<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1996
REGISTRATION NO. 333-12787
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
CROWN CORK & SEAL COMPANY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------
PENNSYLVANIA 23-1526444
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
9300 ASHTON ROAD
PHILADELPHIA, PA 19136
(215) 698-5100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
RICHARD L. KRZYZANOWSKI, ESQ.
CROWN CORK & SEAL COMPANY, INC.
9300 ASHTON ROAD
PHILADELPHIA, PA 19136
(215) 698-5208
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------
COPIES TO:
THOMAS A. RALPH, ESQ. ALLAN M. CHAPIN, ESQ. JOHN W. WHITE, ESQ.
WILLIAM G. LAWLOR, ESQ. SULLIVAN & CROMWELL CRAVATH, SWAINE & MOORE
DECHERT PRICE & RHOADS 125 BROAD STREET 825 EIGHTH AVENUE
4000 BELL ATLANTIC NEW YORK, NY 10014 NEW YORK, NY 10019
TOWER, (212) 558-4000 (212) 474-1000
1717 ARCH STREET
PHILADELPHIA, PA 19103-
2793
(215) 994-4000
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are offered pursuant to
dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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- -------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains three prospectuses, including (a) two
forms of Prospectus to be used in connection with the U.S. Offering and the
International Offering, respectively, as described herein and collectively
comprising the Common Stock Offerings, and (b) a form of Prospectus to be used
in connection with the Preferred Stock Offering, as described herein. In the
case of the Common Stock Offerings, the Prospectus to be used in connection
with the U.S. Offering (the "U.S. Prospectus") is set forth in full following
this Explanatory Note. The Prospectus to be used in connection with the
International Offering is identical to the U.S. Prospectus except that the
outside front cover, the back cover and the section entitled "Underwriting"
are replaced with alternative versions included herein following the U.S.
Prospectus. The Prospectus to be used in connection with the Preferred Stock
Offering is set forth after the alternate pages following the U.S. Prospectus.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+ REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+ SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+ OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+ BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+ THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+ SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+ UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 24, 1996
PROSPECTUS
[LOGO OF CROWN CORK 9,250,000 SHARES
& SEAL COMPANY, INC.
APPEARS HERE] CROWN CORK & SEAL COMPANY, INC.
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 16, 1996, the reported last sales prices of the Common Stock and the
Preferred Stock on the NYSE were $48.38 per share and $47.00 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.............................. $ $ $
- --------------------------------------------------------------------------------
Total(3)............................... $ $ $
================================================================================
</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 $ , of which $ will be
payable by the Selling Shareholders and $ 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 $ , $ and
$ , 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 , 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 , 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 128,239,341 shares (139,567,478 shares
Offerings(2)...................... 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 16, 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.......... 48 3/8 45 1/2 -- 47 5/8 45 1/2 --
(through October 16,
1996)
</TABLE>
As of October 16, 1996, there were approximately 5,713 holders of record of
the Common Stock and nine holders of record of the Preferred Stock. On such
date, the reported last sales prices of the Common Stock and Preferred Stock
on the NYSE were $48.38 per share and $47.00 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 16, 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 16, 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 16, 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
16, 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 16,
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."
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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 16, 1996, the Company had
outstanding 128,239,341 shares of Common Stock and 12,432,622 shares of
Preferred Stock, and 27,552,291 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
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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,
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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
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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
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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
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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 16, 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
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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...................................
CS First Boston Corporation...............................
Salomon Brothers Inc......................................
---------
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, CGIP has
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").
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.
28
<PAGE>
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 $ per share. The U.S. Underwriters may allow, and such
dealers may reallow, a concession not in excess of $ 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 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.
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 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>
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- -------------------------------------------------------------------------------
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 AND SEAL COMPANY APPEARS HERE]
CROWN CORK & SEAL COMPANY, INC.
COMMON STOCK
----------------
PROSPECTUS
----------------
LAZARD FRERES & CO. LLC
CS FIRST BOSTON
SALOMON BROTHERS INC
OCTOBER , 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+ REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+ SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+ OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+ BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+ THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+ SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+ UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 24, 1996
PROSPECTUS 9,250,000 SHARES
[LOGO OF CROWN CORK CROWN CORK & SEAL COMPANY, INC.
& 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 16, 1996, the reported last sales price of the Common Stock and the
Preferred Stock on the NYSE were $48.38 per share and $47.00 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.............................. $ $ $
- --------------------------------------------------------------------------------
Total(3)............................... $ $ $
================================================================================
</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 $ , of which $ will be
payable by the Selling Shareholders and $ 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 $ , $ and
$ , 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 , 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 , 1996.
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement (the
"International 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......................................
CS First Boston Limited.....................................
Salomon Brothers International Limited......................
---------
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 the approval of certain legal
matters by counsel and to certain other conditions. The International
Underwriters are obligated to purchase all International Shares (other than
shares covered by the over-allotment option) 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 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 the Shares 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 $ 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 , 1996
================================================================================
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+ REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+ SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+ OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+ BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+ THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+ SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+ UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS SUBJECT TO COMPLETION, DATED OCTOBER 24, 1996
3,000,000 SHARES
[LOGO OF CROWN CORK CROWN CORK & SEAL COMPANY, INC.
& SEAL COMPANY, INC. 4.5% CONVERTIBLE PREFERRED STOCK
APPEARS HERE]
----------
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 16, 1996, the reported last sales prices of the Preferred Stock and the
Common Stock on the NYSE were $47.00 per share and $48.38 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(1) COMMISSIONS(2) SHAREHOLDERS(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.......................... $ $ $
- --------------------------------------------------------------------------------
Total(4)........................... $ $ $
================================================================================
</TABLE>
(1) Plus accrued dividends, if any, from , 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 $ , of which $ will be
payable by the Selling Shareholders and $ 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 $ , $ and
$ , 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 ,
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 , 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)............
128,239,341 shares (139,567,478 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
8
<PAGE>
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
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 16, 1996.
