<PAGE>
PROSPECTUS Rule 424 (b)(1)
9,250,000 SHARES Registration
No. 333-12787
CROWN CORK & SEAL COMPANY, INC.
[LOGO OF CROWN CORK
& SEAL COMPANY, INC.
APPEARS HERE]
COMMON STOCK
--------------
Of the 9,250,000 shares of Common Stock, par value $5.00 per share (the
"Common Stock"), of Crown Cork & Seal Company, Inc. (the "Company") being
offered, 7,400,000 shares are being offered by Compagnie Generale d'Industrie
et de Participations, a societe anonyme organized under the laws of the
Republic of France ("CGIP"), and Sofiservice, a societe anonyme organized
under the laws of the Republic of France and a wholly owned subsidiary of CGIP
("Sofiservice" and, together with CGIP, the "Selling Shareholders"), in the
United States and Canada, and the remaining 1,850,000 shares are being offered
by the Selling Shareholders in a concurrent offering outside the United States
and Canada (collectively, the "Common Stock Offerings"). The Company will not
receive any of the proceeds from the sale of the shares of Common Stock
offered hereby. See "Selling Shareholders." The public offering price and
aggregate underwriting discount and commissions per share are identical for
each of the Common Stock Offerings. CGIP has also granted to the U.S.
Underwriters an option for 30 days to purchase an additional 1,387,500 shares
of Common Stock solely to cover over-allotments. See "Underwriting."
The Common Stock offered by the Selling Shareholders was acquired in
February 1996 in exchange for shares of CarnaudMetalbox, a societe anonyme
organized under the laws of the Republic of France ("CarnaudMetalbox"), in
connection with the acquisition of CarnaudMetalbox by the Company. See "The
Company--CarnaudMetalbox Acquisition."
Concurrently with the Common Stock Offerings, the Selling Shareholders are
offering for sale 3,000,000 shares of 4.5% Convertible Preferred Stock, par
value $41.8875 per share (the "Preferred Stock"), of the Company, plus up to
an additional 450,000 shares subject to an over-allotment option granted to
the underwriters (the "Preferred Stock Offering" and, together with the Common
Stock Offerings, the "Offerings"). The closings of the Common Stock Offerings,
on the one hand, and the Preferred Stock Offering, on the other, are not
mutually contingent. Upon consummation of the Offerings, the Selling
Shareholders will hold approximately 11.3% of the total voting power of the
Company's capital stock (assuming the over-allotment options of the
underwriters in the Offerings are not exercised).
The Common Stock is listed on the New York Stock Exchange (the "NYSE") under
the symbol "CCK" and on the Paris Stock Exchange. The Preferred Stock is
listed on the NYSE under the symbol "CCK Pr" and on the Paris Stock Exchange.
On October 24, 1996, the reported last sales prices of the Common Stock and
the Preferred Stock on the NYSE were $46.25 per share and $47.38 per share,
respectively. See "Price Range of Capital Stock and Dividends."
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
===============================================================================
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNT AND SELLING
PUBLIC COMMISSIONS(1) SHAREHOLDERS(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.......................... $46.25 $1.61 $44.64
- --------------------------------------------------------------------------------
Total(3)........................... $427,812,500 $14,892,500 $412,920,000
</TABLE>
===============================================================================
(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting."
(2) Does not include expenses, estimated to be $700,000, of which $550,000
will be payable by the Selling Shareholders and $150,000 will be payable
by the Company.
(3) CGIP has granted the U.S. Underwriters an option for 30 days to purchase
up to an additional 1,387,500 shares of Common Stock at the Price to
Public, less the Underwriting Discount and Commissions, solely to cover
over-allotments. If such option is exercised in full, the total Price to
Public, Underwriting Discount and Commissions and Proceeds to Selling
Shareholders (before deducting expenses as indicated in note (2)) will be
$491,984,375, $17,126,375 and $474,858,000, respectively. See
"Underwriting."
--------------
The Common Stock is offered by the U.S. Underwriters, subject to prior sale,
when, as and if delivered to and accepted by the U.S. Underwriters, subject to
certain conditions. The U.S. Underwriters reserve their right to withdraw,
cancel or modify such offer and to reject orders in whole or in part. It is
expected that delivery of share certificates for the Common Stock will be made
at the offices of Lazard Freres & Co. LLC, New York, New York, on or about
October 30, 1996, against payment therefor in immediately available funds.
--------------
LAZARD FRERES & CO. LLC
CS FIRST BOSTON
SALOMON BROTHERS INC
--------------
The date of this Prospectus is October 24, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). The reports, proxy statements
and other information filed by the Company with the SEC can be inspected and
copied at the public reference facilities maintained by the SEC at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the SEC located at 7 World Trade Center, 13th Floor, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can also be obtained by mail
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The SEC maintains a site on the
world wide web that contains reports, proxy and information statements and
other information on registrants, such as the Company, who must file such
material with the SEC electronically. The SEC's internet address on the world
wide web is http://www.sec.gov. In addition, material filed by the Company can
be inspected at the offices of the NYSE, 20 Broad Street, New York, New York
10005. The Company has filed with the SEC a Registration Statement on Form S-3
(together with all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), covering the offer
and sale of the securities offered hereby. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the SEC.
Reference is hereby made to the Registration Statement and related exhibits
for further information with respect to the Company and the securities offered
hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC (File No. 1-2227)
pursuant to the Exchange Act are hereby incorporated by reference in this
Prospectus:
(1) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
(2) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996 (as amended by the Company's Reports on Form 10-Q/A filed on
May 16, 1996 and September 26, 1996), and June 30, 1996 (as amended by the
Company's Report on Form 10-Q/A filed on September 26, 1996);
(3) the Company's Current Reports on Form 8-K filed on January 2, 1996,
March 1, 1996 (as amended by the Company's Reports on Form 8-K/A filed on
March 18, 1996, May 3, 1996 and May 7, 1996), September 26, 1996, and
October 15, 1996; and
(4) the Company's Registration Statements on Form 8-B filed on May 2,
1989 with respect to the Common Stock, on Form 8-A filed on August 10, 1995
with respect to the Company's common stock purchase rights and on Form 8-A
filed on February 20, 1996 with respect to the Preferred Stock.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to termination of the offers and sales hereunder are
hereby incorporated by reference herein and shall be deemed a part hereof from
the respective dates of filing of such reports and other documents. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for all purposes of this Prospectus to the
extent that a statement contained herein, or in any other subsequently filed
document that also is incorporated by reference herein, modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Prospectus. Certain statements contained herein (including, without
limitation, the statements in "The Company" and "Unaudited Pro Forma
Consolidated Condensed Financial Information" which are not historical facts)
or incorporated by reference herein constitute forward-looking statements as
such term is defined in Section 27A of the Securities Act and Section 21E of
the Exchange Act. Certain factors as discussed herein or in the Company's
Exchange Act filings with the SEC, including the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996, as amended, could cause actual
results to differ materially from those in the forward-looking statements.
2
<PAGE>
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents (not including exhibits thereto,
unless such exhibits are specifically incorporated by reference) are
available, without charge, to any person, including any beneficial owner, to
whom this prospectus is delivered upon written or oral request directed to:
Crown Cork & Seal Company, Inc., 9300 Ashton Road, Philadelphia, Pa 19136
(telephone number (215) 698-5208), Attention: Richard L. Krzyzanowski,
Executive Vice President, Secretary And General Counsel.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AND THE PREFERRED STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED MAY BE DISCONTINUED AT ANY TIME.
DURING THIS OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR
THE ACCOUNTS OF OTHERS IN THE PREFERRED STOCK OR THE COMMON STOCK PURSUANT TO
EXEMPTIONS FROM RULES 10B-6, 10B-7 AND 10B-8 UNDER THE EXCHANGE ACT.
3
<PAGE>
THE COMPANY
GENERAL
The Company is the world's leading manufacturer of packaging products for
consumer goods. The Company believes that it is unique in its industry in its
ability to supply food, beverage and aerosol containers to multinational
consumer marketers on a global basis. The Company currently operates 275
plants located in 53 countries and employs approximately 48,000 people.
The Company's products include metal cans for food, beverage, household and
other consumer products; plastic containers for beverage, processed food,
household, personal care and other products; metal and plastic packaging
products for health and beauty care applications including cosmetics,
fragrances and pharmaceuticals; metal specialty and promotional packaging
products; a wide variety of caps, closures, pumps and dispensing systems; and
composite containers. The Company also manufactures filling and material
handling machinery, primarily for the beverage and brewing industries, as well
as machinery used in the can making process.
Under current management, the Company has pursued a strategy of growth by
acquisition within the global packaging industry. Over the past seven years,
the Company has completed 20 acquisitions of companies with aggregate net
sales of approximately $8 billion. The largest acquisitions over this period
include CarnaudMetalbox (February 1996), Van Dorn Company (April 1993),
CONSTAR International (October 1992), Continental Can International (May
1991), Continental Can's U.S. food and beverage can businesses (July 1990) and
Continental Can Canada (December 1989). This strategy has contributed to an
increase in the Company's net sales from $1.9 billion in 1989 to $5.1 billion
in 1995. The Company's net sales in 1996, which will include the net sales of
CarnaudMetalbox for 10 months, are expected to approach $9 billion. The
Company's acquisition strategy has resulted in numerous benefits to the
Company, including, among others, improved market positions, product and
geographic diversification, and cost savings. The Company believes that the
ongoing rationalization of excess or inefficient capacity within the global
packaging industry, particularly in the core mature markets served by the
Company, has had a beneficial effect on asset utilization. The Company
believes that industry consolidation has generally resulted in fewer but more
competitive packaging suppliers.
In conjunction with its strategy of growth by acquisition, the Company has
invested in new manufacturing capacity, particularly for beverage can
production in emerging markets and for polyethylene terephthalate (PET)
plastic containers globally. The Company has also invested in projects that
improve production efficiencies and product quality, and lower manufacturing
and administrative costs. The Company continually reviews its operations,
especially in terms of their competitiveness and the appropriate number, size
and location of plants, emphasizing service to customers and rate of return to
investors.
The Company was founded in 1892 and is a Pennsylvania corporation. The
principal executive offices of the Company are located at 9300 Ashton Road,
Philadelphia, Pennsylvania 19136, and the telephone number at such address is
(215) 698-5100.
CARNAUDMETALBOX ACQUISITION
On February 22, 1996, the Company acquired CarnaudMetalbox, a leading
multinational manufacturer of metal and plastic packaging products with
headquarters in Paris, France, for approximately $4.0 billion. Management
believes that the acquisition of CarnaudMetalbox has positioned the Company to
benefit from the following factors, among others:
. Complementary Geographic Markets. The Company is now significantly more
diversified on a global basis. Prior to the acquisition, the Company was
the leading manufacturer of packaging products for consumer goods in
North America. The acquisition enabled the Company to significantly
increase its market presence in Europe as well as in the Middle East,
Asia-Pacific and Africa regions, where CarnaudMetalbox has a substantial
presence. As a result of the acquisition, the Company has become the
world's leading manufacturer of packaging products for consumer goods.
. Complementary Product Markets. The Company is now able to offer a
broader range of products to existing and new customers, including
packaging for health and beauty care applications, metal specialty and
promotional packaging, metal closures for glass food containers and
easy-open ends for metal food containers. The only area of significant
product overlap with CarnaudMetalbox, tinplate
4
<PAGE>
aerosol cans in Europe, was eliminated by the recently completed,
European Community-mandated divestiture of a portion of the Company's
aerosol can operations in that region.
. Cost Reduction Opportunities. The Company believes that, as in past
acquisitions, it can realize significant cost reductions over time
through more effective management of costs relating to sales, marketing
and administration, and research and development activities. The Company
also expects to reduce costs through rationalization of metal and other
raw material specification requirements, improved coordination of
purchasing activities and greater price discounts on certain items
purchased in larger quantities. For information on the Company's
rationalization of manufacturing operations, see "-- 1996 Restructuring"
below.
. Leadership in Research, Development and Engineering. The Company
considers its research, development and engineering ("RD&E")
capabilities to be unsurpassed in the industry. The Company's principal
RD&E centers are located near Chicago, Illinois and in Wantage, UK. The
Company uses its RD&E capabilities to (a) promote development of value-
added packaging systems, (b) design cost-efficient manufacturing systems
and materials that also provide continuous quality improvement, (c)
support technical needs in customer and vendor relationships, and (d)
provide engineering services for the Company's worldwide packaging
activities. These capabilities allow the Company to identify market
opportunities by working with customers to develop new products. In
addition, the Company believes that its technical expertise, quality
reputation and customer relationships will enable it to anticipate and
capitalize on shifting customer preferences, such as the conversion to
plastic from other materials, and potential demand for new packaging
shapes.
. Improved Free Cash Flow Generation. The Company believes that the
CarnaudMetalbox acquisition has the potential to improve the Company's
ability to generate free cash flow as a result of the Company's
strengthened competitive position worldwide, opportunities to reduce
operating costs, improved working capital management and lower capital
expenditure requirements for the combined entity. Over the near term,
the Company intends to use a portion of its available free cash flow to
reduce indebtedness.
1996 RESTRUCTURING
During the second quarter of 1996, the Company charged against operations
$29.6 million for the costs associated with the closure of a South American
operation and costs associated with restructuring existing businesses in
Europe. The Company anticipates that such restructuring, when complete, will
generate approximately $6.0 million in after-tax cost savings on an annualized
basis.
The Company has made a preliminary assessment of the restructuring and exit
costs related to the acquisition of CarnaudMetalbox. The current plan of
restructuring, which commenced at the end of the first quarter of 1996, is
expected to be substantially completed during the first quarter of 1997. As of
June 30, 1996, the Company had accrued approximately $370 million for the
costs associated with restructuring CarnaudMetalbox operations and allocated
such costs to the purchase price of CarnaudMetalbox in accordance with
purchase accounting requirements. These costs are comprised of severance pay
and benefits, writedown of assets and lease termination and other exit costs.
The cost of providing severance pay and benefits to employees is currently
estimated at approximately $202 million and is primarily a cash expense. The
cost associated with the writedown of assets (property, equipment, inventory,
etc.) is currently estimated at approximately $139 million and has been
reflected as a reduction in the fair value of the Company's assets. Lease
termination costs and other exit costs are currently estimated at
approximately $29 million and are primarily cash expenses. The $370 million in
restructuring costs recorded in connection with the CarnaudMetalbox
acquisition include the $70 million restructuring charge previously announced
by CarnaudMetalbox Asia Ltd., a subsidiary of the Company.
The Company, on a preliminary basis, estimates that this plan of
restructuring of CarnaudMetalbox operations, when complete, will generate
annual cost savings of approximately $116 million (or $77 million after-tax)
on a full year basis. It is also estimated that capital expenditures of
approximately $50 million will be made to expand
5
<PAGE>
and upgrade other facilities to minimize the adverse effects of the
restructuring on existing business and customer relationships.
The Company expects that there will be other restructurings effected within
the next year. These plans will be finalized when the Company has had time to
properly evaluate and assess business conditions and operating efficiencies to
make such decisions. As the Company continues to restructure the newly
combined Company, costs that do not qualify for purchase accounting will be
charged against operations.
The foregoing estimates of sales, restructuring charges and related cost
savings represent the Company's best estimates, but necessarily make numerous
assumptions with respect to industry performance, general business and
economic conditions, raw materials and product pricing levels, the timing of
implementation of the restructuring and related employee reductions and
facility closings and other matters, many of which are outside the Company's
control. These estimates may change, resulting in lower actual sales and
adjustments to restructuring costs and savings. The Company's estimates and
related assumptions, which are unaudited, are not necessarily indicative of
future performance, which may be significantly more or less favorable than as
set forth above, and are subject to considerations discussed in the Company's
Exchange Act filings with the SEC, including its Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 1996, as amended, which is
incorporated by reference herein. Undue reliance should not be placed on the
estimates and assumptions. Such information may not necessarily be updated to
reflect circumstances existing after the date hereof or to reflect the
occurrence of unanticipated events.
6
<PAGE>
THIRD QUARTER RESULTS
On October 14, 1996, the Company issued a news release announcing the
following summary, unaudited results of operations for the quarter and nine
months ended September 30, 1996.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
1996(1) 1995(2) 1996(1) 1995(2)
----------- ---------- ----------- ----------
(IN MILLIONS, EXCEPT SHARE AND PER SHARE
AMOUNTS)
<S> <C> <C> <C> <C>
Net sales................... $ 2,462.1 $ 1,427.1 $ 6,367.0 $ 3,939.6
----------- ---------- ----------- ----------
Cost of products sold...... 1,988.6 1,252.8 5,169.1 3,343.6
Depreciation and amortiza-
tion...................... 130.0 67.3 359.8 196.5
Selling and administrative
expense................... 101.6 36.0 277.4 107.8
Provision for restructur-
ing....................... 82.5 29.6 102.7
Gain on sale of assets..... (12.6) (3.1) (22.8) (8.1)
Interest expense, net of
interest income........... 85.0 34.8 223.0 102.8
Translation and exchange
adjustments............... 3.0 (1.8) (35.7) (1.3)
----------- ---------- ----------- ----------
Income (loss) before income
taxes...................... 166.5 (41.4) 366.6 95.6
Provision for income tax-
es........................ 54.1 (23.9) 107.7 17.4
Minority interests, net of
equity earnings........... (3.0) (2.4) (14.1) (9.4)
----------- ---------- ----------- ----------
Net income (loss)........... 109.4 (19.9) 244.8 68.8
Preferred stock dividends... 5.9 13.9
----------- ---------- ----------- ----------
Net income (loss) available
to common shareholders..... $ 103.5 $ (19.9) $ 230.9 $ 68.8
=========== ========== =========== ==========
Primary earnings (loss) per
average common share....... $ 0.81 $ (0.22) $ 1.91 $ 0.76
=========== ========== =========== ==========
Fully diluted earnings
(loss) per average common
share...................... $ 0.78 $ (0.22) $ 1.89 $ 0.76
=========== ========== =========== ==========
Dividends per common share.. $ 0.25 $ 0.75
=========== ===========
Weighted average shares out-
standing:
Primary.................... 128,510,213 90,840,987 120,820,436 90,619,389
Fully diluted.............. 139,836,015 90,840,987 129,837,826 90,621,473
Actual common shares out-
standing................... 128,215,366 90,576,900 128,215,366 90,576,900
Actual preferred shares out-
standing................... 12,432,622 12,432,622
</TABLE>
- --------
(1) The results for 1996 include the operations of CarnaudMetalbox from the
acquistion date of February 22, 1996.
(2) Certain prior year amounts have been reclassified to improve
comparability.
7
<PAGE>
THE OFFERINGS
Concurrently with the shares of Common Stock being offered hereby, the
Selling Shareholders are offering for sale 3,000,000 shares of Preferred
Stock. In addition, CGIP has granted the underwriters in connection with the
Preferred Stock Offering an option for 30 days to purchase up to an additional
450,000 shares of Preferred Stock solely to cover over-allotments. The
closings of the Common Stock Offerings, on the one hand, and the Preferred
Stock Offering, on the other hand, are not mutually contingent.
<TABLE>
<S> <C>
Common Stock Offered(1)............ 9,250,000 shares
Common Stock Outstanding Before
and After the Offerings(2)........ 128,245,064 shares (139,573,201 shares
assuming full conversion of the outstanding
Preferred Stock at the current conversion
price of $45.9715 per share)
Use of Proceeds.................... The Company will not receive any of the
proceeds from the sale of the Common Stock
offered hereby
New York Stock Exchange Symbol..... CCK
</TABLE>
- --------
(1) Does not include up to 1,387,500 shares of Common Stock that may be sold
by CGIP pursuant to an over-allotment option granted to the U.S.
Underwriters. See "Underwriting."
(2) Based on shares outstanding as of October 23, 1996. Does not include up to
4,719,494 shares of Common Stock that may be issued upon the exercise of
outstanding options granted under the Company's employee and director
stock option plans.
8
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION
The summary financial information presented below for the years ended
December 31, 1995, 1994, 1993, 1992, and 1991 and as of the end of each such
fiscal year is derived from the consolidated financial statements of the
Company, which have been audited by Price Waterhouse LLP, independent
accountants, and should be read in conjunction with the information and
audited consolidated financial statements contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995, which is
incorporated by reference herein. The summary financial information for and as
of the end of the six-month periods ended June 30, 1996 and 1995 is unaudited
and, in the opinion of the Company management, includes all adjustments,
consisting of only normal recurring accruals, necessary for a fair
presentation of such information. Such unaudited information should be read in
conjunction with the information and the consolidated financial statements
contained in the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1996 and June 30, 1996, as amended, which are
incorporated by reference herein. See also "Unaudited Pro Forma Consolidated
Condensed Financial Information." The summary financial data set forth in the
table below do not reflect the financial results of the Company after June 30,
1996. See "The Company--Third Quarter Results."
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,(1) YEAR ENDED DECEMBER 31,(1)
------------------- ------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net sales.............. $ 3,904.9 $2,512.5 $5,053.8 $4,452.2 $4,162.6 $3,780.7 $3,807.4
Cost of products sold.. 3,170.3 2,085.8 4,311.0 3,699.5 3,474.0 3,197.4 3,290.7
Depreciation and amor-
tization.............. 229.8 129.2 256.3 218.3 191.7 142.4 128.4
Selling and administra-
tive expense.......... 175.8 71.8 139.3 135.4 126.6 112.1 105.4
Provision for restruc-
turing(2)............. 29.6 20.2 102.7 114.6
Interest expense....... 172.9 73.5 148.6 98.8 89.8 77.4 76.6
Interest income........ (34.9) (5.5) (12.5) (7.2) (10.1) (13.5) (10.0)
Translation and ex-
change adjustments.... (38.7) 0.5 (1.1) 10.1 10.8 10.2 7.5
--------- -------- -------- -------- -------- -------- --------
Income before income
taxes, equity in
earnings of affiliates
and cumulative effect
of accounting
changes............... 200.1 137.0 109.5 182.7 279.8 254.7 208.8
Income taxes........... 53.6 41.3 24.9 55.6 97.4 101.0 83.8
Equity in earnings of
affiliates, net of
minority interests.... (11.1) (7.0) (9.7) 3.9 (1.5) 1.7 3.1
--------- -------- -------- -------- -------- -------- --------
Net income before
cumulative effect of
accounting changes.... 135.4 88.7 74.9 131.0 180.9 155.4 128.1
Cumulative effect of
accounting
changes(3)............ (81.8)
--------- -------- -------- -------- -------- -------- --------
Net income............. 135.4 88.7 74.9 131.0 99.1 155.4 128.1
Preferred Stock divi-
dends(4).............. 8.0
--------- -------- -------- -------- -------- -------- --------
Net income available
for common sharehold-
ers................... $ 127.4 $ 88.7 $ 74.9 $ 131.0 $ 99.1 $ 155.4 $ 128.1
========= ======== ======== ======== ======== ======== ========
PER SHARE OF COMMON
STOCK(5)
Net income before
cumulative effect of
accounting changes.... $ 1.09 $ 0.99 $ 0.83 $ 1.47 $ 2.08 $ 1.79 $ 1.48
Cumulative effect of
accounting
changes(3)............ (0.94)
--------- -------- -------- -------- -------- -------- --------
Net income............. $ 1.09 $ 0.99 $ 0.83 $ 1.47 $ 1.14 $ 1.79 $ 1.48
========= ======== ======== ======== ======== ======== ========
Cash dividends declared
per common share(6)... $ 0.50
RATIO OF EARNINGS TO
COMBINED FIXED CHARGES
AND PREFERRED STOCK
DIVIDENDS(7) .......... 2.0x 2.8x 1.7x 2.8x 4.2x 4.3x 3.7x
OTHER DATA
EBITDA(8).............. $ 597.5 $ 354.4 $ 604.6 $ 607.2 $ 551.2 $ 461.0 $ 403.8
Capital expenditures... 286.2 206.5 433.5 439.8 271.3 150.6 92.2
EBITDA as a percentage
of net sales.......... 15.3% 14.1% 12.0% 13.6% 13.2% 12.2% 10.6%
Selling and
administrative expense
as a percentage of net
sales................. 4.5 2.9 2.8 3.0 3.0 3.0 2.8
Total debt as a per-
centage of total capi-
talization(9) ........ 56.7 58.0 56.2 55.3 50.1 52.1 40.5
Average number of
common shares
outstanding (000's)... 116,623 89,920 90,234 89,087 87,087 86,896 86,781
FINANCIAL POSITION (AT
END OF PERIOD)
Total assets........... $12,848.1 $5,278.0 $5,051.7 $4,781.3 $4,236.3 $3,825.1 $2,963.5
Working capital........ 319.5 197.1 429.9 122.6 43.8 174.5 333.3
Total debt............. 5,400.6 2,238.9 2,098.2 1,825.3 1,366.3 1,319.3 769.4
Shareholders' equity... 3,617.2 1,470.3 1,461.2 1,365.2 1,251.8 1,143.6 1,084.4
</TABLE>
(Footnotes on next page)
9
<PAGE>
- --------
(1) Certain reclassifications of prior years' data have been made to improve
comparability. The Company has completed a number of acquisitions during
the periods presented. Such acquisitions were accounted for using the
purchase method and may affect the comparability of data on a year-to-year
basis. See Note C to the Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995
with respect to the effect of certain acquisitions by the Company.
(2) Reflects restructuring of certain facilities announced in 1996, 1995 and
1994. See Note H to the Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995
and the Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1996, as amended. Does not reflect restructuring costs
qualifying for purchase accounting, including certain restructuring costs
in connection with the acquisition of CarnaudMetalbox. See "The Company--
1996 Restructuring." The after-tax impact of the restructuring charges for
the years ended December 31, 1995 and 1994, as reflected in the table
above, was $67.0 or $0.74 per share and $73.2 or $0.82 per share,
respectively. The after-tax impact of the restructuring charges for the
six months ended June 30, 1996 and 1995 were $21.9 or $0.17 per share and
$12.8 or $0.14 per share, respectively.
(3) Reflects accounting changes related to adoption of SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions,"
SFAS 109, "Accounting for Income Taxes," and SFAS 112, "Employers'
Accounting for Postemployment Benefits." See Note B to the Company's
Consolidated Financial Statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995.
(4) The Company issued Preferred Stock on February 26, 1996 in connection with
the acquisition of CarnaudMetalbox. See Notes N and T to the Company's
Consolidated Financial Statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995.
(5) All data relating to Common Stock prior to 1992 have been restated for
comparative purposes to reflect the three-for-one split of the Common
Stock in 1992.
(6) Prior to 1996, the Company traditionally did not pay dividends on its
Common Stock. For a description of the Company's dividend policy, see
"Price Range of Capital Stock and Dividends."
(7) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income before income taxes, equity in earnings of affiliates
and cumulative effect of accounting changes plus fixed charges and
distributed income from less-than-50%-owned companies. Fixed charges
include preferred stock dividend requirements, interest expense,
amortization of debt issue costs and the portion of rental expense that is
deemed representative of an interest factor.
(8) "EBITDA" is defined as income before income taxes, equity in earnings of
affiliates and cumulative effect of accounting changes, plus depreciation
and amortization, provision for restructuring and interest expense, minus
interest income. EBITDA is presented solely as a supplement to the other
information provided above. EBITDA is not a substitute for operating and
cash flow data as determined in accordance with generally accepted
accounting principles.
(9) Total capitalization includes total debt (net of cash and cash
equivalents), minority interests and shareholders' equity.
10
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma consolidated condensed statements of
operations give effect to the acquisition of CarnaudMetalbox under the
purchase method of accounting. The unaudited pro forma consolidated condensed
statements of operations for the six months ended June 30, 1995 and for the
year ended December 31, 1995, respectively, combine the historical
consolidated statements of operations of the Company and CarnaudMetalbox
giving effect to the acquisition as if it had occurred on January 1, 1995. The
unaudited pro forma consolidated condensed statement of operations for the six
months ended June 30, 1996 combines the historical consolidated statements of
operations of the Company and CarnaudMetalbox giving effect to the acquisition
as if it had occurred on January 1, 1996.
The unaudited pro forma consolidated condensed statements of operations are
for illustrative purposes only and have been presented in accordance with SEC
guidelines. They are not necessarily indicative of the results of operations
that might have occurred had the acquisition actually taken place on such
dates, or of future results of operations of the Company.
The unaudited pro forma consolidated condensed statements of operations are
based on the historical consolidated financial statements of the Company and
CarnaudMetalbox and should be read in conjunction with such historical
financial statements and the notes thereto, which are, in the case of
CarnaudMetalbox, included as part of the Company's Current Report on Form 8-K
filed on March 1, 1996, as amended (the "CarnaudMetalbox Financial
Statements"), and, in the case of the Company, filed with the Company's Annual
Report on Form 10-K for the year ended December 31, 1995 and the Company's
Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 1996
and June 30, 1996, as amended, respectively (and which, in the case of the
Company's 1996 quarterly results, include balance sheet and income statement
data reflecting historical results of the CarnaudMetalbox acquisition since
the acquisition date of February 22, 1996). See also "Selected Historical
Financial Information." Certain reclassifications have been made to
CarnaudMetalbox's historical consolidated financial statements to conform with
the presentation of the Company's historical consolidated financial
statements. Furthermore, the historical financial statements for
CarnaudMetalbox, prepared in accordance with French law and presented in
French francs, have for purposes of preparing these unaudited pro forma
consolidated condensed statements of operations been conformed to comply with
U.S. generally accepted accounting principles and, in accordance with SFAS No.
52, have been translated to U.S. dollars at actual average exchange rates
equal to FF 4.992/$1.00 for the pro forma statement of operations for the six
months ended June 30, 1995, FF 4.982/$1.00 for the pro forma statement of
operations for the year ended December 31, 1995 and FF 5.007/$1.00 for the pro
forma statement of operations for the period beginning January 1, 1996 and
ending on the acquisition date of February 22, 1996. See Note 1-B of the
CarnaudMetalbox Financial Statements for the reconciliation of
CarnaudMetalbox's 1995, 1994 and 1993 net income and shareholders' equity to
U.S. generally accepted accounting principles. Such translations should not be
construed as representations that French franc amounts have been or could be
converted into U.S. dollars at that or any other rate. The use of exchange
rates different from those used in the unaudited pro forma consolidated
condensed statements of operations could have a material impact on the
information presented therein.
In accordance with the purchase method of accounting, the total purchase
price has been allocated to the assets and liabilities of CarnaudMetalbox
based upon their fair values. The accompanying unaudited pro forma
consolidated condensed statements of operations reflect the preliminary
allocation of purchase price to assets and liabilities. Accordingly, the final
allocations may differ from the amounts reflected herein.
The unaudited pro forma consolidated condensed statements of operations
reflect a $3.6 billion excess of purchase price over net assets acquired,
which is being amortized over 40 years at a rate of $90 million per year in
accordance with generally accepted accounting principles, which require that
acquired intangibles be amortized over lives not to exceed 40 years.
Intangible assets acquired principally represent CarnaudMetalbox's customer
base and CarnaudMetalbox's European market presence, assets with indefinite
lives which have historically appreciated in value over time. In addition, the
acquisition facilitates the continued expansion of current lines of business
as well as the development of new businesses via the cross-selling of
packaging product offerings of both the Company and CarnaudMetalbox to
existing and potential customers as well as other factors. See "The Company."
The Company believes it will benefit from the acquisition for a period of at
least 40 years and, therefore, a 40-year amortization period is appropriate.
11
<PAGE>
The Company has obtained appraisals and other studies of the significant
assets, liabilities and business operations of CarnaudMetalbox. The unaudited
pro forma consolidated condensed statements of operations reflect the
preliminary results of these reviews, including the Company's estimate of
known restructuring costs and expenses. For a discussion of recent and
possible future restructuring costs and expenses, including restructurings in
connection with the CarnaudMetalbox acquisition, see "The Company--1996
Restructuring." The final allocation of the purchase price will be completed
in the first quarter of 1997 when final appraisals, other studies and
additional information become available.
See the notes to the unaudited pro forma consolidated condensed statements
of operations for a description of the principal assumptions made in the
preparation of the pro forma information. The unaudited pro forma consolidated
condensed statements of operations do not reflect the financial results of the
Company or CarnaudMetalbox after June 30, 1996. See "The Company--Third
Quarter Results."
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996(A)
----------------------------------------------------------------------
HISTORICAL AMOUNTS PRO FORMA
----------------------------------- ---------------------------------
COMPANY CARNAUDMETALBOX ADJUSTMENTS CONSOLIDATED
---------------- ----------------- ------------- ----------------
(dollars in millions, except per share data)
<S> <C> <C> <C> <C>
Net Sales............... $ 3,905 $ 606 $ 4,511
Cost of products
sold................. 3,170 486 3,656
Depreciation and amor-
tization............. 230 36 $ (1)(B) 265
Selling and adminis-
trative expense...... 176 57 233
Provision for restruc-
turing............... 30 15 45
Interest expense...... 173 17 19 (C) 209
Interest income....... (35) (3) (38)
Translation and ex-
change adjustments... (39) (39)
---------------- --------------- -------- ----------------
Income from operations
before income taxes.... 200 (2) (18) 180
Income taxes.......... 54 3 (4)(D) 53
Equity in earnings of
affiliates........... (5) (5)
Minority interests.... (6) 2 (4)
---------------- --------------- -------- ----------------
Net income.............. 135 (3) (14) 118
Preferred Stock divi-
dends.................. (8) (4)(E) (12)
---------------- --------------- -------- ----------------
Net income available for
common shareholders.... $ 127 $ (3) $ (18) $ 106
================ =============== ======== ================
Earnings per share...... $ 1.09 $ (0.03) $ 0.83
Average number of common
shares outstanding..... 116,623,109 86,202,056 128,100,284
</TABLE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995
------------------------------------------------------
HISTORICAL AMOUNTS PRO FORMA
---------------------------- -------------------------
COMPANY CARNAUDMETALBOX ADJUSTMENTS CONSOLIDATED
----------- --------------- ----------- ------------
(dollars in millions, except per share data)
<S> <C> <C> <C> <C>
Net Sales............... $ 2,513 $ 2,460 $ 4,973
Cost of products
sold................. 2,086 1,919 4,005
Depreciation and
amortization......... 129 146 $ (5)(B) 270
Selling and
administrative
expense.............. 72 234 306
Provision for
restructuring........ 20 18 38
Interest expense...... 74 58 69 (C) 201
Interest income....... (6) (12) (18)
Translation and
exchange
adjustments.......... 1 2 3
Preference share
dividends and other.. (21) (21)
----------- ----------- ---- ------------
Income from operations
before income taxes.... 137 116 (64) 189
Income taxes.......... 41 16 (13)(D) 44
Equity in earnings of
affiliates........... 3 2 5
Minority interests.... (10) (1) (11)
----------- ----------- ---- ------------
Net income.............. 89 101 (51) 139
Preferred Stock divi-
dends.................. (12)(E) (12)
----------- ----------- ---- ------------
Net income available for
common shareholders.... $ 89 $ 101 $(63) $ 127
=========== =========== ==== ============
Earnings per share...... $ 0.99 $ 1.19 $ 1.00
Average number of common
shares outstanding..... 89,920,245 84,605,561 127,221,063
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995(F)
-----------------------------------------------------------------
HISTORICAL AMOUNTS PRO FORMA
--------------------------------- -------------------------------
COMPANY CARNAUDMETALBOX ADJUSTMENTS CONSOLIDATED
-------------- ----------------- ------------- ---------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net Sales............... $ 5,054 $ 4,939 $ 9,993
Cost of products
sold................. 4,311 3,926 8,237
Depreciation and amor-
tization............. 256 292 $ (10)(B) 538
Selling and adminis-
trative expense...... 139 415 554
Provision for restruc-
turing............... 103 55 158
Interest expense...... 149 130 138 (C) 417
Interest income....... (13) (25) (38)
Translation and ex-
change adjustments... (1) 2 1
Preference share divi-
dends and other...... (13) (13)
-------------- -------------- -------- ---------------
Income from operations
before income taxes.... 110 157 (128) 139
Income taxes.......... 25 11 (26)(D) 10
Equity in earnings of
affiliates........... 4 1 5
Minority interests.... (14) 3 (11)
-------------- -------------- -------- ---------------
Net income.............. 75 150 (102) 123
Preferred Stock divi-
dends.................. (23)(E) (23)
-------------- -------------- -------- ---------------
Net income available for
common shareholders.... $ 75 $ 150 $ (125) $ 100
============== ============== ======== ===============
Earnings per share...... $ 0.83 $ 1.76 $ 0.78
Average number of common
shares outstanding..... 90,233,518 85,327,985 127,534,336
</TABLE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
A. Historical amounts for the Company include the results from operations of
CarnaudMetalbox from the date of acquisition, February 22, 1996. Historical
amounts for CarnaudMetalbox include the results from operations of
CarnaudMetalbox for the preacquisition period beginning January 1, 1996 and
ending on the acquisition date. Pro forma adjustments relate only to such
preacquisition period.
