the five highest
consecutive years of earnings times years of service up to
20, plus (ii) 1% of such earnings times years of service over
20.
Years of service credited under the Salaried Pension Plan
and the SERP for the following individuals are: Mr. Avery -
34 years, Mr. McKenna - 37 years, Mr. Hartman - 31 years, Mr.
Rutherford - 19 years and Mr. Thoma - 38 years.
The SERP also provides a lump sum death benefit of five
times the annual retirement benefit and subsidized survivor
benefits.
Participants vest in their benefits at the earliest of
five years of participation, specified retirement dates or
employment termination (other than for cause) within one year
after a change in control of the Company (as defined in the
SERP).
8
<PAGE>
<PAGE>9
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Committee of the Board of
Directors is charged with developing, monitoring, and
managing the executive compensation program at Crown Cork &
Seal Company, Inc. We submit this report to shareholders
describing both the principles under which the program was
developed and decisions reached that directly impact the
Chief Executive Officer during 1993.
Principles
Our guiding principle is to implement a unified program
that enables the Company to retain and motivate a team of the
industry's most outstanding executives so that they can
create long-term value for the shareholders. We do this by:
- - Regularly commissioning studies of competitive pay
practices within the container industry and other
manufacturing companies so that pay opportunities are
generally within competitive norms.
- - Integrating all executive pay programs with the Company's
short and long-term objectives and strategies.
- - Developing ownership-oriented programs that reward for
total shareholder return over a long-service career.
The Executive Compensation Committee works with
independent management consultants in monitoring the
effectiveness of the entire program. Over the last several
years, your Company has undergone dramatic change. Crown has
been turned into one of the world's packaging giants. To
sustain the Company's performance and continue its growth, we
need to not only motivate existing management, but to attract
and retain experienced managers at all levels in the Company.
As a result, a number of modifications were made to the four
primary components of the Company's executive compensation
program. Overall, the program has been redirected from an
orientation on length of service and retirement compensation
to a program more closely aligned with sustained improvement,
Company performance, and increased shareholder value. The
specific components of the program are described below.
1. Base Salary
Historically, the Company's annual base salary levels
have been well below competitive market levels. In order to
attract and hold the management team, and also recognize the
substantial growth and performance of the Company, we began
last year to move senior executive salaries toward
competitive market rates, as defined by the container and
manufacturing industries. We continued the policy this year
but with more normal movement as we move toward the
competitive market medians which the executive salaries are
still below. The competitive market includes but is not
limited to companies included in the peer group used in the
five year performance graph.
2. Annual Incentives
In 1990, the Committee implemented a goal-based
Management Incentive Plan that replaced programs used in the
past years. The Plan calls for the achievement of Company net
income targets, as well as specific financial and operating
goals, before incentive awards are earned by Plan
participants. These goals stem directly from the Company's
strategic and operating plans.
9
<PAGE>
<PAGE>10
3. Long Term Incentives
Stock options have always been a part of the executive
compensation program at the Company. However, grant
opportunities were somewhat discretionary both in terms of
amount and timing. Recently, the Committee adopted a program
that will offer stock options annually, but the size of the
grant will vary based on the Company's and the executives'
performance. In making this change, the Committee reaffirms
its belief that stock options are an ideal way to link
shareholder and executive interests.
4. Retirement Benefits
In the past, the Company's executive compensation plan
had a bias toward providing significant end-of-career
retirement income and insurance benefits. While in no way
disavowing the Committee's belief that a long and successful
career with the Company is important to growing shareholder
value, these programs will begin to decline in importance to
the overall Program as competitive pay and incentive
opportunities are reached.
In summary, the Committee believes that its role in
designing, monitoring, and managing the executive
compensation program is critical to the objective of driving
performance to the ultimate benefit of the shareholders. Base
salaries need to be within competitive norms so that
executives will be attracted and retained to carry out their
roles and responsibilities. Annual incentive awards deliver
the message that competitive pay is received only when
earnings and other tactical goals are achieved. In addition,
annual stock option grants require continuous improvement in
value created for the long-term shareholder.