(3) Based on shares outstanding as of October 16, 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.......... 48 3/8 45 1/2 -- 47 5/8 45 1/2 --
(through October 16,
1996)
</TABLE>
As of October 16, 1996, there were approximately 5,713 holders of record of
the Common Stock and nine holders of record of the Preferred Stock. On such
date, the reported last sales prices of the Common Stock and Preferred Stock on
the NYSE were $48.38 per share and $47.00 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 16, 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 16, 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 16, 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
16, 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 16,
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 16, 1996, the Company had
outstanding 128,239,341 shares of Common Stock and 12,432,622 shares of
Preferred Stock, and 27,552,291 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.
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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
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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
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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 16, 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
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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.
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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."
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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.
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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....................................
CS First Boston Corporation................................
Salomon Brothers Inc.......................................
---------
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 $ per share. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ 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 APPEARS HERE]
CROWN CORK & SEAL COMPANY, INC.
4.5% CONVERTIBLE PREFERRED STOCK
----------------
PROSPECTUS
----------------
LAZARD FRERES & CO. LLC
CS FIRST BOSTON
SALOMON BROTHERS INC
OCTOBER , 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses estimated* to be
incurred in connection with the issuance and distribution of the securities
being registered hereby. All such expenses, other than the fees and expenses
of the Registrant's counsel (estimated to be $100,000) and the Registrant's
accountants (estimated to be $50,000), will be borne by the Selling
Shareholders.
<TABLE>
<S> <C>
SEC registration fee.......................................... $ 220,070
NASD filing fee............................................... 46,484
Legal fees and expenses....................................... 250,000
Accounting fees and expenses.................................. 50,000
Blue Sky fees and expenses.................................... 20,000
Printing expenses............................................. 100,000
Miscellaneous................................................. 13,446
---------
Total....................................................... $ 700,000
</TABLE>
- --------
*All items estimated except for SEC registration and NASD filing fees.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the Pennsylvania Business Corporation Law of 1988, as amended (the
"PBCL"), Pennsylvania corporations have the power to indemnify any person
acting as a representative of the corporation against liabilities incurred in
such capacity provided certain standards are met, including good faith and the
belief that the particular action or failure to take action is in the best
interests of the corporation. In general, this power to indemnify does not
exist in the case of actions against any person by or in the right of the
corporation if the person otherwise entitled to indemnification shall have
been adjudged to be liable to the corporation unless a court determines that
despite the adjudication of liability but in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity for
expenses that the court deems proper. A corporation is required to indemnify
representatives of the corporation against expenses they may incur in
defending actions against them in such capacities if they are successful on
the merits or otherwise in the defense of such actions. In all other cases, if
a representative of the corporation acted, or failed to act, in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, indemnification is discretionary, except as may
be otherwise provided by a corporation's bylaws, agreement, vote of
shareholders or disinterested directors or otherwise. Indemnification so
otherwise provided may not, however, be made if the act or failure to act
giving rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness. Expenses (including attorney's
fees) incurred in defending any such action may be paid by the corporation in
advance of the final disposition of the action upon receipt of an undertaking
by or on behalf of the representative to repay the amount if it is ultimately
determined that he or she is not entitled to be indemnified by the
corporation.
Section 1746 of the PBCL provides that the foregoing provisions shall not be
deemed exclusive of any other rights to which a person seeking indemnification
may be entitled under, among other things, any bylaw provision, provided that
no indemnification may be made in any case where the act or failure to act
giving rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness.
The Registrant's Bylaws provide that the Registrant shall indemnify to the
fullest extent permitted by applicable law any person who was or is a party or
is threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding by reason of the
fact that such person is or was a director or officer of the Registrant,
against all liability, loss and expense (including attorney's fees and amounts
paid in settlement) actually and reasonably incurred by such person in
connection with such proceeding, whether or not the indemnified liability
arises or arose from any proceeding by or in the right of the Registrant.
II-1
<PAGE>
The Registrant's Bylaws also provide that expenses incurred by a director or
officer in defending (or acting as a witness in) a proceeding may (and,
following a "change in control," shall) be paid by the Registrant in advance
of the final disposition of such proceeding, subject to the provisions of
applicable law, upon receipt of an undertaking by or on behalf of the director
or officer to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the Registrant under applicable
law. Additionally, the Registrant's Bylaws limit directors' personal liability
for monetary damages for any action taken, or any failure to take any action,
unless (1) the director has breached or failed to perform the duties of his or
her office under the PBCL's standard of care and justifiable reliance
provisions and (2) the breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness. However, these provisions do not apply to
the responsibility or liability of a director pursuant to any criminal statute
or for the payment of taxes pursuant to local, state or federal law. The
Registrant has purchased directors and officers' liability insurance covering
certain liabilities which may be incurred by the officers and directors of the
Registrant in connection with the performance of their duties.
ITEM 16. EXHIBITS.
The Exhibit Index appearing on page II-5 is hereby incorporated by
reference.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(2) Insofar as indemnification of liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions
or otherwise, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification it is against public
policy as expressed in the Act and will be governed by final adjudication
of such issue.
(3) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(4) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Philadelphia, Commonwealth of Pennsylvania, on
October 23, 1996.
Crown Cork & Seal Company, Inc.
By: /s/ William J. Avery
---------------------------
Name: William J. Avery
Title: Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities below on October 23, 1996.