B. To reflect the net decrease in depreciation and amortization expense due
to (a) amortization of the excess purchase price over net tangible assets
acquired on a straight-line basis over 40 years, net of elimination of
CarnaudMetalbox historical amortization of excess acquisition costs over the
values assigned to net assets acquired in prior acquisitions, (b) additional
amortization resulting from basis assigned to intangible assets other than
goodwill, (c) net decrease in depreciation resulting from change in asset
basis and lives identified in the appraisal process, and (d) decreased
depreciation resulting from property and equipment written-off under existing
plans of restructuring.
C. To reflect the increase in interest expense resulting from the use of new
borrowings to finance a portion of the purchase price. The interest rate on
new borrowings of $1.84 billion is assumed to be 7.5% per annum. Such
borrowings have been made by the Company under a multicurrency credit facility
bearing interest at a variable rate. See Exhibit 10.1 to the Company's Current
Report on Form 8-K filed on December 15, 1995, which is hereby incorporated by
reference, for additional information with respect to the terms of the credit
facility.
D. To reflect the income tax effect of increased interest net of decreased
depreciation at the statutory tax rate of 37.0%. The Company expects that its
effective consolidated income tax rate may be higher than that reflected in
the unaudited pro forma consolidated condensed statements of operations due to
several factors, including the geographical mix in which the Company's future
pre-tax earnings are generated, the non-deductibility for tax purposes of a
significant portion of the purchase price for the CarnaudMetalbox acquisition
and the accounting rules governing utilization of pre-acquisition net
operating losses.
E. To reflect dividends on Preferred Stock of $1.88 per share per annum on
12,432,622 outstanding shares.
F. The unaudited pro forma consolidated condensed statement of operations
for the year ended December 31, 1995 has been updated from that included in
the Company's Current Report on Form 8-K/A filed on May 7, 1996, principally
to reflect increased pro forma goodwill amortization arising from changes in
the estimated fair value of net tangible assets acquired and the acquisition
in the second quarter of 1996 of the remaining 1.3% minority interest in
CarnaudMetalbox.
13
<PAGE>
PRICE RANGE OF CAPITAL STOCK AND DIVIDENDS
The Common Stock and the Preferred Stock are listed on the NYSE under the
symbols "CCK" and "CCK Pr," respectively. The Common Stock and the Preferred
Stock are also listed on the Paris Stock Exchange. The following table sets
forth, for the periods indicated, the high and low reported last sales prices
of the Common Stock and the Preferred Stock as reported on the NYSE and
dividends paid per share.
The Company commenced paying cash dividends on the Common Stock for the
first time since 1956 in the first quarter of 1996. Subject to the Company's
financial results and declaration by the Board of Directors, it is the present
intention of the Company to continue paying cash dividends on the Common Stock
on a quarterly basis. The anticipated record date for the Preferred Stock
dividend payable on November 20, 1996 and for the 1996 fourth quarter Common
Stock dividend is November 4, 1996.
The Preferred Stock was issued as part of the CarnaudMetalbox acquisition in
February 1996.
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
------------------------- -------------------------
DIVIDENDS DIVIDENDS
HIGH LOW PAID HIGH LOW PAID
------- ------- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
1994
First Quarter........... $41 7/8 $36 5/8 -- -- -- --
Second Quarter.......... 39 3/4 33 3/4 -- -- -- --
Third Quarter........... 39 1/2 33 1/2 -- -- -- --
Fourth Quarter.......... 40 7/8 35 7/8 -- -- -- --
1995
First Quarter........... 45 37 3/4 -- -- -- --
Second Quarter.......... 50 1/4 40 1/2 -- -- -- --
Third Quarter........... 50 5/8 36 -- -- -- --
Fourth Quarter.......... 44 5/8 33 1/2 -- -- -- --
1996
First Quarter........... 51 40 5/8 $0.25 $49 $45 1/2 --
Second Quarter.......... 49 1/8 43 5/8 0.25 47 3/4 43 $0.4712
Third Quarter........... 49 1/2 41 0.25 48 7/8 41 1/4 0.4712
Fourth Quarter.......... 49 5/8 45 1/2 -- 49 45 1/2 --
(through October 24,
1996)
</TABLE>
As of October 23, 1996, there were approximately 5,715 holders of record of
the Common Stock and nine holders of record of the Preferred Stock. On October
24, 1996, the reported last sales prices of the Common Stock and Preferred
Stock on the NYSE were $46.25 per share and $47.38 per share, respectively.
USE OF PROCEEDS
All of the shares of Common Stock and Preferred Stock in the Offerings are
being offered by the Selling Shareholders. The Company will not receive any
proceeds from the sale of such shares.
14
<PAGE>
SELLING SHAREHOLDERS
The Selling Shareholders are CGIP and its wholly owned subsidiary
Sofiservice. CGIP was previously the largest shareholder of CarnaudMetalbox,
beneficially holding more than 30% of its outstanding shares. The Selling
Shareholders acquired their shares of Common Stock and Preferred Stock in
connection with the acquisition of CarnaudMetalbox by the Company in February
1996. CGIP is a holding company that maintains a portfolio of investments in
companies engaged in, among other things, the manufacture of packaging
products for consumer goods, computer-related services, consulting services,
medical diagnostics, abrasive pellets, energy and real estate. The Offerings
are being undertaken by the Selling Shareholders in furtherance of CGIP's
strategy of diversifying its portfolio of investments. The proceeds of the
Offering may be used to finance a portion of the costs of acquiring a stake in
Valeo, a French manufacturer of automotive components and systems, as
announced by CGIP on September 26, 1996.
Concurrently with the Common Stock Offerings, the Selling Shareholders are
offering for sale 3,000,000 shares of Preferred Stock. In addition, CGIP has
granted the underwriters in connection with the Preferred Stock Offering an
option for up to 30 days to purchase up to an additional 450,000 shares of
Preferred Stock solely to cover over-allotments. The closings of the Preferred
Stock Offering, on the one hand, and the Common Stock Offerings, on the other,
are not mutually contingent.
The following table sets forth, as of October 23, 1996, certain information
with respect to beneficial ownership of Common Stock and Preferred Stock by
the Selling Shareholders and as adjusted to reflect the sale of shares in the
Offerings (assuming the over-allotment options of the underwriters in the
Offerings are not exercised).
<TABLE>
<CAPTION>
OWNERSHIP OWNERSHIP
PRIOR TO THE OFFERINGS AFTER THE OFFERINGS
------------------------- ---------------------
NUMBER OF
NUMBER SHARES TO NUMBER
TYPE OF SECURITIES OF SHARES PERCENTAGE BE SOLD OF SHARES PERCENTAGE
- ------------------ ------------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Common Stock(1):
CGIP (2)........... 19,323,975 15.07% 7,243,072 12,080,903 9.42%
Sofiservice........ 2,006,928 1.56 2,006,928 -- --
------------- -------- --------- ---------- -----
Total............ 21,330,903 16.63% 9,250,000 12,080,903 9.42%
Preferred Stock:
CGIP (2)........... 6,441,324 51.81% 2,331,024 4,110,300 33.06%
Sofiservice........ 668,976 5.38 668,976 -- --
------------- -------- --------- ---------- -----
Total............ 7,110,300 57.19% 3,000,000 4,110,300 33.06%
</TABLE>
- --------
(1) Based on shares outstanding as of October 23, 1996 and assuming no
conversion of the Preferred Stock outstanding as of such date. Does not
include up to 4,719,494 shares of Common Stock that may be issued upon the
exercise of outstanding options granted under the Company's employee and
director stock option plans.
(2) Does not include the shares of Common Stock or Preferred Stock owned by
Sofiservice which CGIP is deemed to beneficially own.
As of October 23, 1996, the shares of Common Stock and Preferred Stock owned
by the Selling Shareholders represented approximately 19.9% of the Total
Voting Power of the Company (as defined below). Assuming the over-allotment
options of the underwriters in the Offerings are not exercised, after giving
effect to (a) the Offerings, (b) the Preferred Stock Offering (but not the
Common Stock Offerings), and (c) the Common Stock Offerings (but not the
Preferred Stock Offerings), the shares of Common Stock and Preferred Stock
owned by the Selling Shareholders will represent approximately 11.3%, 18.0%
and 13.3%, respectively, of the Total Voting Power of the Company, in each
case based upon the outstanding Common Stock and Preferred Stock on October
23, 1996. Assuming the over-allotment options of the underwriters in the
Offerings are exercised in full, the shares of Common Stock and Preferred
Stock owned by the Selling Shareholders upon consummation of the Offerings
will represent approximately 10.1% of the Total Voting Power of the Company
based upon the outstanding Common Stock and Preferred Stock on October 23,
1996.
15
<PAGE>
As used above, "Total Voting Power" means the voting power of the capital
stock (and all securities convertible into or exchangeable for such stock,
other than options granted pursuant to employee benefit plans and the rights
issued pursuant to the Company's Rights Plan) of the Company that is
ordinarily entitled to vote in the election of directors of the Company,
calculated by reference to the maximum number of votes any such security is
entitled to cast, whether in converted or exercised or unconverted or
unexercised form.
The shares of Preferred Stock and Common Stock owned by the Selling
Shareholders may not be sold in the absence of registration under the
Securities Act, unless an exemption from registration is available, including
pursuant to Rule 144. In addition, the shares of Preferred Stock and Common
Stock owned by the Selling Shareholders are subject to additional restrictions
on transfer under the Shareholders Agreement entered into by the Company and
CGIP in connection with the Company's acquisition of CarnaudMetalbox (the
"Shareholders Agreement").
During the Standstill Period under the Shareholders Agreement (see
"Description of Capital Stock--Shareholders Agreement and Certain Other
Agreements and Provisions"), CGIP and its affiliates may not dispose of voting
securities of the Company except (subject, in some cases, to certain
exceptions): (a) to other affiliates; (b) pursuant to a widely distributed
underwritten public offering (provided such disposition is not made to any
person or entity which CGIP or the managing underwriter knows will
beneficially own immediately thereafter, together with its affiliates and
other persons or entities acting as a "group" with such person or entity
within the meaning of the federal securities laws, voting securities of the
Company representing 3.5% or more of the Total Voting Power of the Company,
which requirement is waivable by the Company); (c) pursuant to Rule 144
(except to any such person or entity which CGIP knows will beneficially own
immediately thereafter 3.5% or more of the Total Voting Power of the Company);
(d) in a private sale to any person or entity that would, following such sale,
beneficially own no more than 3.5% of the Total Voting Power of the Company;
(e) in certain cases, to the Company; (f) pursuant to a tender offer or
exchange offer or any other transaction with a third party which is
recommended to the shareholders of the Company by a majority of "continuing
directors" of the Company; (g) upon conversion of the Preferred Stock into
Common Stock (or upon similar conversions, exchanges or exercises); and (h)
pursuant to one or more bona fide pledges or grants of a security interest in
such shares to a major brokerage firm or financial institution to secure bona
fide indebtedness, or the sale of such shares by foreclosure on such pledge
(provided that in the case of any such pledge involving securities
representing more than 3.5% of the Total Voting Power of the Company, such
lender will be subject to the provisions of the Shareholders Agreement).
In the case of a disposition of voting securities pursuant to clauses (b)-
(d) above, CGIP has agreed that the Company will have certain rights to
purchase such securities upon certain terms and conditions and pursuant to
certain procedures set forth in the Shareholders Agreement. If the Company
does not exercise such rights, CGIP will be free to effect the disposition of
such securities subject to the Shareholders Agreement. The Company has waived
such rights in connection with the Offerings.
The Shareholders Agreement also provides CGIP and its affiliates with the
right to have their shares of Preferred Stock and Common Stock registered
under the Securities Act. CGIP has seven remaining demand registration rights
and unlimited incidental or "piggyback" registration rights, subject to
customary terms and conditions in the Shareholders Agreement. Such rights are
subject to termination if CGIP owns voting securities representing less than
3.5% of the Total Voting Power of the Company or in the event of certain
breaches of the Shareholders Agreement by CGIP.
In addition, CGIP has agreed with the Underwriters that it will not offer,
sell, contract to sell or otherwise dispose of any of its remaining shares of
Common Stock or Preferred Stock for one year following the date of this
Prospectus. See "Underwriting."
The Shareholders Agreement also contains standstill, board representation
and other provisions. See "Description of Capital Stock--Shareholders
Agreement and Certain Other Agreements and Provisions."
16
<PAGE>
On May 20, 1995, CarnaudMetalbox and CGIP entered into a letter agreement
pursuant to which CGIP has agreed to provide management and administrative
services to CarnaudMetalbox through 1999. This letter agreement conformed with
the prior agreement in effect since 1977 between CarnaudMetalbox and CGIP with
respect to CGIP's provisions of such services. In 1995, the amount paid by
CarnaudMetalbox to CGIP (on a pre-tax basis) under such agreement was
approximately FF 11.2 million. After 1999, the letter agreement will be
automatically renewable unless terminated in the first quarter of the prior
year, in which case such agreement will terminate on the next succeeding
January 1.
DESCRIPTION OF CAPITAL STOCK
The following description of the Company's capital stock is a summary and is
qualified in its entirety by reference to the Company's Amended and Restated
Articles of Incorporation (the "Company Articles") and Amended and Restated
Bylaws (the "Company Bylaws"), copies of which have been filed with the SEC.
The description is also subject in all respects to the Pennsylvania Business
Corporation Law of 1988, as amended (the "PBCL").
GENERAL
The Company's authorized capital stock consists of 500,000,000 shares of
Common Stock, 12,432,622 shares of Preferred Stock, and 30,000,000 shares of
additional preferred stock with such voting rights, preferences, limitations
and special rights as may be specified, subject to the Company Articles, by
the Company's Board of Directors. As of October 23, 1996, the Company had
outstanding 128,245,064 shares of Common Stock and 12,432,622 shares of
Preferred Stock, and 27,546,568 shares of Common Stock were held in the
treasury of the Company. No shares of such additional preferred stock were
outstanding as of such date. The Common Stock and the Preferred Stock are
currently listed both on the NYSE and the Paris Stock Exchange.
PREFERRED STOCK
Dividends. Subject to the prior rights of holders of any preferred stock
senior in right of payment of dividends to the Preferred Stock, holders of the
Preferred Stock are entitled to receive, when, as and if declared by the
Company's Board of Directors out of funds of the Company legally available,
annual dividends at the rate of 4.5% of the par value of the Preferred Stock,
or $1.8848 per share, payable in cash quarterly in arrears on February 20, May
20, August 20 and November 20, except that if such day is not a business day,
then such dividend will be payable on the next day that is a business day.
Dividends will accrue without interest on a daily basis and will be cumulative
from the date of initial issuance. All dividends on the Preferred Stock will
be paid pro rata to the holders entitled thereto. Dividends (other than in
shares of the Common Stock or any other stock ranking junior to the Preferred
Stock as to dividend rights and rights upon liquidation) may not be declared,
paid or set apart on the Common Stock or any other stock of the Company
ranking junior to the Preferred Stock as to dividend rights and rights upon
liquidation unless all accrued and unpaid dividends on the Preferred Stock
have been paid or declared and set aside for payment; and no Common Stock or
any other stock of the Company ranking junior to the Preferred Stock as to
dividend rights or rights upon liquidation may be redeemed, purchased or
otherwise acquired for any consideration by the Company (other than pursuant
to certain benefit plans or upon exchange or conversion of such junior
securities or in connection with rights granted to holders of the Common Stock
pursuant to the Company's Rights Plan discussed below) unless all accrued and
unpaid dividends on the Preferred Stock have been paid or declared and set
aside for payment.
Full dividends may not be declared, paid or set apart on any stock of the
Company ranking on a parity with the Preferred Stock as to dividend rights and
rights upon liquidation unless full cumulative unpaid dividends on the
Preferred Stock have been, or contemporaneously are, paid or declared and set
aside for payment. If dividends
are not paid in full, or set apart in full, upon the Preferred Stock and any
other preferred stock ranking on a parity as to dividends and rights upon
liquidation with the Preferred Stock, all dividends declared upon shares of
the Preferred Stock and such other parity preferred stock will when, as and if
declared, be declared pro rata so
17
<PAGE>
that in all cases the amount of dividends declared and paid per share on
Preferred Stock and such other parity preferred stock will bear to each other
the same ratio that accrued and unpaid dividends per share on the shares of
Preferred Stock and such other parity preferred stock to the date of payment
bear to each other. No such parity preferred stock may be redeemed, purchased
or otherwise acquired for any consideration by the Company (other than
pursuant to certain benefit plans or upon exchange or conversion of such
parity stock or in connection with rights granted to holders of the Common
Stock pursuant to the Company's Rights Plan) unless all accrued and unpaid
dividends on the Preferred Stock have been paid or declared and set aside for
payment.
Conversion Rights. Each share of the Preferred Stock is convertible into
shares of Common Stock of the Company at any time at the conversion rate of
that number of shares of Common Stock for each full share of Preferred Stock
that is equal to the par value of such share divided by the Conversion Price
per share of Common Stock. The "Conversion Price" is currently $45.9715,
subject to adjustment as described in the following paragraph. As of the date
of this Prospectus, each share of the Preferred Stock is convertible into
approximately 0.91 shares of Common Stock. Fractional shares of Common Stock
will not be delivered upon conversion, but a cash adjustment will be paid in
respect of such fractional interests based on the then current market price of
the Common Stock.
The Conversion Price is subject to adjustment upon certain events, including
(a) the issuance of Common Stock as a dividend or distribution on the Common
Stock; (b) the issuance to all holders of the Common Stock of rights or
warrants entitling them to subscribe for or purchase Common Stock at less than
the then current market price; (c) a combination or subdivision of the Common
Stock; (d) dividends or distributions on the Common Stock (other than
dividends or distributions in cash solely out of retained earnings of the
Company) and (e) reclassifications of the Common Stock. No adjustment of the
Conversion Price will be required to be made in any case until cumulative
adjustments amount to 1% of such price. In addition to the foregoing
adjustments, the Company will be permitted to make such reductions in the
Conversion Price as it determines to be advisable in order that any event
treated for Federal income tax purposes as a dividend of stock or stock rights
will not be taxable to the recipients.
In case of any consolidation of the Company with, or merger of the Company
or share exchange into, any other entity, any merger of another entity into
the Company (other than a merger or share exchange which does not result in
any reclassification, conversion, exchange or cancellation of the outstanding
shares of Common Stock) or any sale or transfer of all or substantially all
the assets of the Company, lawful provision will be made such that the holder
of each share of the Preferred Stock will have the right to convert each share
of the Preferred Stock into the kind and amount of securities, cash or other
property receivable upon such merger, consolidation, sale or transfer by a
holder of the number of shares of Common Stock into which a share of the
Preferred Stock might have been converted immediately prior to such merger,
consolidation, sale or transfer assuming such holder of Common Stock failed to
exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such merger, consolidation,
sale or transfer (provided that if the kind or amount of securities, cash or
other property receivable upon such merger, consolidation, sale or transfer is
not the same for each non-electing share, then the kind and amount of
securities, cash or other property receivable upon such merger, consolidation,
sale or transfer for each non-electing share shall be deemed to be the kind
and amount so receivable per share by a plurality of the non-electing shares).
If the shareholders of the Company have approved any such consolidation,
merger, sale or transfer which makes provision for the Preferred Stock
under the terms of such consolidation, merger, sale or transfer, then the
holders of the Preferred Stock will be deemed to have waived the foregoing
provisions.
In the event of any voluntary conversion of the Preferred Stock, the holder
will not have any right to accrued and unpaid dividends.
See " -- Shareholders Agreement and Certain Other Agreements and Provisions"
for a description of the Common Stock purchase rights issuable upon conversion
of the Preferred Stock.
Mandatory Conversion. On February 26, 2000 (the "Latest Mandatory Conversion
Date"), all of the Preferred Stock will convert into shares of the Common
Stock at the Conversion Price then in effect,
18
<PAGE>
automatically and without further action of the holder of such shares. In
addition, if at any time prior to the Latest Mandatory Conversion Date less
than 30% of the initially issued shares of Preferred Stock are outstanding,
the Company will have the right to convert the remaining Preferred Stock into
Common Stock at the Conversion Price then in effect. There is no restriction
on any such mandatory conversion by reason of any arrearage in payment of
dividends on the Preferred Stock.
In the event of any mandatory conversion of the Preferred Stock, all accrued
and unpaid dividends on the Preferred Stock will be converted into Common
Stock at the Conversion Price then in effect.
Liquidation Rights. In the event of any liquidation, dissolution or winding
up of the Company and subject to the rights of creditors of the Company and
holders of any preferred stock senior in right of payment in the event of a
liquidation of the Company, the holders of shares of the Preferred Stock are
entitled to receive a liquidation preference of $41.8875 per share, plus an
amount equal to any accrued and unpaid dividends to the date of payment before
any payment or distribution of assets is made to holders of the Common Stock
or any other stock that ranks junior to the Preferred Stock as to liquidation
rights. The holders of the Preferred Stock and all series or classes of the
Company's stock hereafter issued that rank on a parity as to liquidation
rights with the Preferred Stock are entitled to share ratably in any
distribution which is not sufficient to pay in full the aggregate of the
amounts payable thereon.
After payment in full of the liquidation preference of the Preferred Stock,
the holders of such shares will not be entitled to any further participation
in any distribution of assets by the Company. Neither a merger, consolidation,
or other business combination of the Company with or into another corporation
or other entity nor a voluntary sale or transfer of all or part of the
Company's assets for cash, securities or other property will be considered a
liquidation, dissolution or winding up of the Company.
Voting Rights. Other than as set forth below and except as provided by
applicable law, the holders of the Preferred Stock are entitled to vote
together with the holders of the Common Stock on all matters to be voted on by
holders of the Common Stock. When voting together with holders of the Common
Stock, each share of the Preferred Stock will be entitled to the number of
votes equal to the number of shares of Common Stock into which such share of
the Preferred Stock is convertible as of the record date applicable to such
vote.
Whenever dividends on the Preferred Stock are in arrears and unpaid for at
least six quarterly dividend periods (whether or not consecutive), the number
of directors of the Company will be increased by two, and the holders of the
Preferred Stock (voting separately as a class with the holders of any
outstanding shares of stock on a parity as to dividends and rights upon
liquidation with the Preferred Stock on which like voting rights have been
conferred and are exercisable) will be entitled to elect such two additional
directors to the Board of Directors of the Company. Such right to elect
directors will become effective at the earlier of (a) the next meeting of
shareholders of the Company at which directors are to be elected held after
such dividends have been unpaid and in arrears for six quarterly dividend
periods and (b) the special meeting of holders of the Preferred Stock (and of
parity preferred stock having like rights) called for such purpose, and will
terminate when all accrued and unpaid dividends on the Preferred Stock have
been declared and paid or set apart for payment. The holders of at least 10%
of the outstanding shares of the Preferred Stock have the right to require the
President of the Company to call a special meeting of holders of the Preferred
Stock if the right to elect additional directors has accrued more than 90 days
preceding the next annual meeting of shareholders of the Company.
In addition, so long as any of the Preferred Stock is outstanding (except
when notice of mandatory conversion by the Company has been given or as of the
Latest Mandatory Conversion Date), the Company will not, without the
affirmative vote or consent of the holders of at least 66 2/3 percent (unless
a higher percentage is required by law) of all outstanding shares of the
Preferred Stock, voting separately as a class, (a) amend, alter or repeal any
provision of the Company Articles so as to affect adversely the relative
rights, preferences, qualifications, limitations or restrictions of the
Preferred Stock, (b) authorize or issue, or reclassify any authorized stock
into, or increase the authorized amount of, any additional class or series of
stock, or any security convertible into stock of such class or series, ranking
senior to the Preferred Stock as to dividends or as to rights
19
<PAGE>
upon liquidation, dissolution or winding up of the Company or (c) take any
other action on which the holders of the Preferred Stock are entitled by law
to vote separately as a class.
Holders of the Preferred Stock do not have the right to vote separately as a
class on the creation, authorization or issuance of securities ranking junior
to or on a parity with the Preferred Stock as to dividend rights or rights
upon liquidation or on the creation of any indebtedness of the Company.
Other Provisions. The holders of the Preferred Stock have no rights with
respect to cumulative voting in the election of directors of the Company.
Shareholders of the Company are not entitled to any preemptive rights to
purchase or to subscribe to any additional or increased stock of any class or
any obligations convertible into any class or classes of stock.
COMMON STOCK
Dividends. Holders of the Common Stock are entitled to receive such
dividends as may be declared by the Board of Directors. The Company's ability
to pay dividends on the Common Stock is subject to the legal availability of
funds therefor as well as contractual restrictions (including prior full
payment of dividends as to the Preferred Stock and any other outstanding
preferred stock of the Company).
Voting Rights. Except as to matters as to which holders of the Preferred
Stock (and any other capital stock of the Company) have the right to vote
separately as a class, the holders of the Common Stock vote together with
holders of the Preferred Stock (and any other capital stock of the Company
entitled to vote with the Common Stock) as a class. At every meeting of
shareholders of the Company, the holders of record of shares of the Common
Stock entitled to vote at the meeting are entitled to one vote for each share
of Common Stock held. When voting with holders of the Common Stock as to any
matter, holders of the Preferred Stock are entitled, for each share of the
Preferred Stock held, to that number of votes equal to the number of shares of
Common Stock into which a share of Preferred Stock is convertible as of the
record date of the vote. See "--Preferred Stock--Voting Rights" above. Holders
of the Common Stock have certain additional special voting rights under the
PBCL in the event of certain mergers and other extraordinary transactions. See
"--Shareholders Agreement and Certain Other Agreements and Provisions."
As provided above, holders of Preferred Stock have rights to vote separately
as a class with respect to certain matters. In addition, whenever dividends
accrued on the Preferred Stock are in arrears and unpaid for at least six
quarterly dividend periods, the Company Articles provide that the size of the
Board of Directors of the Company shall be increased by two directors and that
the holders of the Preferred Stock will have the right, voting separately as a
class together with holders of any other shares of preferred stock of the
Company having such voting rights, to elect such two additional directors. See
"--Preferred Stock--Voting Rights" above.
Shareholders of the Company are not entitled to cumulative voting in the
election of directors.
No Preemptive Rights. Shareholders of the Company are not entitled to any
preemptive rights to purchase or to subscribe to any additional or increased
stock of any class or any obligations convertible into any class or classes of
stock.
Liquidation Rights. In any liquidation, dissolution or winding up of the
Company, after the debts of the Company have been paid or provided for, and
subject to the rights upon liquidation of the holders of the Preferred Stock
and any other preferred stock of the Company, all of the remaining assets of
the Company shall belong to and shall be distributed ratably among the holders
of the Common Stock.
SHAREHOLDERS AGREEMENT AND CERTAIN OTHER AGREEMENTS AND PROVISIONS
Shareholders Agreement and Strategic Committee. Subject to the terms of the
Shareholders Agreement, during the Standstill Period (as described below),
CGIP has agreed that neither it nor any of its controlled
20
<PAGE>
affiliates will acquire beneficial ownership of voting securities of the
Company representing more than 19.95% of the Total Voting Power of the
Company, make a proposal for any tender or exchange offer, merger or other
business combination or recapitalization, restructuring or similar transaction
for the Company or its subsidiaries (a "Takeover Proposal") or take certain
other actions.
In accordance with the Shareholders Agreement, immediately following the
CarnaudMetalbox acquisition, the Company elected Ernest-Antoine Seilliere, Guy
de Wouters and Felix G. Rohatyn, all of whom were designated by CGIP, to the
Company's Board of Directors. The Shareholders Agreement provides that during
the Standstill Period the Company will support the nomination of, and the
nominating committee of the Company's Board of Directors will recommend to the
Board that, (a) so long as the CGIP owns voting securities of the Company
representing at least 5% but less than 10% of the Total Voting Power of the
Company, one person, (b) so long as CGIP owns voting securities of the Company
representing at least 10% but less than 15% of the Total Voting Power of the
Company, two persons, and (c) so long as CGIP owns voting securities of the
Company representing at least 15% but less than 20% of the Total Voting Power
of the Company, three persons, designated by CGIP ("CGIP Designees") be
included in the slate of nominees recommended by the Board of Directors for
election as directors at each annual meeting of the Company's shareholders.
Following consummation of the Offerings, CGIP will have the right to designate
two persons to be nominated for election as directors of the Company. The
Company currently does not intend to request the resignation of any of the
current CGIP Designees following consummation of the Offerings, although the
Company has reserved its right, in accordance with its agreements with CGIP,
to make such a request at a future date.
Also in connection with the acquisition of CarnaudMetalbox, the Company
amended its Bylaws to create a Strategic Committee of the Board of Directors,
one-half the members of which (including its chair) must be representatives of
CGIP. Currently, the CGIP Designees are members of the Strategic Committee,
and Mr. Seilliere is chairman of the Strategic Committee. CGIP and the Company
have agreed that, following consummation of the Offerings, the Strategic
Committee will be made up of six directors, two of whom will be
representatives of CGIP. Mr. Seilliere will continue to serve as chairman of
the Strategic Committee. CGIP has reserved its right, in accordance with its
agreements with the Company, to request in the future that the Strategic
Committee be made up of an equal number of CGIP Designees and other directors.
Under the Shareholders Agreement, CGIP has agreed to vote any voting
securities of the Company beneficially owned by it or its affiliates during
the Standstill Period in the manner recommended by the Company's Board of
Directors in connection with the election of directors of the Company and any
question relating to a Takeover Proposal.
The Standstill Period began on February 22, 1996 and terminates under
certain circumstances upon the earliest to occur of (a) the later of (x)
February 22, 1999 and (y) the date on which CGIP beneficially owns voting
securities of the Company representing less than 3.5% of the outstanding Total
Voting Power of the Company, (b) the date the Company breaches certain
provisions of the Shareholders Agreement relating to CGIP's board
representation or the Company's dividend or debt rating policy described
generally below, (c) the date the Company agrees to recommend (or ceases to
oppose) the consummation of an unsolicited tender or exchange offer for 20% of
the Total Voting Power of the Company or any unsolicited proxy or consent
solicitation affecting a majority of the "continuing directors" of the Company
or enters into, or takes material steps to solicit, an agreement with respect
to certain fundamental corporate transactions involving the Company or its
subsidiaries, (d) the date a person other than CGIP acquires 25% of the Total
Voting Power of the Company, or (e) the date any CGIP Designee fails to be
elected to the Company's Board of Directors.
The Shareholders Agreement contains provisions relating to the Company's
dividend policy whereby the Company indicated that its Board of Directors
intended to pay quarterly dividends of $.25 per share on the Common Stock
during 1996 and to increase the amount of such dividends over time such that
the amount of dividends paid to CGIP during the four full quarters following
the mandatory conversion of the Preferred Stock on February 26, 2000 (assuming
for these purposes that CGIP has not acquired or disposed of any shares of
Common Stock or Preferred Stock) would not be less than the amount of
dividends paid to CGIP on the Common
21
<PAGE>
Stock and Preferred Stock issued to CGIP in the CarnaudMetalbox acquisition
during the four full quarters following such acquisition (assuming for these
purposes that CGIP has not acquired or disposed of any shares of Common Stock
or Preferred Stock). In addition, the Shareholders Agreement provides that the
Company intends to conduct its business consistent with maintaining an
"investment grade" debt rating for its long-term unsecured debt securities.
Subject to certain exceptions, a failure by the Company to increase the amount
of such dividends or maintain such debt rating will result in the termination
of the Standstill Period, unless, in the case of dividend amounts, the Company
elects an additional CGIP Designee to the Company's Board of Directors, in
which case the Standstill Period will terminate if such breach is not cured
within one year.
The Shareholders Agreement contains restrictions on the Selling
Shareholders' sale or transfer of their shares of Common Stock and Preferred
Stock and provisions granting CGIP registration rights. See "Shares Eligible
for Future Resale."
The provisions of the Shareholders Agreement may be amended or waived by the
parties thereto at any time in accordance with its terms.
Rights Plan. Pursuant to a Rights Agreement, dated as of August 10, 1995
(the "Rights Plan"), the Board of Directors of the Company declared a dividend
distribution of one Right for each share of the Common Stock outstanding on
August 10, 1995 (the "Record Date") and authorized the issuance of one Right
for each share of Common Stock that becomes outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are defined below), including pursuant to
conversion of the Preferred Stock. Subject to the terms and conditions of the
Rights Plan, each Right issued pursuant to the Rights Plan entitles the
registered holder to purchase from the Company one share of Common Stock (or
in certain circumstances cash, property or other securities) at a price of
$200, subject to adjustment.
Until the earlier to occur of (a) ten calendar days following the date (the
"Shares Acquisition Date") of public announcement that a person or entity or
group of affiliated or associated persons or entities acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of the outstanding
shares of Common Stock (an "Acquiring Person") or (b) ten business days (or
such later date as is determined by the Board of Directors or, if there has
been an Adverse Change of Control, by a majority of the "continuing directors"
(as defined below) of the Company) following the commencement or first public
announcement of an intention of any applicable person to make a tender offer
or exchange offer if, upon consummation thereof, such person would be an
Acquiring Person (the earlier of such dates being called the "Distribution
Date"), the Rights are evidenced by the certificates evidencing the Common
Stock. Until the Distribution Date, the Rights will be transferred only with
the shares of Common Stock. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Rights Certificates") will
be mailed to holders of record of shares of the Common Stock as of the close
of business on the Distribution Date, and such separate Right Certificates
alone will evidence the Rights.
The Rights Plan contains special provisions regarding CGIP (and its
affiliates and associates), which as of October 23, 1996 beneficially owned
approximately 19.9% of the Total Voting Power of the Company and, upon
consummation of the Offerings (assuming the over-allotment options of the
underwriters in the Offerings are not exercised), will beneficially own
approximately 11.3% of the Total Voting Power of the Company. During the
Standstill Period under the Shareholders Agreement (see "--Shareholders
Agreement and Strategic Committee") and so long as CGIP has not breached
certain provisions of the Shareholders Agreement, CGIP will not become an
"Acquiring Person" when it takes any action which the Company has agreed to
permit CGIP to take during the Standstill Period. Also, after the expiration
of the Standstill Period, CGIP will be an "Acquiring Person," subject to
certain exceptions including with respect to the acquisition of beneficial
ownership of additional shares of Common Stock within 18 months after certain
dilutive issuances by the Company, only if CGIP acquires beneficial ownership
of additional shares of Common Stock, and CGIP is thereafter the beneficial
owner of 15% or more of the shares of the Common Stock then outstanding,
excluding securities granted by the Company to directors of the Company who
are affiliates or associates of CGIP. If, however, at the time of the
expiration of the Standstill Period, CGIP has breached certain provisions of
the
22
<PAGE>
Shareholders Agreement, then CGIP will be an "Acquiring Person" to the extent
it would otherwise be deemed as such but for the provisions noted above.
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on August 10, 2005 (the "Final Expiration
Date") unless earlier redeemed by the Company as described below.
In the event that a person or entity (other than certain specified persons
or entities) becomes the beneficial owner of more than 15% of the then
outstanding shares of Common Stock, each holder of a Right will thereafter
have the right to receive, upon exercise, shares of Common Stock (or, in
certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth above, all Rights that are, or (under certain circumstances
specified in the Rights Plan) were, beneficially owned by an Acquiring Person
will be null and void.
In the event that, at any time following the Shares Acquisition Date, (a)
the Company is acquired in a merger or other business combination transaction
(other than a merger described in the immediately preceding paragraph), or (b)
50% or more of the Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have been voided as set
forth above) shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two times the exercise
price of the Right. The events set forth in this paragraph and in the
preceding paragraph are referred to as the "Triggering Events."
At any time prior to the earlier of (a) 5:00 p.m. New York City time on the
tenth calendar day following the Shares Acquisition Date and (b) the Final
Expiration Date, the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price"). The date of such
redemption is the "Redemption Date." Following an Adverse Change of Control,
the decision to redeem the Rights will require the concurrence of a majority
of the "continuing directors" of the Company. An "Adverse Change of Control"
means a change (resulting from a proxy or consent solicitation) in a majority
of the directors of the Company in office at the commencement of such
solicitation where a participant in such solicitation has stated (or the
Company's Board of Directors determines) that such participant has taken,
intends to take or may consider taking any action that would result in such
participant becoming an Acquiring Person or causing the occurrence of a
Triggering Event, and "continuing directors" means any member of the Company's
Board of Directors who is not an Acquiring Person and was a member prior to
the Record Date or any person who subsequently becomes a member of the Board
if such person's nomination for election or election to the Board is
recommended or approved by a majority of the continuing directors. Immediately
upon the action of the Board of Directors of the Company electing to redeem
the Rights with, if required, the concurrence of the continuing directors, the
Company shall make announcement thereof, and upon such action, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a shareholder of the Company, including, without limitation, the right to
vote or to receive dividends.