Specific Decisions Impacting Compensation for the
Chairman and Chief Executive Officer
In considering the compensation for the named executive
officers including the Chairman and Chief Executive Officer,
William J. Avery, for the fiscal year 1993, the Committee
reviewed the goals and objectives established at the
beginning of the year and concluded that the management group
had performed in an exceptional manner. Specifically, the
following accomplishments were noted:
1. As a result of recent acquisitions and internal growth,
the Company has been transformed into a major worldwide
packaging manufacturer.
2. The acquisitions have been successfully absorbed,
efficiency improved, and the organization streamlined,
resulting in significant cost reductions and profit
improvement. Following on increases in net income of
19.6% in 1991 and 21.3% in 1992, the Company achieved a
16.4% increase in 1993 (before accounting changes)
bringing reported net income to $180.9 million.
3. The profit objectives have been met in a period of
difficult market conditions. As is shown on the stock
performance graph, the Company's stock has outperformed
both the market and the Container Packaging Index.
4. The acquisitions of both CONSTAR International in October
1992 and Wellstar in May 1993 have been successfully
integrated into the Company by forming the Plastics
Division.
5. The Van Dorn acquisition was successfully closed on April
16, 1993 and its Plastics Injection Machinery division
sold to Mannesmann Demag.
10
<PAGE>
<PAGE>11
6. On January 17, 1994, a letter of intent was signed to
acquire the Container Division of Tri Valley Growers.
This acquisition is expected to close in the spring of
1994.
7. The Company has successfully continued to restructure and
consolidate operations worldwide to meet changing market
conditions. The results of this is to continually reduce
the cost base and help improve margins in competitive
markets.
Mr. Avery's salary was moved to a median competitive
salary level last year, and as a result, his salary has been
increased modestly (2.8%) from $650,000 to $668,200 in 1994.
Mr. Avery also participates in the Management Incentive
Plan as do other executive and senior management employees.
As outlined above, major goals established under the
operating plan and budget were met or exceeded, and the
Committee believes that Mr. Avery's strategic vision for the
Company, stewardship, and performance during the year
significantly enhanced shareholder value and dramatically
improved the Company's competitive position. As a result, he
was granted a bonus payment of $323,423. Also, after
reviewing competitive data, as well as considering the
Company's 1993 performance, a stock option grant to Mr. Avery
of 43,400 shares was made. The exercise price of these
options is $39.875 per share, and the term of the option is
ten years.
This report is respectfully submitted by the members of
the Compensation Committee of the Board of Directors.
Harold A. Sorgenti,
Chairman
Francis J. Dunleavy
Chester C. Hilinski
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<PAGE>12
COMPARATIVE STOCK PERFORMANCE
Comparison of Five-Year Cumulative Total Return (a)
Crown Cork & Seal, S&P 500 Index,
Dow Jones "Containers & Packaging" Index(b)
Performance Graph filed on Form SE on 3/23/94
(a) Assumes that the value of the investment in Crown Common
Stock and each index was $100 on December 31, 1988 and that
all dividends were reinvested.
(b) Industry index is weighted by market capitalization and
is comprised of Crown, Ball, Sonoco Products, Stone Container
and Temple-Inland.
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<PAGE>13
SECTION 16 REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors, officers and persons who
own more than 10% of a registered class of the Company's
equity securities to file initial reports of ownership and
reports of changes in ownership with the Securities and
Exchange Commission (the "SEC") and the New York Stock
Exchange. Such persons are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on the review of the copies of SEC forms
received by the Company with respect to fiscal year 1993, or
written representations from reporting persons, the Company
believes that all filing requirements applicable to its
Directors and Executive Officers have been complied with in
all material respects. Except for J.P. Morgan Company
Incorporated of New York, which owns 11.4% of the Company's
Common Stock, there are no persons or institutions who own
more than 10% of the Company's Common Stock.