SIGNATURES TITLE
/s/ William J. Avery Chairman of the Board and Chief
- ------------------------------------- Executive Officer (Principal
WILLIAM J. AVERY Executive Officer)
/s/ Alan W. Rutherford Executive Vice President, Chief
- ------------------------------------- Financial Officer and Director
ALAN W. RUTHERFORD (Principal Financial Officer)
/s/ Timothy J. Donahue Vice President and Controller
- ------------------------------------- (Principal Accounting Officer)
TIMOTHY J. DONAHUE
* Director
- -------------------------------------
HENRY E. BUTWEL
II-3
<PAGE>
SIGNATURES TITLE
* Director
- -------------------------------------
CHARLES F. CASEY
* Director
- -------------------------------------
FRANCIS X. DALTON
* Director
- -------------------------------------
GUY DE WOUTERS
* Director
- -------------------------------------
CHESTER C. HILINSKI
* Director
- -------------------------------------
RICHARD L. KRZYZANOWSKI
* Director
- -------------------------------------
JOSEPHINE C. MANDEVILLE
* Director
- -------------------------------------
MICHAEL J. MCKENNA
* Director
- -------------------------------------
FELIX G. ROHATYN
* Director
- -------------------------------------
JEAN-PIERRE ROSSO
* Director
- -------------------------------------
J. DOUGLASS SCOTT
* Director
- -------------------------------------
ERNEST-ANTOINE SEILLIERE
* Director
- -------------------------------------
ROBERT J. SIEBERT
* Director
- -------------------------------------
HAROLD A. SORGENTI
*By: /s/ William J. Avery
---------------------------------
William J. Avery
Attorney-in-Fact
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NO. DESCRIPTION NUMBERED PAGE
----------- ----------- -------------
<C> <S> <C>
1.1 Form of U.S. Underwriting Agreement (Common
Stock).
1.2 Form of International Underwriting Agreement
(Common Stock).
1.3 Form of Underwriting Agreement (Preferred Stock).
1.4 Form of Agreement between Selling Shareholders and
Underwriters.
4.1 Amended and Restated Articles of Incorporation of
Registrant (incorporated by reference to Exhibit
3.1 of Registrant's Form 8-A filed February 20,
1996
(File No. 1-2227)).
4.2 Resolution fixing the terms of Registrant's 4.5%
Convertible Preferred Stock (incorporated by
reference to Exhibit 3.2 of Registrant's Form 8-A
filed February 20, 1996 (File No. 1-2227)).
4.3 Bylaws of Registrant (incorporated by reference to
Exhibit 3.3 of Registrant's Form 8-A filed
February 20, 1996 (File No. 1-2227).
4.4 Rights Agreement, dated August 7, 1995 between
Crown Cork & Seal Company, Inc. and First Chicago
Trust Company of New York (incorporated by
reference to Exhibit 1 of Registrant's Form 8-A,
filed August 10, 1995 (File No. 1-2227)).
5.1 Opinion of Dechert Price & Rhoads as to legality
of the securities offered hereby.
12.1 Statement of Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred Stock
Dividends.*
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Arthur Andersen LLP, Befec--Price
Waterhouse, Claude Chevalier and Salustro Reydel.
23.3 Consent of Dechert Price & Rhoads (included in
Exhibit 5.1).
24.1 Power of Attorney.*
</TABLE>
- --------
* Previously filed.
II-5
<PAGE>
Exhibit 1.1
7,400,000 Shares
Crown Cork & Seal Company, Inc.
COMMON STOCK
($5.00 PAR VALUE)
U.S. UNDERWRITING AGREEMENT
---------------------------
October __, 1996
Lazard Freres & Co. LLC
CS First Boston Corporation
Salomon Brothers Inc
c/o Lazard Freres & Co. LLC
30 Rockefeller Plaza
New York, New York 10020
Dear Sirs:
SECTION 1. Introductory. 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 Stockholders"), propose to sell to the several
Underwriters named in Schedule I hereto (the "U.S. Underwriters"), for whom
Lazard Freres & Co. LLC, CS First Boston Corporation and Salomon Brothers Inc
are acting as representatives (the "U.S. Representatives"), an aggregate of
7,400,000 shares (the "U.S. Firm Shares") of Common Stock, par value $5.00 per
share (the "Common Stock"), of Crown Cork & Seal Company, Inc. (the "Company"),
each Selling Stockholder selling the amount set forth opposite such Selling
Stockholder's name in Schedule II hereto. CGIP also proposes to sell to the
U.S. Underwriters, upon the terms and conditions set forth in Section 4 hereof,
up to an additional 1,387,500 shares of Common Stock (the "Additional Shares").
The U.S. Firm Shares and the Additional Shares are hereinafter sometimes
collectively referred to as the "U.S. Shares".
It is understood that the Company and the Selling Stockholders are
concurrently entering into an international underwriting agreement dated the
date hereof (the "International Underwriting Agreement") in which the Selling
Stockholders propose to sell to
<PAGE>
2
the several Underwriters named therein (the "International Underwriters") for
whom Lazard Capital Markets, CS First Boston Limited and Salomon Brothers
International Limited are acting as representatives (the "International
Representatives") an aggregate of 1,850,000 shares (the "International Shares")
of the Company's Common Stock. The respective closings under this Agreement and
the International Underwriting Agreement are hereby expressly made conditional
on one another.
The U.S. Shares and the International Shares are herein collectively
referred to as the "Shares". The U.S. Underwriters and the International
Underwriters are herein collectively referred to as the "Underwriters".
It is further understood that the U.S. Representatives on behalf of
the U.S. Underwriters and the International Representatives on behalf of the
International Underwriters have entered into an agreement of even date herewith
(the "Agreement Among U.S. and International Underwriters"), contemplating the
coordination of certain transactions among the U.S. and International Under-
writers and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may purchase from or sell to the International
Underwriters a portion of the U.S. Shares and the International Underwriters may
purchase from or sell to the U.S. Underwriters a portion of the International
Shares. Any such purchases or sales shall be governed by the Agreement Among
U.S. and International Underwriters and not by the terms of this Agreement.
It is further understood that the Company and the Selling Stock-
holders are concurrently entering into an underwriting agreement dated the
date hereof (the "Preferred Underwriting Agreement") in which the Selling
Stockholders propose to sell to the several Underwriters named therein (the
"Preferred Underwriters") an aggregate of 3,000,000 shares (the "Preferred Firm
Shares") of the Company's 4.5% Convertible Preferred Stock, par value $41.8875
per share (the "Preferred Stock"). In addition, CGIP has agreed to sell to the
Preferred Underwriters, upon the terms and conditions set forth in the Preferred
Underwriting Agreement, up to an additional 450,000 shares of Preferred Stock
(the "Preferred Additional Shares" and, collectively with the Preferred Firm
Shares, the "Preferred Shares"). The respective closings under this Agreement
and the International Underwriting Agreement, on the one hand, and the Preferred
Underwriting Agreement, on the other hand, are not conditional on one another.