Any of the provisions of the Rights Plan may be amended by the Board of
Directors of the Company prior to the earliest of the Distribution Date, the
occurrence of a Triggering Event or an Adverse Change of Control. After the
Distribution Date, the occurrence of a Triggering Event or an Adverse Change
in Control, the provisions of the Rights Plan may be amended by the Board of
Directors of the Company in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or, with
certain limitations, to shorten or lengthen any time period under the Rights
Plan. In addition, the Board of Directors of the Company may at any time (with
the concurrence of the continuing directors) amend the Rights Plan to provide
for the issuance of shares of the Company's preferred stock under the Rights
Plan in place of shares of the Common Stock.
23
<PAGE>
Additional Shares. In addition to the currently outstanding shares of the
Preferred Stock, the Company's Board of Directors is authorized to provide for
the issuance, at any time or from time to time, of up to 30,000,000 shares of
preferred stock of the Company in one or more classes or series of a class as
determined by the Company's Board of Directors, to determine the designation
and number of shares of any such class or series and to determine the voting
rights, preferences, limitations and special rights, if any, of such class or
series; provided, however, that under the Company Articles, such shares will
rank on a parity with or junior to the Preferred Stock in respect of dividend
and rights upon liquidation and provided further that any such shares will not
be entitled to more than one vote per share when voting as a class with
holders of the Common Stock.
The foregoing agreements and provisions, including the existence under the
Company Articles of amounts of authorized but unissued preferred stock and
Common Stock, the Rights Plan, CGIP's voting power (see "Selling
Shareholders") and the various provisions of the Shareholders Agreement, could
have the effect of delaying or preventing a change in control of the Company.
Certain other provisions of the Company Articles and the Company Bylaws
could also have the effect of preventing or delaying any change in control of
the Company, including (a) the advance notice procedures governing shareholder
nomination of candidates to the Company's Board of Directors and other
shareholder proposals or business to be considered at meetings of the
Company's shareholders, (b) the absence of authority for shareholders to call
special shareholder meetings of the Company, except in certain limited
circumstances mandated by the PBCL, (c) director and officer indemnification
and director limitation of liability provisions, (d) the absence of authority
for shareholder action by written consent by less than all of the Company's
shareholders, (e) the reserving to the Board of Directors of the Company the
authority to fill vacancies on the Board of Directors, (f) the Strategic
Committee of the Company's Board of Directors, certain members of which are
CGIP Designees, which has authority to consider, and make non-binding
recommendations to the Company's full Board of Directors regarding, business
combinations and other extraordinary transactions involving the Company and
certain other matters, and (g) the limitation on the maximum number of
directors of the Company.
In addition, the Company is subject to Section 2538 and Sections 2551-2556
of the PBCL, which in certain cases provide for supermajority shareholder
approval of mergers and certain other extraordinary transactions involving the
Company and any "interested shareholder" (as defined in such statutes and
including generally, in the case of Section 2538, shareholders who are party
to the extraordinary transaction or who are treated differently than other
shareholders, and, in the case of Sections 2551-2556, shareholders
beneficially owning 20% or more of the voting power of a "registered"
corporation, such as the Company). There are additional anti-takeover statutes
in the PBCL which the Company currently is not subject to, including
limitations on the voting rights of shareholders achieving for the first time
voting power over 20%, 33 1/3% or 50% or more of the voting shares of a
registered corporation, alternative fiduciary duty provisions for directors,
provisions permitting recovery of short-term profits realized by persons who
acquire or seek to acquire voting power over 20% or more of the voting shares
of registered corporations, provisions permitting recovery of fair value of
shares from persons having voting power over 20% or more of the voting shares
of registered corporations, and provisions mandating payment of severance
benefits and compliance with labor contracts following certain extraordinary
transactions.
The foregoing descriptions of the Shareholders Agreement, the Rights Plan,
the Company Articles and the Company Bylaws do not purport to be complete and
are qualified in their entirety by reference to (a) in the case of the
Shareholders Agreement, the complete text of the Shareholders Agreement and
letter requesting demand registration of the Common Stock and Preferred Stock
in connection with the Offerings and related waiver of the Company's right to
purchase such Common Stock and Preferred Stock, which are Exhibits to the
Company's Current Reports on Form 8-K filed on March 1, 1996, as amended, and
September 26, 1996, respectively, (b) in the case of the Rights Plan, the
complete text of the Rights Plan, which is an Exhibit to the Company's
Registration Statement on Form 8-A filed August 10, 1995, and (c) in the case
of the Company Articles and the Company Bylaws, the complete text of the
Company Articles and the Company Bylaws, which are Exhibits to the Company's
Registration Statement on Form 8-A dated February 20, 1996. See "Incorporation
of Certain Documents by Reference."
24
<PAGE>
First Chicago Trust Company of New York acts as transfer agent, registrar
and dividend disbursing agent for the Preferred Stock and the Common Stock.
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF CAPITAL STOCK
The following discussion concerns the material United States federal income
and estate tax consequences of the ownership and disposition of the Preferred
Stock or the Common Stock applicable to Non-U.S. Holders of such stock. In
general, a "Non-U.S. Holder" is any person other than (a) a citizen or
resident of the United States, (b) a corporation or partnership created or
organized in the United States or under the laws of the United States or of
any State, or (c) an estate or trust that is subject (or potentially subject)
to U.S. federal income tax on its worldwide income on a net basis. The
discussion is based on current law and is for general information only. The
discussion does not address aspects of federal taxation other than income and
estate taxation (such as, for example, gift taxes and generation skipping
transfer taxes) and does not address all aspects of federal income and estate
taxation. This discussion does not consider specific facts and circumstances
that may be relevant to a particular Non-U.S. Holder's tax position and does
not consider U.S. State and local or non-U.S. tax consequences. Further, it
does not consider Non-U.S. Holders subject to special tax treatment under the
federal income tax laws (including holders of securities held as part of a
"straddle," "hedge," or "conversion transaction"). The following discussion is
based on provisions of the Internal Revenue Code of 1986, as amended, and
administrative and judicial interpretations as of the date hereof, all of
which are subject to change, possibly on a retroactive basis, and any change
could affect the continuing validity of this discussion. The following summary
is included herein for general information. Accordingly, each prospective Non-
U.S. Holder is urged to consult a tax advisor with respect to the United
States federal tax consequences of holding and disposing of the Preferred
Stock or the Common Stock, as well as any tax consequences that may arise
under the laws of any U.S. State, local or other non-U.S. taxing jurisdiction.
Dividends. In general, dividends paid to a Non-U.S. Holder will be subject
to United States withholding tax at a 30% rate (or any lower rate prescribed
by an applicable tax treaty) unless the dividends are either (a) effectively
connected with a trade or business carried on by the Non-U.S. Holder within
the United States, or (b) if a tax treaty applies, attributable to a United
States permanent establishment maintained by the Non-U.S. Holder. Dividends
effectively connected with such a trade or business or attributable to such a
permanent establishment will generally not be subject to withholding (if the
Non-U.S. Holder files certain forms with the payor of the dividend) and will
generally be subject to United States federal income tax at the same rates
applicable to U.S. holders. In the case of a Non-U.S. Holder that is a
corporation, such effectively connected income or income attributable to a
permanent establishment also may be subject to the United States branch
profits tax (which is generally imposed on a foreign corporation on the
repatriation from the United States of effectively connected earnings and
profits) at a 30% rate, or such lower rate as may be applicable under an
income tax treaty. To determine the applicability of a tax treaty providing
for a lower rate of withholding on dividends that are neither effectively
connected income nor attributable to a permanent establishment, dividends paid
to an address in a foreign country are presumed under current Treasury
regulations to be paid to a resident of that country, unless the Company has
actual knowledge that such presumption is not warranted or an applicable
treaty (or United States Treasury regulations thereunder) requires some other
method for determining a Non-U.S. Holder's residence. Proposed Treasury
regulations that are not currently effective would, if finally adopted,
require Non-U.S. Holders or intermediaries receiving payments on their behalf
to file a form, signed under penalties of perjury, to obtain the benefit of an
applicable tax treaty providing for a lower rate of withholding tax on
dividends. Such form would contain the holder's name and permanent residence
address and a statement of the basis for the reduced rate of withholding.
Alternatively, the Non-U.S. Holder could provide certain documentation issued
by the treaty country establishing that the Non-U.S. Holder is a resident of
the treaty country for tax purpose. These proposed regulations, if adopted,
would generally be effective for payments made after December 31, 1997.
25
<PAGE>
A Non-U.S. Holder of the Preferred Stock or the Common Stock that is
eligible for a reduced rate of U.S. withholding tax pursuant to an income tax
treaty may obtain a refund of any excess amounts withheld by filing an
appropriate claim for a refund with the U.S. Internal Revenue Service.
Conversion of Preferred Stock Into Common Stock. A Non-U.S. Holder who
voluntarily converts shares of the Preferred Stock into Common Stock will
recognize no gain or loss on the conversion for U.S. federal income tax
purposes and will not be subject to U.S. tax on the conversion. Upon a
mandatory conversion of the Preferred Stock into Common Stock, holders will
receive additional shares of Common Stock on account of accrued and unpaid
dividends on the Preferred Stock at the time of the conversion. If dividends
on the Preferred Stock are in arrears upon such a mandatory conversion, the
portion of the shares of Common Stock received on account of such dividend
arrearages will be treated as a taxable dividend for U.S. tax purposes,
subject to withholding as described above and subject to any applicable treaty
rules.
Adjustment of Conversion Ratio. Section 305 of the Code treats as a taxable
dividend certain actual or constructive distributions of stock with respect to
stock or convertible securities. Treasury regulations treat holders of
convertible stock as having received such a constructive distribution where
the conversion price of such stock is adjusted to reflect certain taxable
distributions with respect to stock into which such stock is convertible.
Thus, under certain circumstances an adjustment in the conversion price of the
Preferred Stock may give rise to a deemed taxable stock dividend to the
holders thereof. In addition, the failure to fully adjust the conversion price
of the Preferred Stock to reflect distributions of stock dividends with
respect to the Common Stock (or rights to acquire such Common Stock) may give
rise to a deemed taxable stock dividend to the holders of the Common Stock.
Sale of Preferred Stock or Common Stock. Generally, a Non-U.S. Holder will
not be subject to United States federal income tax on any gain realized upon
the disposition of shares of the Preferred Stock or the Common Stock unless
(a) the Company is or has been a "U.S. real property holding corporation" for
federal income tax purposes (which the Company does not believe that it is or
is likely to become); (b) the gain is effectively connected with a trade or
business carried on by the Non-U.S. Holder within the United States or, if a
tax treaty applies, attributable to a permanent establishment maintained by
the Non-U.S. Holder in the United States; (c) in the case of a Non-U.S. Holder
who is an individual, the Non-U.S. Holder holds the shares as a capital asset
and is present in the United States for 183 days or more in the taxable year
of the disposition and certain other conditions are satisfied; or (d) the Non-
U.S. Holder is subject to tax pursuant to the provisions of U.S. tax law
applicable to certain United States expatriates.
Estate Tax. In general, an individual who is a Non-U.S. Holder for U.S.
estate tax purposes will incur liability for U.S. federal estate tax if the
fair market value of property included in the individual's taxable estate for
U.S. federal estate tax purposes exceeds the statutory threshold amount. For
that purpose, the Preferred Stock or the Common Stock owned or treated as
owned by an individual who is not a citizen or resident (as defined for United
States federal estate tax purposes) of the United States at the time of death
will be includible in the individual's gross estate for United States federal
estate tax purposes, unless an applicable tax treaty provides otherwise, and
may be subject to United States federal estate tax.
Backup Withholding and Information Reporting. The Company generally must
report annually to the Internal Revenue Service and to each Non-U.S. Holder
the amount of dividends paid to, and the tax withheld with respect to, each
Non-U.S. Holder. These reporting requirements apply regardless of whether
withholding was reduced or eliminated by an applicable tax treaty. Copies of
these information returns also may be made available under the provisions of a
specific treaty. Backup withholding tax (which generally is a withholding tax
imposed at the rate of 31% on certain payments to persons that fail to furnish
the information required under the United States information reporting
requirements) will generally not apply to dividends paid on Preferred Stock or
Common Stock to a Non-U.S. Holder at an address outside the United States.
The payment of the proceeds from the disposition of the Preferred Stock or
the Common Stock to or through the United States office of a broker will be
subject to information reporting and backup withholding unless the
26
<PAGE>
owner certifies, among other things, its status as a Non-U.S. Holder (and the
broker does not have knowledge to the contrary), or otherwise establishes an
exemption. The payment of the proceeds will generally not be subject to
information reporting (except under the circumstances described in the
following sentence) and, under current temporary regulations, will not be
subject to backup withholding. Information reporting will apply to
dispositions through (a) a non-U.S. office of a U.S. broker and (b) a non-U.S.
office of a non-U.S. broker that is either a "controlled foreign corporation"
for United States federal income tax purposes or a person 50% or more of whose
gross income for certain periods is effectively connected with the conduct of
a United States trade or business unless the broker has documentary evidence
in its files that the owner is a Non-U.S. Holder (and does not have actual
knowledge to the contrary).
Under proposed Treasury regulations that are not currently effective, backup
withholding would generally not apply to the payment of dividends paid on or
proceeds from the disposition of the Preferred Stock or the Common Stock to a
Non-U.S. Holder provided that the Non-U.S. Holder or an intermediary receiving
the payment on its behalf properly certifies that the beneficial owner of the
payment is a foreign person. However, under the proposed regulations, backup
withholding would apply to the payment if the Company or broker has actual
knowledge that the beneficial owner is not a foreign person.
27
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement (the "U.S.
Underwriting Agreement"), among the Company, the Selling Shareholders and each
of the Underwriters named below (the "U.S. Underwriters"), each of the U.S.
Underwriters has severally agreed to purchase, and the Selling Shareholders
have agreed to sell, the respective number of shares of Common Stock (the
"U.S. Shares") set forth opposite its name below:
<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
----------- ----------------
<S> <C>
Lazard Freres & Co. LLC..................................... 1,773,334
CS First Boston Corporation................................. 1,773,333
Salomon Brothers Inc........................................ 1,773,333
Bear, Stearns & Co. Inc. ................................... 110,000
Alex. Brown & Sons Incorporated............................. 110,000
Chase Securities Inc. ...................................... 110,000
Deutsche Morgan Grenfell Inc. .............................. 110,000
Dillon, Read & Co. Inc. .................................... 110,000
Donaldson, Lufkin & Jenrette Securities Corporation......... 110,000
Hambrecht & Quist LLC....................................... 110,000
Lehman Brothers Inc. ....................................... 110,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 110,000
J.P. Morgan Securities Inc. ................................ 110,000
Morgan Stanley & Co. Incorporated........................... 110,000
PaineWebber Incorporated.................................... 110,000
Schroder Wertheim & Co. Incorporated........................ 110,000
Societe Generale Securities Corp. .......................... 110,000
Allen & Company Incorporated................................ 60,000
Janney Montgomery Scott Inc. ............................... 60,000
Jefferies & Company, Inc. .................................. 60,000
Edward D. Jones & Co., L.P. ................................ 60,000
Parker/Hunter Incorporated.................................. 60,000
Pennsylvania Merchant Group Ltd............................. 60,000
Pryor, McClendon, Counts & Co. ............................. 60,000
Raymond James & Associates, Inc. ........................... 60,000
Wheat First Butcher Singer.................................. 60,000
---------
Total................................................... 7,400,000
=========
</TABLE>
In addition, pursuant to the U.S. Underwriting Agreement, CGIP has granted
the U.S. Underwriters an option, exercisable for 30 days after the date
hereof, to purchase up to 1,387,500 additional shares of Common Stock to cover
over-allotments, if any, at the public offering price less the underwriting
discount and commissions set forth on the cover page of this prospectus.
The U.S. Underwriting Agreement provides that the several obligations of the
U.S. Underwriters to pay for and accept delivery of the U.S. Shares are
subject to certain conditions. The U.S. Underwriters are obligated to purchase
all U.S. Shares (other than shares covered by the over-allotment option) if
any are purchased.
Concurrently with the sale of U.S. Shares to the U.S. Underwriters, the
Selling Shareholders have agreed to sell to certain underwriters outside the
United States and Canada (the "International Underwriters" and, together with
the U.S. Underwriters, the "Underwriters"), and the International Underwriters
severally have agreed to purchase from the Selling Shareholders, an aggregate
of 1,850,000 shares of Common Stock (the "International Shares") pursuant to
an international underwriting agreement among the Company, the Selling
Shareholders and the International Underwriters (the "International
Underwriting Agreement").
28
<PAGE>
The Underwriters have entered into an intersyndicate agreement (the
"Intersyndicate Agreement") providing for the coordination of their activities
under the direction of Lazard Freres & Co. LLC, CS First Boston Corporation
and Salomon Brothers Inc, on behalf of the U.S. Underwriters (the "U.S.
Representatives"), and Lazard Capital Markets, CS First Boston Limited and
Salomon Brothers International Limited, on behalf of the International
Underwriters (the "International Representatives"). Pursuant to the
Intersyndicate Agreement, each U.S. Underwriter has represented and agreed
that, with certain exceptions, (a) it is not purchasing any U.S. Shares for
the account of anyone other than a United States or Canadian Person (as
defined below) and (b) it has not offered or sold, and will not offer or sell,
directly or indirectly, any U.S. Shares or distribute any prospectus relating
to the U.S. Shares outside the United States or Canada to anyone other than a
United States or Canadian Person. Also, pursuant to the Intersyndicate
Agreement, each International Underwriter has represented and agreed that,
with certain exceptions, (a) it is not purchasing any International Shares for
the account of any United States or Canadian Person and (b) it has not offered
or sold, and will not offer or sell, directly or indirectly, any International
Shares in the United States or Canada or to any United States or Canadian
Person. The foregoing limitations do not apply to stabilization transactions
or to certain other transactions specified in the Intersyndicate Agreement. As
used herein, "United States or Canadian Person" means any national or resident
of the United States or Canada or any corporation, pension, profit-sharing, or
other trust or other entity organized under the laws of the United States or
Canada or of any political subdivision thereof (other than a branch located
outside the United States and Canada of any United States or Canadian Person)
and includes any United States or Canadian branch of a person who is otherwise
not a United States or Canadian Person.
Pursuant to the Intersyndicate Agreement, sales may be made between the U.S.
Underwriters and International Underwriters of any number of shares of Common
Stock as may be mutually agreed. The per share price of any such shares of
Common Stock sold shall be the price to the public set forth on the cover page
hereof, less an amount not greater than the per share amount of concession to
dealers set forth below.
Pursuant to the Intersyndicate Agreement, each U.S. Underwriter has
represented that is has not offered or sold, and has agreed not to offer or
sell, any shares of Common Stock, directly or indirectly, in Canada in
contravention of the securities laws of Canada or any province or territory
thereof and has represented that any offer of shares of Common Stock in Canada
will be made only pursuant to an exemption from the requirement to file a
prospectus in the province or territory of Canada in which such offer is made.
Each U.S. Underwriter has further agreed to send to any dealer who purchases
from it any shares of Common Stock a notice stating in substance that, by
purchasing such shares of Common Stock, such dealer represents and agrees that
is has not offered or sold, and will not offer or sell, directly or
indirectly, any of such shares of Common Stock in violation of the laws of
Canada or any province or territory thereof and that any offer of shares of
Common Stock in Canada will be made only pursuant to an exemption from the
requirement to file a prospectus in the province of Canada in which such offer
is made, and that such dealer will deliver to any other dealer to whom it
sells any of such shares of Common Stock a notice to the foregoing effect.
The Selling Shareholders have been advised by Lazard Freres & Co. LLC that
the several U.S. Underwriters propose to offer the U.S. Shares offered hereby
directly to the public at the public offering price set forth on the cover
page of this Prospectus and to certain dealers at such price less a concession
not in excess of $0.96 per share. The U.S. Underwriters may allow, and such
dealers may reallow, a concession not in excess of $0.10 per share to other
Underwriters or to certain other dealers. After the Common Stock Offerings,
the public offering price and such concessions may be changed by the U.S.
Underwriters.
The Selling Shareholders have agreed with the Underwriters that they will
not, without the prior written consent of the Underwriters, offer, sell or
otherwise dispose of any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such capital
stock or any rights to purchase or acquire such capital stock for a period of
one year after the date of this Prospectus except in connection with the
Offerings or in connection with a pledge of such stock.
The Company has agreed with the Underwriters that neither the Company nor
certain executive officers and directors of the Company will, without the
prior written consent of the Underwriters, offer, sell or otherwise dispose of
any shares of capital stock of the Company or any securities convertible into
or exchangeable for
29
<PAGE>
such capital stock or any rights to purchase or acquire such capital stock for
a period of 90 days after the date of this Prospectus; provided, however, that
the foregoing restriction will not apply to issuances or sales (a) in
connection with stock option, savings, benefit or compensation plans or
dividend reinvestment plans in existence as of the date of this Prospectus or
the conversion or exchange of convertible or exchangeable securities of the
Company, (b) in connection with a merger or other combination with, or
exchange offer for shares or purchase of assets of, another entity,
(c) required in the Company's judgment to prevent termination of the
Standstill Period under the Shareholders Agreement, or (d) by such executive
officers and directors of up to 300,000 shares of capital stock in the
aggregate; provided, further, that the Underwriters shall be given prior
written notice of any issuance or sale described in clause (b), (c) or (d)
above.
The Company and the Selling Shareholders have agreed to indemnify the U.S.
Underwriters against certain liabilities, including liabilities under the
Securities Act.
Felix G. Rohatyn, a Managing Director of Lazard Freres & Co. LLC, is a
director of the Company. As a result, Lazard Freres & Co. LLC may be deemed to
be an affiliate of the Company. Accordingly, any offering of the shares
offered hereby will be made pursuant to the provisions of Rule 2720 of the
Conduct Rules of the National Association of Securities Dealers, Inc.
CS First Boston Corporation served as financial advisor to the Company and
Lazard Freres & Co. LLC served as financial advisor to CarnaudMetalbox and
CGIP in connection with the acquisition of CarnaudMetalbox by the Company in
February 1996, for which they received customary fees. CS First Boston
Corporation also served as financial advisor to the Company in connection with
the acquisition by the Company of CONSTAR International Inc. in 1992, for
which it received customary fees. In addition, certain Underwriters and their
affiliates have from time to time provided, and may in the future provide,
investment banking and commercial banking services to the Company, for which
they received or will receive customary fees.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Dechert Price & Rhoads, Philadelphia, Pennsylvania, and certain
other legal matters in connection with the Offerings will be passed upon for
the Company by Richard L. Krzyzanowski, Executive Vice President, Secretary
and General Counsel for the Company, and Dechert Price & Rhoads. Certain legal
matters in connection with the Offerings will be passed upon for the Selling
Shareholders by Sullivan & Cromwell, New York, New York, special counsel to
the Selling Shareholders. Certain legal matters in connection with the
Offerings are being passed upon for the Underwriters by Cravath, Swaine &
Moore, New York, New York. Mr. Krzyzanowski is a director of the Company and,
as of March 1, 1996, beneficially owned 0.108% of the outstanding shares of
Common Stock. Chester C. Hilinski, of counsel to Dechert Price & Rhoads, is a
director of the Company and, as of March 1, 1996, beneficially owned 0.013% of
the outstanding shares of Common Stock.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995,
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting. The audited financial statements of CarnaudMetalbox
as of December 31, 1994 and 1993 and for each of the two years ending on
December 31, 1994 and 1993 included in the Company's Current Report on Form 8-
K filed on March 1, 1996, as amended, incorporated by reference in this
Prospectus have been so incorporated in reliance on the report of Arthur
Andersen LLP, independent accountants, and Befec-Price Waterhouse and Claude
Chevalier, statutory auditors, given on the authority of said firms as experts
in auditing and accounting. The audited financial statements of
CarnaudMetalbox as of December 31, 1995 and for the year ended December 31,
1995 included in such Current Report on Form 8-K have been so incorporated in
reliance on the report of Arthur Andersen LLP, independent accountants, and
Befec-Price Waterhouse and Salustro Reydel, statutory auditors, given on the
authority of said firms as experts in auditing and accounting.
30
<PAGE>
===============================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFOR-
MATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 2
The Company.............................................................. 4
The Offerings............................................................ 8
Selected Historical Financial Information................................ 9
Unaudited Pro Forma Consolidated Condensed Financial Information......... 11
Price Range of Capital Stock and Dividends............................... 14
Use of Proceeds.......................................................... 14
Selling Shareholders..................................................... 15
Description of Capital Stock............................................. 17
Certain United States Federal Tax Considerations for Non-U.S. Holders of
Capital Stock........................................................... 25
Underwriting............................................................. 28
Legal Matters............................................................ 30
Experts.................................................................. 30
</TABLE>
===============================================================================
9,250,000 SHARES
[LOGO OF CROWN CORK & SEAL COMPANY, INC. APPEARS HERE]
CROWN CORK & SEAL COMPANY, INC.
COMMON STOCK
----------
PROSPECTUS
----------
LAZARD FRERES & CO. LLC
CS FIRST BOSTON
SALOMON BROTHERS INC
October 24, 1996
===============================================================================
<PAGE>
Rule 424(b)(1)
Registration No. 333-12787
PROSPECTUS
9,250,000 SHARES
[LOGO OF CROWN CORK
& SEAL COMPANY, INC. CROWN CORK & SEAL COMPANY, INC.
APPEARS HERE]
COMMON STOCK
------------
Of the 9,250,000 shares of Common Stock, par value $5.00 per share (the
"Common Stock"), of Crown Cork & Seal Company, Inc. (the "Company") being
offered, 1,850,000 shares are being offered by Compagnie Generale d'Industrie
et de Participations, a societe anonyme organized under the laws of the
Republic of France ("CGIP"), and Sofiservice, a societe anonyme organized under
the laws of the Republic of France and a wholly owned subsidiary of CGIP
("Sofiservice" and, together with CGIP, the "Selling Shareholders"), outside
the United States and Canada, and the remaining 7,400,000 shares are being
offered by the Selling Shareholders in a concurrent offering in the United
States and Canada (collectively, the "Common Stock Offerings"). The Company
will not receive any of the proceeds from the sale of the Common Stock offered
hereby. See "Selling Shareholders". The public offering price and aggregate
underwriting discount and commissions per share are identical for each of the
Common Stock Offerings. CGIP has also granted to the U.S. Underwriters an
option for 30 days to purchase an additional 1,387,500 shares of Common Stock
solely to cover over-allotments. See "Underwriting."
The Common Stock offered by the Selling Shareholders was acquired in February
1996 in exchange for shares of CarnaudMetalbox, a societe anonyme organized
under the laws of the Republic of France ("CarnaudMetalbox"), in connection
with the acquisition of CarnaudMetalbox by the Company. See "The Company--
CarnaudMetalbox Acquisition."
Concurrently with the Common Stock Offerings, the Selling Shareholders are
offering for sale 3,000,000 shares of 4.5% Convertible Preferred Stock, par
value $41.8875 per share (the "Preferred Stock"), of the Company, plus up to an
additional 450,000 shares subject to an over-allotment option granted to the
underwriters (the "Preferred Stock Offering" and, together with the Common
Stock Offerings, the "Offerings"). The closings of the Common Stock Offerings,
on the one hand, and the Preferred Stock Offering, on the other, are not
mutually contingent. Upon consummation of the Offerings, the Selling
Shareholders will hold approximately 11.3% of the total voting power of the
Company's capital stock (assuming the over-allotment options of the
underwriters in the Offerings are not exercised).
The Common Stock is listed on the New York Stock Exchange (the "NYSE") under
the symbol "CCK" and on the Paris Stock Exchange. The Preferred Stock is listed
on the NYSE under the symbol "CCK Pr" and on the Paris Stock Exchange. On
October 24, 1996, the reported last sales price of the Common Stock and the
Preferred Stock on the NYSE were $46.25 per share and $47.38 per share,
respectively. See "Price Range of Capital Stock and Dividends."
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
================================================================================
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNT AND SELLING
PUBLIC COMMISSIONS(1) SHAREHOLDERS(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.......................... $46.25 $1.61 $44.64
- --------------------------------------------------------------------------------
Total(3)........................... $427,812,500 $14,892,500 $412,920,000
================================================================================
</TABLE>
(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting."
(2) Does not include expenses, estimated to be $700,000, of which $550,000 will
be payable by the Selling Shareholders and $150,000 will be payable by the
Company.
(3) CGIP has granted the U.S. Underwriters an option for 30 days to purchase up
to an additional 1,387,500 shares of Common Stock at the Price to Public,
less the Underwriting Discount and Commissions, solely to cover over-
allotments. If such option is exercised in full, the total Price to Public,
Underwriting Discount and Commissions and Proceeds to Selling Shareholders
(before deducting expenses as indicated in note (2)) will be $491,984,375,
$17,126,375 and $474,858,000, respectively. See "Underwriting."
-----------
The Common Stock is offered by the International Underwriters, subject to
prior sale, when, as and if delivered to and accepted by the International
Underwriters, subject to certain conditions. The International Underwriters
reserve their right to withdraw, cancel or modify such offer and to reject
orders in whole or in part. It is expected that delivery of share certificates
for the Common Stock will be made at the offices of Lazard Freres & Co. LLC,
New York, New York, on or about October 30, 1996, against payment therefor in
immediately available funds.
-----------
LAZARD CAPITAL MARKETS
CS FIRST BOSTON
SALOMON BROTHERS INTERNATIONAL LIMITED
-----------
The date of this Prospectus is October 24, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). The reports, proxy statements
and other information filed by the Company with the SEC can be inspected and
copied at the public reference facilities maintained by the SEC at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the SEC located at 7 World Trade Center, 13th Floor, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can also be obtained by mail
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The SEC maintains a site on the
world wide web that contains reports, proxy and information statements and
other information on registrants, such as the Company, who must file such
material with the SEC electronically. The SEC's internet address on the world
wide web is http://www.sec.gov. In addition, material filed by the Company can
be inspected at the offices of the NYSE, 20 Broad Street, New York, New York
10005. The Company has filed with the SEC a Registration Statement on Form S-3
(together with all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), covering the offer
and sale of the securities offered hereby. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the SEC.
Reference is hereby made to the Registration Statement and related exhibits
for further information with respect to the Company and the securities offered
hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC (File No. 1-2227)
pursuant to the Exchange Act are hereby incorporated by reference in this
Prospectus:
(1) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
(2) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996 (as amended by the Company's Reports on Form 10-Q/A filed on
May 16, 1996 and September 26, 1996), and June 30, 1996 (as amended by the
Company's Report on Form 10-Q/A filed on September 26, 1996);
(3) the Company's Current Reports on Form 8-K filed on January 2, 1996,
March 1, 1996 (as amended by the Company's Reports on Form 8-K/A filed on
March 18, 1996, May 3, 1996 and May 7, 1996), September 26, 1996, and
October 15, 1996; and
(4) the Company's Registration Statements on Form 8-B filed on May 2,
1989 with respect to the Common Stock, on Form 8-A filed on August 10, 1995
with respect to the Company's common stock purchase rights and on Form 8-A
filed on February 20, 1996 with respect to the Preferred Stock.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to termination of the offers and sales hereunder are
hereby incorporated by reference herein and shall be deemed a part hereof from
the respective dates of filing of such reports and other documents. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for all purposes of this Prospectus to the
extent that a statement contained herein, or in any other subsequently filed
document that also is incorporated by reference herein, modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Prospectus. Certain statements contained herein (including, without
limitation, the statements in "The Company" and "Unaudited Pro Forma
Consolidated Condensed Financial Information" which are not historical facts)
or incorporated by reference herein constitute forward-looking statements as
such term is defined in Section 27A of the Securities Act and Section 21E of
the Exchange Act. Certain factors as discussed herein or in the Company's
Exchange Act filings with the SEC, including the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996, as amended, could cause actual
results to differ materially from those in the forward-looking statements.
2
<PAGE>
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents (not including exhibits thereto,
unless such exhibits are specifically incorporated by reference) are
available, without charge, to any person, including any beneficial owner, to
whom this prospectus is delivered upon written or oral request directed to:
Crown Cork & Seal Company, Inc., 9300 Ashton Road, Philadelphia, Pa 19136
(telephone number (215) 698-5208), Attention: Richard L. Krzyzanowski,
Executive Vice President, Secretary And General Counsel.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AND THE PREFERRED STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED MAY BE DISCONTINUED AT ANY TIME.
DURING THIS OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR
THE ACCOUNTS OF OTHERS IN THE PREFERRED STOCK OR THE COMMON STOCK PURSUANT TO
EXEMPTIONS FROM RULES 10B-6, 10B-7 AND 10B-8 UNDER THE EXCHANGE ACT.
3
<PAGE>
THE COMPANY
GENERAL
The Company is the world's leading manufacturer of packaging products for
consumer goods. The Company believes that it is unique in its industry in its
ability to supply food, beverage and aerosol containers to multinational
consumer marketers on a global basis. The Company currently operates 275
plants located in 53 countries and employs approximately 48,000 people.
The Company's products include metal cans for food, beverage, household and
other consumer products; plastic containers for beverage, processed food,
household, personal care and other products; metal and plastic packaging
products for health and beauty care applications including cosmetics,
fragrances and pharmaceuticals; metal specialty and promotional packaging
products; a wide variety of caps, closures, pumps and dispensing systems; and
composite containers. The Company also manufactures filling and material
handling machinery, primarily for the beverage and brewing industries, as well
as machinery used in the can making process.
Under current management, the Company has pursued a strategy of growth by
acquisition within the global packaging industry. Over the past seven years,
the Company has completed 20 acquisitions of companies with aggregate net
sales of approximately $8 billion. The largest acquisitions over this period
include CarnaudMetalbox (February 1996), Van Dorn Company (April 1993),
CONSTAR International (October 1992), Continental Can International (May
1991), Continental Can's U.S. food and beverage can businesses (July 1990) and
Continental Can Canada (December 1989). This strategy has contributed to an
increase in the Company's net sales from $1.9 billion in 1989 to $5.1 billion
in 1995. The Company's net sales in 1996, which will include the net sales of
CarnaudMetalbox for 10 months, are expected to approach $9 billion. The
Company's acquisition strategy has resulted in numerous benefits to the
Company, including, among others, improved market positions, product and
geographic diversification, and cost savings. The Company believes that the
ongoing rationalization of excess or inefficient capacity within the global
packaging industry, particularly in the core mature markets served by the
Company, has had a beneficial effect on asset utilization. The Company
believes that industry consolidation has generally resulted in fewer but more
competitive packaging suppliers.
In conjunction with its strategy of growth by acquisition, the Company has
invested in new manufacturing capacity, particularly for beverage can
production in emerging markets and for polyethylene terephthalate (PET)
plastic containers globally. The Company has also invested in projects that
improve production efficiencies and product quality, and lower manufacturing
and administrative costs. The Company continually reviews its operations,
especially in terms of their competitiveness and the appropriate number, size
and location of plants, emphasizing service to customers and rate of return to
investors.
The Company was founded in 1892 and is a Pennsylvania corporation. The
principal executive offices of the Company are located at 9300 Ashton Road,
Philadelphia, Pennsylvania 19136, and the telephone number at such address is
(215) 698-5100.
CARNAUDMETALBOX ACQUISITION
On February 22, 1996, the Company acquired CarnaudMetalbox, a leading
multinational manufacturer of metal and plastic packaging products with
headquarters in Paris, France, for approximately $4.0 billion. Management
believes that the acquisition of CarnaudMetalbox has positioned the Company to
benefit from the following factors, among others:
. Complementary Geographic Markets. The Company is now significantly more
diversified on a global basis. Prior to the acquisition, the Company was
the leading manufacturer of packaging products for consumer goods in
North America. The acquisition enabled the Company to significantly
increase its market presence in Europe as well as in the Middle East,
Asia-Pacific and Africa regions, where CarnaudMetalbox has a substantial
presence. As a result of the acquisition, the Company has become the
world's leading manufacturer of packaging products for consumer goods.
. Complementary Product Markets. The Company is now able to offer a
broader range of products to existing and new customers, including
packaging for health and beauty care applications, metal specialty and
promotional packaging, metal closures for glass food containers and
easy-open ends for metal food containers. The only area of significant
product overlap with CarnaudMetalbox, tinplate
4
<PAGE>
aerosol cans in Europe, was eliminated by the recently completed,
European Community-mandated divestiture of a portion of the Company's
aerosol can operations in that region.