CROWN CORK & SEAL COMPANY,INC.
STOCK PURCHASE PLAN
The Board of Directors has adopted and recommends that
the shareholders approve the Crown Cork & Seal Company, Inc.
Stock Purchase Plan (the "Plan"). The purpose of the Plan is
to assist the Company and its United States subsidiaries in
attracting and retaining employees by offering them a greater
stake in the Company's success and a closer identity with it,
and to encourage ownership of the Company's stock by
employees. The Plan will accomplish these goals by allowing
eligible employees of the Company and its United States
subsidiaries an ongoing opportunity to purchase the Company's
Common Stock through payroll deduction at a discounted price.
The total number of shares of the Company's Common Stock
available for purchase under the Plan is 3,000,000 (subject
to adjustments for stock splits, stock dividends and the
like). The Plan is intended to increase morale and loyalty of
all employees and create an effective incentive to increase
productivity.
1. Eligibility
Full-time and part-time employees of the Company and its
United States subsidiaries who have completed 12 consecutive
months of employment are eligible to participate in the Plan.
There are approximately 12,000 employees eligible for the
Plan. The only employees not eligible to participate in the
Plan are (i) officers of the Company and (ii) certain
employees who are treated as "highly compensated" under the
Internal Revenue Code. Participation in the Plan
automatically terminates upon an employee's ceasing to be an
employee of the Company or one of its United States
subsidiaries.
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<PAGE>14
2. Participant Contributions
An eligible employee participates in the Plan by electing
to make after-tax payroll contributions in an amount equal to
2%, 5%, 10% or 15% of his or her compensation. A
participant's contribution percentage is applied only to the
first $50,000 of compensation earned by the participant
during a calendar year. Therefore, the maximum contribution a
participant may make during any calendar year is $7,500
(i.e., 15% of $50,000). A participant's payroll contributions
to the Plan are allocated to a bookkeeping reserve account
("Account") and used to purchase Common Stock on a quarterly
basis.
Because the number of shares of Common Stock purchased by
an eligible employee is dependent upon the amount such
employee contributes to the Plan, it is not possible at this
time to determine the number of shares of Common Stock that
will be acquired under the Plan by any one employee or group
of employees.
3. Purchase of Common Stock
The Plan permits participants to purchase Common Stock at
a 15 percent discount. The Plan operates on a quarterly basis
("Offering Periods"). Contributions allocated to a
participant's Account during an Offering Period are used to
buy shares of Common Stock on the last day of such Offering
Period. The purchase price of a share of Common Stock under
the Plan is 85 percent of the closing price of a share of the
Common Stock on the New York Stock Exchange (the "Exchange")
on the last day of the Offering Period.
Subject to the restrictions discussed below, each
participant is deemed to legally own all Common Stock
allocated to his or her Account and is entitled to exercise
all of the rights and privileges associated with ownership of
the Common Stock, including voting, tendering and receiving
dividends on such Common Stock.
The Company may acquire Common Stock for use under the
Plan from authorized but unissued shares, treasury shares, in
the open market or in privately negotiated transactions. The
Company will pay all commissions, fees and other charges
related to the Plan's acquisition of Common Stock.
4. Vesting
Common Stock purchased by a participant under the Plan
becomes vested two years after the date of its purchase.
During the two-year vesting period, a participant is
restricted from selling shares of non-vested Common Stock (or
otherwise disposing of such shares) to any person or entity
other than the Company. If a participant elects to sell
non-vested Common Stock to the Company, the purchase price
will equal 85 percent of the official closing price of Common
Stock on the Exchange on the date of sale.
Once Common Stock has been allocated to a participant's
Account for a period of two years, it becomes vested and all
restrictions on the participant's ability to sell or
otherwise dispose of the Common Stock are removed. In
addition, in the event there is a "change in control" of the
Company, all non-vested Common Stock becomes fully vested.