The Company and the Selling Stockholders hereby agree with the U.S.
Underwriters as follows (it being understood and agreed that the obligations set
forth herein are several in nature, unless expressly stated to the contrary):
<PAGE>
3
SECTION 2. Representations, Warranties and Agreements of the Company.
---------------------------------------------------------
The Company represents and warrants to, and agrees with, (i) the several U.S.
Underwriters and (ii) in the case of clauses (a), (b), (c), (j) and (n) and the
second sentence of clause (g) below only, the Selling Stockholders (it being
understood and agreed that such representations and warranties to the Selling
Stockholders are being made solely in connection with the sale of the Shares
under this Agreement and the International Underwriting Agreement and subject
to the last sentence of Section 9(a)), that:
(a) The Company meets the registrant requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). A registration
statement on Form S-3 (File No. 333-12787), including forms of prospectuses
relating to the Shares, has been filed by the Company pursuant to the Act
with the Securities and Exchange Commission (the "Commission"). The Com-
pany may have filed one or more amendments thereto, including the related
Preliminary Prospectuses (as defined below), each of which (other than
documents incorporated by reference therein) has previously been furnished
to you. The Company will file with the Commission either (i) prior to
effectiveness of such registration statement, a further amendment to such
registration statement (including the forms of final prospectuses relating
to the Shares) or (ii) after effectiveness of such registration statement,
final prospectuses relating to the Shares in accordance with Rules 430A and
424(b)(1) or (4) under the Act. In the case of clause (ii), the Company has
included or shall include in such registration statement, as amended at the
Effective Time (as defined below), all information (other than information
permitted to be omitted from such registration statement when it becomes
effective pursuant to Rule 430A ("Rule 430A Information")) required by the
Act and the rules and regulations thereunder (the "Rules and Regulations")
to be included in the final prospectuses with respect to the Shares and the
offering thereof. As filed, such amendment and forms of final prospectuses,
or such final prospectuses, shall contain all Rule 430A Information,
together with all other such required information, with respect to the
Shares and the offering thereof, and, except to the extent you shall agree
in writing to a modification (which shall not be unreasonably withheld or
delayed), shall be in all substantive respects in the form furnished to you
prior to the execution of this Agreement or, to the extent not in such
form, shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectuses) as
the Company has advised the U.S. Representatives, prior to the execution of
this Agreement, will be included or made therein. For purposes of this
Agreement, "Effective Time" means the time as of which such registration
statement or the most recent post-effective amendment thereto, if any, was
or is declared effective by the Commission and each date after the date
hereof on which a document incorporated by reference in the Registration
Statement is filed. "Effective Date" means the date of the Effective Time.
The registration statement contains two prospectuses to be used in
connection with the offering and sale of the Shares: the U.S. prospectus
relating to the U.S. Shares and the international prospectus relating to
the International Shares. The international prospectus is identical to the
U.S. prospectus, except the international prospectus
<PAGE>
4
contains different front and back cover pages and different descriptions
of the plan of distribution (contained under the caption "Underwriting"
in each of the U.S. and international prospectus). Such registration
statement, as amended at the Effective Time, including incorporated
documents, exhibits and financial statements, and including all Rule 430A
Information, if any, and, any post-effective amendment thereto that becomes
effective prior to the Closing Date (as defined below) is hereinafter
referred to as the "Registration Statement", and the U.S. prospectus
relating to the U.S. Shares and the international prospectus relating to
the International Shares in the forms first filed with the Commission
pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under the
Act or, if no such filing is required, as included in the Registration
Statement, are hereinafter referred to as the "U.S. Prospectus" and the
"International Prospectus", respectively, and collectively as the
"Prospectuses". Any preliminary prospectus relating to the U.S. Shares or
the International Shares included in such Registration Statement or filed
pursuant to Rule 424(a) under the Act is hereinafter referred to as a "U.S.
Preliminary Prospectus" or an "International Preliminary Prospectus",
respectively, and collectively as "Preliminary Prospectuses". Any
reference herein to the Registration Statement, a Preliminary Prospectus or
the Prospectuses shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934 (the "Exchange Act")
on or before the Effective Time of the Registration Statement or the issue
date of such Preliminary Prospectus or the Prospectuses, as the case may
be, and references to information being "included", "contained" or "set
forth in" any such document (or similar expressions) shall be similarly
construed; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, any Preliminary
Prospectus or the Prospectuses shall be deemed to refer to and include the
filing of any document under the Exchange Act after the Effective Time of
the Registration Statement, or the issue date of any Preliminary Prospectus
or the Prospectuses, as the case may be, deemed to be incorporated therein
by reference.
(b) At the Effective Time, the Registration Statement did or will,
and when the Prospectuses are first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined in Section 4), the
Prospectuses (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the Rules and
Regulations; at the Effective Time, the Registration Statement did not or
will not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, at the Effective Time, the
Prospectuses, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the Closing
Date, the Prospectuses (and any supplements thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply
<PAGE>
5
to information contained in or omitted from the Registration Statement or
the Prospectuses (or any supplement thereto) in reliance upon and in
conformity with the Underwriters' Information or the Selling Stockholders'
Information (as defined in Section 9(a)).
(c) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and no proceedings for that
purpose shall have been instituted or threatened by the Commission, and
each Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the Rules and
Regulations, and did not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; except that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
the Underwriters' Information or the Selling Stockholders' Information.