. Cost Reduction Opportunities. The Company believes that, as in past
acquisitions, it can realize significant cost reductions over time
through more effective management of costs relating to sales, marketing
and administration, and research and development activities. The Company
also expects to reduce costs through rationalization of metal and other
raw material specification requirements, improved coordination of
purchasing activities and greater price discounts on certain items
purchased in larger quantities. For information on the Company's
rationalization of manufacturing operations, see "-- 1996 Restructuring"
below.
. Leadership in Research, Development and Engineering. The Company
considers its research, development and engineering ("RD&E")
capabilities to be unsurpassed in the industry. The Company's principal
RD&E centers are located near Chicago, Illinois and in Wantage, UK. The
Company uses its RD&E capabilities to (a) promote development of value-
added packaging systems, (b) design cost-efficient manufacturing systems
and materials that also provide continuous quality improvement, (c)
support technical needs in customer and vendor relationships, and (d)
provide engineering services for the Company's worldwide packaging
activities. These capabilities allow the Company to identify market
opportunities by working with customers to develop new products. In
addition, the Company believes that its technical expertise, quality
reputation and customer relationships will enable it to anticipate and
capitalize on shifting customer preferences, such as the conversion to
plastic from other materials, and potential demand for new packaging
shapes.
. Improved Free Cash Flow Generation. The Company believes that the
CarnaudMetalbox acquisition has the potential to improve the Company's
ability to generate free cash flow as a result of the Company's
strengthened competitive position worldwide, opportunities to reduce
operating costs, improved working capital management and lower capital
expenditure requirements for the combined entity. Over the near term,
the Company intends to use a portion of its available free cash flow to
reduce indebtedness.
1996 RESTRUCTURING
During the second quarter of 1996, the Company charged against operations
$29.6 million for the costs associated with the closure of a South American
operation and costs associated with restructuring existing businesses in
Europe. The Company anticipates that such restructuring, when complete, will
generate approximately $6.0 million in after-tax cost savings on an annualized
basis.
The Company has made a preliminary assessment of the restructuring and exit
costs related to the acquisition of CarnaudMetalbox. The current plan of
restructuring, which commenced at the end of the first quarter of 1996, is
expected to be substantially completed during the first quarter of 1997. As of
June 30, 1996, the Company had accrued approximately $370 million for the
costs associated with restructuring CarnaudMetalbox operations and allocated
such costs to the purchase price of CarnaudMetalbox in accordance with
purchase accounting requirements. These costs are comprised of severance pay
and benefits, writedown of assets and lease termination and other exit costs.
The cost of providing severance pay and benefits to employees is currently
estimated at approximately $202 million and is primarily a cash expense. The
cost associated with the writedown of assets (property, equipment, inventory,
etc.) is currently estimated at approximately $139 million and has been
reflected as a reduction in the fair value of the Company's assets. Lease
termination costs and other exit costs are currently estimated at
approximately $29 million and are primarily cash expenses. The $370 million in
restructuring costs recorded in connection with the CarnaudMetalbox
acquisition include the $70 million restructuring charge previously announced
by CarnaudMetalbox Asia Ltd., a subsidiary of the Company.
The Company, on a preliminary basis, estimates that this plan of
restructuring of CarnaudMetalbox operations, when complete, will generate
annual cost savings of approximately $116 million (or $77 million after-tax)
on a full year basis. It is also estimated that capital expenditures of
approximately $50 million will be made to expand
5
<PAGE>
and upgrade other facilities to minimize the adverse effects of the
restructuring on existing business and customer relationships.
The Company expects that there will be other restructurings effected within
the next year. These plans will be finalized when the Company has had time to
properly evaluate and assess business conditions and operating efficiencies to
make such decisions. As the Company continues to restructure the newly
combined Company, costs that do not qualify for purchase accounting will be
charged against operations.
The foregoing estimates of sales, restructuring charges and related cost
savings represent the Company's best estimates, but necessarily make numerous
assumptions with respect to industry performance, general business and
economic conditions, raw materials and product pricing levels, the timing of
implementation of the restructuring and related employee reductions and
facility closings and other matters, many of which are outside the Company's
control. These estimates may change, resulting in lower actual sales and
adjustments to restructuring costs and savings. The Company's estimates and
related assumptions, which are unaudited, are not necessarily indicative of
future performance, which may be significantly more or less favorable than as
set forth above, and are subject to considerations discussed in the Company's
Exchange Act filings with the SEC, including its Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 1996, as amended, which is
incorporated by reference herein. Undue reliance should not be placed on the
estimates and assumptions. Such information may not necessarily be updated to
reflect circumstances existing after the date hereof or to reflect the
occurrence of unanticipated events.
6
<PAGE>
THIRD QUARTER RESULTS
On October 14, 1996, the Company issued a news release announcing the
following summary, unaudited results of operations for the quarter and nine
months ended September 30, 1996.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
1996(1) 1995(2) 1996(1) 1995(2)
----------- ---------- ----------- ----------
(IN MILLIONS, EXCEPT SHARE AND PER SHARE
AMOUNTS)
<S> <C> <C> <C> <C>
Net sales................... $ 2,462.1 $ 1,427.1 $ 6,367.0 $ 3,939.6
----------- ---------- ----------- ----------
Cost of products sold...... 1,988.6 1,252.8 5,169.1 3,343.6
Depreciation and amortiza-
tion...................... 130.0 67.3 359.8 196.5
Selling and administrative
expense................... 101.6 36.0 277.4 107.8
Provision for restructur-
ing....................... 82.5 29.6 102.7
Gain on sale of assets..... (12.6) (3.1) (22.8) (8.1)
Interest expense, net of
interest income........... 85.0 34.8 223.0 102.8
Translation and exchange
adjustments............... 3.0 (1.8) (35.7) (1.3)
----------- ---------- ----------- ----------
Income (loss) before income
taxes...................... 166.5 (41.4) 366.6 95.6
Provision for income tax-
es........................ 54.1 (23.9) 107.7 17.4
Minority interests, net of
equity earnings........... (3.0) (2.4) (14.1) (9.4)
----------- ---------- ----------- ----------
Net income (loss)........... 109.4 (19.9) 244.8 68.8
Preferred stock dividends... 5.9 13.9
----------- ---------- ----------- ----------
Net income (loss) available
to common shareholders..... $ 103.5 $ (19.9) $ 230.9 $ 68.8
=========== ========== =========== ==========
Primary earnings (loss) per
average common share....... $ 0.81 $ (0.22) $ 1.91 $ 0.76
=========== ========== =========== ==========
Fully diluted earnings
(loss) per average common
share...................... $ 0.78 $ (0.22) $ 1.89 $ 0.76
=========== ========== =========== ==========
Dividends per common share.. $ 0.25 $ 0.75
=========== ===========
Weighted average shares out-
standing:
Primary.................... 128,510,213 90,840,987 120,820,436 90,619,389
Fully diluted.............. 139,836,015 90,840,987 129,837,826 90,621,473
Actual common shares out-
standing................... 128,215,366 90,576,900 128,215,366 90,576,900
Actual preferred shares out-
standing................... 12,432,622 12,432,622
</TABLE>
- --------
(1) The results for 1996 include the operations of CarnaudMetalbox from the
acquistion date of February 22, 1996.
(2) Certain prior year amounts have been reclassified to improve
comparability.
7
<PAGE>
THE OFFERINGS
Concurrently with the shares of Common Stock being offered hereby, the
Selling Shareholders are offering for sale 3,000,000 shares of Preferred
Stock. In addition, CGIP has granted the underwriters in connection with the
Preferred Stock Offering an option for 30 days to purchase up to an additional
450,000 shares of Preferred Stock solely to cover over-allotments. The
closings of the Common Stock Offerings, on the one hand, and the Preferred
Stock Offering, on the other hand, are not mutually contingent.
<TABLE>
<S> <C>
Common Stock Offered(1)............ 9,250,000 shares
Common Stock Outstanding Before
and After the Offerings(2)........ 128,245,064 shares (139,573,201 shares
assuming full conversion of the outstanding
Preferred Stock at the current conversion
price of $45.9715 per share)
Use of Proceeds.................... The Company will not receive any of the
proceeds from the sale of the Common Stock
offered hereby
New York Stock Exchange Symbol..... CCK
</TABLE>
- --------
(1) Does not include up to 1,387,500 shares of Common Stock that may be sold
by CGIP pursuant to an over-allotment option granted to the U.S.
Underwriters. See "Underwriting."
(2) Based on shares outstanding as of October 23, 1996. Does not include up to
4,719,494 shares of Common Stock that may be issued upon the exercise of
outstanding options granted under the Company's employee and director
stock option plans.
8
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION
The summary financial information presented below for the years ended
December 31, 1995, 1994, 1993, 1992, and 1991 and as of the end of each such
fiscal year is derived from the consolidated financial statements of the
Company, which have been audited by Price Waterhouse LLP, independent
accountants, and should be read in conjunction with the information and
audited consolidated financial statements contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995, which is
incorporated by reference herein. The summary financial information for and as
of the end of the six-month periods ended June 30, 1996 and 1995 is unaudited
and, in the opinion of the Company management, includes all adjustments,
consisting of only normal recurring accruals, necessary for a fair
presentation of such information. Such unaudited information should be read in
conjunction with the information and the consolidated financial statements
contained in the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1996 and June 30, 1996, as amended, which are
incorporated by reference herein. See also "Unaudited Pro Forma Consolidated
Condensed Financial Information." The summary financial data set forth in the
table below do not reflect the financial results of the Company after June 30,
1996. See "The Company--Third Quarter Results."
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,(1) YEAR ENDED DECEMBER 31,(1)
------------------- ------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net sales.............. $ 3,904.9 $2,512.5 $5,053.8 $4,452.2 $4,162.6 $3,780.7 $3,807.4
Cost of products sold.. 3,170.3 2,085.8 4,311.0 3,699.5 3,474.0 3,197.4 3,290.7
Depreciation and amor-
tization.............. 229.8 129.2 256.3 218.3 191.7 142.4 128.4
Selling and administra-
tive expense.......... 175.8 71.8 139.3 135.4 126.6 112.1 105.4
Provision for restruc-
turing(2)............. 29.6 20.2 102.7 114.6
Interest expense....... 172.9 73.5 148.6 98.8 89.8 77.4 76.6
Interest income........ (34.9) (5.5) (12.5) (7.2) (10.1) (13.5) (10.0)
Translation and ex-
change adjustments.... (38.7) 0.5 (1.1) 10.1 10.8 10.2 7.5
--------- -------- -------- -------- -------- -------- --------
Income before income
taxes, equity in
earnings of affiliates
and cumulative effect
of accounting
changes............... 200.1 137.0 109.5 182.7 279.8 254.7 208.8
Income taxes........... 53.6 41.3 24.9 55.6 97.4 101.0 83.8
Equity in earnings of
affiliates, net of
minority interests.... (11.1) (7.0) (9.7) 3.9 (1.5) 1.7 3.1
--------- -------- -------- -------- -------- -------- --------
Net income before
cumulative effect of
accounting changes.... 135.4 88.7 74.9 131.0 180.9 155.4 128.1
Cumulative effect of
accounting
changes(3)............ (81.8)
--------- -------- -------- -------- -------- -------- --------
Net income............. 135.4 88.7 74.9 131.0 99.1 155.4 128.1
Preferred Stock divi-
dends(4).............. 8.0
--------- -------- -------- -------- -------- -------- --------
Net income available
for common sharehold-
ers................... $ 127.4 $ 88.7 $ 74.9 $ 131.0 $ 99.1 $ 155.4 $ 128.1
========= ======== ======== ======== ======== ======== ========
PER SHARE OF COMMON
STOCK(5)
Net income before
cumulative effect of
accounting changes.... $ 1.09 $ 0.99 $ 0.83 $ 1.47 $ 2.08 $ 1.79 $ 1.48
Cumulative effect of
accounting
changes(3)............ (0.94)
--------- -------- -------- -------- -------- -------- --------
Net income............. $ 1.09 $ 0.99 $ 0.83 $ 1.47 $ 1.14 $ 1.79 $ 1.48
========= ======== ======== ======== ======== ======== ========
Cash dividends declared
per common share(6)... $ 0.50
RATIO OF EARNINGS TO
COMBINED FIXED CHARGES
AND PREFERRED STOCK
DIVIDENDS(7) .......... 2.0x 2.8x 1.7x 2.8x 4.2x 4.3x 3.7x
OTHER DATA
EBITDA(8).............. $ 597.5 $ 354.4 $ 604.6 $ 607.2 $ 551.2 $ 461.0 $ 403.8
Capital expenditures... 286.2 206.5 433.5 439.8 271.3 150.6 92.2
EBITDA as a percentage
of net sales.......... 15.3% 14.1% 12.0% 13.6% 13.2% 12.2% 10.6%
Selling and
administrative expense
as a percentage of net
sales................. 4.5 2.9 2.8 3.0 3.0 3.0 2.8
Total debt as a per-
centage of total capi-
talization(9) ........ 56.7 58.0 56.2 55.3 50.1 52.1 40.5
Average number of
common shares
outstanding (000's)... 116,623 89,920 90,234 89,087 87,087 86,896 86,781
FINANCIAL POSITION (AT
END OF PERIOD)
Total assets........... $12,848.1 $5,278.0 $5,051.7 $4,781.3 $4,236.3 $3,825.1 $2,963.5
Working capital........ 319.5 197.1 429.9 122.6 43.8 174.5 333.3
Total debt............. 5,400.6 2,238.9 2,098.2 1,825.3 1,366.3 1,319.3 769.4
Shareholders' equity... 3,617.2 1,470.3 1,461.2 1,365.2 1,251.8 1,143.6 1,084.4
</TABLE>
(Footnotes on next page)
9
<PAGE>
- --------
(1) Certain reclassifications of prior years' data have been made to improve
comparability. The Company has completed a number of acquisitions during
the periods presented. Such acquisitions were accounted for using the
purchase method and may affect the comparability of data on a year-to-year
basis. See Note C to the Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995
with respect to the effect of certain acquisitions by the Company.
(2) Reflects restructuring of certain facilities announced in 1996, 1995 and
1994. See Note H to the Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995
and the Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1996, as amended. Does not reflect restructuring costs
qualifying for purchase accounting, including certain restructuring costs
in connection with the acquisition of CarnaudMetalbox. See "The Company--
1996 Restructuring." The after-tax impact of the restructuring charges for
the years ended December 31, 1995 and 1994, as reflected in the table
above, was $67.0 or $0.74 per share and $73.2 or $0.82 per share,
respectively. The after-tax impact of the restructuring charges for the
six months ended June 30, 1996 and 1995 were $21.9 or $0.17 per share and
$12.8 or $0.14 per share, respectively.
(3) Reflects accounting changes related to adoption of SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions,"
SFAS 109, "Accounting for Income Taxes," and SFAS 112, "Employers'
Accounting for Postemployment Benefits." See Note B to the Company's
Consolidated Financial Statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995.
(4) The Company issued Preferred Stock on February 26, 1996 in connection with
the acquisition of CarnaudMetalbox. See Notes N and T to the Company's
Consolidated Financial Statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995.
(5) All data relating to Common Stock prior to 1992 have been restated for
comparative purposes to reflect the three-for-one split of the Common
Stock in 1992.
(6) Prior to 1996, the Company traditionally did not pay dividends on its
Common Stock. For a description of the Company's dividend policy, see
"Price Range of Capital Stock and Dividends."
(7) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income before income taxes, equity in earnings of affiliates
and cumulative effect of accounting changes plus fixed charges and
distributed income from less-than-50%-owned companies. Fixed charges
include preferred stock dividend requirements, interest expense,
amortization of debt issue costs and the portion of rental expense that is
deemed representative of an interest factor.
(8) "EBITDA" is defined as income before income taxes, equity in earnings of
affiliates and cumulative effect of accounting changes, plus depreciation
and amortization, provision for restructuring and interest expense, minus
interest income. EBITDA is presented solely as a supplement to the other
information provided above. EBITDA is not a substitute for operating and
cash flow data as determined in accordance with generally accepted
accounting principles.
(9) Total capitalization includes total debt (net of cash and cash
equivalents), minority interests and shareholders' equity.
10
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma consolidated condensed statements of
operations give effect to the acquisition of CarnaudMetalbox under the
purchase method of accounting. The unaudited pro forma consolidated condensed
statements of operations for the six months ended June 30, 1995 and for the
year ended December 31, 1995, respectively, combine the historical
consolidated statements of operations of the Company and CarnaudMetalbox
giving effect to the acquisition as if it had occurred on January 1, 1995. The
unaudited pro forma consolidated condensed statement of operations for the six
months ended June 30, 1996 combines the historical consolidated statements of
operations of the Company and CarnaudMetalbox giving effect to the acquisition
as if it had occurred on January 1, 1996.
The unaudited pro forma consolidated condensed statements of operations are
for illustrative purposes only and have been presented in accordance with SEC
guidelines. They are not necessarily indicative of the results of operations
that might have occurred had the acquisition actually taken place on such
dates, or of future results of operations of the Company.
The unaudited pro forma consolidated condensed statements of operations are
based on the historical consolidated financial statements of the Company and
CarnaudMetalbox and should be read in conjunction with such historical
financial statements and the notes thereto, which are, in the case of
CarnaudMetalbox, included as part of the Company's Current Report on Form 8-K
filed on March 1, 1996, as amended (the "CarnaudMetalbox Financial
Statements"), and, in the case of the Company, filed with the Company's Annual
Report on Form 10-K for the year ended December 31, 1995 and the Company's
Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 1996
and June 30, 1996, as amended, respectively (and which, in the case of the
Company's 1996 quarterly results, include balance sheet and income statement
data reflecting historical results of the CarnaudMetalbox acquisition since
the acquisition date of February 22, 1996). See also "Selected Historical
Financial Information." Certain reclassifications have been made to
CarnaudMetalbox's historical consolidated financial statements to conform with
the presentation of the Company's historical consolidated financial
statements. Furthermore, the historical financial statements for
CarnaudMetalbox, prepared in accordance with French law and presented in
French francs, have for purposes of preparing these unaudited pro forma
consolidated condensed statements of operations been conformed to comply with
U.S. generally accepted accounting principles and, in accordance with SFAS No.
52, have been translated to U.S. dollars at actual average exchange rates
equal to FF 4.992/$1.00 for the pro forma statement of operations for the six
months ended June 30, 1995, FF 4.982/$1.00 for the pro forma statement of
operations for the year ended December 31, 1995 and FF 5.007/$1.00 for the pro
forma statement of operations for the period beginning January 1, 1996 and
ending on the acquisition date of February 22, 1996. See Note 1-B of the
CarnaudMetalbox Financial Statements for the reconciliation of
CarnaudMetalbox's 1995, 1994 and 1993 net income and shareholders' equity to
U.S. generally accepted accounting principles. Such translations should not be
construed as representations that French franc amounts have been or could be
converted into U.S. dollars at that or any other rate. The use of exchange
rates different from those used in the unaudited pro forma consolidated
condensed statements of operations could have a material impact on the
information presented therein.
In accordance with the purchase method of accounting, the total purchase
price has been allocated to the assets and liabilities of CarnaudMetalbox
based upon their fair values. The accompanying unaudited pro forma
consolidated condensed statements of operations reflect the preliminary
allocation of purchase price to assets and liabilities. Accordingly, the final
allocations may differ from the amounts reflected herein.
The unaudited pro forma consolidated condensed statements of operations
reflect a $3.6 billion excess of purchase price over net assets acquired,
which is being amortized over 40 years at a rate of $90 million per year in
accordance with generally accepted accounting principles, which require that
acquired intangibles be amortized over lives not to exceed 40 years.
Intangible assets acquired principally represent CarnaudMetalbox's customer
base and CarnaudMetalbox's European market presence, assets with indefinite
lives which have historically appreciated in value over time. In addition, the
acquisition facilitates the continued expansion of current lines of business
as well as the development of new businesses via the cross-selling of
packaging product offerings of both the Company and CarnaudMetalbox to
existing and potential customers as well as other factors. See "The Company."
The Company believes it will benefit from the acquisition for a period of at
least 40 years and, therefore, a 40-year amortization period is appropriate.
11
<PAGE>
The Company has obtained appraisals and other studies of the significant
assets, liabilities and business operations of CarnaudMetalbox. The unaudited
pro forma consolidated condensed statements of operations reflect the
preliminary results of these reviews, including the Company's estimate of
known restructuring costs and expenses. For a discussion of recent and
possible future restructuring costs and expenses, including restructurings in
connection with the CarnaudMetalbox acquisition, see "The Company--1996
Restructuring." The final allocation of the purchase price will be completed
in the first quarter of 1997 when final appraisals, other studies and
additional information become available.
See the notes to the unaudited pro forma consolidated condensed statements
of operations for a description of the principal assumptions made in the
preparation of the pro forma information. The unaudited pro forma consolidated
condensed statements of operations do not reflect the financial results of the
Company or CarnaudMetalbox after June 30, 1996. See "The Company--Third
Quarter Results."
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996(A)
----------------------------------------------------------------------
HISTORICAL AMOUNTS PRO FORMA
----------------------------------- ---------------------------------
COMPANY CARNAUDMETALBOX ADJUSTMENTS CONSOLIDATED
---------------- ----------------- ------------- ----------------
(dollars in millions, except per share data)
<S> <C> <C> <C> <C>
Net Sales............... $ 3,905 $ 606 $ 4,511
Cost of products
sold................. 3,170 486 3,656
Depreciation and amor-
tization............. 230 36 $ (1)(B) 265
Selling and adminis-
trative expense...... 176 57 233
Provision for restruc-
turing............... 30 15 45
Interest expense...... 173 17 19 (C) 209
Interest income....... (35) (3) (38)
Translation and ex-
change adjustments... (39) (39)
---------------- --------------- -------- ----------------
Income from operations
before income taxes.... 200 (2) (18) 180
Income taxes.......... 54 3 (4)(D) 53
Equity in earnings of
affiliates........... (5) (5)
Minority interests.... (6) 2 (4)
---------------- --------------- -------- ----------------
Net income.............. 135 (3) (14) 118
Preferred Stock divi-
dends.................. (8) (4)(E) (12)
---------------- --------------- -------- ----------------
Net income available for
common shareholders.... $ 127 $ (3) $ (18) $ 106
================ =============== ======== ================
Earnings per share...... $ 1.09 $ (0.03) $ 0.83
Average number of common
shares outstanding..... 116,623,109 86,202,056 128,100,284
</TABLE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995
------------------------------------------------------
HISTORICAL AMOUNTS PRO FORMA
---------------------------- -------------------------
COMPANY CARNAUDMETALBOX ADJUSTMENTS CONSOLIDATED
----------- --------------- ----------- ------------
(dollars in millions, except per share data)
<S> <C> <C> <C> <C>
Net Sales............... $ 2,513 $ 2,460 $ 4,973
Cost of products
sold................. 2,086 1,919 4,005
Depreciation and
amortization......... 129 146 $ (5)(B) 270
Selling and
administrative
expense.............. 72 234 306
Provision for
restructuring........ 20 18 38
Interest expense...... 74 58 69 (C) 201
Interest income....... (6) (12) (18)
Translation and
exchange
adjustments.......... 1 2 3
Preference share
dividends and other.. (21) (21)
----------- ----------- ---- ------------
Income from operations
before income taxes.... 137 116 (64) 189
Income taxes.......... 41 16 (13)(D) 44
Equity in earnings of
affiliates........... 3 2 5
Minority interests.... (10) (1) (11)
----------- ----------- ---- ------------
Net income.............. 89 101 (51) 139
Preferred Stock divi-
dends.................. (12)(E) (12)
----------- ----------- ---- ------------
Net income available for
common shareholders.... $ 89 $ 101 $(63) $ 127
=========== =========== ==== ============
Earnings per share...... $ 0.99 $ 1.19 $ 1.00
Average number of common
shares outstanding..... 89,920,245 84,605,561 127,221,063
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995(F)
-----------------------------------------------------------------
HISTORICAL AMOUNTS PRO FORMA
--------------------------------- -------------------------------
COMPANY CARNAUDMETALBOX ADJUSTMENTS CONSOLIDATED
-------------- ----------------- ------------- ---------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net Sales............... $ 5,054 $ 4,939 $ 9,993
Cost of products
sold................. 4,311 3,926 8,237
Depreciation and amor-
tization............. 256 292 $ (10)(B) 538
Selling and adminis-
trative expense...... 139 415 554
Provision for restruc-
turing............... 103 55 158
Interest expense...... 149 130 138 (C) 417
Interest income....... (13) (25) (38)
Translation and ex-
change adjustments... (1) 2 1
Preference share divi-
dends and other...... (13) (13)
-------------- -------------- -------- ---------------
Income from operations
before income taxes.... 110 157 (128) 139
Income taxes.......... 25 11 (26)(D) 10
Equity in earnings of
affiliates........... 4 1 5
Minority interests.... (14) 3 (11)
-------------- -------------- -------- ---------------
Net income.............. 75 150 (102) 123
Preferred Stock divi-
dends.................. (23)(E) (23)
-------------- -------------- -------- ---------------
Net income available for
common shareholders.... $ 75 $ 150 $ (125) $ 100
============== ============== ======== ===============
Earnings per share...... $ 0.83 $ 1.76 $ 0.78
Average number of common
shares outstanding..... 90,233,518 85,327,985 127,534,336
</TABLE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
A. Historical amounts for the Company include the results from operations of
CarnaudMetalbox from the date of acquisition, February 22, 1996. Historical
amounts for CarnaudMetalbox include the results from operations of
CarnaudMetalbox for the preacquisition period beginning January 1, 1996 and
ending on the acquisition date. Pro forma adjustments relate only to such
preacquisition period.
B. To reflect the net decrease in depreciation and amortization expense due
to (a) amortization of the excess purchase price over net tangible assets
acquired on a straight-line basis over 40 years, net of elimination of
CarnaudMetalbox historical amortization of excess acquisition costs over the
values assigned to net assets acquired in prior acquisitions, (b) additional
amortization resulting from basis assigned to intangible assets other than
goodwill, (c) net decrease in depreciation resulting from change in asset
basis and lives identified in the appraisal process, and (d) decreased
depreciation resulting from property and equipment written-off under existing
plans of restructuring.
C. To reflect the increase in interest expense resulting from the use of new
borrowings to finance a portion of the purchase price. The interest rate on
new borrowings of $1.84 billion is assumed to be 7.5% per annum. Such
borrowings have been made by the Company under a multicurrency credit facility
bearing interest at a variable rate. See Exhibit 10.1 to the Company's Current
Report on Form 8-K filed on December 15, 1995, which is hereby incorporated by
reference, for additional information with respect to the terms of the credit
facility.
D. To reflect the income tax effect of increased interest net of decreased
depreciation at the statutory tax rate of 37.0%. The Company expects that its
effective consolidated income tax rate may be higher than that reflected in
the unaudited pro forma consolidated condensed statements of operations due to
several factors, including the geographical mix in which the Company's future
pre-tax earnings are generated, the non-deductibility for tax purposes of a
significant portion of the purchase price for the CarnaudMetalbox acquisition
and the accounting rules governing utilization of pre-acquisition net
operating losses.
E. To reflect dividends on Preferred Stock of $1.88 per share per annum on
12,432,622 outstanding shares.
F. The unaudited pro forma consolidated condensed statement of operations
for the year ended December 31, 1995 has been updated from that included in
the Company's Current Report on Form 8-K/A filed on May 7, 1996, principally
to reflect increased pro forma goodwill amortization arising from changes in
the estimated fair value of net tangible assets acquired and the acquisition
in the second quarter of 1996 of the remaining 1.3% minority interest in
CarnaudMetalbox.
13
<PAGE>
PRICE RANGE OF CAPITAL STOCK AND DIVIDENDS
The Common Stock and the Preferred Stock are listed on the NYSE under the
symbols "CCK" and "CCK Pr," respectively. The Common Stock and the Preferred
Stock are also listed on the Paris Stock Exchange. The following table sets
forth, for the periods indicated, the high and low reported last sales prices
of the Common Stock and the Preferred Stock as reported on the NYSE and
dividends paid per share.
The Company commenced paying cash dividends on the Common Stock for the
first time since 1956 in the first quarter of 1996. Subject to the Company's
financial results and declaration by the Board of Directors, it is the present
intention of the Company to continue paying cash dividends on the Common Stock
on a quarterly basis. The anticipated record date for the Preferred Stock
dividend payable on November 20, 1996 and for the 1996 fourth quarter Common
Stock dividend is November 4, 1996.
The Preferred Stock was issued as part of the CarnaudMetalbox acquisition in
February 1996.
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
------------------------- -------------------------
DIVIDENDS DIVIDENDS
HIGH LOW PAID HIGH LOW PAID
------- ------- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
1994
First Quarter........... $41 7/8 $36 5/8 -- -- -- --
Second Quarter.......... 39 3/4 33 3/4 -- -- -- --
Third Quarter........... 39 1/2 33 1/2 -- -- -- --
Fourth Quarter.......... 40 7/8 35 7/8 -- -- -- --
1995
First Quarter........... 45 37 3/4 -- -- -- --
Second Quarter.......... 50 1/4 40 1/2 -- -- -- --
Third Quarter........... 50 5/8 36 -- -- -- --
Fourth Quarter.......... 44 5/8 33 1/2 -- -- -- --
1996
First Quarter........... 51 40 5/8 $0.25 $49 $45 1/2 --
Second Quarter.......... 49 1/8 43 5/8 0.25 47 3/4 43 $0.4712
Third Quarter........... 49 1/2 41 0.25 48 7/8 41 1/4 0.4712
Fourth Quarter.......... 49 5/8 45 1/2 -- 49 45 1/2 --
(through October 24,
1996)
</TABLE>
As of October 23, 1996, there were approximately 5,715 holders of record of
the Common Stock and nine holders of record of the Preferred Stock. On October
24, 1996, the reported last sales prices of the Common Stock and Preferred
Stock on the NYSE were $46.25 per share and $47.38 per share, respectively.
USE OF PROCEEDS
All of the shares of Common Stock and Preferred Stock in the Offerings are
being offered by the Selling Shareholders. The Company will not receive any
proceeds from the sale of such shares.
14
<PAGE>
SELLING SHAREHOLDERS
The Selling Shareholders are CGIP and its wholly owned subsidiary
Sofiservice. CGIP was previously the largest shareholder of CarnaudMetalbox,
beneficially holding more than 30% of its outstanding shares. The Selling
Shareholders acquired their shares of Common Stock and Preferred Stock in
connection with the acquisition of CarnaudMetalbox by the Company in February
1996. CGIP is a holding company that maintains a portfolio of investments in
companies engaged in, among other things, the manufacture of packaging
products for consumer goods, computer-related services, consulting services,
medical diagnostics, abrasive pellets, energy and real estate. The Offerings
are being undertaken by the Selling Shareholders in furtherance of CGIP's
strategy of diversifying its portfolio of investments. The proceeds of the
Offering may be used to finance a portion of the costs of acquiring a stake in
Valeo, a French manufacturer of automotive components and systems, as
announced by CGIP on September 26, 1996.
Concurrently with the Common Stock Offerings, the Selling Shareholders are
offering for sale 3,000,000 shares of Preferred Stock. In addition, CGIP has
granted the underwriters in connection with the Preferred Stock Offering an
option for up to 30 days to purchase up to an additional 450,000 shares of
Preferred Stock solely to cover over-allotments. The closings of the Preferred
Stock Offering, on the one hand, and the Common Stock Offerings, on the other,
are not mutually contingent.
The following table sets forth, as of October 23, 1996, certain information
with respect to beneficial ownership of Common Stock and Preferred Stock by
the Selling Shareholders and as adjusted to reflect the sale of shares in the
Offerings (assuming the over-allotment options of the underwriters in the
Offerings are not exercised).
<TABLE>
<CAPTION>
OWNERSHIP OWNERSHIP
PRIOR TO THE OFFERINGS AFTER THE OFFERINGS
------------------------- ---------------------
NUMBER OF
NUMBER SHARES TO NUMBER
TYPE OF SECURITIES OF SHARES PERCENTAGE BE SOLD OF SHARES PERCENTAGE
- ------------------ ------------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Common Stock(1):
CGIP (2)........... 19,323,975 15.07% 7,243,072 12,080,903 9.42%
Sofiservice........ 2,006,928 1.56 2,006,928 -- --
------------- -------- --------- ---------- -----
Total............ 21,330,903 16.63% 9,250,000 12,080,903 9.42%
Preferred Stock:
CGIP (2)........... 6,441,324 51.81% 2,331,024 4,110,300 33.06%
Sofiservice........ 668,976 5.38 668,976 -- --
------------- -------- --------- ---------- -----
Total............ 7,110,300 57.19% 3,000,000 4,110,300 33.06%
</TABLE>
- --------
(1) Based on shares outstanding as of October 23, 1996 and assuming no
conversion of the Preferred Stock outstanding as of such date. Does not
include up to 4,719,494 shares of Common Stock that may be issued upon the
exercise of outstanding options granted under the Company's employee and
director stock option plans.
(2) Does not include the shares of Common Stock or Preferred Stock owned by
Sofiservice which CGIP is deemed to beneficially own.
As of October 23, 1996, the shares of Common Stock and Preferred Stock owned
by the Selling Shareholders represented approximately 19.9% of the Total
Voting Power of the Company (as defined below). Assuming the over-allotment
options of the underwriters in the Offerings are not exercised, after giving
effect to (a) the Offerings, (b) the Preferred Stock Offering (but not the
Common Stock Offerings), and (c) the Common Stock Offerings (but not the
Preferred Stock Offerings), the shares of Common Stock and Preferred Stock
owned by the Selling Shareholders will represent approximately 11.3%, 18.0%
and 13.3%, respectively, of the Total Voting Power of the Company, in each
case based upon the outstanding Common Stock and Preferred Stock on October
23, 1996. Assuming the over-allotment options of the underwriters in the
Offerings are exercised in full, the shares of Common Stock and Preferred
Stock owned by the Selling Shareholders upon consummation of the Offerings
will represent approximately 10.1% of the Total Voting Power of the Company
based upon the outstanding Common Stock and Preferred Stock on October 23,
1996.
15
<PAGE>
As used above, "Total Voting Power" means the voting power of the capital
stock (and all securities convertible into or exchangeable for such stock,
other than options granted pursuant to employee benefit plans and the rights
issued pursuant to the Company's Rights Plan) of the Company that is
ordinarily entitled to vote in the election of directors of the Company,
calculated by reference to the maximum number of votes any such security is
entitled to cast, whether in converted or exercised or unconverted or
unexercised form.
The shares of Preferred Stock and Common Stock owned by the Selling
Shareholders may not be sold in the absence of registration under the
Securities Act, unless an exemption from registration is available, including
pursuant to Rule 144. In addition, the shares of Preferred Stock and Common
Stock owned by the Selling Shareholders are subject to additional restrictions
on transfer under the Shareholders Agreement entered into by the Company and
CGIP in connection with the Company's acquisition of CarnaudMetalbox (the
"Shareholders Agreement").
During the Standstill Period under the Shareholders Agreement (see
"Description of Capital Stock--Shareholders Agreement and Certain Other
Agreements and Provisions"), CGIP and its affiliates may not dispose of voting
securities of the Company except (subject, in some cases, to certain
exceptions): (a) to other affiliates; (b) pursuant to a widely distributed
underwritten public offering (provided such disposition is not made to any
person or entity which CGIP or the managing underwriter knows will
beneficially own immediately thereafter, together with its affiliates and
other persons or entities acting as a "group" with such person or entity
within the meaning of the federal securities laws, voting securities of the
Company representing 3.5% or more of the Total Voting Power of the Company,
which requirement is waivable by the Company); (c) pursuant to Rule 144
(except to any such person or entity which CGIP knows will beneficially own
immediately thereafter 3.5% or more of the Total Voting Power of the Company);
(d) in a private sale to any person or entity that would, following such sale,
beneficially own no more than 3.5% of the Total Voting Power of the Company;
(e) in certain cases, to the Company; (f) pursuant to a tender offer or
exchange offer or any other transaction with a third party which is
recommended to the shareholders of the Company by a majority of "continuing
directors" of the Company; (g) upon conversion of the Preferred Stock into
Common Stock (or upon similar conversions, exchanges or exercises); and (h)
pursuant to one or more bona fide pledges or grants of a security interest in
such shares to a major brokerage firm or financial institution to secure bona
fide indebtedness, or the sale of such shares by foreclosure on such pledge
(provided that in the case of any such pledge involving securities
representing more than 3.5% of the Total Voting Power of the Company, such
lender will be subject to the provisions of the Shareholders Agreement).