Satisfaction of the two-year vesting requirement is
unrelated to a participant's continued employment with the
Company. That is, a participant who terminates from service
with the Company and all of its subsidiaries will continue to
vest in Common Stock allocated to his or her Account.
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<PAGE>15
5. Administration
The Stock Purchase Plan Committee, designated by the
Board of Directors, has the full and exclusive authority to
administer the Plan. The Committee shall interpret the
provisions of the Plan and make all determinations necessary
for the administration of the Plan (including the
determination as to whether a "change in control" has
occurred).
6. Amendment and Termination
The Board of Directors has authority to amend the Plan at
any time. However, certain amendments require the approval of
a majority of the Company's shareholders. Without shareholder
approval, no amendment may be made: (i) increasing the
maximum number of shares available for purchase under the
Plan; (ii) modifying the Plan's eligibility requirements; or
(iii), causing the Plan to fail the requirements of Section
423 of the Internal Revenue Code.
The Board of Directors also has authority to terminate
the Plan at any time. In any event, if not earlier terminated
by the Board of Directors, the Plan will automatically
terminate when the participants have purchased all of the
shares of Common Stock available under the Plan.
7. Federal Tax Treatment
The Plan is an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code. Therefore, a
participant who purchases shares of Common Stock under the
Plan will not be subject to Federal income tax on the
difference between the fair market value of the shares and
the price actually paid for such shares at the time of
purchase. The Company is not entitled to a deduction for the
difference between the fair market value of the shares and
the price paid for such shares.
If a participant disposes of Common Stock purchased under
the Plan after it has become vested, the participant will be
treated as having ordinary compensation income equal to the
lesser of (i) the excess of the fair market value of the
Common Stock on the date it was purchased over the actual
purchase price, or (ii) the excess of the fair market value
of the Common Stock at the time of disposition over the
actual purchase price. The amount of the compensation income
is then added to the participant's basis in the Common Stock.
The difference between the amount realized on the sale of the
Common Stock and the participant's adjusted basis will be
treated as a capital gain or loss.
If a participant disposes of Common Stock purchased under
the Plan before such Common Stock becomes vested, the
participant will be treated as having ordinary compensation
income equal to the excess of the fair market value of the
Common Stock on the date it was purchased over the actual
purchase price. Any additional appreciation in the Common
Stock is treated as a capital gain. In addition, if a
participant disposes of Common Stock before it is vested, the
Company is entitled to a tax deduction equal to the amount of
income treated as compensation by the participant.
8. Requisite Vote
To be adopted, the Plan requires the affirmative vote of
a majority of the votes cast by all shareholders entitled to
vote thereon.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" THE ADOPTION OF THE STOCK PURCHASE PLAN.
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<PAGE>16
RESOLUTION ON SOUTH AFRICA
The Evangelical Lutheran Church in America, which is the
beneficial owner of 58,200 shares of the Company's Common
Stock, and the Sisters of Mercy of the Americas, which is the
beneficial owner of 160 shares of the Company's Common Stock,
have submitted the following resolution for consideration of
the shareholders at the 1994 Annual Meeting of Shareholders.
During 1993, negotiations in South Africa resulted in a
date, April 27, 1994, for the first non-racial elections. The
talks also established a Transitional Executive Council to
oversee the change to a new democratic South Africa. These
actions resulted in the call to lift international sanctions
and to reinvest to build a new South Africa.
Meanwhile, deaths from unabated violence make the
transition to peace difficult. Moreover, while statutory
apartheid has ended, its economic and social legacy continue:
EDUCATION: The rate of illiteracy is 50%. The apartheid
government spent four times the amount on whites for
education that it did on blacks, and maintained 14 education
departments.