(d) The historical consolidated financial statements included in
the Registration Statement and the Prospectuses (and any amendment or
supplement thereto) present fairly in all material respects the consoli-
dated financial position of the Company and its consolidated subsidiaries
as of the dates indicated and the results of their operations, the
statements of their cash flows and the changes in their financial position
for the periods specified; such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as described in the
notes to such financial statements); and the supporting schedules, if any,
included in the Registration Statement present fairly in all material
respects the information required to be stated therein. The pro forma
financial statements included in the Registration Statement and the
Prospectuses (and any amendment or supplement thereto) have been prepared
on a basis consistent with such historical financial statements (except as
described in such pro forma financial statements), include all material
adjustments to the historical financial data required to reflect the
transactions to which pro forma effect is given, give effect to assumptions
made on a reasonable basis, and present fairly in all material respects on
a pro forma basis the estimated consolidated financial position and results
of operations of the Company and its consolidated subsidiaries assuming
that such transactions had occurred on the date specified therein.
(e) There has not been sustained since the date of the latest audited
financial statements included in the Prospectuses any material adverse
change in the financial condition, results of operations or business of the
Company and its subsidiaries considered as a whole (a "Material Adverse
Effect"), except as set forth in the Prospectuses.
(f) The Company and each of its subsidiaries have been duly
incorporated and are validly existing in good standing under the laws of
their respective
<PAGE>
6
jurisdictions of organization with power and authority to own, lease and
operate their properties and conduct their businesses as described in the
Registration Statement and the Prospectuses; and each of them is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases properties or in
which the conduct of its business requires such qualification, except to
the extent that any such failure to be so qualified or be in good standing
would not, individually or in the aggregate, have a Material Adverse
Effect.
(g) The Company has an authorized capitalization as set forth in the
Prospectuses, and all shares of capital stock of the Company outstanding,
including the Shares, have been duly authorized, are validly issued, fully
paid and non-assessable, and conform in all material respects to the
description thereof contained in the Prospectuses. The sale of the Shares
is not subject to pre-emptive or other similar rights or restrictions on
transfer created by the Company under the Company's articles of incorpo-
ration or bylaws, under applicable law or under any agreement to which the
Company is a party or of which the Company has actual knowledge (other than
those imposed by the Act, the Rules and Regulations, foreign securities
laws or state securities or Blue Sky laws and other than restrictions on
transfers contained in that certain Shareholders Agreement, dated February
22, 1996, between the Company and CGIP (the "Shareholders Agreement") which
have been fully waived or satisfied); and the Shares are duly listed and
admitted for trading on the New York Stock Exchange (the "NYSE").
(h) All of the issued and outstanding capital stock of each material
subsidiary of the Company listed on Schedule III hereto has been duly
authorized and validly issued and is fully paid and non-assessable, and,
except as set forth in the Prospectuses, all the issued and outstanding
capital stock of each such material subsidiary is owned, directly or
through subsidiaries, by the Company, free and clear of any pledge, lien,
encumbrance, adverse claim or equity (collectively, a "Lien"), except for
any such Liens that would not, individually or in the aggregate, have a
Material Adverse Effect.
(i) Neither the Company nor any of its subsidiaries is in violation
of its or any of their charters or by-laws or other organizational
documents or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement or
instrument to which it or any of them is a party or by which it or any of
them or their properties may be bound, except any violations or defaults
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(j) No consent, approval, authorization, order, registration, filing
or qualification by or on behalf of the Company or any of its subsidiaries
of or with any court or governmental authority or agency or of the NYSE is
required for the sale of
<PAGE>
7
the Shares or the consummation of the transactions contemplated by this
Agreement and the International Underwriting Agreement, except such as may
be required under the Act, the Rules and Regulations or state securities or
Blue Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters; and the execution and delivery of this Agree-
ment and the International Underwriting Agreement, and the consummation of
transactions contemplated herein and therein will not (i) conflict with or
constitute a breach of any of the terms or provisions of, or default under,
or result in the creation or imposition of any Lien upon any property or
assets of the Company or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them may be bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject
that is material to the Company and its subsidiaries taken as a whole, (ii)
result in any violation or breach of the provisions of the charter or by-
laws or other organizational documents of the Company or any of its
subsidiaries or (iii) result in any violation of any law, administrative
regulation or administrative or court decree or order applicable to the
Company, any of its material subsidiaries or their respective property.
(k) The Company and its subsidiaries are in compliance with all
laws and regulations applicable to them and their respective properties
and possess all certificates, authorities or permits issued by, and have
made all filings with, the appropriate state, local, Federal or foreign
regulatory agencies or bodies necessary or desirable to conduct the
business now operated by them, except where noncompliance with such laws
or regulations or the failure to possess or make the same would not,
individually or in the aggregate, have a Material Adverse Effect, and
neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation, termination or modification of
any such certificate, authority, permit or filing, other than any such
revocation, termination or modification that would not, individually or in
the aggregate, have a Material Adverse Effect.
(l) Except as described in the Prospectuses, there are no actions,
suits or proceedings before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
contemplated or threatened against the Company or any of its subsidiaries,
or to which any of their respective properties is subject, which, (i) if
adversely determined, would, individually or in the aggregate, result in
any Material Adverse Effect or (ii) questions the validity of this
Agreement or any action taken or required to be taken pursuant hereto.
(m) Each of the Company and its subsidiaries has good and marketable
title to all real and personal property owned by it, in each case free and
clear of any Lien, except (i) such as are referred to in the Prospectuses
or (ii) such as would not, individually or in the aggregate, have a
Material Adverse Effect; and any real
<PAGE>
8
property and buildings held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases with such
exceptions as would not, individually or in the aggregate, have a Material
Adverse Effect.
(n) This Agreement has been duly authorized, executed and delivered
by the Company.
(o) Other than the Shareholders Agreement, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include such
securities under the Registration Statement.
(p) Except as set forth in the Prospectuses under the caption
"Underwriting", neither the Company nor, to the Company's knowledge, any
of its officers or directors or any of their respective affiliates is a
member of, or is associated or affiliated with a member of, the National
Association of Securities Dealers, Inc. ("NASD").