In the case of a disposition of voting securities pursuant to clauses (b)-
(d) above, CGIP has agreed that the Company will have certain rights to
purchase such securities upon certain terms and conditions and pursuant to
certain procedures set forth in the Shareholders Agreement. If the Company
does not exercise such rights, CGIP will be free to effect the disposition of
such securities subject to the Shareholders Agreement. The Company has waived
such rights in connection with the Offerings.
The Shareholders Agreement also provides CGIP and its affiliates with the
right to have their shares of Preferred Stock and Common Stock registered
under the Securities Act. CGIP has seven remaining demand registration rights
and unlimited incidental or "piggyback" registration rights, subject to
customary terms and conditions in the Shareholders Agreement. Such rights are
subject to termination if CGIP owns voting securities representing less than
3.5% of the Total Voting Power of the Company or in the event of certain
breaches of the Shareholders Agreement by CGIP.
In addition, CGIP has agreed with the Underwriters that it will not offer,
sell, contract to sell or otherwise dispose of any of its remaining shares of
Common Stock or Preferred Stock for one year following the date of this
Prospectus. See "Underwriting."
The Shareholders Agreement also contains standstill, board representation
and other provisions. See "Description of Capital Stock--Shareholders
Agreement and Certain Other Agreements and Provisions."
16
<PAGE>
On May 20, 1995, CarnaudMetalbox and CGIP entered into a letter agreement
pursuant to which CGIP has agreed to provide management and administrative
services to CarnaudMetalbox through 1999. This letter agreement conformed with
the prior agreement in effect since 1977 between CarnaudMetalbox and CGIP with
respect to CGIP's provisions of such services. In 1995, the amount paid by
CarnaudMetalbox to CGIP (on a pre-tax basis) under such agreement was
approximately FF 11.2 million. After 1999, the letter agreement will be
automatically renewable unless terminated in the first quarter of the prior
year, in which case such agreement will terminate on the next succeeding
January 1.
DESCRIPTION OF CAPITAL STOCK
The following description of the Company's capital stock is a summary and is
qualified in its entirety by reference to the Company's Amended and Restated
Articles of Incorporation (the "Company Articles") and Amended and Restated
Bylaws (the "Company Bylaws"), copies of which have been filed with the SEC.
The description is also subject in all respects to the Pennsylvania Business
Corporation Law of 1988, as amended (the "PBCL").
GENERAL
The Company's authorized capital stock consists of 500,000,000 shares of
Common Stock, 12,432,622 shares of Preferred Stock, and 30,000,000 shares of
additional preferred stock with such voting rights, preferences, limitations
and special rights as may be specified, subject to the Company Articles, by
the Company's Board of Directors. As of October 23, 1996, the Company had
outstanding 128,245,064 shares of Common Stock and 12,432,622 shares of
Preferred Stock, and 27,546,568 shares of Common Stock were held in the
treasury of the Company. No shares of such additional preferred stock were
outstanding as of such date. The Common Stock and the Preferred Stock are
currently listed both on the NYSE and the Paris Stock Exchange.
PREFERRED STOCK
Dividends. Subject to the prior rights of holders of any preferred stock
senior in right of payment of dividends to the Preferred Stock, holders of the
Preferred Stock are entitled to receive, when, as and if declared by the
Company's Board of Directors out of funds of the Company legally available,
annual dividends at the rate of 4.5% of the par value of the Preferred Stock,
or $1.8848 per share, payable in cash quarterly in arrears on February 20, May
20, August 20 and November 20, except that if such day is not a business day,
then such dividend will be payable on the next day that is a business day.
Dividends will accrue without interest on a daily basis and will be cumulative
from the date of initial issuance. All dividends on the Preferred Stock will
be paid pro rata to the holders entitled thereto. Dividends (other than in
shares of the Common Stock or any other stock ranking junior to the Preferred
Stock as to dividend rights and rights upon liquidation) may not be declared,
paid or set apart on the Common Stock or any other stock of the Company
ranking junior to the Preferred Stock as to dividend rights and rights upon
liquidation unless all accrued and unpaid dividends on the Preferred Stock
have been paid or declared and set aside for payment; and no Common Stock or
any other stock of the Company ranking junior to the Preferred Stock as to
dividend rights or rights upon liquidation may be redeemed, purchased or
otherwise acquired for any consideration by the Company (other than pursuant
to certain benefit plans or upon exchange or conversion of such junior
securities or in connection with rights granted to holders of the Common Stock
pursuant to the Company's Rights Plan discussed below) unless all accrued and
unpaid dividends on the Preferred Stock have been paid or declared and set
aside for payment.
Full dividends may not be declared, paid or set apart on any stock of the
Company ranking on a parity with the Preferred Stock as to dividend rights and
rights upon liquidation unless full cumulative unpaid dividends on the
Preferred Stock have been, or contemporaneously are, paid or declared and set
aside for payment. If dividends
are not paid in full, or set apart in full, upon the Preferred Stock and any
other preferred stock ranking on a parity as to dividends and rights upon
liquidation with the Preferred Stock, all dividends declared upon shares of
the Preferred Stock and such other parity preferred stock will when, as and if
declared, be declared pro rata so
17
<PAGE>
that in all cases the amount of dividends declared and paid per share on
Preferred Stock and such other parity preferred stock will bear to each other
the same ratio that accrued and unpaid dividends per share on the shares of
Preferred Stock and such other parity preferred stock to the date of payment
bear to each other. No such parity preferred stock may be redeemed, purchased
or otherwise acquired for any consideration by the Company (other than
pursuant to certain benefit plans or upon exchange or conversion of such
parity stock or in connection with rights granted to holders of the Common
Stock pursuant to the Company's Rights Plan) unless all accrued and unpaid
dividends on the Preferred Stock have been paid or declared and set aside for
payment.
Conversion Rights. Each share of the Preferred Stock is convertible into
shares of Common Stock of the Company at any time at the conversion rate of
that number of shares of Common Stock for each full share of Preferred Stock
that is equal to the par value of such share divided by the Conversion Price
per share of Common Stock. The "Conversion Price" is currently $45.9715,
subject to adjustment as described in the following paragraph. As of the date
of this Prospectus, each share of the Preferred Stock is convertible into
approximately 0.91 shares of Common Stock. Fractional shares of Common Stock
will not be delivered upon conversion, but a cash adjustment will be paid in
respect of such fractional interests based on the then current market price of
the Common Stock.
The Conversion Price is subject to adjustment upon certain events, including
(a) the issuance of Common Stock as a dividend or distribution on the Common
Stock; (b) the issuance to all holders of the Common Stock of rights or
warrants entitling them to subscribe for or purchase Common Stock at less than
the then current market price; (c) a combination or subdivision of the Common
Stock; (d) dividends or distributions on the Common Stock (other than
dividends or distributions in cash solely out of retained earnings of the
Company) and (e) reclassifications of the Common Stock. No adjustment of the
Conversion Price will be required to be made in any case until cumulative
adjustments amount to 1% of such price. In addition to the foregoing
adjustments, the Company will be permitted to make such reductions in the
Conversion Price as it determines to be advisable in order that any event
treated for Federal income tax purposes as a dividend of stock or stock rights
will not be taxable to the recipients.
In case of any consolidation of the Company with, or merger of the Company
or share exchange into, any other entity, any merger of another entity into
the Company (other than a merger or share exchange which does not result in
any reclassification, conversion, exchange or cancellation of the outstanding
shares of Common Stock) or any sale or transfer of all or substantially all
the assets of the Company, lawful provision will be made such that the holder
of each share of the Preferred Stock will have the right to convert each share
of the Preferred Stock into the kind and amount of securities, cash or other
property receivable upon such merger, consolidation, sale or transfer by a
holder of the number of shares of Common Stock into which a share of the
Preferred Stock might have been converted immediately prior to such merger,
consolidation, sale or transfer assuming such holder of Common Stock failed to
exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such merger, consolidation,
sale or transfer (provided that if the kind or amount of securities, cash or
other property receivable upon such merger, consolidation, sale or transfer is
not the same for each non-electing share, then the kind and amount of
securities, cash or other property receivable upon such merger, consolidation,
sale or transfer for each non-electing share shall be deemed to be the kind
and amount so receivable per share by a plurality of the non-electing shares).
If the shareholders of the Company have approved any such consolidation,
merger, sale or transfer which makes provision for the Preferred Stock
under the terms of such consolidation, merger, sale or transfer, then the
holders of the Preferred Stock will be deemed to have waived the foregoing
provisions.
In the event of any voluntary conversion of the Preferred Stock, the holder
will not have any right to accrued and unpaid dividends.
See " -- Shareholders Agreement and Certain Other Agreements and Provisions"
for a description of the Common Stock purchase rights issuable upon conversion
of the Preferred Stock.
Mandatory Conversion. On February 26, 2000 (the "Latest Mandatory Conversion
Date"), all of the Preferred Stock will convert into shares of the Common
Stock at the Conversion Price then in effect,
18
<PAGE>
automatically and without further action of the holder of such shares. In
addition, if at any time prior to the Latest Mandatory Conversion Date less
than 30% of the initially issued shares of Preferred Stock are outstanding,
the Company will have the right to convert the remaining Preferred Stock into
Common Stock at the Conversion Price then in effect. There is no restriction
on any such mandatory conversion by reason of any arrearage in payment of
dividends on the Preferred Stock.
In the event of any mandatory conversion of the Preferred Stock, all accrued
and unpaid dividends on the Preferred Stock will be converted into Common
Stock at the Conversion Price then in effect.
Liquidation Rights. In the event of any liquidation, dissolution or winding
up of the Company and subject to the rights of creditors of the Company and
holders of any preferred stock senior in right of payment in the event of a
liquidation of the Company, the holders of shares of the Preferred Stock are
entitled to receive a liquidation preference of $41.8875 per share, plus an
amount equal to any accrued and unpaid dividends to the date of payment before
any payment or distribution of assets is made to holders of the Common Stock
or any other stock that ranks junior to the Preferred Stock as to liquidation
rights. The holders of the Preferred Stock and all series or classes of the
Company's stock hereafter issued that rank on a parity as to liquidation
rights with the Preferred Stock are entitled to share ratably in any
distribution which is not sufficient to pay in full the aggregate of the
amounts payable thereon.
After payment in full of the liquidation preference of the Preferred Stock,
the holders of such shares will not be entitled to any further participation
in any distribution of assets by the Company. Neither a merger, consolidation,
or other business combination of the Company with or into another corporation
or other entity nor a voluntary sale or transfer of all or part of the
Company's assets for cash, securities or other property will be considered a
liquidation, dissolution or winding up of the Company.
Voting Rights. Other than as set forth below and except as provided by
applicable law, the holders of the Preferred Stock are entitled to vote
together with the holders of the Common Stock on all matters to be voted on by
holders of the Common Stock. When voting together with holders of the Common
Stock, each share of the Preferred Stock will be entitled to the number of
votes equal to the number of shares of Common Stock into which such share of
the Preferred Stock is convertible as of the record date applicable to such
vote.
Whenever dividends on the Preferred Stock are in arrears and unpaid for at
least six quarterly dividend periods (whether or not consecutive), the number
of directors of the Company will be increased by two, and the holders of the
Preferred Stock (voting separately as a class with the holders of any
outstanding shares of stock on a parity as to dividends and rights upon
liquidation with the Preferred Stock on which like voting rights have been
conferred and are exercisable) will be entitled to elect such two additional
directors to the Board of Directors of the Company. Such right to elect
directors will become effective at the earlier of (a) the next meeting of
shareholders of the Company at which directors are to be elected held after
such dividends have been unpaid and in arrears for six quarterly dividend
periods and (b) the special meeting of holders of the Preferred Stock (and of
parity preferred stock having like rights) called for such purpose, and will
terminate when all accrued and unpaid dividends on the Preferred Stock have
been declared and paid or set apart for payment. The holders of at least 10%
of the outstanding shares of the Preferred Stock have the right to require the
President of the Company to call a special meeting of holders of the Preferred
Stock if the right to elect additional directors has accrued more than 90 days
preceding the next annual meeting of shareholders of the Company.
In addition, so long as any of the Preferred Stock is outstanding (except
when notice of mandatory conversion by the Company has been given or as of the
Latest Mandatory Conversion Date), the Company will not, without the
affirmative vote or consent of the holders of at least 66 2/3 percent (unless
a higher percentage is required by law) of all outstanding shares of the
Preferred Stock, voting separately as a class, (a) amend, alter or repeal any
provision of the Company Articles so as to affect adversely the relative
rights, preferences, qualifications, limitations or restrictions of the
Preferred Stock, (b) authorize or issue, or reclassify any authorized stock
into, or increase the authorized amount of, any additional class or series of
stock, or any security convertible into stock of such class or series, ranking
senior to the Preferred Stock as to dividends or as to rights
19
<PAGE>
upon liquidation, dissolution or winding up of the Company or (c) take any
other action on which the holders of the Preferred Stock are entitled by law
to vote separately as a class.
Holders of the Preferred Stock do not have the right to vote separately as a
class on the creation, authorization or issuance of securities ranking junior
to or on a parity with the Preferred Stock as to dividend rights or rights
upon liquidation or on the creation of any indebtedness of the Company.
Other Provisions. The holders of the Preferred Stock have no rights with
respect to cumulative voting in the election of directors of the Company.
Shareholders of the Company are not entitled to any preemptive rights to
purchase or to subscribe to any additional or increased stock of any class or
any obligations convertible into any class or classes of stock.
COMMON STOCK
Dividends. Holders of the Common Stock are entitled to receive such
dividends as may be declared by the Board of Directors. The Company's ability
to pay dividends on the Common Stock is subject to the legal availability of
funds therefor as well as contractual restrictions (including prior full
payment of dividends as to the Preferred Stock and any other outstanding
preferred stock of the Company).
Voting Rights. Except as to matters as to which holders of the Preferred
Stock (and any other capital stock of the Company) have the right to vote
separately as a class, the holders of the Common Stock vote together with
holders of the Preferred Stock (and any other capital stock of the Company
entitled to vote with the Common Stock) as a class. At every meeting of
shareholders of the Company, the holders of record of shares of the Common
Stock entitled to vote at the meeting are entitled to one vote for each share
of Common Stock held. When voting with holders of the Common Stock as to any
matter, holders of the Preferred Stock are entitled, for each share of the
Preferred Stock held, to that number of votes equal to the number of shares of
Common Stock into which a share of Preferred Stock is convertible as of the
record date of the vote. See "--Preferred Stock--Voting Rights" above. Holders
of the Common Stock have certain additional special voting rights under the
PBCL in the event of certain mergers and other extraordinary transactions. See
"--Shareholders Agreement and Certain Other Agreements and Provisions."
As provided above, holders of Preferred Stock have rights to vote separately
as a class with respect to certain matters. In addition, whenever dividends
accrued on the Preferred Stock are in arrears and unpaid for at least six
quarterly dividend periods, the Company Articles provide that the size of the
Board of Directors of the Company shall be increased by two directors and that
the holders of the Preferred Stock will have the right, voting separately as a
class together with holders of any other shares of preferred stock of the
Company having such voting rights, to elect such two additional directors. See
"--Preferred Stock--Voting Rights" above.
Shareholders of the Company are not entitled to cumulative voting in the
election of directors.
No Preemptive Rights. Shareholders of the Company are not entitled to any
preemptive rights to purchase or to subscribe to any additional or increased
stock of any class or any obligations convertible into any class or classes of
stock.
Liquidation Rights. In any liquidation, dissolution or winding up of the
Company, after the debts of the Company have been paid or provided for, and
subject to the rights upon liquidation of the holders of the Preferred Stock
and any other preferred stock of the Company, all of the remaining assets of
the Company shall belong to and shall be distributed ratably among the holders
of the Common Stock.
SHAREHOLDERS AGREEMENT AND CERTAIN OTHER AGREEMENTS AND PROVISIONS
Shareholders Agreement and Strategic Committee. Subject to the terms of the
Shareholders Agreement, during the Standstill Period (as described below),
CGIP has agreed that neither it nor any of its controlled
20
<PAGE>
affiliates will acquire beneficial ownership of voting securities of the
Company representing more than 19.95% of the Total Voting Power of the
Company, make a proposal for any tender or exchange offer, merger or other
business combination or recapitalization, restructuring or similar transaction
for the Company or its subsidiaries (a "Takeover Proposal") or take certain
other actions.
In accordance with the Shareholders Agreement, immediately following the
CarnaudMetalbox acquisition, the Company elected Ernest-Antoine Seilliere, Guy
de Wouters and Felix G. Rohatyn, all of whom were designated by CGIP, to the
Company's Board of Directors. The Shareholders Agreement provides that during
the Standstill Period the Company will support the nomination of, and the
nominating committee of the Company's Board of Directors will recommend to the
Board that, (a) so long as the CGIP owns voting securities of the Company
representing at least 5% but less than 10% of the Total Voting Power of the
Company, one person, (b) so long as CGIP owns voting securities of the Company
representing at least 10% but less than 15% of the Total Voting Power of the
Company, two persons, and (c) so long as CGIP owns voting securities of the
Company representing at least 15% but less than 20% of the Total Voting Power
of the Company, three persons, designated by CGIP ("CGIP Designees") be
included in the slate of nominees recommended by the Board of Directors for
election as directors at each annual meeting of the Company's shareholders.
Following consummation of the Offerings, CGIP will have the right to designate
two persons to be nominated for election as directors of the Company. The
Company currently does not intend to request the resignation of any of the
current CGIP Designees following consummation of the Offerings, although the
Company has reserved its right, in accordance with its agreements with CGIP,
to make such a request at a future date.
Also in connection with the acquisition of CarnaudMetalbox, the Company
amended its Bylaws to create a Strategic Committee of the Board of Directors,
one-half the members of which (including its chair) must be representatives of
CGIP. Currently, the CGIP Designees are members of the Strategic Committee,
and Mr. Seilliere is chairman of the Strategic Committee. CGIP and the Company
have agreed that, following consummation of the Offerings, the Strategic
Committee will be made up of six directors, two of whom will be
representatives of CGIP. Mr. Seilliere will continue to serve as chairman of
the Strategic Committee. CGIP has reserved its right, in accordance with its
agreements with the Company, to request in the future that the Strategic
Committee be made up of an equal number of CGIP Designees and other directors.
Under the Shareholders Agreement, CGIP has agreed to vote any voting
securities of the Company beneficially owned by it or its affiliates during
the Standstill Period in the manner recommended by the Company's Board of
Directors in connection with the election of directors of the Company and any
question relating to a Takeover Proposal.
The Standstill Period began on February 22, 1996 and terminates under
certain circumstances upon the earliest to occur of (a) the later of (x)
February 22, 1999 and (y) the date on which CGIP beneficially owns voting
securities of the Company representing less than 3.5% of the outstanding Total
Voting Power of the Company, (b) the date the Company breaches certain
provisions of the Shareholders Agreement relating to CGIP's board
representation or the Company's dividend or debt rating policy described
generally below, (c) the date the Company agrees to recommend (or ceases to
oppose) the consummation of an unsolicited tender or exchange offer for 20% of
the Total Voting Power of the Company or any unsolicited proxy or consent
solicitation affecting a majority of the "continuing directors" of the Company
or enters into, or takes material steps to solicit, an agreement with respect
to certain fundamental corporate transactions involving the Company or its
subsidiaries, (d) the date a person other than CGIP acquires 25% of the Total
Voting Power of the Company, or (e) the date any CGIP Designee fails to be
elected to the Company's Board of Directors.
The Shareholders Agreement contains provisions relating to the Company's
dividend policy whereby the Company indicated that its Board of Directors
intended to pay quarterly dividends of $.25 per share on the Common Stock
during 1996 and to increase the amount of such dividends over time such that
the amount of dividends paid to CGIP during the four full quarters following
the mandatory conversion of the Preferred Stock on February 26, 2000 (assuming
for these purposes that CGIP has not acquired or disposed of any shares of
Common Stock or Preferred Stock) would not be less than the amount of
dividends paid to CGIP on the Common
21
<PAGE>
Stock and Preferred Stock issued to CGIP in the CarnaudMetalbox acquisition
during the four full quarters following such acquisition (assuming for these
purposes that CGIP has not acquired or disposed of any shares of Common Stock
or Preferred Stock). In addition, the Shareholders Agreement provides that the
Company intends to conduct its business consistent with maintaining an
"investment grade" debt rating for its long-term unsecured debt securities.
Subject to certain exceptions, a failure by the Company to increase the amount
of such dividends or maintain such debt rating will result in the termination
of the Standstill Period, unless, in the case of dividend amounts, the Company
elects an additional CGIP Designee to the Company's Board of Directors, in
which case the Standstill Period will terminate if such breach is not cured
within one year.
The Shareholders Agreement contains restrictions on the Selling
Shareholders' sale or transfer of their shares of Common Stock and Preferred
Stock and provisions granting CGIP registration rights. See "Shares Eligible
for Future Resale."
The provisions of the Shareholders Agreement may be amended or waived by the
parties thereto at any time in accordance with its terms.
Rights Plan. Pursuant to a Rights Agreement, dated as of August 10, 1995
(the "Rights Plan"), the Board of Directors of the Company declared a dividend
distribution of one Right for each share of the Common Stock outstanding on
August 10, 1995 (the "Record Date") and authorized the issuance of one Right
for each share of Common Stock that becomes outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are defined below), including pursuant to
conversion of the Preferred Stock. Subject to the terms and conditions of the
Rights Plan, each Right issued pursuant to the Rights Plan entitles the
registered holder to purchase from the Company one share of Common Stock (or
in certain circumstances cash, property or other securities) at a price of
$200, subject to adjustment.
Until the earlier to occur of (a) ten calendar days following the date (the
"Shares Acquisition Date") of public announcement that a person or entity or
group of affiliated or associated persons or entities acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of the outstanding
shares of Common Stock (an "Acquiring Person") or (b) ten business days (or
such later date as is determined by the Board of Directors or, if there has
been an Adverse Change of Control, by a majority of the "continuing directors"
(as defined below) of the Company) following the commencement or first public
announcement of an intention of any applicable person to make a tender offer
or exchange offer if, upon consummation thereof, such person would be an
Acquiring Person (the earlier of such dates being called the "Distribution
Date"), the Rights are evidenced by the certificates evidencing the Common
Stock. Until the Distribution Date, the Rights will be transferred only with
the shares of Common Stock. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Rights Certificates") will
be mailed to holders of record of shares of the Common Stock as of the close
of business on the Distribution Date, and such separate Right Certificates
alone will evidence the Rights.
The Rights Plan contains special provisions regarding CGIP (and its
affiliates and associates), which as of October 23, 1996 beneficially owned
approximately 19.9% of the Total Voting Power of the Company and, upon
consummation of the Offerings (assuming the over-allotment options of the
underwriters in the Offerings are not exercised), will beneficially own
approximately 11.3% of the Total Voting Power of the Company. During the
Standstill Period under the Shareholders Agreement (see "--Shareholders
Agreement and Strategic Committee") and so long as CGIP has not breached
certain provisions of the Shareholders Agreement, CGIP will not become an
"Acquiring Person" when it takes any action which the Company has agreed to
permit CGIP to take during the Standstill Period. Also, after the expiration
of the Standstill Period, CGIP will be an "Acquiring Person," subject to
certain exceptions including with respect to the acquisition of beneficial
ownership of additional shares of Common Stock within 18 months after certain
dilutive issuances by the Company, only if CGIP acquires beneficial ownership
of additional shares of Common Stock, and CGIP is thereafter the beneficial
owner of 15% or more of the shares of the Common Stock then outstanding,
excluding securities granted by the Company to directors of the Company who
are affiliates or associates of CGIP. If, however, at the time of the
expiration of the Standstill Period, CGIP has breached certain provisions of
the
22
<PAGE>
Shareholders Agreement, then CGIP will be an "Acquiring Person" to the extent
it would otherwise be deemed as such but for the provisions noted above.
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on August 10, 2005 (the "Final Expiration
Date") unless earlier redeemed by the Company as described below.
In the event that a person or entity (other than certain specified persons
or entities) becomes the beneficial owner of more than 15% of the then
outstanding shares of Common Stock, each holder of a Right will thereafter
have the right to receive, upon exercise, shares of Common Stock (or, in
certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth above, all Rights that are, or (under certain circumstances
specified in the Rights Plan) were, beneficially owned by an Acquiring Person
will be null and void.
In the event that, at any time following the Shares Acquisition Date, (a)
the Company is acquired in a merger or other business combination transaction
(other than a merger described in the immediately preceding paragraph), or (b)
50% or more of the Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have been voided as set
forth above) shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two times the exercise
price of the Right. The events set forth in this paragraph and in the
preceding paragraph are referred to as the "Triggering Events."
At any time prior to the earlier of (a) 5:00 p.m. New York City time on the
tenth calendar day following the Shares Acquisition Date and (b) the Final
Expiration Date, the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price"). The date of such
redemption is the "Redemption Date." Following an Adverse Change of Control,
the decision to redeem the Rights will require the concurrence of a majority
of the "continuing directors" of the Company. An "Adverse Change of Control"
means a change (resulting from a proxy or consent solicitation) in a majority
of the directors of the Company in office at the commencement of such
solicitation where a participant in such solicitation has stated (or the
Company's Board of Directors determines) that such participant has taken,
intends to take or may consider taking any action that would result in such
participant becoming an Acquiring Person or causing the occurrence of a
Triggering Event, and "continuing directors" means any member of the Company's
Board of Directors who is not an Acquiring Person and was a member prior to
the Record Date or any person who subsequently becomes a member of the Board
if such person's nomination for election or election to the Board is
recommended or approved by a majority of the continuing directors. Immediately
upon the action of the Board of Directors of the Company electing to redeem
the Rights with, if required, the concurrence of the continuing directors, the
Company shall make announcement thereof, and upon such action, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a shareholder of the Company, including, without limitation, the right to
vote or to receive dividends.
Any of the provisions of the Rights Plan may be amended by the Board of
Directors of the Company prior to the earliest of the Distribution Date, the
occurrence of a Triggering Event or an Adverse Change of Control. After the
Distribution Date, the occurrence of a Triggering Event or an Adverse Change
in Control, the provisions of the Rights Plan may be amended by the Board of
Directors of the Company in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or, with
certain limitations, to shorten or lengthen any time period under the Rights
Plan. In addition, the Board of Directors of the Company may at any time (with
the concurrence of the continuing directors) amend the Rights Plan to provide
for the issuance of shares of the Company's preferred stock under the Rights
Plan in place of shares of the Common Stock.
23
<PAGE>
Additional Shares. In addition to the currently outstanding shares of the
Preferred Stock, the Company's Board of Directors is authorized to provide for
the issuance, at any time or from time to time, of up to 30,000,000 shares of
preferred stock of the Company in one or more classes or series of a class as
determined by the Company's Board of Directors, to determine the designation
and number of shares of any such class or series and to determine the voting
rights, preferences, limitations and special rights, if any, of such class or
series; provided, however, that under the Company Articles, such shares will
rank on a parity with or junior to the Preferred Stock in respect of dividend
and rights upon liquidation and provided further that any such shares will not
be entitled to more than one vote per share when voting as a class with
holders of the Common Stock.
The foregoing agreements and provisions, including the existence under the
Company Articles of amounts of authorized but unissued preferred stock and
Common Stock, the Rights Plan, CGIP's voting power (see "Selling
Shareholders") and the various provisions of the Shareholders Agreement, could
have the effect of delaying or preventing a change in control of the Company.
Certain other provisions of the Company Articles and the Company Bylaws
could also have the effect of preventing or delaying any change in control of
the Company, including (a) the advance notice procedures governing shareholder
nomination of candidates to the Company's Board of Directors and other
shareholder proposals or business to be considered at meetings of the
Company's shareholders, (b) the absence of authority for shareholders to call
special shareholder meetings of the Company, except in certain limited
circumstances mandated by the PBCL, (c) director and officer indemnification
and director limitation of liability provisions, (d) the absence of authority
for shareholder action by written consent by less than all of the Company's
shareholders, (e) the reserving to the Board of Directors of the Company the
authority to fill vacancies on the Board of Directors, (f) the Strategic
Committee of the Company's Board of Directors, certain members of which are
CGIP Designees, which has authority to consider, and make non-binding
recommendations to the Company's full Board of Directors regarding, business
combinations and other extraordinary transactions involving the Company and
certain other matters, and (g) the limitation on the maximum number of
directors of the Company.
In addition, the Company is subject to Section 2538 and Sections 2551-2556
of the PBCL, which in certain cases provide for supermajority shareholder
approval of mergers and certain other extraordinary transactions involving the
Company and any "interested shareholder" (as defined in such statutes and
including generally, in the case of Section 2538, shareholders who are party
to the extraordinary transaction or who are treated differently than other
shareholders, and, in the case of Sections 2551-2556, shareholders
beneficially owning 20% or more of the voting power of a "registered"
corporation, such as the Company). There are additional anti-takeover statutes
in the PBCL which the Company currently is not subject to, including
limitations on the voting rights of shareholders achieving for the first time
voting power over 20%, 33 1/3% or 50% or more of the voting shares of a
registered corporation, alternative fiduciary duty provisions for directors,
provisions permitting recovery of short-term profits realized by persons who
acquire or seek to acquire voting power over 20% or more of the voting shares
of registered corporations, provisions permitting recovery of fair value of
shares from persons having voting power over 20% or more of the voting shares
of registered corporations, and provisions mandating payment of severance
benefits and compliance with labor contracts following certain extraordinary
transactions.
The foregoing descriptions of the Shareholders Agreement, the Rights Plan,
the Company Articles and the Company Bylaws do not purport to be complete and
are qualified in their entirety by reference to (a) in the case of the
Shareholders Agreement, the complete text of the Shareholders Agreement and
letter requesting demand registration of the Common Stock and Preferred Stock
in connection with the Offerings and related waiver of the Company's right to
purchase such Common Stock and Preferred Stock, which are Exhibits to the
Company's Current Reports on Form 8-K filed on March 1, 1996, as amended, and
September 26, 1996, respectively, (b) in the case of the Rights Plan, the
complete text of the Rights Plan, which is an Exhibit to the Company's
Registration Statement on Form 8-A filed August 10, 1995, and (c) in the case
of the Company Articles and the Company Bylaws, the complete text of the
Company Articles and the Company Bylaws, which are Exhibits to the Company's
Registration Statement on Form 8-A dated February 20, 1996. See "Incorporation
of Certain Documents by Reference."
24
<PAGE>
First Chicago Trust Company of New York acts as transfer agent, registrar
and dividend disbursing agent for the Preferred Stock and the Common Stock.
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF CAPITAL STOCK
The following discussion concerns the material United States federal income
and estate tax consequences of the ownership and disposition of the Preferred
Stock or the Common Stock applicable to Non-U.S. Holders of such stock. In
general, a "Non-U.S. Holder" is any person other than (a) a citizen or
resident of the United States, (b) a corporation or partnership created or
organized in the United States or under the laws of the United States or of
any State, or (c) an estate or trust that is subject (or potentially subject)
to U.S. federal income tax on its worldwide income on a net basis. The
discussion is based on current law and is for general information only. The
discussion does not address aspects of federal taxation other than income and
estate taxation (such as, for example, gift taxes and generation skipping
transfer taxes) and does not address all aspects of federal income and estate
taxation. This discussion does not consider specific facts and circumstances
that may be relevant to a particular Non-U.S. Holder's tax position and does
not consider U.S. State and local or non-U.S. tax consequences. Further, it
does not consider Non-U.S. Holders subject to special tax treatment under the
federal income tax laws (including holders of securities held as part of a
"straddle," "hedge," or "conversion transaction"). The following discussion is
based on provisions of the Internal Revenue Code of 1986, as amended, and
administrative and judicial interpretations as of the date hereof, all of
which are subject to change, possibly on a retroactive basis, and any change
could affect the continuing validity of this discussion. The following summary
is included herein for general information. Accordingly, each prospective Non-
U.S. Holder is urged to consult a tax advisor with respect to the United
States federal tax consequences of holding and disposing of the Preferred
Stock or the Common Stock, as well as any tax consequences that may arise
under the laws of any U.S. State, local or other non-U.S. taxing jurisdiction.
Dividends. In general, dividends paid to a Non-U.S. Holder will be subject
to United States withholding tax at a 30% rate (or any lower rate prescribed
by an applicable tax treaty) unless the dividends are either (a) effectively
connected with a trade or business carried on by the Non-U.S. Holder within
the United States, or (b) if a tax treaty applies, attributable to a United
States permanent establishment maintained by the Non-U.S. Holder. Dividends
effectively connected with such a trade or business or attributable to such a
permanent establishment will generally not be subject to withholding (if the
Non-U.S. Holder files certain forms with the payor of the dividend) and will
generally be subject to United States federal income tax at the same rates
applicable to U.S. holders. In the case of a Non-U.S. Holder that is a
corporation, such effectively connected income or income attributable to a
permanent establishment also may be subject to the United States branch
profits tax (which is generally imposed on a foreign corporation on the
repatriation from the United States of effectively connected earnings and
profits) at a 30% rate, or such lower rate as may be applicable under an
income tax treaty. To determine the applicability of a tax treaty providing
for a lower rate of withholding on dividends that are neither effectively
connected income nor attributable to a permanent establishment, dividends paid
to an address in a foreign country are presumed under current Treasury
regulations to be paid to a resident of that country, unless the Company has
actual knowledge that such presumption is not warranted or an applicable
treaty (or United States Treasury regulations thereunder) requires some other
method for determining a Non-U.S. Holder's residence. Proposed Treasury
regulations that are not currently effective would, if finally adopted,
require Non-U.S. Holders or intermediaries receiving payments on their behalf
to file a form, signed under penalties of perjury, to obtain the benefit of an
applicable tax treaty providing for a lower rate of withholding tax on
dividends. Such form would contain the holder's name and permanent residence
address and a statement of the basis for the reduced rate of withholding.
Alternatively, the Non-U.S. Holder could provide certain documentation issued
by the treaty country establishing that the Non-U.S. Holder is a resident of
the treaty country for tax purpose. These proposed regulations, if adopted,
would generally be effective for payments made after December 31, 1997.
25
<PAGE>
A Non-U.S. Holder of the Preferred Stock or the Common Stock that is
eligible for a reduced rate of U.S. withholding tax pursuant to an income tax
treaty may obtain a refund of any excess amounts withheld by filing an
appropriate claim for a refund with the U.S. Internal Revenue Service.
Conversion of Preferred Stock Into Common Stock. A Non-U.S. Holder who
voluntarily converts shares of the Preferred Stock into Common Stock will
recognize no gain or loss on the conversion for U.S. federal income tax
purposes and will not be subject to U.S. tax on the conversion. Upon a
mandatory conversion of the Preferred Stock into Common Stock, holders will
receive additional shares of Common Stock on account of accrued and unpaid
dividends on the Preferred Stock at the time of the conversion. If dividends
on the Preferred Stock are in arrears upon such a mandatory conversion, the
portion of the shares of Common Stock received on account of such dividend
arrearages will be treated as a taxable dividend for U.S. tax purposes,
subject to withholding as described above and subject to any applicable treaty
rules.
Adjustment of Conversion Ratio. Section 305 of the Code treats as a taxable
dividend certain actual or constructive distributions of stock with respect to
stock or convertible securities. Treasury regulations treat holders of
convertible stock as having received such a constructive distribution where
the conversion price of such stock is adjusted to reflect certain taxable
distributions with respect to stock into which such stock is convertible.
Thus, under certain circumstances an adjustment in the conversion price of the
Preferred Stock may give rise to a deemed taxable stock dividend to the
holders thereof. In addition, the failure to fully adjust the conversion price
of the Preferred Stock to reflect distributions of stock dividends with
respect to the Common Stock (or rights to acquire such Common Stock) may give
rise to a deemed taxable stock dividend to the holders of the Common Stock.
Sale of Preferred Stock or Common Stock. Generally, a Non-U.S. Holder will
not be subject to United States federal income tax on any gain realized upon
the disposition of shares of the Preferred Stock or the Common Stock unless
(a) the Company is or has been a "U.S. real property holding corporation" for
federal income tax purposes (which the Company does not believe that it is or
is likely to become); (b) the gain is effectively connected with a trade or
business carried on by the Non-U.S. Holder within the United States or, if a
tax treaty applies, attributable to a permanent establishment maintained by
the Non-U.S. Holder in the United States; (c) in the case of a Non-U.S. Holder
who is an individual, the Non-U.S. Holder holds the shares as a capital asset
and is present in the United States for 183 days or more in the taxable year
of the disposition and certain other conditions are satisfied; or (d) the Non-
U.S. Holder is subject to tax pursuant to the provisions of U.S. tax law
applicable to certain United States expatriates.