ECONOMY: Wealth continues to be concentrated in white
hands. Black incomes are one tenth those of whites, while
black unemployment is 50%. Four groups of companies control
80.7% of the capitalized value of the Johannesburg Stock
Exchange.
HOUSING AND LAND: Over seven million people live in
makeshift shanties and backlog of affordable housing is
between 1.2 million and 1.4 million units. Poverty among
blacks leaves 60% with inadequate incomes to invest in
housing. Forced removals of blacks to homelands placed 44% of
the nation's population on 13% of the land. These removals
continued into 1993.
HEALTH AND ENVIRONMENT: The average black infant is six
times more likely to die during its first six months than the
average white infant. The mining industry operates with
little regulation of health and environment impact. In some
townships 40% of residents have asbestos-related cancer from
mining waste in their communities.
We believe the international business community should
assist in rebuilding a viable economy within a just social
structure.
The South African Council of Churches on July 8, 1993,
adopted a Code of Conduct for Business Operating in South
Africa. This ethical framework for investment grew out of
collaborative work with the African National Congress (ANC),
the Coalition of South African Trade Unions (COSATU),
numerous other political, community and business
organizations and international partners. It is similar to
the Platform of Guiding Principles announced in November 1992
by the ANC and COSATU.
The SACC Code summons business to play a constructive and
creative role in partnership with workers, communities and
other members of civil society to lay the economic
foundations for a stable and prosperous South Africa. Its
planks call for equal opportunity, training and education to
increase productive capacities, protection and workers'
rights, a safe and healthy work place, job creation, social
responsibility programs developed in consultation with
communities affected, disclosure of product hazards to
consumers, environmentally sound products and practices,
support for black-owned businesses, and disclosure of
information needed to monitor Code implementation.
We believe this code presents an acceptable ethical
framework for our company's South African operations and will
improve its standing in its communities and markets in South
Africa.
THEREFORE, shareholders request the Board of Directors:
1. to endorse the Code of Conduct for Business Operating
in South Africa and
2. report to shareholders on its implementation.
16
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<PAGE>17
Code of Conduct for Business Operating in
South Africa - (SACC Initiative, July 1993)
The apartheid system has historically burdened South
Africa with gross economic distortions, stagnation, secrecy,
severe discrimination and natural devastation. It has
deprived the country's workers, communities, and environment
of the fundamental rights written into international
conventions and upheld in other countries.
In order to reverse this crippling legacy and to improve
the economic well-being of all South Africans, investment by
both South African and multi-national companies needs to be
reshaped in the image of an equitable, democratic and
life-enhancing society.
It is out of this grave concern and motivation based on
ethical religious considerations that the South African
Council of Churches, meeting in conference on 8 July 1993,
takes this initiative to introduce and support this code of
conduct. The code outlines ways in which business can play a
constructive and creative role in partnership with workers,
communities and other members of civil society, to lay the
economic foundations for a stable and prosperous South
Africa.
While these standards are also expected to inform the
policies of a democratically elected government, in the
interim, they are designed to apply to companies operating in
South Africa.
1. Equal Opportunity
Companies should insure that their operations are free
from discrimination based on race, sex, religion,
political opinion or physical handicap, and implement
affirmative action programs designed to protect the
equal rights and treatment of the historically
disadvantaged.
2. Training And Education
Companies should develop and implement training and
education programs to increase the productive capacities
of their South African employees in consultation with
the trade union movement.
3. Workers Rights
Companies should recognize representative unions and
uphold their employees' rights to organize openly,
bargain collectively, picket peacefully and strike
without intimidation or harassment.
4. Working and Living Conditions
Companies should maintain safe and healthy work
environment and strive to ensure that the working and
living conditions they provide accord with relevant
international conventions.
5. Job Creation and Security
Companies should strive to maintain productive
employment opportunities and create new jobs for South
Africans.
6. Community Relations
Companies should share information about their practices
and projected plans with communities affected by their
operations, and develop social responsibility programs
in ongoing consultation with representative bodies in
these communities.