SECTION 3. Representations, Warranties and Agreements of the Selling
---------------------------------------------------------
Stockholders. Each Selling Stockholder, jointly and severally, represents and
- ------------
warrants to, and agrees with, (i) the several U.S. Underwriters and (ii) the
Company (it being understood and agreed that such representations and warranties
to the Company are being made solely in connection with the sale of the Shares
under this Agreement and the International Underwriting Agreement and subject to
the last sentence of Section 9(b)), that:
(a) This Agreement has been duly authorized, executed and delivered
by or on behalf of such Selling Stockholder.
(b) Such Selling Stockholder has the legal right and power to execute
and deliver this Agreement and to sell, transfer and deliver the Shares to
be sold by such Selling Stockholder in the manner provided in this Agree-
ment and the International Underwriting Agreement, and no such action will
result in any violation or breach of the provisions of the charter or by-
laws or other organizational documents of such Selling Stockholder or any
agreement or other instrument binding upon such Selling Stockholder
(including the restrictions on transfer contained in the Shareholders
Agreement, which have been fully waived or satisfied) or any law,
administrative regulation or administrative or court decree or order
applicable to such Selling Stockholder; and no consent, approval,
authorization, order, registration, filing or qualification of or with any
court or governmental authority or agency or of the NYSE is required for
the consummation of the transactions contemplated by this Agreement and the
International Underwriting Agreement in connection with the sale of the
Shares by such Selling Stockholder, except such as may be required under
the
<PAGE>
9
Act, the Rules and Regulations or state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters.
(c) Such Selling Stockholder has, and will deliver to the Under-
writers upon payment therefor good and marketable title to the Shares
to be sold by such Selling Stockholder, free and clear of any Lien.
(d) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(e) At the Effective Time, the Selling Stockholders' Information
contained in the Registration Statement did not or will not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
in the Selling Stockholders' Information not misleading; and, at the
Effective Time, the Selling Stockholders' Information contained in the
Prospectuses, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the Closing
Date, the Selling Stockholders' Information contained in the Prospectuses
(and any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements in the Selling Stockholders' Information, in the light of
the circumstances under which they were made, not misleading.
(f) There are no contracts, agreements or understandings between the
Selling Stockholders and any person that would give rise to a valid claim
against the Selling Stockholders or any Underwriter for a brokerage
commission, finder's fee or other like payment.
SECTION 4. Purchase, Sale and Delivery of U.S. Shares. On the basis
------------------------------------------
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, each Selling Stockholder,
severally and not jointly, hereby agrees to sell to the U.S. Underwriters, and
each U.S. Underwriter agrees, severally and not jointly, to purchase from such
Selling Stockholder, at a purchase price of $______ per U.S. Share (the
"purchase price per U.S. Share"), the respective number of U.S. Firm Shares
(subject to adjustment by the U.S. Representatives to eliminate fractions) that
bear the same proportion to the number of U.S. Firm Shares to be sold by such
Selling Stockholder as the number of U.S. Firm Shares set forth opposite the
name of such U.S. Underwriter in Schedule I hereto bears to the total number of
U.S. Firm Shares.
The obligations of the Selling Stockholders hereunder to sell the U.S.
Firm Shares, and the obligations of the U.S. Underwriters to purchase the U.S.
Firm Shares, are
<PAGE>
10
subject to the closing of the sale and purchase of the International Shares
pursuant to the International Underwriting Agreement.
CGIP hereby agrees to sell to the U.S. Underwriters and, on the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the U.S. Underwriters shall have
the right to purchase, severally and not jointly, from CGIP, pursuant to an
option to be exercised in the 30-day period commencing on the date of this
Agreement, up to 1,387,500 Additional Shares at the purchase price per U.S.
Share. Additional Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the U.S. Firm Shares
and the International Shares. If any Additional Shares are to be purchased,
each U.S. Underwriter agrees, severally and not jointly, to purchase from CGIP
that proportion of the total number of Additional Shares (subject to adjustment
by the U.S. Representatives to eliminate fractions) to be purchased from CGIP
as the number of U.S. Firm Shares set forth opposite the name of such U.S.
Underwriter in Schedule I hereto bears to the total number of U.S. Firm Shares.
Each Selling Stockholder will deliver the U.S. Firm Shares to be
purchased by the U.S. Underwriters to the U.S. Representatives for the accounts
of the U.S. Underwriters, against payment of the purchase price therefor by wire
transfer of same day funds to an account specified in writing by such Selling
Stockholder. Payment for the U.S. Firm Shares shall be made at the offices of
Cravath, Swaine & Moore at 10:00 A.M., New York Time, on _____________, 1996 or
at such other place or time not later than seven full business days thereafter
as the U.S. Representatives and the Selling Stockholders determine (the "Initial
Closing Date").
CGIP will deliver the Additional Shares to be purchased by the U.S.
Underwriters to the U.S. Representatives for the accounts of the U.S. Under-
writers, against payment of the purchase price therefor by wire transfer of
same day funds to an account specified in writing by CGIP, at the offices of
Cravath, Swaine & Moore on such date and at such time (the "Option Closing
Date"), as shall be specified in the notice from Lazard Freres & Co. LLC to
CGIP exercising the option to purchase the Additional Shares. The Option
Closing Date may be the same as the Initial Closing Date but shall in no event
be earlier than the Initial Closing Date nor earlier than two nor later than ten
business days after the giving of the notice hereinafter referred to. Such
notice may be given, by letter or by telecopy or other facsimile transmission or
by telephone (if subsequently confirmed in writing), to CGIP at any time within
30 days after the date of this Agreement. The Option Closing Date may be varied
by agreement between the U.S. Representatives and CGIP. The Initial Closing Date
and the Option Closing Date are herein collectively referred to as the "Closing
Date."
The certificates for all the U.S. Firm Shares and the Additional
Shares so to be delivered will be in such denominations and registered in such
names as the U.S. Representatives request two full business days prior to the
Initial Closing Date or the Option Closing Date, as the case may be, and will be
made available at the offices of Lazard Freres & Co. LLC, New York, New York or,
upon your request, through the facilities of The
<PAGE>
11
Depository Trust Company, for checking and packaging at least one full business
day prior to the Initial Closing Date or the Option Closing Date, as the case
may be.