Estate Tax. In general, an individual who is a Non-U.S. Holder for U.S.
estate tax purposes will incur liability for U.S. federal estate tax if the
fair market value of property included in the individual's taxable estate for
U.S. federal estate tax purposes exceeds the statutory threshold amount. For
that purpose, the Preferred Stock or the Common Stock owned or treated as
owned by an individual who is not a citizen or resident (as defined for United
States federal estate tax purposes) of the United States at the time of death
will be includible in the individual's gross estate for United States federal
estate tax purposes, unless an applicable tax treaty provides otherwise, and
may be subject to United States federal estate tax.
Backup Withholding and Information Reporting. The Company generally must
report annually to the Internal Revenue Service and to each Non-U.S. Holder
the amount of dividends paid to, and the tax withheld with respect to, each
Non-U.S. Holder. These reporting requirements apply regardless of whether
withholding was reduced or eliminated by an applicable tax treaty. Copies of
these information returns also may be made available under the provisions of a
specific treaty. Backup withholding tax (which generally is a withholding tax
imposed at the rate of 31% on certain payments to persons that fail to furnish
the information required under the United States information reporting
requirements) will generally not apply to dividends paid on Preferred Stock or
Common Stock to a Non-U.S. Holder at an address outside the United States.
The payment of the proceeds from the disposition of the Preferred Stock or
the Common Stock to or through the United States office of a broker will be
subject to information reporting and backup withholding unless the
26
<PAGE>
owner certifies, among other things, its status as a Non-U.S. Holder (and the
broker does not have knowledge to the contrary), or otherwise establishes an
exemption. The payment of the proceeds will generally not be subject to
information reporting (except under the circumstances described in the
following sentence) and, under current temporary regulations, will not be
subject to backup withholding. Information reporting will apply to
dispositions through (a) a non-U.S. office of a U.S. broker and (b) a non-U.S.
office of a non-U.S. broker that is either a "controlled foreign corporation"
for United States federal income tax purposes or a person 50% or more of whose
gross income for certain periods is effectively connected with the conduct of
a United States trade or business unless the broker has documentary evidence
in its files that the owner is a Non-U.S. Holder (and does not have actual
knowledge to the contrary).
Under proposed Treasury regulations that are not currently effective, backup
withholding would generally not apply to the payment of dividends paid on or
proceeds from the disposition of the Preferred Stock or the Common Stock to a
Non-U.S. Holder provided that the Non-U.S. Holder or an intermediary receiving
the payment on its behalf properly certifies that the beneficial owner of the
payment is a foreign person. However, under the proposed regulations, backup
withholding would apply to the payment if the Company or broker has actual
knowledge that the beneficial owner is not a foreign person.
27
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement (the
"International Underwriting Agreement"), among the Company, the Selling
Shareholders and each of the Underwriters named below (the "International
Underwriters"), each of the International Underwriters has severally agreed to
purchase, and the Selling Shareholders have agreed to sell, the respective
number of shares of Common Stock (the "International Shares") set forth
opposite its name below:
<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
----------- ----------------
<S> <C>
Lazard Capital Markets...................................... 505,670
CS First Boston Limited..................................... 505,665
Salomon Brothers International Limited...................... 505,665
ABN AMRO Rothschild......................................... 37,000
Barclays de Zoete Wedd Limited.............................. 37,000
Cazenove & Co............................................... 37,000
Credit Lyonnais Securities.................................. 37,000
Creditanstalt Investment Bank AG............................ 37,000
Dresdner Bank AG............................................ 37,000
Mediobanca - Banca di Credito Finanziario S.p.A. ........... 37,000
Merrill Lynch International................................. 37,000
Societe Generale............................................ 37,000
---------
Total..................................................... 1,850,000
=========
</TABLE>
The International Underwriting Agreement provides that the several
obligations of the International Underwriters to pay for and accept delivery
of the International Shares are subject to certain conditions. The
International Underwriters are obligated to purchase all International Shares
if any are purchased.
Concurrently with the sale of International Shares to the International
Underwriters, the Selling Shareholders have agreed to sell to certain
underwriters in the United States and Canada (the "U.S. Underwriters" and,
together with the International Underwriters, the "Underwriters"), and the
U.S. Underwriters severally have agreed to purchase from the Selling
Shareholders, an aggregate of 7,400,000 shares of Common Stock (the "U.S.
Shares") pursuant to a U.S. underwriting agreement among the Company, the
Selling Shareholders and the U.S. Underwriters (the "U.S. Underwriting
Agreement").
The Underwriters have entered into an intersyndicate agreement (the
"Intersyndicate Agreement") providing for the coordination of their activities
under the direction of Lazard Freres & Co. LLC, CS First Boston Corporation
and Salomon Brothers Inc, on behalf of the U.S. Underwriters (the "U.S.
Representatives"), and Lazard Capital Markets, CS First Boston Limited and
Salomon Brothers International Limited, on behalf of the International
Underwriters (the "International Representatives"). Pursuant to the
Intersyndicate Agreement, each U.S. Underwriter has represented and agreed
that, with certain exceptions, (a) it is not purchasing any U.S. Shares for
the account of anyone other than a United States or Canadian Person (as
defined below) and (b) it has not offered or sold, and will not offer or sell,
directly or indirectly, any U.S. Shares or distribute any prospectus relating
to the U.S. Shares outside the United States or Canada to anyone other than a
United States or Canadian Person. Also, pursuant to the Intersyndicate
Agreement, each International Underwriter has represented and agreed that,
with certain exceptions, (a) it is not purchasing any International Shares for
the account of any United States or Canadian Person and (b) it has not offered
or sold, and will not offer or sell, directly or indirectly, any International
Shares in the United States or Canada or to any United States or Canadian
Person. The foregoing limitations do not apply to stabilization transactions
or to certain other transactions specified in the Intersyndicate Agreement. As
used herein, "United States or Canadian Person" means any national or resident
of the United States or Canada or any corporation, pension, profit-sharing, or
other trust or other entity
28
<PAGE>
organized under the laws of the United States or Canada or of any political
subdivision thereof (other than a branch located outside the United States and
Canada of any United States or Canadian Person) and includes any United States
or Canadian branch of a person who is otherwise not a United States or
Canadian Person.
Pursuant to the Intersyndicate Agreement, sales may be made between the U.S.
Underwriters and International Underwriters of any number of shares of Common
Stock as may be mutually agreed. The per share price of any such shares of
Common Stock sold shall be the price to the public set forth on the cover page
hereof, less an amount not greater than the per share amount of concession to
dealers set forth below.
Pursuant to the Intersyndicate Agreement, each International Underwriter has
represented and agreed that: (a) it has not offered or sold and prior to the
date six months after the date hereof will not offer or sell any Common Stock
to persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995 (the "Regulations"); (b) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 and
the Regulations with respect to anything done by it in relation to the Common
Stock in, from or otherwise involving the United Kingdom; and (c) it has only
issued or passed on and will only issue or pass on in the United Kingdom any
document received by it in connection with the offer of the Common Stock to a
person who is of a kind described in Article 11(3) of the Financial Services
Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a person to
whom such document may otherwise lawfully be issued or passed on.
Pursuant to the Intersyndicate Agreement, each International Underwriter has
represented that it has not offered or sold, and has agreed not to offer or
sell, directly or indirectly, in Japan or to or for the account of any
resident thereof, any of the shares of Common Stock acquired in connection
with the distribution contemplated thereby, except for offers or sales to
Japanese International Underwriters or dealers and except pursuant to any
exemption from the registration requirements of the Securities and Exchange
Law of Japan. Each International Underwriter has further agreed to send to any
dealer who purchases from it any of such shares of Common Stock a notice
stating in substance that, by purchasing such shares, such dealer represents
and agrees that it has not offered or sold, and will not offer or sell, any of
such shares, directly or indirectly, in Japan or to or for the account of any
resident thereof except pursuant to any exemption from the registration
requirements of the Securities and Exchange Law of Japan, and that such dealer
will send to any other dealer to whom it sells any of such shares a notice to
the foregoing effect.
The Selling Shareholders have been advised by Lazard Capital Markets that
the several International Underwriters propose to offer the International
Shares offered hereby directly to the public at the public offering price set
forth on the cover page of this Prospectus and to certain dealers at such
price less a concession not in excess of $0.96 per share. After the Common
Stock Offerings, the public offering price and such concessions may be changed
by the International Underwriters.
The Selling Shareholders have agreed with the Underwriters that they will
not, without the prior written consent of the Underwriters, offer, sell or
otherwise dispose of any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such capital
stock or any rights to purchase or acquire such capital stock for a period of
one year after the date of this Prospectus except in connection with the
Offerings or in connection with a pledge of such stock.
The Company has agreed with the Underwriters that neither the Company nor
certain executive officers and directors of the Company will, without the
prior written consent of the Underwriters, offer, sell or otherwise dispose of
any shares of capital stock of the Company or any securities convertible into
or exchangeable for such capital stock or any rights to purchase or acquire
such capital stock for a period of 90 days after the date of this Prospectus;
provided, however, that the foregoing restriction will not apply to issuances
or sales (a) in connection with stock option, savings, benefit or compensation
plans or dividend reinvestment plans in existence as of the date of this
Prospectus or the conversion or exchange of convertible or exchangeable
securities of the Company, (b) in connection with a merger or other
combination with, or exchange offer for shares or purchase
29
<PAGE>
of assets of, another entity, (c) required in the Company's judgment to
prevent termination of the Standstill Period under the Shareholders Agreement,
or (d) by such executive officers and directors of up to 300,000 shares of
capital stock in the aggregate; provided, further, that the Underwriters shall
be given prior written notice of any issuance or sale described in clause (b),
(c) or (d) above.
The Company and the Selling Shareholders have agreed to indemnify the
International Underwriters against certain liabilities, including liabilities
under the Securities Act.
Felix G. Rohatyn, a Managing Director of Lazard Freres & Co. LLC, is a
director of the Company. As a result, Lazard Freres & Co. LLC may be deemed to
be an affiliate of the Company. Accordingly, any offering of the shares
offered hereby will be made pursuant to the provisions of Rule 2720 of the
Conduct Rules of the National Association of Securities Dealers, Inc.
CS First Boston Corporation served as financial advisor to the Company and
Lazard Freres & Co. LLC served as financial advisor to CarnaudMetalbox and
CGIP in connection with the acquisition of CarnaudMetalbox by the Company in
February 1996, for which they received customary fees. CS First Boston
Corporation also served as financial advisor to the Company in connection with
the acquisition by the Company of CONSTAR International Inc. in 1992, for
which it received customary fees. In addition, certain Underwriters and their
affiliates have from time to time provided, and may in the future provide,
investment banking and commercial banking services to the Company, for which
they received or will receive customary fees.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Dechert Price & Rhoads, Philadelphia, Pennsylvania, and certain
other legal matters in connection with the Offerings will be passed upon for
the Company by Richard L. Krzyzanowski, Executive Vice President, Secretary
and General Counsel for the Company, and Dechert Price & Rhoads. Certain legal
matters in connection with the Offerings will be passed upon for the Selling
Shareholders by Sullivan & Cromwell, New York, New York, special counsel to
the Selling Shareholders. Certain legal matters in connection with the
Offerings are being passed upon for the Underwriters by Cravath, Swaine &
Moore, New York, New York. Mr. Krzyzanowski is a director of the Company and,
as of March 1, 1996, beneficially owned 0.108% of the outstanding shares of
Common Stock. Chester C. Hilinski, of counsel to Dechert Price & Rhoads, is a
director of the Company and, as of March 1, 1996, beneficially owned 0.013% of
the outstanding shares of Common Stock.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995,
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting. The audited financial statements of CarnaudMetalbox
as of December 31, 1994 and 1993 and for each of the two years ending on
December 31, 1994 and 1993 included in the Company's Current Report on Form 8-
K filed on March 1, 1996, as amended, incorporated by reference in this
Prospectus have been so incorporated in reliance on the report of Arthur
Andersen LLP, independent accountants, and Befec-Price Waterhouse and Claude
Chevalier, statutory auditors, given on the authority of said firms as experts
in auditing and accounting. The audited financial statements of
CarnaudMetalbox as of December 31, 1995 and for the year ended December 31,
1995 included in such Current Report on Form 8-K have been so incorporated in
reliance on the report of Arthur Andersen LLP, independent accountants, and
Befec-Price Waterhouse and Salustro Reydel, statutory auditors, given on the
authority of said firms as experts in auditing and accounting.
30
<PAGE>
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFOR-
MATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 2
The Company.............................................................. 4
The Offerings............................................................ 8
Selected Historical Financial Information................................ 9
Unaudited Pro Forma Consolidated Condensed Financial Information......... 11
Price Range of Capital Stock and Dividends............................... 14
Use of Proceeds.......................................................... 14
Selling Shareholders..................................................... 15
Description of Capital Stock............................................. 17
Certain United States Federal Tax Considerations for Non-U.S. Holders of
Capital Stock........................................................... 25
Underwriting............................................................. 28
Legal Matters............................................................ 30
Experts.................................................................. 30
</TABLE>
================================================================================
================================================================================
9,250,000 SHARES
[LOGO OF CROWN CORK & SEAL COMPANY, INC. APPEARS HERE]
CROWN CORK & SEAL
COMPANY, INC.
COMMON STOCK
----------------
PROSPECTUS
----------------
LAZARD CAPITAL MARKETS
CS FIRST BOSTON
SALOMON BROTHERS
INTERNATIONAL LIMITED
OCTOBER 24, 1996
================================================================================
<PAGE>
RULE NO.424(b)(1)
REGISTRATION
NO. 333-12787
PROSPECTUS
3,000,000 SHARES
CROWN CORK & SEAL COMPANY, INC.
[LOGO OF CROWN CORK
& SEAL COMPANY, INC.
APPEARS HERE]
4.5% CONVERTIBLE PREFERRED STOCK
----------
The 3,000,000 shares of 4.5% Convertible Preferred Stock, par value $41.8875
per share (the "Preferred Stock"), of Crown Cork & Seal Company, Inc., a
Pennsylvania corporation (the "Company"), being offered hereby are being
offered by Compagnie Generale d'Industrie et de Participations, a societe
anonyme organized under the laws of the Republic of France ("CGIP"), and
Sofiservice, a societe anonyme organized under the laws of the Republic of
France and a wholly owned subsidiary of CGIP ("Sofiservice" and, together with
CGIP, the "Selling Shareholders"). The Company will not receive any of the
proceeds from the sale of the Preferred Stock offered hereby. See "Selling
Shareholders." CGIP has also granted the Underwriters an option for 30 days to
purchase an additional 450,000 shares of Preferred Stock solely to cover over-
allotments.
The Preferred Stock offered by the Selling Shareholders was acquired in
February 1996 in exchange for shares of CarnaudMetalbox, a societe anonyme
organized under the laws of the Republic of France ("CarnaudMetalbox"), in
connection with the acquisition of CarnaudMetalbox by the Company. See "The
Company--CarnaudMetalbox Acquisition."
The holders of the Preferred Stock are entitled to receive, when, as and if
declared by the Board of Directors of the Company, a quarterly cumulative cash
dividend of $.4712 per share, payable in arrears on November 20, February 20,
May 20 and August 20 of each year until February 26, 2000, at which date each
outstanding share of the Preferred Stock will convert mandatorily into Common
Stock, par value $5.00 per share (the "Common Stock"), of the Company at the
conversion price then in effect (currently $45.9715 per share, subject to
adjustment upon the occurrence of certain events that affect the Common Stock).
The next scheduled dividend payment date for the Preferred Stock is
November 20, 1996, and the anticipated record date for such dividend is
November 4, 1996. Each share of Preferred Stock is convertible by the holder
into shares of Common Stock at any time at the conversion price then in effect.
If at any time prior to February 26, 2000, less than 30% of the shares of
Preferred Stock originally issued in connection with the Company's acquisition
of CarnaudMetalbox are outstanding, the Company may convert the remaining
shares of Preferred Stock into shares of Common Stock at the conversion price
then in effect. Accumulated unpaid dividends in respect of the Preferred Stock
will not bear interest. See "Description of Capital Stock."
Concurrently with the shares of Preferred Stock being offered hereby (the
"Preferred Stock Offering"), the Selling Shareholders are offering for sale
7,400,000 shares of Common Stock in the United States and Canada and 1,850,000
shares of Common Stock outside the United States and Canada, plus up to an
additional 1,387,500 shares of Common Stock subject to an over-allotment option
granted to the underwriters (collectively, the "Common Stock Offerings" and,
together with the Preferred Stock Offering, the "Offerings"). The closings of
the Preferred Stock Offering, on the one hand, and the Common Stock Offerings,
on the other hand, are not mutually contingent. Upon consummation of the
Offerings, the Selling Shareholders will hold approximately 11.3% of the total
voting power of the Company's capital stock (assuming the over-allotment
options of the underwriters in the Offerings are not exercised).
The Preferred Stock is listed on the New York Stock Exchange (the "NYSE")
under the symbol "CCK Pr" and on the Paris Stock Exchange. The Common Stock is
listed on the NYSE under the symbol "CCK" and on the Paris Stock Exchange. On
October 24, 1996, the reported last sales prices of the Preferred Stock and the
Common Stock on the NYSE were $47.38 per share and $46.25 per share,
respectively. See "Price Range of Capital Stock and Dividends."
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNT AND SELLING
PUBLIC(1) COMMISSIONS(2) SHAREHOLDERS(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share....................... $44.250 $1.217 $43.033
- --------------------------------------------------------------------------------
Total(4)........................ $132,750,000 $3,651,000 $129,099,000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Plus accrued dividends, if any, from October 30, 1996.
(2) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting."
(3) Does not include expenses, estimated to be $700,000, of which $550,000 will
be payable by the Selling Shareholders and $150,000 will be payable by the
Company.
(4) CGIP has granted the Underwriters an option for 30 days to purchase up to
an additional 450,000 shares of Preferred Stock at the Price to Public,
less the Underwriting Discount and Commissions, solely to cover over-
allotments. If such option is exercised in full, the total Price to Public,
Underwriting Discount and Commissions and Proceeds to Selling Shareholders
(before deducting expenses as indicated in note (3)) will be $152,662,500,
$4,198,650 and $148,463,850, respectively. See "Underwriting."
----------
The Preferred Stock is offered by the Underwriters, subject to prior sale,
when, as and if delivered to and accepted by the Underwriters, subject to
certain conditions. The Underwriters reserve their right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that
delivery of share certificates for the Preferred Stock will be made at the
offices of Lazard Freres & Co. LLC, New York, New York, on or about October 30,
1996, against payment therefor in immediately available funds.
----------
LAZARD FRERES & CO. LLC
CS FIRST BOSTON
SALOMON BROTHERS INC
----------
The date of this Prospectus is October 24, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). The reports, proxy statements
and other information filed by the Company with the SEC can be inspected and
copied at the public reference facilities maintained by the SEC at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the SEC located at 7 World Trade Center, 13th Floor, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can also be obtained by mail
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The SEC maintains a site on the
world wide web that contains reports, proxy and information statements and
other information on registrants, such as the Company, who must file such
material with the SEC electronically. The SEC's internet address on the world
wide web is http://www.sec.gov. In addition, material filed by the Company can
be inspected at the offices of the NYSE, 20 Broad Street, New York, New York
10005. The Company has filed with the SEC a Registration Statement on Form S-3
(together with all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), covering the offer
and sale of the securities offered hereby. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the SEC.
Reference is hereby made to the Registration Statement and related exhibits
for further information with respect to the Company and the securities offered
hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC (File No. 1-2227)
pursuant to the Exchange Act are hereby incorporated by reference in this
Prospectus:
(1) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
(2) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996 (as amended by the Company's Reports on Form 10-Q/A filed on
May 16, 1996 and September 26, 1996), and June 30, 1996 (as amended by the
Company's Report on Form 10-Q/A filed on September 26, 1996);
(3) the Company's Current Reports on Form 8-K filed on January 2, 1996,
March 1, 1996 (as amended by the Company's Reports on Form 8-K/A filed on
March 18, 1996, May 3, 1996 and May 7, 1996), September 26, 1996, and
October 15, 1996; and
(4) the Company's Registration Statements on Form 8-B filed on May 2,
1989 with respect to the Common Stock, on Form 8-A filed on August 10, 1995
with respect to the Company's common stock purchase rights and on Form 8-A
filed on February 20, 1996 with respect to the Preferred Stock.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to termination of the offers and sales hereunder are
hereby incorporated by reference herein and shall be deemed a part hereof from
the respective dates of filing of such reports and other documents. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for all purposes of this Prospectus to the
extent that a statement contained herein, or in any other subsequently filed
document that also is incorporated by reference herein, modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Prospectus. Certain statements contained herein (including, without
limitation, the statements in "The Company" and "Unaudited Pro Forma
Consolidated Condensed Financial Information" which are not historical facts)
or incorporated by reference herein constitute forward-looking statements as
such term is defined in Section 27A of the Securities Act and Section 21E of
the Exchange Act. Certain factors as discussed herein or in the Company's
Exchange Act filings with the SEC, including the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996, as amended, could cause actual
results to differ materially from those in the forward-looking statements.
2
<PAGE>
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (NOT INCLUDING EXHIBITS THERETO,
UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE) ARE
AVAILABLE, WITHOUT CHARGE, TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO
WHOM THIS PROSPECTUS IS DELIVERED UPON WRITTEN OR ORAL REQUEST DIRECTED TO:
CROWN CORK & SEAL COMPANY, INC., 9300 ASHTON ROAD, PHILADELPHIA, PA 19136
(TELEPHONE NUMBER (215) 698-5208), ATTENTION: RICHARD L. KRZYZANOWSKI,
EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AND THE PREFERRED STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED MAY BE DISCONTINUED AT ANY TIME.
DURING THIS OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR
THE ACCOUNTS OF OTHERS IN THE PREFERRED STOCK OR THE COMMON STOCK PURSUANT TO
EXEMPTIONS FROM RULES 10B-6, 10B-7 AND 10B-8 UNDER THE EXCHANGE ACT.
3
<PAGE>
THE COMPANY
GENERAL
The Company is the world's leading manufacturer of packaging products for
consumer goods. The Company believes that it is unique in its industry in its
ability to supply food, beverage and aerosol containers to multinational
consumer marketers on a global basis. The Company currently operates 275
plants located in 53 countries and employs approximately 48,000 people.
The Company's products include metal cans for food, beverage, household and
other consumer products; plastic containers for beverage, processed food,
household, personal care and other products; metal and plastic packaging
products for health and beauty care applications including cosmetics,
fragrances and pharmaceuticals; metal specialty and promotional packaging
products; a wide variety of caps, closures, pumps and dispensing systems; and
composite containers. The Company also manufactures filling and material
handling machinery, primarily for the beverage and brewing industries, as well
as machinery used in the can making process.
Under current management, the Company has pursued a strategy of growth by
acquisition within the global packaging industry. Over the past seven years,
the Company has completed 20 acquisitions of companies with aggregate net
sales of approximately $8 billion. The largest acquisitions over this period
include CarnaudMetalbox (February 1996), Van Dorn Company (April 1993),
CONSTAR International (October 1992), Continental Can International (May
1991), Continental Can's U.S. food and beverage can businesses (July 1990) and
Continental Can Canada (December 1989). This strategy has contributed to an
increase in the Company's net sales from $1.9 billion in 1989 to $5.1 billion
in 1995. The Company's net sales in 1996, which will include the net sales of
CarnaudMetalbox for 10 months, are expected to approach $9 billion. The
Company's acquisition strategy has resulted in numerous benefits to the
Company, including, among others, improved market positions, product and
geographic diversification, and cost savings. The Company believes that the
ongoing rationalization of excess or inefficient capacity within the global
packaging industry, particularly in the core mature markets served by the
Company, has had a beneficial effect on asset utilization. The Company
believes that industry consolidation has generally resulted in fewer but more
competitive packaging suppliers.
In conjunction with its strategy of growth by acquisition, the Company has
invested in new manufacturing capacity, particularly for beverage can
production in emerging markets and for polyethylene terephthalate (PET)
plastic containers globally. The Company has also invested in projects that
improve production efficiencies and product quality, and lower manufacturing
and administrative costs. The Company continually reviews its operations,
especially in terms of their competitiveness and the appropriate number, size
and location of plants, emphasizing service to customers and rate of return to
investors.
The Company was founded in 1892 and is a Pennsylvania corporation. The
principal executive offices of the Company are located at 9300 Ashton Road,
Philadelphia, Pennsylvania 19136, and the telephone number at such address is
(215) 698-5100.
CARNAUDMETALBOX ACQUISITION
On February 22, 1996, the Company acquired CarnaudMetalbox, a leading
multinational manufacturer of metal and plastic packaging products with
headquarters in Paris, France, for approximately $4.0 billion. Management
believes that the acquisition of CarnaudMetalbox has positioned the Company to
benefit from the following factors, among others:
. Complementary Geographic Markets. The Company is now significantly more
diversified on a global basis. Prior to the acquisition, the Company was
the leading manufacturer of packaging products for consumer goods in
North America. The acquisition enabled the Company to significantly
increase its market presence in Europe as well as in the Middle East,
Asia-Pacific and Africa regions, where CarnaudMetalbox has a substantial
presence. As a result of the acquisition, the Company has become the
world's leading manufacturer of packaging products for consumer goods.
4
<PAGE>
. Complementary Product Markets. The Company is now able to offer a
broader range of products to existing and new customers, including
packaging for health and beauty care applications, metal specialty and
promotional packaging, metal closures for glass food containers and
easy-open ends for metal food containers. The only area of significant
product overlap with CarnaudMetalbox, tinplate
aerosol cans in Europe, was eliminated by the recently completed,
European Community-mandated divestiture of a portion of the Company's
aerosol can operations in that region.
. Cost Reduction Opportunities. The Company believes that, as in past
acquisitions, it can realize significant cost reductions over time
through more effective management of costs relating to sales, marketing
and administration, and research and development activities. The Company
also expects to reduce costs through rationalization of metal and other
raw material specification requirements, improved coordination of
purchasing activities and greater price discounts on certain items
purchased in larger quantities. For information on the Company's
rationalization of manufacturing operations, see "-- 1996 Restructuring"
below.
. Leadership in Research, Development and Engineering. The Company
considers its research, development and engineering ("RD&E")
capabilities to be unsurpassed in the industry. The Company's principal
RD&E centers are located near Chicago, Illinois and in Wantage, UK. The
Company uses its RD&E capabilities to (a) promote development of value-
added packaging systems, (b) design cost-efficient manufacturing systems
and materials that also provide continuous quality improvement, (c)
support technical needs in customer and vendor relationships, and (d)
provide engineering services for the Company's worldwide packaging
activities. These capabilities allow the Company to identify market
opportunities by working with customers to develop new products. In
addition, the Company believes that its technical expertise, quality
reputation and customer relationships will enable it to anticipate and
capitalize on shifting customer preferences, such as the conversion to
plastic from other materials, and potential demand for new packaging
shapes.
. Improved Free Cash Flow Generation. The Company believes that the
CarnaudMetalbox acquisition has the potential to improve the Company's
ability to generate free cash flow as a result of the Company's
strengthened competitive position worldwide, opportunities to reduce
operating costs, improved working capital management and lower capital
expenditure requirements for the combined entity. Over the near term,
the Company intends to use a portion of its available free cash flow to
reduce indebtedness.
1996 RESTRUCTURING
During the second quarter of 1996, the Company charged against operations
$29.6 million for the costs associated with the closure of a South American
operation and costs associated with restructuring existing businesses in
Europe. The Company anticipates that such restructuring, when complete, will
generate approximately $6.0 million in after-tax cost savings on an annualized
basis.
The Company has made a preliminary assessment of the restructuring and exit
costs related to the acquisition of CarnaudMetalbox. The current plan of
restructuring, which commenced at the end of the first quarter of 1996, is
expected to be substantially completed during the first quarter of 1997. As of
June 30, 1996, the Company had accrued approximately $370 million for the
costs associated with restructuring CarnaudMetalbox operations and allocated
such costs to the purchase price of CarnaudMetalbox in accordance with
purchase accounting requirements. These costs are comprised of severance pay
and benefits, writedown of assets and lease termination and other exit costs.
The cost of providing severance pay and benefits to employees is currently
estimated at approximately $202 million and is primarily a cash expense. The
cost associated with the writedown of assets (property, equipment, inventory,
etc.) is currently estimated at approximately $139 million and has been
reflected as a reduction in the fair value of the Company's assets. Lease
termination costs and other exit costs are currently estimated at
approximately $29 million and are primarily cash expenses. The $370 million in
restructuring costs recorded in connection with the CarnaudMetalbox
acquisition include the $70 million restructuring charge previously announced
by CarnaudMetalbox Asia Ltd., a subsidiary of the Company.
5
<PAGE>
The Company, on a preliminary basis, estimates that this plan of
restructuring of CarnaudMetalbox operations, when complete, will generate
annual cost savings of approximately $116 million (or $77 million after-tax)
on a full year basis. It is also estimated that capital expenditures of
approximately $50 million will be made to expand
and upgrade other facilities to minimize the adverse effects of the
restructuring on existing business and customer relationships.
The Company expects that there will be other restructurings effected within
the next year. These plans will be finalized when the Company has had time to
properly evaluate and assess business conditions and operating efficiencies to
make such decisions. As the Company continues to restructure the newly
combined Company, costs that do not qualify for purchase accounting will be
charged against operations.
The foregoing estimates of sales, restructuring charges and related cost
savings represent the Company's best estimates, but necessarily make numerous
assumptions with respect to industry performance, general business and
economic conditions, raw materials and product pricing levels, the timing of
implementation of the restructuring and related employee reductions and
facility closings and other matters, many of which are outside the Company's
control. These estimates may change, resulting in lower actual sales and
adjustments to restructuring costs and savings. The Company's estimates and
related assumptions, which are unaudited, are not necessarily indicative of
future performance, which may be significantly more or less favorable than as
set forth above, and are subject to considerations discussed in the Company's
Exchange Act filings with the SEC, including its Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 1996, as amended, which is
incorporated by reference herein. Undue reliance should not be placed on the
estimates and assumptions. Such information may not necessarily be updated to
reflect circumstances existing after the date hereof or to reflect the
occurrence of unanticipated events.
6
<PAGE>
THIRD QUARTER RESULTS
On October 14, 1996, the Company issued a news release announcing the
following summary, unaudited results of operations for the quarter and nine
months ended September 30, 1996.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
1996(1) 1995(2) 1996(1) 1995(2)
----------- ---------- ----------- ----------
(IN MILLIONS, EXCEPT SHARE AND PER SHARE
AMOUNTS)
<S> <C> <C> <C> <C>
Net sales................... $ 2,462.1 $ 1,427.1 $ 6,367.0 $ 3,939.6
----------- ---------- ----------- ----------
Cost of products sold...... 1,988.6 1,252.8 5,169.1 3,343.6
Depreciation and amortiza-
tion...................... 130.0 67.3 359.8 196.5
Selling and administrative
expense................... 101.6 36.0 277.4 107.8
Provision for restructur-
ing....................... 82.5 29.6 102.7
Gain on sale of assets..... (12.6) (3.1) (22.8) (8.1)
Interest expense, net of
interest income........... 85.0 34.8 223.0 102.8
Translation and exchange
adjustments............... 3.0 (1.8) (35.7) (1.3)
----------- ---------- ----------- ----------
Income (loss) before income
taxes...................... 166.5 (41.4) 366.6 95.6
Provision for income tax-
es........................ 54.1 (23.9) 107.7 17.4
Minority interests, net of
equity earnings........... (3.0) (2.4) (14.1) (9.4)
----------- ---------- ----------- ----------
Net income (loss)........... 109.4 (19.9) 244.8 68.8
Preferred stock dividends... 5.9 13.9
----------- ---------- ----------- ----------
Net income (loss) available
to common shareholders..... $ 103.5 $ (19.9) $ 230.9 $ 68.8
=========== ========== =========== ==========
Primary earnings (loss) per
average common share....... $ 0.81 $ (0.22) $ 1.91 $ 0.76
=========== ========== =========== ==========
Fully diluted earnings
(loss) per average common
share...................... $ 0.78 $ (0.22) $ 1.89 $ 0.76
=========== ========== =========== ==========
Dividends per common share.. $ 0.25 $ 0.75
=========== ===========
Weighted average shares out-
standing:
Primary.................... 128,510,213 90,840,987 120,820,436 90,619,389
Fully diluted.............. 139,836,015 90,840,987 129,837,826 90,621,473
Actual common shares out-
standing................... 128,215,366 90,576,900 128,215,366 90,576,900
Actual preferred shares out-
standing................... 12,432,622 12,432,622
</TABLE>
- --------
(1) The results for 1996 include the operations of CarnaudMetalbox from the
acquistion date of February 22, 1996.
(2) Certain prior year amounts have been reclassified to improve
comparability.
7
<PAGE>
THE OFFERINGS
Concurrently with the shares of Preferred Stock being offered hereby, the
Selling Shareholders are offering for sale an aggregate of 9,250,000 shares of
Common Stock. In addition, CGIP has granted the underwriters in connection
with the Common Stock Offerings an option for 30 days to purchase up to an
additional 1,387,500 shares of Common Stock solely to cover over-allotments.
The closings of the Preferred Stock Offering, on the one hand, and the Common
Stock Offerings, on the other hand, are not mutually contingent.
Preferred Stock 3,000,000 shares
Offered(1)..............
Preferred Stock
Outstanding Before and
After the 12,432,622 shares
Offerings(2)............
Common Stock Outstanding
Before and After the
Offerings(3)............ 128,245,064 shares (139,573,201 shares assuming
full conversion of the outstanding Preferred Stock
at the current conversion price of $45.9715 per
share)
Dividends................ The holders of Preferred Stock are entitled to
receive, when, as and if declared by the Board of
Directors of the Company, a quarterly cumulative
cash dividend of $.4712 per share, payable in
arrears on each November 20, February 20, May 20
and August 20 until February 26, 2000. The
anticipated record date for the quarterly dividend
payable November 20, 1996 is November 4, 1996.
Accumulated unpaid dividends on the Preferred Stock
will not bear interest.
Conversion at Option of At any time prior to February 26, 2000, each share
Holder.................. of Preferred Stock is convertible into shares of
Common Stock based upon the conversion price then
in effect. The conversion price is currently
$45.9715 per share, and is subject to adjustment
upon the occurrence of certain events that affect
the Common Stock. In the event of any optional
conversion of Preferred Stock, the holder will not
have any right to accrued and unpaid dividends,
other than those declared payable to holders of
record on or prior to the conversion date. See
"Description of Capital Stock--Preferred Stock--
Conversion Rights."
Mandatory Conversion..... Each share of Preferred Stock will convert
mandatorily into shares of Common Stock on February
26, 2000 at the conversion price then in effect. In
addition, if at any time prior to such date less
than 30% of the shares of Preferred Stock
originally issued in connection with the Company's
acquisition of CarnaudMetalbox are outstanding, the
Company may convert the remaining shares of
Preferred Stock into Common Stock at the conversion
price then in effect. Upon any mandatory conversion
of the Preferred Stock, all accrued and unpaid
dividends to the date of conversion will be
converted into shares of Common Stock at the
conversion price then in effect.
Liquidation Preference... $41.8875 per share, plus accrued and unpaid
dividends
Voting Rights............ Except as otherwise provided by applicable law,
holders of Preferred Stock have the right to vote
with the holders of Common Stock on all matters to
be voted on by holders of Common Stock based on the
number of shares of Common Stock into which a share
of Preferred Stock is convertible as of the record
date for the vote. The Preferred Stock also has
8
<PAGE>
certain class voting rights, including in the event
the Company fails to pay dividends on the Preferred
Stock for six quarterly periods, whether or not
consecutive. See "Description of Capital Stock --
Preferred Stock -- Voting Rights."
Use of Proceeds.......... The Company will not receive any of the proceeds
from the sale of the Preferred Stock offered
hereby.
New York Stock Exchange
Symbol for Preferred
Stock................... CCK Pr
New York Stock Exchange
Symbol for Common
Stock................... CCK
- --------
(1) Does not include up to 450,000 shares of Preferred Stock that may be sold
by CGIP pursuant to an over-allotment option granted to the Underwriters.
See "Underwriting."
(2) Based on shares outstanding as of October 23, 1996.
(3) Based on shares outstanding as of October 23, 1996. Does not include up to
4,719,494 shares of Common Stock that may be issued upon the exercise of
outstanding options granted under the Company's employee and director
stock option plans.