7. Consumer Protection
Companies should inform consumers of any possible
dangers associated with their products and cooperate
with consumer protection and broader community
organizations to develop and uphold appropriate product
safety and quality standards.
8. Environmental Protection
Companies should utilize environmentally sound practices
and technologies, disclose how and in what amounts they
dispose of their waste products, and seek to minimize
hazardous waste.
9. Empowerment of Black Businesses
Companies should strive to improve the development of
black-owned South African businesses by purchasing from
and sub-contracting to such firms.
10. Implementation
Companies should cooperate with monitors established to
implement these standards by disclosing relevant
information in a timely fashion.
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<PAGE>18
MANAGEMENT STATEMENT IN OPPOSITION
The Board of Directors of the Company opposes the
proposed resolution. For many years, the Board of Directors
has looked forward to the establishment of full political,
social and economic equality for all South Africans. The
Company believes that it has for years been at the forefront
of employers in promoting these goals in South Africa. The
Company's current investment in South Africa is a 50%
interest in a joint venture with a South African company. The
joint venture provides equal wages and fully integrated
facilities for all South African employees and promotes
funding and grants for education and new housing for its
non-white employees. Through its sponsorship of legal
clinics, education and building grants and various activities
with the South African business community, the Company
believes it has contributed to the dismantling of the
apartheid system and the establishment of a climate leading
to peaceful change in South Africa. The Company has been
commended by the United States Ambassador to South Africa for
its contribution to socially responsive programs of black
advancement in that country. Commendation was also received
from the leadership of the School Principals Enrichment
Program in South Africa praising the company for sponsoring
principal/teacher activities in an effort to improve the
quality of black employees' education in South Africa.
We share some of the proponent's views as to the future
of South Africa, particularly the need for a democratic
multi-racial government as a necessary prerequisite for
national reconciliation and advancement of black business in
all fields. We also support many of the goals set forth in
the proposed Code of Conduct. However, the Code of Conduct
also attempts to regulate the Company's policies in matters
which the Board of Directors believes are not directly
related to the worthy goal of establishing political, social
and economic equality in South Africa. Certain aspects of the
Code of Conduct deal directly with the Company's conduct of
its ordinary business operations. We believe this is
unnecessary and will interfere with management
responsibilities. The Board of Directors has, and will
continue, to manage the business and affairs of the Company
in a manner that the Board believes is consistent with the
best interests of Shareholders.
The Company is currently reporting to the U.S. State
Department on its social, educational and civil rights
activities in South Africa. Since the inception of these
reporting requirements, the Company has received the highest
rating from the State Department for compliance with the
requirements of the United States in all these fields. The
Board of Directors believes that the adoption of the
proponents' resolution would add another layer of costly
reporting and, given the Company's record in this area, would
be superfluous and not in the best interests of the Company's
Shareholders.
For all these reasons, and in view of the Company's
history of promoting social justice in South Africa, THE
BOARD OF DIRECTORS OPPOSES THE PROPOSED RESOLUTION AND
UNANIMOUSLY RECOMMENDS A VOTE "AGAINST" IT.
PROPOSALS OF SHAREHOLDERS
Proposals of Shareholders intended to be presented at
the 1995 Annual Meeting must be received in writing, via
Certified Mail - Return Receipt Requested, by the Office of
the Secretary, Crown Cork & Seal Company, Inc., 9300 Ashton
Road, Philadelphia, Pennsylvania 19136, not later than
November 25, 1994.
18
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<PAGE>19
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The firm of Price Waterhouse is the independent
accountant for the most recently completed fiscal year and
has been selected by the Board to continue in that capacity
for the current year. Price Waterhouse reviews and performs
annual audits of the Company's financial statements and
assists the Company in the preparation of federal tax
returns. A representative or representatives of Price
Waterhouse are expected to be present at the Annual Meeting
and will have the opportunity to make a statement if they
desire to do so. Such representatives are also expected to be
available to respond to questions raised orally at the
meeting or submitted in writing to the Office of the
Secretary of the Company before the meeting.