Each Selling Stockholder will not, without the prior written consent
of the U.S. Representatives, offer, sell, pledge 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
Agreement; provided, however, that the foregoing restriction shall not apply to
-------- -------
(i) the sale of the Shares to be sold hereunder and under the International
Underwriting Agreement, (ii) the sale of the Preferred Shares to be sold under
the Preferred Underwriting Agreement, (iii) any conversion of shares of
Preferred Stock into shares of Common Stock pursuant to the terms of the
Preferred Stock and (iv) any disposition of any shares of Common Stock or
Preferred Stock pursuant to a bona fide pledge or grant of a security interest
to a major brokerage firm or financial institution to secure bona fide
indebtedness, or the sale of such shares upon foreclosure on such pledge,
provided that each purchaser of such shares upon foreclosure agrees to be bound
- --------
by the provisions of this paragraph.
SECTION 5. Offering by U.S. Underwriters. After the Registration
-----------------------------
Statement becomes effective, the several U.S. Underwriters will offer the U.S.
Shares for sale to the public on the terms and conditions as set forth in the
U.S. Prospectus.
SECTION 6. Covenants of the Company. The Company covenants and
------------------------
agrees with the several U.S. Underwriters and the Selling Stockholders that:
(a) If the Effective Time is prior to the execution and delivery of
this Agreement, the Company will file the Prospectuses with the Commission
pursuant to and in accordance with subparagraph (1) (or, if applicable, and
with the U.S. Representatives' consent, subparagraph (4)) of Rule 424(b)
within the time period prescribed by such rule. The Company will advise
the U.S. Representatives promptly of any proposal to amend or supplement
the Registration Statement as filed, or the Prospectuses, and will not
effect such amendment or supplement or filing without the U.S.
Representatives' consent (which shall not be unreasonably withheld or
delayed). The Company will also advise the U.S. Representatives promptly
after the Company receives notice of the effectiveness of the Registration
Statement (if the Effective Time is subsequent to the execution and
delivery of this Agreement), of the filing and effectiveness of any
amendment or supplement to the Registration Statement or the Prospectuses,
and of the issuance by the Commission of any stop order in respect of the
Registration Statement or of any order preventing or suspending the use of
any Preliminary Prospectus or any prospectus relating to the Shares or the
initiation of proceedings for any such purpose, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, or of any
request by the Commission to amend or supplement the Registration Statement
or the Prospectuses or for additional
<PAGE>
12
information and will use its best efforts to prevent the issuance of any
such stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or any prospectus relating to the Shares or
suspending any such qualification and to obtain as soon as possible its
lifting, if issued.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any event occurs as a result of
which the Prospectuses as then amended or supplemented would include an
untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend or supplement the Prospectuses or the Registration Statement
to comply with the Act, the Rules and Regulations or any other law, the
Company promptly will prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 6, an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance and will notify the U.S. Representatives
and, upon their request, prepare and furnish without charge to each U.S.
Underwriter, each Selling Stockholder (except as provided below) and to any
dealer in securities as many copies as the U.S. Representatives may from
time to time reasonably request, of amended Prospectuses or any supplement
to the Prospectuses complying with Section 10(a) of the Act which will
correct such statement or omission or effect such compliance, it being
understood and agreed that the Selling Stockholders will pay all costs and
expenses incident to the preparation, printing, filing and distribution of
any such amendment or supplement.
(c) The Company will make generally available to the Company's
security holders as soon as practicable, but in any event not later than 18
months after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Act), an earnings statement that satisfies the
provisions of Section 11(a) of the Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(d) The Company will deliver to each of the U.S. Representatives as
many conformed copies of the Registration Statement (as originally filed)
and of each amendment thereto (including exhibits filed therewith and
documents incorporated therein by reference) and copies of the Preliminary
Prospectuses and the Prospectuses as the U.S. Representatives may
reasonably request and will also deliver to the U.S. Representatives a
conformed copy of the Registration Statement and each amendment thereto
(including exhibits filed therewith and documents incorporated therein by
reference) for each of the U.S. Underwriters.
(e) The Company will take such action as the U.S. Representatives may
reasonably request, in cooperation with the U.S. Representatives to qualify
the Shares for offering and sale under the applicable securities laws of
such states and other
<PAGE>
13
jurisdictions of the United States as the U.S. Representatives may
designate, and will maintain such qualifications in effect for as long as
may be required for the distribution of the Shares; provided, however, that
-------- -------
in no event shall the Company be obligated in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it shall not
then be qualified, or to execute a general consent to service of process in
any jurisdiction in which such a consent has not been previously filed, or
subject itself to taxation in any jurisdiction wherein it would not
otherwise be subject to tax but for the requirements of this paragraph.
The Company will file such statements and reports as may be required by the
laws of each jurisdiction in which the Shares have been qualified as above
provided.
(f) The Company agrees that neither it nor any of its directors or
the principal executive officers set forth in Item 10 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 will,
without the prior written consent of the U.S. Representatives, 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 90 days after the date of this Agreement; provided, however, that the
-------- -------
foregoing restriction shall not apply to any issuances or sales (a) in
connection with stock option, savings, benefit or compensation plans or
dividend reinvestment plans in existence on the date of this Agreement 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 of, or acquisition of assets of, another entity,
(c) required in the Company's judgment to prevent termination of the
Standstill Period (as defined in the Shareholders Agreement) or (d) by such
directors and officers of up to 300,000 shares of capital stock in the
aggregate; provided, further, that (i) in the case of clauses (b), (c) and
(d) above, the Company shall give the U.S. Underwriters at least 2 Business
Days' prior written notice of such issuance or sale and (ii) in the case of
clauses (b) and (c) above, the recipients of any such securities shall
agree to be bound by the provisions of this paragraph.
SECTION 7. Conditions of the Obligations of the U.S. Underwriters.