9
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION
The summary financial information presented below for the years ended
December 31, 1995, 1994, 1993, 1992, and 1991 and as of the end of each such
fiscal year is derived from the consolidated financial statements of the
Company, which have been audited by Price Waterhouse LLP, independent
accountants, and should be read in conjunction with the information and
audited consolidated financial statements contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995, which is
incorporated by reference herein. The summary financial information for and as
of the end of the six-month periods ended June 30, 1996 and 1995 is unaudited
and, in the opinion of the Company management, includes all adjustments,
consisting of only normal recurring accruals, necessary for a fair
presentation of such information. Such unaudited information should be read in
conjunction with the information and the consolidated financial statements
contained in the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1996 and June 30, 1996, as amended, which are
incorporated by reference herein. See also "Unaudited Pro Forma Consolidated
Condensed Financial Information." The summary financial data set forth in the
table below do not reflect the financial results of the Company after June 30,
1996. See "The Company--Third Quarter Results."
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,(1) YEAR ENDED DECEMBER 31,(1)
------------------- ------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net sales.............. $ 3,904.9 $2,512.5 $5,053.8 $4,452.2 $4,162.6 $3,780.7 $3,807.4
Cost of products sold.. 3,170.3 2,085.8 4,311.0 3,699.5 3,474.0 3,197.4 3,290.7
Depreciation and amor-
tization.............. 229.8 129.2 256.3 218.3 191.7 142.4 128.4
Selling and administra-
tive expense.......... 175.8 71.8 139.3 135.4 126.6 112.1 105.4
Provision for restruc-
turing(2)............. 29.6 20.2 102.7 114.6
Interest expense....... 172.9 73.5 148.6 98.8 89.8 77.4 76.6
Interest income........ (34.9) (5.5) (12.5) (7.2) (10.1) (13.5) (10.0)
Translation and ex-
change adjustments.... (38.7) 0.5 (1.1) 10.1 10.8 10.2 7.5
--------- -------- -------- -------- -------- -------- --------
Income before income
taxes, equity in
earnings of affiliates
and cumulative effect
of accounting
changes............... 200.1 137.0 109.5 182.7 279.8 254.7 208.8
Income taxes........... 53.6 41.3 24.9 55.6 97.4 101.0 83.8
Equity in earnings of
affiliates, net of
minority interests.... (11.1) (7.0) (9.7) 3.9 (1.5) 1.7 3.1
--------- -------- -------- -------- -------- -------- --------
Net income before
cumulative effect of
accounting changes.... 135.4 88.7 74.9 131.0 180.9 155.4 128.1
Cumulative effect of
accounting
changes(3)............ (81.8)
--------- -------- -------- -------- -------- -------- --------
Net income............. 135.4 88.7 74.9 131.0 99.1 155.4 128.1
Preferred Stock divi-
dends(4).............. 8.0
--------- -------- -------- -------- -------- -------- --------
Net income available
for common sharehold-
ers................... $ 127.4 $ 88.7 $ 74.9 $ 131.0 $ 99.1 $ 155.4 $ 128.1
========= ======== ======== ======== ======== ======== ========
PER SHARE OF COMMON
STOCK(5)
Net income before
cumulative effect of
accounting changes.... $ 1.09 $ 0.99 $ 0.83 $ 1.47 $ 2.08 $ 1.79 $ 1.48
Cumulative effect of
accounting
changes(3)............ (0.94)
--------- -------- -------- -------- -------- -------- --------
Net income............. $ 1.09 $ 0.99 $ 0.83 $ 1.47 $ 1.14 $ 1.79 $ 1.48
========= ======== ======== ======== ======== ======== ========
Cash dividends declared
per common share(6)... $ 0.50
RATIO OF EARNINGS TO
COMBINED FIXED CHARGES
AND PREFERRED STOCK
DIVIDENDS(7) .......... 2.0x 2.8x 1.7x 2.8x 4.2x 4.3x 3.7x
OTHER DATA
EBITDA(8).............. $ 597.5 $ 354.4 $ 604.6 $ 607.2 $ 551.2 $ 461.0 $ 403.8
Capital expenditures... 286.2 206.5 433.5 439.8 271.3 150.6 92.2
EBITDA as a percentage
of net sales.......... 15.3% 14.1% 12.0% 13.6% 13.2% 12.2% 10.6%
Selling and
administrative expense
as a percentage of net
sales................. 4.5 2.9 2.8 3.0 3.0 3.0 2.8
Total debt as a per-
centage of total capi-
talization(9) ........ 56.7 58.0 56.2 55.3 50.1 52.1 40.5
Average number of
common shares
outstanding (000's)... 116,623 89,920 90,234 89,087 87,087 86,896 86,781
FINANCIAL POSITION (AT
END OF PERIOD)
Total assets........... $12,848.1 $5,278.0 $5,051.7 $4,781.3 $4,236.3 $3,825.1 $2,963.5
Working capital........ 319.5 197.1 429.9 122.6 43.8 174.5 333.3
Total debt............. 5,400.6 2,238.9 2,098.2 1,825.3 1,366.3 1,319.3 769.4
Shareholders' equity... 3,617.2 1,470.3 1,461.2 1,365.2 1,251.8 1,143.6 1,084.4
</TABLE>
10
<PAGE>
- --------
(1) Certain reclassifications of prior years' data have been made to improve
comparability. The Company has completed a number of acquisitions during
the periods presented. Such acquisitions were accounted for using the
purchase method and may affect the comparability of data on a year-to-year
basis. See Note C to the Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995
with respect to the effect of certain acquisitions by the Company.
(2) Reflects restructuring of certain facilities announced in 1996, 1995 and
1994. See Note H to the Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995
and the Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1996, as amended. Does not reflect restructuring costs
qualifying for purchase accounting, including certain restructuring costs
in connection with the acquisition of CarnaudMetalbox. See "The Company--
1996 Restructuring." The after-tax impact of the restructuring charges for
the years ended December 31, 1995 and 1994, as reflected in the table
above, was $67.0 or $0.74 per share and $73.2 or $0.82 per share,
respectively. The after-tax impact of the restructuring charges for the
six months ended June 30, 1996 and 1995 were $21.9 or $0.17 per share and
$12.8 or $0.14 per share, respectively.
(3) Reflects accounting changes related to adoption of SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions,"
SFAS 109, "Accounting for Income Taxes," and SFAS 112, "Employers'
Accounting for Postemployment Benefits." See Note B to the Company's
Consolidated Financial Statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995.
(4) The Company issued Preferred Stock on February 26, 1996 in connection with
the acquisition of CarnaudMetalbox. See Notes N and T to the Company's
Consolidated Financial Statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995.
(5) All data relating to Common Stock prior to 1992 have been restated for
comparative purposes to reflect the three-for-one split of the Common
Stock in 1992.
(6) Prior to 1996, the Company traditionally did not pay dividends on its
Common Stock. For a description of the Company's dividend policy, see
"Price Range of Capital Stock and Dividends."
(7) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income before income taxes, equity in earnings of affiliates
and cumulative effect of accounting changes plus fixed charges and
distributed income from less-than-50%-owned companies. Fixed charges
include preferred stock dividend requirements, interest expense,
amortization of debt issue costs and the portion of rental expense that is
deemed representative of an interest factor.
(8) "EBITDA" is defined as income before income taxes, equity in earnings of
affiliates and cumulative effect of accounting changes, plus depreciation
and amortization, provision for restructuring and interest expense, minus
interest income. EBITDA is presented solely as a supplement to the other
information provided above. EBITDA is not a substitute for operating and
cash flow data as determined in accordance with generally accepted
accounting principles.
(9) Total capitalization includes total debt (net of cash and cash
equivalents), minority interests and shareholders' equity.
11
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma consolidated condensed statements of
operations give effect to the acquisition of CarnaudMetalbox under the
purchase method of accounting. The unaudited pro forma consolidated condensed
statements of operations for the six months ended June 30, 1995 and for the
year ended December 31, 1995, respectively, combine the historical
consolidated statements of operations of the Company and CarnaudMetalbox
giving effect to the acquisition as if it had occurred on January 1, 1995. The
unaudited pro forma consolidated condensed statement of operations for the six
months ended June 30, 1996 combines the historical consolidated statements of
operations of the Company and CarnaudMetalbox giving effect to the acquisition
as if it had occurred on January 1, 1996.
The unaudited pro forma consolidated condensed statements of operations are
for illustrative purposes only and have been presented in accordance with SEC
guidelines. They are not necessarily indicative of the results of operations
that might have occurred had the acquisition actually taken place on such
dates, or of future results of operations of the Company.
The unaudited pro forma consolidated condensed statements of operations are
based on the historical consolidated financial statements of the Company and
CarnaudMetalbox and should be read in conjunction with such historical
financial statements and the notes thereto, which are, in the case of
CarnaudMetalbox, included as part of the Company's Current Report on Form 8-K
filed on March 1, 1996, as amended (the "CarnaudMetalbox Financial
Statements"), and, in the case of the Company, filed with the Company's Annual
Report on Form 10-K for the year ended December 31, 1995 and the Company's
Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 1996
and June 30, 1996, as amended, respectively (and which, in the case of the
Company's 1996 quarterly results, include balance sheet and income statement
data reflecting historical results of the CarnaudMetalbox acquisition since
the acquisition date of February 22, 1996). See also "Selected Historical
Financial Information." Certain reclassifications have been made to
CarnaudMetalbox's historical consolidated financial statements to conform with
the presentation of the Company's historical consolidated financial
statements. Furthermore, the historical financial statements for
CarnaudMetalbox, prepared in accordance with French law and presented in
French francs, have for purposes of preparing these unaudited pro forma
consolidated condensed statements of operations been conformed to comply with
U.S. generally accepted accounting principles and, in accordance with SFAS No.
52, have been translated to U.S. dollars at actual average exchange rates
equal to FF 4.992/$1.00 for the pro forma statement of operations for the six
months ended June 30, 1995, FF 4.982/$1.00 for the pro forma statement of
operations for the year ended December 31, 1995 and FF 5.007/$1.00 for the pro
forma statement of operations for the period beginning January 1, 1996 and
ending on the acquisition date of February 22, 1996. See Note 1-B of the
CarnaudMetalbox Financial Statements for the reconciliation of
CarnaudMetalbox's 1995, 1994 and 1993 net income and shareholders' equity to
U.S. generally accepted accounting principles. Such translations should not be
construed as representations that French franc amounts have been or could be
converted into U.S. dollars at that or any other rate. The use of exchange
rates different from those used in the unaudited pro forma consolidated
condensed statements of operations could have a material impact on the
information presented therein.
In accordance with the purchase method of accounting, the total purchase
price has been allocated to the assets and liabilities of CarnaudMetalbox
based upon their fair values. The accompanying unaudited pro forma
consolidated condensed statements of operations reflect the preliminary
allocation of purchase price to assets and liabilities. Accordingly, the final
allocations may differ from the amounts reflected herein.
The unaudited pro forma consolidated condensed statements of operations
reflect a $3.6 billion excess of purchase price over net assets acquired,
which is being amortized over 40 years at a rate of $90 million per year in
accordance with generally accepted accounting principles, which require that
acquired intangibles be amortized over lives not to exceed 40 years.
Intangible assets acquired principally represent CarnaudMetalbox's customer
base and CarnaudMetalbox's European market presence, assets with indefinite
lives which have historically appreciated in value over time. In addition, the
acquisition facilitates the continued expansion of current lines of business
as well as the development of new businesses via the cross-selling of
packaging product offerings of both the Company and CarnaudMetalbox to
existing and potential customers as well as other factors. See "The Company."
The Company believes it will benefit from the acquisition for a period of at
least 40 years and, therefore, a 40-year amortization period is appropriate.
12
<PAGE>
The Company has obtained appraisals and other studies of the significant
assets, liabilities and business operations of CarnaudMetalbox. The unaudited
pro forma consolidated condensed statements of operations reflect the
preliminary results of these reviews, including the Company's estimate of
known restructuring costs and expenses. For a discussion of recent and
possible future restructuring costs and expenses, including restructurings in
connection with the CarnaudMetalbox acquisition, see "The Company--1996
Restructuring." The final allocation of the purchase price will be completed
in the first quarter of 1997 when final appraisals, other studies and
additional information become available.
See the notes to the unaudited pro forma consolidated condensed statements
of operations for a description of the principal assumptions made in the
preparation of the pro forma information. The unaudited pro forma consolidated
condensed statements of operations do not reflect the financial results of the
Company or CarnaudMetalbox after June 30, 1996. See "The Company--Third
Quarter Results."
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996(A)
----------------------------------------------------------------------
HISTORICAL AMOUNTS PRO FORMA
----------------------------------- ---------------------------------
COMPANY CARNAUDMETALBOX ADJUSTMENTS CONSOLIDATED
---------------- ----------------- ------------- ----------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net Sales............... $ 3,905 $ 606 $ 4,511
Cost of products
sold................. 3,170 486 3,656
Depreciation and amor-
tization............. 230 36 $ (1)(B) 265
Selling and adminis-
trative expense...... 176 57 233
Provision for restruc-
turing............... 30 15 45
Interest expense...... 173 17 19 (C) 209
Interest income....... (35) (3) (38)
Translation and ex-
change adjustments... (39) (39)
---------------- --------------- -------- ----------------
Income from operations
before income taxes.... 200 (2) (18) 180
Income taxes.......... 54 3 (4)(D) 53
Equity in earnings of
affiliates........... (5) (5)
Minority interests.... (6) 2 (4)
---------------- --------------- -------- ----------------
Net income.............. 135 (3) (14) 118
Preferred Stock divi-
dends.................. (8) (4)(E) (12)
---------------- --------------- -------- ----------------
Net income available for
common shareholders.... $ 127 $ (3) $ (18) $ 106
================ =============== ======== ================
Earnings per share...... $ 1.09 $ (0.03) $ 0.83
Average number of common
shares outstanding..... 116,623,109 86,202,056 128,100,284
</TABLE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995
------------------------------------------------------
HISTORICAL AMOUNTS PRO FORMA
---------------------------- -------------------------
COMPANY CARNAUDMETALBOX ADJUSTMENTS CONSOLIDATED
----------- --------------- ----------- ------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net Sales............... $ 2,513 $ 2,460 $ 4,973
Cost of products
sold................. 2,086 1,919 4,005
Depreciation and
amortization......... 129 146 $ (5)(B) 270
Selling and
administrative
expense.............. 72 234 306
Provision for
restructuring........ 20 18 38
Interest expense...... 74 58 69 (C) 201
Interest income....... (6) (12) (18)
Translation and
exchange
adjustments.......... 1 2 3
Preference share
dividends and other.. (21) (21)
----------- ----------- ---- ------------
Income from operations
before income taxes.... 137 116 (64) 189
Income taxes.......... 41 16 (13)(D) 44
Equity in earnings of
affiliates........... 3 2 5
Minority interests.... (10) (1) (11)
----------- ----------- ---- ------------
Net income.............. 89 101 (51) 139
Preferred Stock divi-
dends.................. (12)(E) (12)
----------- ----------- ---- ------------
Net income available for
common shareholders.... $ 89 $ 101 $(63) $ 127
=========== =========== ==== ============
Earnings per share...... $ 0.99 $ 1.19 $ 1.00
Average number of common
shares outstanding..... 89,920,245 84,605,561 127,221,063
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995(F)
-----------------------------------------------------------------
HISTORICAL AMOUNTS PRO FORMA
--------------------------------- -------------------------------
COMPANY CARNAUDMETALBOX ADJUSTMENTS CONSOLIDATED
-------------- ----------------- ------------- ---------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net Sales............... $ 5,054 $ 4,939 $ 9,993
Cost of products
sold................. 4,311 3,926 8,237
Depreciation and amor-
tization............. 256 292 $ (10)(B) 538
Selling and adminis-
trative expense...... 139 415 554
Provision for restruc-
turing............... 103 55 158
Interest expense...... 149 130 138 (C) 417
Interest income....... (13) (25) (38)
Translation and ex-
change adjustments... (1) 2 1
Preference share divi-
dends and other...... (13) (13)
-------------- -------------- -------- ---------------
Income from operations
before income taxes.... 110 157 (128) 139
Income taxes.......... 25 11 (26)(D) 10
Equity in earnings of
affiliates........... 4 1 5
Minority interests.... (14) 3 (11)
-------------- -------------- -------- ---------------
Net income.............. 75 150 (102) 123
Preferred Stock divi-
dends.................. (23)(E) (23)
-------------- -------------- -------- ---------------
Net income available for
common shareholders.... $ 75 $ 150 $ (125) $ 100
============== ============== ======== ===============
Earnings per share...... $ 0.83 $ 1.76 $ 0.78
Average number of common
shares outstanding..... 90,233,518 85,327,985 127,534,336
</TABLE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
A. Historical amounts for the Company include the results from operations of
CarnaudMetalbox from the date of acquisition, February 22, 1996. Historical
amounts for CarnaudMetalbox include the results from operations of
CarnaudMetalbox for the preacquisition period beginning January 1, 1996 and
ending on the acquisition date. Pro forma adjustments relate only to such
preacquisition period.
B. To reflect the net decrease in depreciation and amortization expense due
to (a) amortization of the excess purchase price over net tangible assets
acquired on a straight-line basis over 40 years, net of elimination of
CarnaudMetalbox historical amortization of excess acquisition costs over the
values assigned to net assets acquired in prior acquisitions, (b) additional
amortization resulting from basis assigned to intangible assets other than
goodwill, (c) net decrease in depreciation resulting from change in asset
basis and lives identified in the appraisal process, and (d) decreased
depreciation resulting from property and equipment written-off under existing
plans of restructuring.
C. To reflect the increase in interest expense resulting from the use of new
borrowings to finance a portion of the purchase price. The interest rate on
new borrowings of $1.84 billion is assumed to be 7.5% per annum. Such
borrowings have been made by the Company under a multicurrency credit facility
bearing interest at a variable rate. See Exhibit 10.1 to the Company's Current
Report on Form 8-K filed on December 15, 1995, which is hereby incorporated by
reference, for additional information with respect to the terms of the credit
facility.
D. To reflect the income tax effect of increased interest net of decreased
depreciation at the statutory tax rate of 37.0%. The Company expects that its
effective consolidated income tax rate may be higher than that reflected in
the unaudited pro forma consolidated condensed statements of operations due to
several factors, including the geographical mix in which the Company's future
pre-tax earnings are generated, the non-deductibility for tax purposes of a
significant portion of the purchase price for the CarnaudMetalbox acquisition
and the accounting rules governing utilization of pre-acquisition net
operating losses.
E. To reflect dividends on Preferred Stock of $1.88 per share per annum on
12,432,622 outstanding shares.
F. The unaudited pro forma consolidated condensed statement of operations
for the year ended December 31, 1995 has been updated from that included in
the Company's Current Report on Form 8-K/A filed on May 7, 1996, principally
to reflect increased pro forma goodwill amortization arising from changes in
the estimated fair value of net tangible assets acquired and the acquisition
in the second quarter of 1996 of the remaining 1.3% minority interest in
CarnaudMetalbox.
14
<PAGE>
PRICE RANGE OF CAPITAL STOCK AND DIVIDENDS
The Common Stock and the Preferred Stock are listed on the NYSE under the
symbols "CCK" and "CCK Pr," respectively. The Common Stock and the Preferred
Stock are also listed on the Paris Stock Exchange. The following table sets
forth, for the periods indicated, the high and low reported last sales prices
of the Common Stock and the Preferred Stock as reported on the NYSE and
dividends paid per share.
The Company commenced paying cash dividends on the Common Stock for the
first time since 1956 in the first quarter of 1996. Subject to the Company's
financial results and declaration by the Board of Directors, it is the present
intention of the Company to continue paying cash dividends on the Common Stock
on a quarterly basis. The anticipated record date for the Preferred Stock
dividend payable on November 20, 1996 and for the 1996 fourth quarter Common
Stock dividend is November 4, 1996.
The Preferred Stock was issued as part of the CarnaudMetalbox acquisition in
February 1996.
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
------------------------- -------------------------
DIVIDENDS DIVIDENDS
HIGH LOW PAID HIGH LOW PAID
------- ------- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
1994
First Quarter........... $41 7/8 $36 5/8 -- -- -- --
Second Quarter.......... 39 3/4 33 3/4 -- -- -- --
Third Quarter........... 39 1/2 33 1/2 -- -- -- --
Fourth Quarter.......... 40 7/8 35 7/8 -- -- -- --
1995
First Quarter........... 45 37 3/4 -- -- -- --
Second Quarter.......... 50 1/4 40 1/2 -- -- -- --
Third Quarter........... 50 5/8 36 -- -- -- --
Fourth Quarter.......... 44 5/8 33 1/2 -- -- -- --
1996
First Quarter........... 51 40 5/8 $0.25 $ 49 $45 1/2 --
Second Quarter.......... 49 1/8 43 5/8 0.25 47 3/4 43 $0.4712
Third Quarter........... 49 1/2 41 0.25 48 7/8 41 1/4 0.4712
Fourth Quarter.......... 49 5/8 45 1/2 -- 49 45 1/2 --
(through October 24,
1996)
</TABLE>
As of October 23, 1996, there were approximately 5,715 holders of record of
the Common Stock and nine holders of record of the Preferred Stock. On October
24, 1996, the reported last sales prices of the Common Stock and Preferred
Stock on the NYSE were $46.25 per share and $47.38 per share, respectively.
USE OF PROCEEDS
All of the shares of Common Stock and Preferred Stock in the Offerings are
being offered by the Selling Shareholders. The Company will not receive any
proceeds from the sale of such shares.
15
<PAGE>
SELLING SHAREHOLDERS
The Selling Shareholders are CGIP and its wholly owned subsidiary
Sofiservice. CGIP was previously the largest shareholder of CarnaudMetalbox,
beneficially holding more than 30% of its outstanding shares. The Selling
Shareholders acquired their shares of Common Stock and Preferred Stock in
connection with the acquisition of CarnaudMetalbox by the Company in February
1996. CGIP is a holding company that maintains a portfolio of investments in
companies engaged in, among other things, the manufacture of packaging
products for consumer goods, computer-related services, consulting services,
medical diagnostics, abrasive pellets, energy and real estate. The Offerings
are being undertaken by the Selling Shareholders in furtherance of CGIP's
strategy of diversifying its portfolio of investments. The proceeds of the
Offerings may be used to finance a portion of the costs of acquiring a stake
in Valeo, a French manufacturer of automotive components and systems, as
announced by CGIP on September 26, 1996.
Concurrently with the Preferred Stock Offering, the Selling Shareholders are
offering for sale 7,400,000 shares of Common Stock in the United States and
Canada and 1,850,000 shares of Common Stock outside the United States and
Canada. In addition, CGIP has granted the underwriters in connection with the
Common Stock Offerings an option for up to 30 days to purchase up to an
additional 1,387,500 shares of Common Stock solely to cover over-allotments.
The closings of the Preferred Stock Offering, on the one hand, and the Common
Stock Offerings, on the other, are not mutually contingent.
The following table sets forth, as of October 23, 1996, certain information
with respect to beneficial ownership of Common Stock and Preferred Stock by
the Selling Shareholders and as adjusted to reflect the sale of shares in the
Offerings (assuming the over-allotment options of the underwriters in the
Offerings are not exercised).
<TABLE>
<CAPTION>
OWNERSHIP OWNERSHIP
PRIOR TO THE OFFERINGS AFTER THE OFFERINGS
------------------------- ---------------------
NUMBER OF
NUMBER SHARES TO NUMBER
TYPE OF SECURITIES OF SHARES PERCENTAGE BE SOLD OF SHARES PERCENTAGE
- ------------------ ------------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Common Stock(1):
CGIP (2)........... 19,323,975 15.07% 7,243,072 12,080,903 9.42%
Sofiservice........ 2,006,928 1.56 2,006,928 -- --
------------- -------- --------- ---------- -----
Total............ 21,330,903 16.63% 9,250,000 12,080,903 9.42%
Preferred Stock:
CGIP (2)........... 6,441,324 51.81% 2,331,024 4,110,300 33.06%
Sofiservice........ 668,976 5.38 668,976 -- --
------------- -------- --------- ---------- -----
Total............ 7,110,300 57.19% 3,000,000 4,110,300 33.06%
</TABLE>
- --------
(1) Based on shares outstanding as of October 23, 1996 and assuming no
conversion of the Preferred Stock outstanding as of such date. Does not
include up to 4,719,494 shares of Common Stock that may be issued upon the
exercise of outstanding options granted under the Company's employee and
director stock option plans.
(2) Does not include the shares of Common Stock or Preferred Stock owned by
Sofiservice which CGIP is deemed to beneficially own.
As of October 23, 1996, the shares of Common Stock and Preferred Stock owned
by the Selling Shareholders represented approximately 19.9% of the Total
Voting Power of the Company (as defined below). Assuming the over-allotment
options of the underwriters in the Offerings are not exercised, after giving
effect to (a) the Offerings, (b) the Preferred Stock Offering (but not the
Common Stock Offerings), and (c) the Common Stock Offerings (but not the
Preferred Stock Offerings), the shares of Common Stock and Preferred Stock
owned by the Selling Shareholders will represent approximately 11.3%, 18.0%
and 13.3%, respectively, of the Total Voting Power of the Company, in each
case based upon the outstanding Common Stock and Preferred Stock on October
23, 1996. Assuming the over-allotment options of the underwriters in the
Offerings are exercised in full, the shares of Common Stock and Preferred
Stock owned by the Selling Shareholders upon consummation of the Offerings
will represent approximately 10.1% of the Total Voting Power of the Company
based upon the outstanding Common Stock and Preferred Stock on October 23,
1996.
16
<PAGE>
As used above, "Total Voting Power" means the voting power of the capital
stock (and all securities convertible into or exchangeable for such stock,
other than options granted pursuant to employee benefit plans and the rights
issued pursuant to the Company's Rights Plan) of the Company that is
ordinarily entitled to vote in the election of directors of the Company,
calculated by reference to the maximum number of votes any such security is
entitled to cast, whether in converted or exercised or unconverted or
unexercised form.
The shares of Preferred Stock and Common Stock owned by the Selling
Shareholders may not be sold in the absence of registration under the
Securities Act, unless an exemption from registration is available, including
pursuant to Rule 144. In addition, the shares of Preferred Stock and Common
Stock owned by the Selling Shareholders are subject to additional restrictions
on transfer under the Shareholders Agreement entered into by the Company and
CGIP in connection with the Company's acquisition of CarnaudMetalbox (the
"Shareholders Agreement").
During the Standstill Period under the Shareholders Agreement (see
"Description of Capital Stock--Shareholders Agreement and Certain Other
Agreements and Provisions"), CGIP and its affiliates may not dispose of voting
securities of the Company, except (subject, in some cases, to certain
exceptions): (a) to other affiliates; (b) pursuant to a widely distributed
underwritten public offering (provided such disposition is not made to any
person or entity which CGIP or the managing underwriter knows will
beneficially own immediately thereafter, together with its affiliates and
other persons or entities acting as a "group" with such person or entity
within the meaning of the federal securities laws, voting securities of the
Company representing 3.5% or more of the Total Voting Power of the Company,
which requirement is waivable by the Company); (c) pursuant to Rule 144
(except to any such person or entity which CGIP knows will beneficially own
immediately thereafter 3.5% or more of the Total Voting Power of the Company);
(d) in a private sale to any person or entity that would, following such sale,
beneficially own no more than 3.5% of the Total Voting Power of the Company;
(e) in certain cases, to the Company; (f) pursuant to a tender offer or
exchange offer or any other transaction with a third party which is
recommended to the shareholders of the Company by a majority of "continuing
directors" of the Company; (g) upon conversion of the Preferred Stock into
Common Stock (or upon similar conversions, exchanges or exercises); and (h)
pursuant to one or more bona fide pledges or grants of a security interest in
such shares to a major brokerage firm or financial institution to secure bona
fide indebtedness, or the sale of such shares by foreclosure on such pledge
(provided that in the case of any such pledge involving securities
representing more than 3.5% of the Total Voting Power of the Company, such
lender will be subject to the provisions of the Shareholders Agreement).
In the case of a disposition of voting securities pursuant to clauses (b)-
(d) above, CGIP has agreed that the Company will have certain rights to
purchase such securities upon certain terms and conditions and pursuant to
certain procedures set forth in the Shareholders Agreement. If the Company
does not exercise such rights, CGIP will be free to effect the disposition of
such securities subject to the Shareholders Agreement. The Company has waived
such rights in connection with the Offerings.
The Shareholders Agreement also provides CGIP and its affiliates with the
right to have their shares of Preferred Stock and Common Stock registered
under the Securities Act. CGIP has seven remaining demand registration rights
and unlimited incidental or "piggyback" registration rights, subject to
customary terms and conditions in the Shareholders Agreement. Such rights are
subject to termination if CGIP owns voting securities representing less than
3.5% of the Total Voting Power of the Company or in the event of certain
breaches of the Shareholders Agreement by CGIP.
In addition, CGIP has agreed with the Underwriters that it will not offer,
sell, contract to sell or otherwise dispose of any of its remaining shares of
Common Stock or Preferred Stock for one year following the date of this
Prospectus. See "Underwriting."
The Shareholders Agreement also contains standstill, board representation
and other provisions. See "Description of Capital Stock--Shareholders
Agreement and Certain Other Agreements and Provisions."
On May 20, 1995, CarnaudMetalbox and CGIP entered into a letter agreement
pursuant to which CGIP has agreed to provide management and administrative
services to CarnaudMetalbox through 1999. This letter
17
<PAGE>
agreement conformed with the prior agreement in effect since 1977 between
CarnaudMetalbox and CGIP with respect to CGIP's provisions of such services.
In 1995, the amount paid by CarnaudMetalbox to CGIP (on a pre-tax basis) under
such agreement was approximately FF 11.2 million. After 1999, the letter
agreement will be automatically renewable unless terminated in the first
quarter of the prior year, in which case such agreement will terminate on the
next succeeding January 1.
DESCRIPTION OF CAPITAL STOCK
The following description of the Company's capital stock is a summary and is
qualified in its entirety by reference to the Company's Amended and Restated
Articles of Incorporation (the "Company Articles") and Amended and Restated
Bylaws (the "Company Bylaws"), copies of which have been filed with the SEC.
The description is also subject in all respects to the Pennsylvania Business
Corporation Law of 1988, as amended (the "PBCL").
GENERAL
The Company's authorized capital stock consists of 500,000,000 shares of
Common Stock, 12,432,622 shares of Preferred Stock, and 30,000,000 shares of
additional preferred stock with such voting rights, preferences, limitations
and special rights as may be specified, subject to the Company Articles, by
the Company's Board of Directors. As of October 23, 1996, the Company had
outstanding 128,245,064 shares of Common Stock and 12,432,622 shares of
Preferred Stock, and 27,546,568 shares of Common Stock were held in the
treasury of the Company. No shares of such additional preferred stock were
outstanding as of such date. The Common Stock and the Preferred Stock are
currently listed both on the NYSE and the Paris Stock Exchange.
PREFERRED STOCK
Dividends. Subject to the prior rights of holders of any preferred stock
senior in right of payment of dividends to the Preferred Stock, holders of the
Preferred Stock are entitled to receive, when, as and if declared by the
Company's Board of Directors out of funds of the Company legally available,
annual dividends at the rate of 4.5% of the par value of the Preferred Stock,
or $1.8848 per share, payable in cash quarterly in arrears on February 20, May
20, August 20 and November 20, except that if such day is not a business day,
then such dividend will be payable on the next day that is a business day.
Dividends will accrue without interest on a daily basis and will be cumulative
from the date of initial issuance. All dividends on the Preferred Stock will
be paid pro rata to the holders entitled thereto. Dividends (other than in
shares of the Common Stock or any other stock ranking junior to the Preferred
Stock as to dividend rights and rights upon liquidation) may not be declared,
paid or set apart on the Common Stock or any other stock of the Company
ranking junior to the Preferred Stock as to dividend rights and rights upon
liquidation unless all accrued and unpaid dividends on the Preferred Stock
have been paid or declared and set aside for payment; and no Common Stock or
any other stock of the Company ranking junior to the Preferred Stock as to
dividend rights or rights upon liquidation may be redeemed, purchased or
otherwise acquired for any consideration by the Company (other than pursuant
to certain benefit plans or upon exchange or conversion of such junior
securities or in connection with rights granted to holders of the Common Stock
pursuant to the Company's Rights Plan discussed below) unless all accrued and
unpaid dividends on the Preferred Stock have been paid or declared and set
aside for payment.
Full dividends may not be declared, paid or set apart on any stock of the
Company ranking on a parity with the Preferred Stock as to dividend rights and
rights upon liquidation unless full cumulative unpaid dividends on the
Preferred Stock have been, or contemporaneously are, paid or declared and set
aside for payment. If dividends are not paid in full, or set apart in full,
upon the Preferred Stock and any other preferred stock ranking on a parity as
to dividends and rights upon liquidation with the Preferred Stock, all
dividends declared upon shares of the Preferred Stock and such other parity
preferred stock will when, as and if declared, be declared pro rata so that in
all cases the amount of dividends declared and paid per share on Preferred
Stock and such other parity preferred stock will bear to each other the same
ratio that accrued and unpaid dividends per share on the shares
18
<PAGE>
of Preferred Stock and such other parity preferred stock to the date of
payment bear to each other. No such parity preferred stock may be redeemed,
purchased or otherwise acquired for any consideration by the Company (other
than pursuant to certain benefit plans or upon exchange or conversion of such
parity stock or in connection with rights granted to holders of the Common
Stock pursuant to the Company's Rights Plan) unless all accrued and unpaid
dividends on the Preferred Stock have been paid or declared and set aside for
payment.
Conversion Rights. Each share of the Preferred Stock is convertible into
shares of Common Stock of the Company at any time at the conversion rate of
that number of shares of Common Stock for each full share of Preferred Stock
that is equal to the par value of such share divided by the Conversion Price
per share of Common Stock. The "Conversion Price" is currently $45.9715,
subject to adjustment as described in the following paragraph. As of the date
of this Prospectus, each share of the Preferred Stock is convertible into
approximately 0.91 shares of Common Stock. Fractional shares of Common Stock
will not be delivered upon conversion, but a cash adjustment will be paid in
respect of such fractional interests based on the then current market price of
the Common Stock.
The Conversion Price is subject to adjustment upon certain events, including
(a) the issuance of Common Stock as a dividend or distribution on the Common
Stock; (b) the issuance to all holders of the Common Stock of rights or
warrants entitling them to subscribe for or purchase Common Stock at less than
the then current market price; (c) a combination or subdivision of the Common
Stock; (d) dividends or distributions on the Common Stock (other than
dividends or distributions in cash solely out of retained earnings of the
Company) and (e) reclassifications of the Common Stock. No adjustment of the
Conversion Price will be required to be made in any case until cumulative
adjustments amount to 1% of such price. In addition to the foregoing
adjustments, the Company will be permitted to make such reductions in the
Conversion Price as it determines to be advisable in order that any event
treated for Federal income tax purposes as a dividend of stock or stock rights
will not be taxable to the recipients.
In case of any consolidation of the Company with, or merger of the Company
or share exchange into, any other entity, any merger of another entity into
the Company (other than a merger or share exchange which does not result in
any reclassification, conversion, exchange or cancellation of the outstanding
shares of Common Stock) or any sale or transfer of all or substantially all
the assets of the Company, lawful provision will be made such that the holder
of each share of the Preferred Stock will have the right to convert each share
of the Preferred Stock into the kind and amount of securities, cash or other
property receivable upon such merger, consolidation, sale or transfer by a
holder of the number of shares of Common Stock into which a share of the
Preferred Stock might have been converted immediately prior to such merger,
consolidation, sale or transfer assuming such holder of Common Stock failed to
exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such merger, consolidation,
sale or transfer (provided that if the kind or amount of securities, cash or
other property receivable upon such merger, consolidation, sale or transfer is
not the same for each non-electing share, then the kind and amount of
securities, cash or other property receivable upon such merger, consolidation,
sale or transfer for each non-electing share shall be deemed to be the kind
and amount so receivable per share by a plurality of the non-electing shares).
If the shareholders of the Company have approved any such consolidation,
merger, sale or transfer which makes provision for the Preferred Stock under
the terms of such consolidation, merger, sale or transfer, then the holders of
the Preferred Stock will be deemed to have waived the foregoing provisions.
In the event of any voluntary conversion of the Preferred Stock, the holder
will not have any right to accrued and unpaid dividends.
See " -- Shareholders Agreement and Certain Other Agreements and Provisions"
for a description of the Common Stock purchase rights issuable upon conversion
of the Preferred Stock.
Mandatory Conversion. On February 26, 2000 (the "Latest Mandatory Conversion
Date"), all of the Preferred Stock will convert into shares of the Common
Stock at the Conversion Price then in effect, automatically and without
further action of the holder of such shares. In addition, if at any time prior
to the Latest
19
<PAGE>
Mandatory Conversion Date less than 30% of the initially issued shares of
Preferred Stock are outstanding, the Company will have the right to convert
the remaining Preferred Stock into Common Stock at the Conversion Price then
in effect. There is no restriction on any such mandatory conversion by reason
of any arrearage in payment of dividends on the Preferred Stock.