OTHER MATTERS
The Board of Directors knows of no other matter which
may be presented for Shareholders' action at the Annual
Meeting, but if other matters do properly come before the
Annual Meeting, or if any of the persons named above to serve
as Directors are unable to serve, it is intended that the
persons named in the proxy or their substitutes will vote on
such matters and for other nominees in accordance with their
best judgment.
The Company will file its Annual Report on Form 10-K
with the Securities and Exchange Commission on or before
March 31, 1994. A copy of the Report, including the financial
statements and schedules thereto and a list describing all
the exhibits not contained therein, may be obtained without
charge by any Shareholder after March 31, 1994. Requests for
copies of the Report should be sent to: Corporate Secretary,
Crown Cork & Seal Company, Inc., 9300 Ashton Road,
Philadelphia, Pennsylvania 19136.
RICHARD L. KRZYZANOWSKI
Executive Vice President,
Secretary & General Counsel
Philadelphia,
Pennsylvania 19136
March 25, 1994
19
<PAGE>
CROWN CORK & SEAL COMPANY, INC.
9300 Ashton Road, Philadelphia, PA 19136
Proxy for Annual Meeting of Common Shareholders
to be held on April 28, 1994
The undersigned hereby appoints WILLIAM J. AVERY, ALAN W.
RUTHERFORD and RICHARD L. KRZYZANOWSKI as Proxies, each with
the power to appoint his substitute and hereby authorizes
them to represent and to vote, as designated on the reverse
side, all the shares of common stock of Crown Cork & Seal
Company, Inc. held of record by the undersigned on March 18,
1994 at the Annual Meeting of Shareholders to be held on
April 28, 1994 or any adjournments thereof, for the items
shown below and in any other matter that may properly come
before the meeting:
(1) FOR the election of a Board of fifteen Directors:
William J. Avery, Henry E. Butwel, Charles F. Casey, Francis
X. Dalton, Francis J. Dunleavy, Chester C. Hilinski, Richard
L. Krzyzanowski, Josephine C. Mandeville, Owen A. Mandeville,
Jr., Michael J. McKenna, Alan W. Rutherford, J. Douglass
Scott, Robert J. Siebert, Harold A. Sorgenti and Edward P
Stuart.
(2) FOR a resolution to adopt the Crown Cork & Seal Company,
Inc. Stock Purchase Plan for Eligible Employees, which the
Board of Directors unanimously recommends.
(3) AGAINST a resolution requesting the company to adopt a
code of conduct for business operating in South Africa, which
the Board of Directors unanimously opposes.
You are encouraged to specify your choice by marking the
appropriate boxes (SEE REVERSE SIDE), but you need not mark
any boxes if you wish to vote in accordance with the Board of
Directors' recommendations. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
-----------------
SEE REVERSE SIDE
-----------------
<PAGE>
/X/ Please mark your votes as in this example
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
This proxy, when properly executed will be voted in the
manner directed herein by the shareholder. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 AND PROPOSAL
2 AND AGAINST PROPOSAL 3.
The Board of Directors recommends a vote FOR Proposal 1 and
Proposal 2.
FOR WITHHELD
1. Election of Directors. / / / /
(see reverse)
for, except vote withheld from the following
Nominee(s):____________
2. Resolution to adopt the
Crown Cork & Seal
Company, Inc. Stock Purchase
Plan for eligible FOR AGAINST ABSTAIN
employees of the Company. / / / / / /
The Board of Directors recommends a vote AGAINST Proposal 3.
3. Resolution requesting the
Company to adopt a
code of conduct for business FOR AGAINST ABSTAIN
operating in South Africa. / / / / / /
Please sign exactly as name(s) appear hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such.
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SIGNATURE(S) DATE