In the event of any mandatory conversion of the Preferred Stock, all accrued
and unpaid dividends on the Preferred Stock will be converted into Common
Stock at the Conversion Price then in effect.
Liquidation Rights. In the event of any liquidation, dissolution or winding
up of the Company and subject to the rights of creditors of the Company and
holders of any preferred stock senior in right of payment in the event of a
liquidation of the Company, the holders of shares of the Preferred Stock are
entitled to receive a liquidation preference of $41.8875 per share, plus an
amount equal to any accrued and unpaid dividends to the date of payment before
any payment or distribution of assets is made to holders of the Common Stock
or any other stock that ranks junior to the Preferred Stock as to liquidation
rights. The holders of the Preferred Stock and all series or classes of the
Company's stock hereafter issued that rank on a parity as to liquidation
rights with the Preferred Stock are entitled to share ratably in any
distribution which is not sufficient to pay in full the aggregate of the
amounts payable thereon.
After payment in full of the liquidation preference of the Preferred Stock,
the holders of such shares will not be entitled to any further participation
in any distribution of assets by the Company. Neither a merger, consolidation,
or other business combination of the Company with or into another corporation
or other entity nor a voluntary sale or transfer of all or part of the
Company's assets for cash, securities or other property will be considered a
liquidation, dissolution or winding up of the Company.
Voting Rights. Other than as set forth below and except as provided by
applicable law, the holders of the Preferred Stock are entitled to vote
together with the holders of the Common Stock on all matters to be voted on by
holders of the Common Stock. When voting together with holders of the Common
Stock, each share of the Preferred Stock will be entitled to the number of
votes equal to the number of shares of Common Stock into which such share of
the Preferred Stock is convertible as of the record date applicable to such
vote.
Whenever dividends on the Preferred Stock are in arrears and unpaid for at
least six quarterly dividend periods (whether or not consecutive), the number
of directors of the Company will be increased by two, and the holders of the
Preferred Stock (voting separately as a class with the holders of any
outstanding shares of stock on a parity as to dividends and rights upon
liquidation with the Preferred Stock on which like voting rights have been
conferred and are exercisable) will be entitled to elect such two additional
directors to the Board of Directors of the Company. Such right to elect
directors will become effective at the earlier of (a) the next meeting of
shareholders of the Company at which directors are to be elected held after
such dividends have been unpaid and in arrears for six quarterly dividend
periods and (b) the special meeting of holders of the Preferred Stock (and of
parity preferred stock having like rights) called for such purpose, and will
terminate when all accrued and unpaid dividends on the Preferred Stock have
been declared and paid or set apart for payment. The holders of at least 10%
of the outstanding shares of the Preferred Stock have the right to require the
President of the Company to call a special meeting of holders of the Preferred
Stock if the right to elect additional directors has accrued more than 90 days
preceding the next annual meeting of shareholders of the Company.
In addition, so long as any of the Preferred Stock is outstanding (except
when notice of mandatory conversion by the Company has been given or as of the
Latest Mandatory Conversion Date), the Company will not, without the
affirmative vote or consent of the holders of at least 66 2/3 percent (unless
a higher percentage is required by law) of all outstanding shares of the
Preferred Stock, voting separately as a class, (a) amend, alter or repeal any
provision of the Company Articles so as to affect adversely the relative
rights, preferences, qualifications, limitations or restrictions of the
Preferred Stock, (b) authorize or issue, or reclassify any authorized stock
into, or increase the authorized amount of, any additional class or series of
stock, or any security convertible into stock of such class or series, ranking
senior to the Preferred Stock as to dividends or as to rights upon
liquidation, dissolution or winding up of the Company or (c) take any other
action on which the holders of the Preferred Stock are entitled by law to vote
separately as a class.
20
<PAGE>
Holders of the Preferred Stock do not have the right to vote separately as a
class on the creation, authorization or issuance of securities ranking junior
to or on a parity with the Preferred Stock as to dividend rights or rights
upon liquidation or on the creation of any indebtedness of the Company.
Other Provisions. The holders of the Preferred Stock have no rights with
respect to cumulative voting in the election of directors of the Company.
Shareholders of the Company are not entitled to any preemptive rights to
purchase or to subscribe to any additional or increased stock of any class or
any obligations convertible into any class or classes of stock.
COMMON STOCK
Dividends. Holders of the Common Stock are entitled to receive such
dividends as may be declared by the Board of Directors. The Company's ability
to pay dividends on the Common Stock is subject to the legal availability of
funds therefor as well as contractual restrictions (including prior full
payment of dividends as to the Preferred Stock and any other outstanding
preferred stock of the Company).
Voting Rights. Except as to matters as to which holders of the Preferred
Stock (and any other capital stock of the Company) have the right to vote
separately as a class, the holders of the Common Stock vote together with
holders of the Preferred Stock (and any other capital stock of the Company
entitled to vote with the Common Stock) as a class. At every meeting of
shareholders of the Company, the holders of record of shares of the Common
Stock entitled to vote at the meeting are entitled to one vote for each share
of Common Stock held. When voting with holders of the Common Stock as to any
matter, holders of the Preferred Stock are entitled, for each share of the
Preferred Stock held, to that number of votes equal to the number of shares of
Common Stock into which a share of Preferred Stock is convertible as of the
record date of the vote. See "--Preferred Stock--Voting Rights" above. Holders
of the Common Stock have certain additional special voting rights under the
PBCL in the event of certain mergers and other extraordinary transactions. See
"--Shareholders Agreement and Certain Other Agreements and Provisions."
As provided above, holders of Preferred Stock have rights to vote separately
as a class with respect to certain matters. In addition, whenever dividends
accrued on the Preferred Stock are in arrears and unpaid for at least six
quarterly dividend periods, the Company Articles provide that the size of the
Board of Directors of the Company shall be increased by two directors and that
the holders of the Preferred Stock will have the right, voting separately as a
class together with holders of any other shares of preferred stock of the
Company having such voting rights, to elect such two additional directors. See
"--Preferred Stock--Voting Rights" above.
Shareholders of the Company are not entitled to cumulative voting in the
election of directors.
No Preemptive Rights. Shareholders of the Company are not entitled to any
preemptive rights to purchase or to subscribe to any additional or increased
stock of any class or any obligations convertible into any class or classes of
stock.
Liquidation Rights. In any liquidation, dissolution or winding up of the
Company, after the debts of the Company have been paid or provided for, and
subject to the rights upon liquidation of the holders of the Preferred Stock
and any other preferred stock of the Company, all of the remaining assets of
the Company shall belong to and shall be distributed ratably among the holders
of the Common Stock.
SHAREHOLDERS AGREEMENT AND CERTAIN OTHER AGREEMENTS AND PROVISIONS
Shareholders Agreement and Strategic Committee. Subject to the terms of the
Shareholders Agreement, during the Standstill Period (as described below),
CGIP has agreed that neither it nor any of its controlled affiliates will
acquire beneficial ownership of voting securities of the Company representing
more than 19.95% of the Total Voting Power of the Company, make a proposal for
any tender or exchange offer, merger or other
21
<PAGE>
business combination or recapitalization, restructuring or similar transaction
for the Company or its subsidiaries (a "Takeover Proposal") or take certain
other actions.
In accordance with the Shareholders Agreement, immediately following the
CarnaudMetalbox acquisition, the Company elected Ernest-Antoine Seilliere, Guy
de Wouters and Felix G. Rohatyn, all of whom were designated by CGIP, to the
Company's Board of Directors. The Shareholders Agreement provides that during
the Standstill Period the Company will support the nomination of, and the
nominating committee of the Company's Board of Directors will recommend to the
Board that, (a) so long as the CGIP owns voting securities of the Company
representing at least 5% but less than 10% of the Total Voting Power of the
Company, one person, (b) so long as CGIP owns voting securities of the Company
representing at least 10% but less than 15% of the Total Voting Power of the
Company, two persons, and (c) so long as CGIP owns voting securities of the
Company representing at least 15% but less than 20% of the Total Voting Power
of the Company, three persons, designated by CGIP ("CGIP Designees") be
included in the slate of nominees recommended by the Board of Directors for
election as directors at each annual meeting of the Company's shareholders.
Following consummation of the Offerings, CGIP will have the right to designate
two persons to be nominated for election as directors of the Company. The
Company currently does not intend to request the resignation of any of the
current CGIP Designees following consummation of the Offerings, although the
Company has reserved its right, in accordance with its agreements with CGIP,
to make such a request at a future date.
Also in connection with the acquisition of CarnaudMetalbox, the Company
amended its Bylaws to create a Strategic Committee of the Board of Directors,
one-half the members of which (including its chair) must be representatives of
CGIP. Currently, the CGIP Designees are members of the Strategic Committee,
and Mr. Seilliere is chairman of the Strategic Committee. CGIP and the Company
have agreed that, following consummation of the Offerings, the Strategic
Committee will be made up of six directors, two of whom will be
representatives of CGIP. Mr. Seilliere will continue to serve as chairman of
the Strategic Committee. CGIP has reserved its right, in accordance with its
agreements with the Company, to request in the future that the Strategic
Committee be made up of an equal number of CGIP Designees and other directors.
Under the Shareholders Agreement, CGIP has agreed to vote any voting
securities of the Company beneficially owned by it or its affiliates during
the Standstill Period in the manner recommended by the Company's Board of
Directors in connection with the election of directors of the Company and any
question relating to a Takeover Proposal.
The Standstill Period began on February 22, 1996 and terminates under
certain circumstances upon the earliest to occur of (a) the later of (x)
February 22, 1999 and (y) the date on which CGIP beneficially owns voting
securities of the Company representing less than 3.5% of the outstanding Total
Voting Power of the Company, (b) the date the Company breaches certain
provisions of the Shareholders Agreement relating to CGIP's board
representation or the Company's dividend or debt rating policy described
generally below, (c) the date the Company agrees to recommend (or ceases to
oppose) the consummation of an unsolicited tender or exchange offer for 20% of
the Total Voting Power of the Company or any unsolicited proxy or consent
solicitation affecting a majority of the "continuing directors" of the Company
or enters into, or takes material steps to solicit, an agreement with respect
to certain fundamental corporate transactions involving the Company or its
subsidiaries, (d) the date a person other than CGIP acquires 25% of the Total
Voting Power of the Company, or (e) the date any CGIP Designee fails to be
elected to the Company's Board of Directors.
The Shareholders Agreement contains provisions relating to the Company's
dividend policy whereby the Company indicated that its Board of Directors
intended to pay quarterly dividends of $.25 per share on the Common Stock
during 1996 and to increase the amount of such dividends over time such that
the amount of dividends paid to CGIP during the four full quarters following
the mandatory conversion of the Preferred Stock on February 26, 2000 (assuming
for these purposes that CGIP has not acquired or disposed of any shares of
Common Stock or Preferred Stock) would not be less than the amount of
dividends paid to CGIP on the Common Stock and Preferred Stock issued to CGIP
in the CarnaudMetalbox acquisition during the four full quarters
22
<PAGE>
following such acquisition (assuming for these purposes that CGIP has not
acquired or disposed of any shares of Common Stock or Preferred Stock). In
addition, the Shareholders Agreement provides that the Company intends to
conduct its business consistent with maintaining an "investment grade" debt
rating for its long-term unsecured debt securities. Subject to certain
exceptions, a failure by the Company to increase the amount of such dividends
or maintain such debt rating will result in the termination of the Standstill
Period unless, in the case of dividend amounts, the Company elects an
additional CGIP Designee to the Company's Board of Directors, in which case
the Standstill Period will terminate if such breach is not cured within one
year.
The Shareholders Agreement contains restrictions on the Selling
Shareholders' sale or transfer of their shares of Common Stock and Preferred
Stock and provisions granting CGIP registration rights. See "Shares Eligible
for Future Resale."
The provisions of the Shareholders Agreement may be amended or waived by the
parties thereto at any time in accordance with its terms.
Rights Plan. Pursuant to a Rights Agreement, dated as of August 10, 1995
(the "Rights Plan"), the Board of Directors of the Company declared a dividend
distribution of one Right for each share of the Common Stock outstanding on
August 10, 1995 (the "Record Date") and authorized the issuance of one Right
for each share of Common Stock that becomes outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are defined below), including pursuant to
conversion of the Preferred Stock. Subject to the terms and conditions of the
Rights Plan, each Right issued pursuant to the Rights Plan entitles the
registered holder to purchase from the Company one share of Common Stock (or
in certain circumstances cash, property or other securities) at a price of
$200, subject to adjustment.
Until the earlier to occur of (a) ten calendar days following the date (the
"Shares Acquisition Date") of public announcement that a person or entity or
group of affiliated or associated persons or entities acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of the outstanding
shares of Common Stock (an "Acquiring Person") or (b) ten business days (or
such later date as is determined by the Board of Directors or, if there has
been an Adverse Change of Control, by a majority of the "continuing directors"
(as defined below) of the Company) following the commencement or first public
announcement of an intention of any applicable person to make a tender offer
or exchange offer if, upon consummation thereof, such person would be an
Acquiring Person (the earlier of such dates being called the "Distribution
Date"), the Rights are evidenced by the certificates evidencing the Common
Stock. Until the Distribution Date, the Rights will be transferred only with
the shares of Common Stock. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Rights Certificates") will
be mailed to holders of record of shares of the Common Stock as of the close
of business on the Distribution Date, and such separate Right Certificates
alone will evidence the Rights.
The Rights Plan contains special provisions regarding CGIP (and its
affiliates and associates), which as of October 23, 1996 beneficially owned
approximately 19.9% of the Total Voting Power of the Company and, upon
consummation of the Offerings (assuming the over-allotment options of the
underwriters in the Offerings are not exercised), will beneficially own
approximately 11.3% of the Total Voting Power of the Company. During the
Standstill Period under the Shareholders Agreement (see "--Shareholders
Agreement and Strategic Committee") and so long as CGIP has not breached
certain provisions of the Shareholders Agreement, CGIP will not become an
"Acquiring Person" when it takes any action which the Company has agreed to
permit CGIP to take during the Standstill Period. Also, after the expiration
of the Standstill Period, CGIP will be an "Acquiring Person," subject to
certain exceptions including with respect to the acquisition of beneficial
ownership of additional shares of Common Stock within 18 months after certain
dilutive issuances by the Company, only if CGIP acquires beneficial ownership
of additional shares of Common Stock, and CGIP is thereafter the beneficial
owner of 15% or more of the shares of the Common Stock then outstanding,
excluding securities granted by the Company to directors of the Company who
are affiliates or associates of CGIP. If, however, at the time of the
expiration of the Standstill Period, CGIP has breached certain provisions of
the
23
<PAGE>
Shareholders Agreement, then CGIP will be an "Acquiring Person" to the extent
it would otherwise be deemed as such but for the provisions noted above.
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on August 10, 2005 (the "Final Expiration
Date") unless earlier redeemed by the Company as described below.
In the event that a person or entity (other than certain specified persons
or entities) becomes the beneficial owner of more than 15% of the then
outstanding shares of Common Stock, each holder of a Right will thereafter
have the right to receive, upon exercise, shares of Common Stock (or, in
certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth above, all Rights that are, or (under certain circumstances
specified in the Rights Plan) were, beneficially owned by an Acquiring Person
will be null and void.
In the event that, at any time following the Shares Acquisition Date, (a)
the Company is acquired in a merger or other business combination transaction
(other than a merger described in the immediately preceding paragraph), or (b)
50% or more of the Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have been voided as set
forth above) shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two times the exercise
price of the Right. The events set forth in this paragraph and in the
preceding paragraph are referred to as the "Triggering Events."
At any time prior to the earlier of (a) 5:00 p.m. New York City time on the
tenth calendar day following the Shares Acquisition Date and (b) the Final
Expiration Date, the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price"). The date of such
redemption is the "Redemption Date." Following an Adverse Change of Control,
the decision to redeem the Rights will require the concurrence of a majority
of the "continuing directors" of the Company. An "Adverse Change of Control"
means a change (resulting from a proxy or consent solicitation) in a majority
of the directors of the Company in office at the commencement of such
solicitation where a participant in such solicitation has stated (or the
Company's Board of Directors determines) that such participant has taken,
intends to take or may consider taking any action that would result in such
participant becoming an Acquiring Person or causing the occurrence of a
Triggering Event, and "continuing directors" means any member of the Company's
Board of Directors who is not an Acquiring Person and was a member prior to
the Record Date or any person who subsequently becomes a member of the Board
if such person's nomination for election or election to the Board is
recommended or approved by a majority of the continuing directors. Immediately
upon the action of the Board of Directors of the Company electing to redeem
the Rights with, if required, the concurrence of the continuing directors, the
Company shall make announcement thereof, and upon such action, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a shareholder of the Company, including, without limitation, the right to
vote or to receive dividends.
Any of the provisions of the Rights Plan may be amended by the Board of
Directors of the Company prior to the earliest of the Distribution Date, the
occurrence of a Triggering Event or an Adverse Change of Control. After the
Distribution Date, the occurrence of a Triggering Event or an Adverse Change
in Control, the provisions of the Rights Plan may be amended by the Board of
Directors of the Company in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or, with
certain limitations, to shorten or lengthen any time period under the Rights
Plan. In addition, the Board of Directors of the Company may at any time (with
the concurrence of the continuing directors) amend the Rights Plan to provide
for the issuance of shares of the Company's preferred stock under the Rights
Plan in place of shares of the Common Stock.
24
<PAGE>
Additional Shares. In addition to the currently outstanding shares of the
Preferred Stock, the Company's Board of Directors is authorized to provide for
the issuance, at any time or from time to time, of up to 30,000,000 shares of
preferred stock of the Company in one or more classes or series of a class as
determined by the Company's Board of Directors, to determine the designation
and number of shares of any such class or series and to determine the voting
rights, preferences, limitations and special rights, if any, of such class or
series; provided, however, that under the Company Articles, such shares will
rank on a parity with or junior to the Preferred Stock in respect of dividend
and rights upon liquidation and provided further that any such shares will not
be entitled to more than one vote per share when voting as a class with
holders of the Common Stock.
The foregoing agreements and provisions, including the existence under the
Company Articles of amounts of authorized but unissued preferred stock and
Common Stock, the Rights Plan, CGIP's voting power (see "Selling
Shareholders") and the various provisions of the Shareholders Agreement, could
have the effect of delaying or preventing a change in control of the Company.
Certain other provisions of the Company Articles and the Company Bylaws
could also have the effect of preventing or delaying any change in control of
the Company, including (a) the advance notice procedures governing shareholder
nomination of candidates to the Company's Board of Directors and other
shareholder proposals or business to be considered at meetings of the
Company's shareholders, (b) the absence of authority for shareholders to call
special shareholder meetings of the Company, except in certain limited
circumstances mandated by the PBCL, (c) director and officer indemnification
and director limitation of liability provisions, (d) the absence of authority
for shareholder action by written consent by less than all of the Company's
shareholders, (e) the reserving to the Board of Directors of the Company the
authority to fill vacancies on the Board of Directors, (f) the Strategic
Committee of the Company's Board of Directors, certain members of which are
CGIP Designees, which has authority to consider, and make non-binding
recommendations to the Company's full Board of Directors regarding, business
combinations and other extraordinary transactions involving the Company and
certain other matters, and (g) the limitation on the maximum number of
directors of the Company.
In addition, the Company is subject to Section 2538 and Sections 2551-2556
of the PBCL, which in certain cases provide for supermajority shareholder
approval of mergers and certain other extraordinary transactions involving the
Company and any "interested shareholder" (as defined in such statutes and
including generally, in the case of Section 2538, shareholders who are party
to the extraordinary transaction or who are treated differently than other
shareholders, and, in the case of Sections 2551-2556, shareholders
beneficially owning 20% or more of the voting power of a "registered"
corporation, such as the Company). There are additional anti-takeover statutes
in the PBCL which the Company currently is not subject to, including
limitations on the voting rights of shareholders achieving for the first time
voting power over 20%, 33 1/3% or 50% or more of the voting shares of a
registered corporation, alternative fiduciary duty provisions for directors,
provisions permitting recovery of short-term profits realized by persons who
acquire or seek to acquire voting power over 20% or more of the voting shares
of registered corporations, provisions permitting recovery of fair value of
shares from persons having voting power over 20% or more of the voting shares
of registered corporations, and provisions mandating payment of severance
benefits and compliance with labor contracts following certain extraordinary
transactions.
The foregoing descriptions of the Shareholders Agreement, the Rights Plan,
the Company Articles and the Company Bylaws do not purport to be complete and
are qualified in their entirety by reference to (a) in the case of the
Shareholders Agreement, the complete text of the Shareholders Agreement and
letter requesting demand registration of the Common Stock and Preferred Stock
in connection with the Offerings and related waiver of the Company's right to
purchase such Common Stock and Preferred Stock which are Exhibits to the
Company's Current Reports on Form 8-K filed on March 1, 1996, as amended, and
September 26, 1996, respectively, (b) in the case of the Rights Plan, the
complete text of the Rights Plan, which is an Exhibit to the Company's
Registration Statement on Form 8-A filed August 10, 1995, and (c) in the case
of the Company Articles and the Company Bylaws, the complete text of the
Company Articles and the Company Bylaws, which are Exhibits to the Company's
Registration Statement on Form 8-A dated February 20, 1996. See "Incorporation
of Certain Documents by Reference."
25
<PAGE>
First Chicago Trust Company of New York acts as transfer agent, registrar
and dividend disbursing agent for the Preferred Stock and the Common Stock.
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF CAPITAL STOCK
The following discussion concerns the material United States federal income
and estate tax consequences of the ownership and disposition of the Preferred
Stock or the Common Stock applicable to Non-U.S. Holders of such stock. In
general, a "Non-U.S. Holder" is any person other than (a) a citizen or
resident of the United States, (b) a corporation or partnership created or
organized in the United States or under the laws of the United States or of
any State, or (c) an estate or trust that is subject (or potentially subject)
to U.S. federal income tax on its worldwide income on a net basis. The
discussion is based on current law and is for general information only. The
discussion does not address aspects of federal taxation other than income and
estate taxation (such as, for example, gift taxes and generation skipping
transfer taxes) and does not address all aspects of federal income and estate
taxation. This discussion does not consider specific facts and circumstances
that may be relevant to a particular Non-U.S. Holder's tax position and does
not consider U.S. State and local or non-U.S. tax consequences. Further, it
does not consider Non-U.S. Holders subject to special tax treatment under the
federal income tax laws (including holders of securities held as part of a
"straddle," "hedge," or "conversion transaction"). The following discussion is
based on provisions of the Internal Revenue Code of 1986, as amended, and
administrative and judicial interpretations as of the date hereof, all of
which are subject to change, possibly on a retroactive basis, and any change
could affect the continuing validity of this discussion. The following summary
is included herein for general information. Accordingly, each prospective Non-
U.S. Holder is urged to consult a tax advisor with respect to the United
States federal tax consequences of holding and disposing of the Preferred
Stock or the Common Stock, as well as any tax consequences that may arise
under the laws of any U.S. State, local or other non-U.S. taxing jurisdiction.
Dividends. In general, dividends paid to a Non-U.S. Holder will be subject
to United States withholding tax at a 30% rate (or any lower rate prescribed
by an applicable tax treaty) unless the dividends are either (a) effectively
connected with a trade or business carried on by the Non-U.S. Holder within
the United States, or (b) if a tax treaty applies, attributable to a United
States permanent establishment maintained by the Non-U.S. Holder. Dividends
effectively connected with such a trade or business or attributable to such a
permanent establishment will generally not be subject to withholding (if the
Non-U.S. Holder files certain forms with the payor of the dividend) and will
generally be subject to United States federal income tax at the same rates
applicable to U.S. holders. In the case of a Non-U.S. Holder that is a
corporation, such effectively connected income or income attributable to a
permanent establishment also may be subject to the United States branch
profits tax (which is generally imposed on a foreign corporation on the
repatriation from the United States of effectively connected earnings and
profits) at a 30% rate, or such lower rate as may be applicable under an
income tax treaty. To determine the applicability of a tax treaty providing
for a lower rate of withholding on dividends that are neither effectively
connected income nor attributable to a permanent establishment, dividends paid
to an address in a foreign country are presumed under current Treasury
regulations to be paid to a resident of that country, unless the Company has
actual knowledge that such presumption is not warranted or an applicable
treaty (or United States Treasury regulations thereunder) requires some other
method for determining a Non-U.S. Holder's residence. Proposed Treasury
regulations that are not currently effective would, if finally adopted,
require Non-U.S. Holders or intermediaries receiving payments on their behalf
to file a form, signed under penalties of perjury, to obtain the benefit of an
applicable tax treaty providing for a lower rate of withholding tax on
dividends. Such form would contain the holder's name and permanent residence
address and a statement of the basis for the reduced rate of withholding.
Alternatively, the Non-U.S. Holder could provide certain documentation issued
by the treaty country establishing that the Non-U.S. Holder is a resident of
the treaty country for tax purpose. These proposed regulations, if adopted,
would generally be effective for payments made after December 31, 1997.
26
<PAGE>
A Non-U.S. Holder of the Preferred Stock or the Common Stock that is
eligible for a reduced rate of U.S. withholding tax pursuant to an income tax
treaty may obtain a refund of any excess amounts withheld by filing an
appropriate claim for a refund with the U.S. Internal Revenue Service.
Conversion of Preferred Stock Into Common Stock. A Non-U.S. Holder who
voluntarily converts shares of the Preferred Stock into Common Stock will
recognize no gain or loss on the conversion for U.S. federal income tax
purposes and will not be subject to U.S. tax on the conversion. Upon a
mandatory conversion of the Preferred Stock into Common Stock, holders will
receive additional shares of Common Stock on account of accrued and unpaid
dividends on the Preferred Stock at the time of the conversion. If dividends
on the Preferred Stock are in arrears upon such a mandatory conversion, the
portion of the shares of Common Stock received on account of such dividend
arrearages will be treated as a taxable dividend for U.S. tax purposes,
subject to withholding as described above and subject to any applicable treaty
rules.
Adjustment of Conversion Ratio. Section 305 of the Code treats as a taxable
dividend certain actual or constructive distributions of stock with respect to
stock or convertible securities. Treasury regulations treat holders of
convertible stock as having received such a constructive distribution where
the conversion price of such stock is adjusted to reflect certain taxable
distributions with respect to stock into which such stock is convertible.
Thus, under certain circumstances an adjustment in the conversion price of the
Preferred Stock may give rise to a deemed taxable stock dividend to the
holders thereof. In addition, the failure to fully adjust the conversion price
of the Preferred Stock to reflect distributions of stock dividends with
respect to the Common Stock (or rights to acquire such Common Stock) may give
rise to a deemed taxable stock dividend to the holders of the Common Stock.
Sale of Preferred Stock or Common Stock. Generally, a Non-U.S. Holder will
not be subject to United States federal income tax on any gain realized upon
the disposition of shares of the Preferred Stock or the Common Stock unless
(a) the Company is or has been a "U.S. real property holding corporation" for
federal income tax purposes (which the Company does not believe that it is or
is likely to become); (b) the gain is effectively connected with a trade or
business carried on by the Non-U.S. Holder within the United States or, if a
tax treaty applies, attributable to a permanent establishment maintained by
the Non-U.S. Holder in the United States; (c) in the case of a Non-U.S. Holder
who is an individual, the Non-U.S. Holder holds the shares as a capital asset
and is present in the United States for 183 days or more in the taxable year
of the disposition and certain other conditions are satisfied; or (d) the Non-
U.S. Holder is subject to tax pursuant to the provisions of U.S. tax law
applicable to certain United States expatriates.
Estate Tax. In general, an individual who is a Non-U.S. Holder for U.S.
estate tax purposes will incur liability for U.S. federal estate tax if the
fair market value of property included in the individual's taxable estate for
U.S. federal estate tax purposes exceeds the statutory threshold amount. For
that purpose, the Preferred Stock or the Common Stock owned or treated as
owned by an individual who is not a citizen or resident (as defined for United
States federal estate tax purposes) of the United States at the time of death
will be includible in the individual's gross estate for United States federal
estate tax purposes, unless an applicable tax treaty provides otherwise, and
may be subject to United States federal estate tax.
Backup Withholding and Information Reporting. The Company generally must
report annually to the Internal Revenue Service and to each Non-U.S. Holder
the amount of dividends paid to, and the tax withheld with respect to, each
Non-U.S. Holder. These reporting requirements apply regardless of whether
withholding was reduced or eliminated by an applicable tax treaty. Copies of
these information returns also may be made available under the provisions of a
specific treaty. Backup withholding tax (which generally is a withholding tax
imposed at the rate of 31% on certain payments to persons that fail to furnish
the information required under the United States information reporting
requirements) will generally not apply to dividends paid on Preferred Stock or
Common Stock to a Non-U.S. Holder at an address outside the United States.
The payment of the proceeds from the disposition of the Preferred Stock or
the Common Stock to or through the United States office of a broker will be
subject to information reporting and backup withholding unless the
27
<PAGE>
owner certifies, among other things, its status as a Non-U.S. Holder (and the
broker does not have knowledge to the contrary), or otherwise establishes an
exemption. The payment of the proceeds will generally not be subject to
information reporting (except under the circumstances described in the
following sentence) and, under current temporary regulations, will not be
subject to backup withholding. Information reporting will apply to
dispositions through (a) a non-U.S. office of a U.S. broker and (b) a non-U.S.
office of a non-U.S. broker that is either a "controlled foreign corporation"
for United States federal income tax purposes or a person 50% or more of whose
gross income for certain periods is effectively connected with the conduct of
a United States trade or business unless the broker has documentary evidence
in its files that the owner is a Non-U.S. Holder (and does not have actual
knowledge to the contrary).
Under proposed Treasury regulations that are not currently effective, backup
withholding would generally not apply to the payment of dividends paid on or
proceeds from the disposition of the Preferred Stock or the Common Stock to a
Non-U.S. Holder provided that the Non-U.S. Holder or an intermediary receiving
the payment on its behalf properly certifies that the beneficial owner of the
payment is a foreign person. However, under the proposed regulations, backup
withholding would apply to the payment if the Company or broker has actual
knowledge that the beneficial owner is not a foreign person.
28
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement (the
"Underwriting Agreement") among the Company, the Selling Shareholders and each
of the Underwriters named below (the "Underwriters"), each of the Underwriters
has severally agreed to purchase, and the Selling Shareholders have agreed to
sell, the respective number of shares of the Preferred Stock offered hereby
set forth opposite its name below:
<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
----------- ----------------
<S> <C>
Lazard Freres & Co. LLC.................................... 1,000,000
CS First Boston Corporation................................ 1,000,000
Salomon Brothers Inc....................................... 1,000,000
---------
Total..................................................... 3,000,000
=========
</TABLE>
The Selling Shareholders have been advised by Lazard Freres & Co. LLC that
the several Underwriters propose to offer the shares offered hereby directly
to the public at the public offering price set forth on the cover page of this
Prospectus and to certain dealers at such price less a concession not in
excess of $0.73 per share. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $0.10 per share to other Underwriters
or to certain other dealers. After the Preferred Stock Offering, the public
offering price and such concessions may be changed by the Underwriters.
In addition, pursuant to the Underwriting Agreement, CGIP has granted the
Underwriters an option, exercisable for 30 days after the date hereof, to
purchase up to 450,000 additional shares of the Preferred Stock to cover over-
allotments, if any, at the public offering price less the underwriting
discount and commissions set forth on the cover page of this Prospectus.
The Underwriting Agreement provides that the several obligations of the
Underwriters to pay for and accept delivery of the shares offered hereby are
subject to certain conditions. The Underwriters are obligated to purchase all
shares offered hereby (other than shares covered by the over-allotment option)
if any are purchased.
The Selling Shareholders have agreed with the Underwriters that they will
not, without the prior written consent of the Underwriters, offer, sell or
otherwise dispose of any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such capital
stock or any rights to purchase or acquire such capital stock for a period of
one year after the date of this Prospectus except in connection with the
Offerings or in connection with a pledge of such stock.
The Company has agreed with the Underwriters that neither the Company nor
certain executive officers and directors of the Company will, without the
prior written consent of the Underwriters, offer, sell or otherwise dispose of
any shares of capital stock of the Company or any securities convertible into
or exchangeable for such capital stock or any rights to purchase or acquire
such capital stock for a period of 90 days after the date of this Prospectus;
provided, however, that the foregoing restriction will not apply to issuances
or sales (a) in connection with stock option, savings, benefit or compensation
plans or dividend reinvestment plans in existence as of the date of this
Prospectus or the conversion or exchange of convertible or exchangeable
securities of the Company, (b) in connection with a merger or other
combination with, or exchange offer for shares or purchase of assets of,
another entity, (c) required in the Company's judgment to prevent termination
of the Standstill Period under the Shareholders Agreement, or (d) by such
executive officers and directors of up to 300,000 shares of capital stock in
the aggregate; provided, further, that the Underwriters shall be given prior
written notice of any issuance or sale described in clause (b), (c) or (d)
above.
The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act.
29
<PAGE>
Felix G. Rohatyn, a Managing Director of Lazard Freres & Co. LLC, is a
director of the Company. As a result, Lazard Freres & Co. LLC may be deemed to
be an affiliate of the Company. Accordingly, any offering of the shares
offered hereby will be made pursuant to the provisions of Rule 2720 of the
Conduct Rules of the National Association of Securities Dealers, Inc.
CS First Boston Corporation served as financial advisor to the Company and
Lazard Freres & Co. LLC served as financial advisor to CarnaudMetalbox and
CGIP in connection with the acquisition of CarnaudMetalbox by the Company in
February 1996, for which they received customary fees. CS First Boston
Corporation also served as financial advisor to the Company in connection with
the acquisition by the Company of CONSTAR International Inc. in 1992, for
which it received customary fees. In addition, certain Underwriters and their
affiliates have from time to time provided, and may in the future provide,
investment banking and commercial banking services to the Company, for which
they received or will receive customary fees.
LEGAL MATTERS
The validity of the Preferred Stock offered hereby will be passed upon for
the Company by Dechert Price & Rhoads, Philadelphia, Pennsylvania, and certain
other legal matters in connection with the Offerings will be passed upon for
the Company by Richard L. Krzyzanowski, Executive Vice President, Secretary
and General Counsel for the Company, and Dechert Price & Rhoads. Certain legal
matters in connection with the Offerings will be passed upon for the Selling
Shareholders by Sullivan & Cromwell, New York, New York, special counsel to
the Selling Shareholders. Certain legal matters in connection with the
Offerings are being passed upon for the Underwriters by Cravath, Swaine &
Moore, New York, New York. Mr. Krzyzanowski is a director of the Company and,
as of March 1, 1996, beneficially owned 0.108% of the outstanding shares of
Common Stock. Chester C. Hilinski, of counsel to Dechert Price & Rhoads, is a
director of the Company and, as of March 1, 1996, beneficially owned 0.013% of
the outstanding shares of Common Stock.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995,
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting. The audited financial statements of CarnaudMetalbox
as of December 31, 1994 and 1993 and for each of the two years ending on
December 31, 1994 and 1993 included in the Company's Current Report on Form 8-
K filed on March 1, 1996, as amended, incorporated by reference in this
Prospectus have been so incorporated in reliance on the report of Arthur
Andersen LLP, independent accountants, and Befec-Price Waterhouse and Claude
Chevalier, statutory auditors, given on the authority of said firms as experts
in auditing and accounting. The audited financial statements of
CarnaudMetalbox as of December 31, 1995 and for the year ended on December 31,
1995 included in such Current Report on Form 8-K have been so incorporated in
reliance on the report of Arthur Andersen LLP, independent accountants, and
Befec-Price Waterhouse and Salustro Reydel, statutory auditors, given on the
authority of said firms as experts in auditing and accounting.
30
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFOR-
MATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 2
The Company.............................................................. 4
The Offerings............................................................ 8
Selected Historical Financial Information................................ 10
Unaudited Pro Forma Consolidated Condensed Financial Information......... 12
Price Range of Capital Stock and Dividends............................... 15
Use of Proceeds.......................................................... 15
Selling Shareholders..................................................... 16
Description of Capital Stock............................................. 18
Certain United States Federal Tax Considerations for Non-U.S. Holders of
Capital Stock........................................................... 26
Underwriting............................................................. 29
Legal Matters............................................................ 30
Experts.................................................................. 30
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3,000,000 SHARES
[LOGO OF CROWN CORK & SEAL COMPANY, INC. APPEARS HERE]
CROWN CORK & SEAL
COMPANY, INC.
4.5% CONVERTIBLE PREFERRED STOCK
----------------
PROSPECTUS
----------------
LAZARD FRERES & CO. LLC
CS FIRST BOSTON
SALOMON BROTHERS INC
OCTOBER 24, 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