------------------------------------------------------
The obligations of the several U.S. Underwriters to purchase and pay for
the U.S. Firm Shares on the Initial Closing Date will be subject (i) to the
provisions of Section 11 herein, (ii) in the case of representations and
warranties qualified as to materiality, to the accuracy of such representa-
tions and warranties in all respects, and in the case of representations and
warranties not so qualified, to the accuracy of such representations and
warranties in all material respects, in each case on the part of the Company
and the Selling Stockholders herein as of the date hereof and as of the Initial
Closing Date with the same force and effect as if made as of that date, (iii) to
the accuracy of the statements of Company officers and Selling Stockholder
officers made in any certificates furnished pursuant to the provisions hereof,
(iv)
<PAGE>
14
to the performance by the Company and the Selling Stockholders of their
respective obligations hereunder and (v) to the following additional conditions
precedent:
(a) If the Effective Time is not prior to the execution and delivery
of this Agreement, the Effective Time shall have occurred not later than
(i) 6:00 p.m. New York City time on the date of determination of the
offering price, if such determination occurred at or prior to 3:00 p.m. New
York City time on such date or (ii) 12:00 noon New York City time on the
business day following the day on which the offering price was determined
if such determination occurred after 3:00 p.m. New York City time on such
date. If the Effective Time is prior to the execution and delivery of this
Agreement, the Company shall have filed the Prospectuses with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the Rules and Regulations and in accordance
with Section 6(a) hereof. In either case, prior to the Initial Closing
Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened by the Commission; and the Company shall
have complied with all requests for additional information on the part of
the Commission to the U.S. Representatives' reasonable satisfaction.
(b) The Underwriters shall have received an opinion of Dechert Price
& Rhoads, counsel for the Company, dated the Initial Closing Date, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania; and the Company has the corporate power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged as described in the Prospectuses.
(ii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iii) The execution, delivery and performance of this Agreement
by the Company and the sale of the Shares contemplated hereby do not
(a) conflict with or result in a violation of any of the provisions of
the articles of incorporation or bylaws of the Company, (b) conflict
with or violate in any material respect any Pennsylvania, New York or
United States Federal law, rule or regulation, or, to such counsel's
knowledge, any order, judgment or decree known to such counsel that
is applicable to the Company or by which any property or asset of the
Company or any of its subsidiaries is or may be bound (other than
Federal or state securities or blue sky laws, other anti-fraud laws
and fraudulent transfer laws and bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights, as to which such counsel
need not express any opinion) or (c) to such counsel's knowledge,
result in a material breach of any of the
<PAGE>
15
terms or provisions of, or constitute a default under, any material
loan or credit agreement, indenture, deed of trust, mortgage, note or
other agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which any of them
or any of its properties or assets is or may be bound.
(iv) No consent, approval, authorization or other action by or
filing with any Pennsylvania, New York or United States Federal
governmental agency or body or Pennsylvania, New York or United States
Federal court having jurisdiction over the Company or any of its
properties is required to be obtained by the Company in connection
with the execution and delivery of this Agreement by the Company or
the consummation of the transactions contemplated hereby, except
filings and other actions required under the Act and the Rules and
Regulations and state securities and blue sky laws, as to which such
counsel need not express any opinion.
(v) The Company has an authorized capitalization as set forth in
the Prospectuses; the Shares have been duly and validly authorized and
have been duly and validly issued, and are fully paid and
nonassessable; the Shares conform in all material respects to the
description thereof in the Prospectuses.
(vi) The Registration Statement was declared effective under the
Act as of the date and time specified in such opinion, and, to the
knowledge of such counsel, no stop order has been issued and no
proceeding for that purpose is pending or threatened by the
Commission.
(vii) The statements set forth or referred to in the
Prospectuses under the headings "Description of Capital Stock--
General", "Description of Capital Stock--Common Stock", "Description
of Capital Stock--Preferred Stock" and "Certain United States Federal
Tax Considerations for Non-U.S. Holders of Capital Stock" and in the
Registration Statement under Item 15, insofar as such statements
constitute a summary of the legal matters or documents referred to
therein fairly present the information called for with respect to such
legal matters or documents.
In rendering such opinion, such counsel may state that their opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the Commonwealth of Pennsylvania.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Initial Closing Date to
the effect that (i) the Registration Statement and the Prospectuses and any
further amendments or supplements thereto made by the Company prior to the
Initial Closing Date (other than the financial statements (including pro forma
financial statements and notes to financial statements
<PAGE>
or pro forma financial statements) and related schedules and other financial,
accounting or statistical information included in or excluded from the
Registration Statement or the Prospectuses, as to which such counsel need
express no belief) appear on their face to be appropriately responsive in all
material respects to the requirements of the Act and the Rules and Regulations
and (ii) such counsel participated in conferences with officers and
representatives of the Company, Price Waterhouse LLP, the Underwriters, the
Selling Stockholders and Cravath, Swaine & Moore in connection with the
preparation of the Registration Statement, and based on the foregoing and
without assuming responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or making any independent
check or verification thereof (and relying as to factual matters upon the
statements of officers and other representatives of the Company, the Selling
Stockholders and others), no facts have come to the attention of such counsel
which lead them to believe that (I) the Registration Statement, as of the
Effective Date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading (other than the information omitted
therefrom in reliance on Rule 430A), or (II) any of the Prospectuses as amended
or supplemented, as of its date and as of each Closing Date, contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except
that such counsel need not express a belief as to any financial statements
(including pro forma financial statements and notes to financial statements or
pro forma financial statements) and related schedules, and other financial,
accounting or statistical information included in or excluded from the
Registration Statement or the Prospectuses.
(c) The Underwriters shall also have received from Richard L.
Krzyzanowski, Executive Vice President, Secretary and General Counsel of the
Company, an opinion, dated the Initial Closing Date, to the effect that:
(i) Each of the Company and its material subsidiaries listed
on Schedule III hereto is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, with corporate power and authority to own, lease and
operate its properties and to conduct its business as presently
conducted and as described in the Registration Statement; and each of
the Company and such material subsidiaries is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or the ownership or leasing of its
property requires such qualification, except to the extent that the
failure to be so qualified or to be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole.
(ii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
made by the Company for the execution and delivery of this Agreement
by the Company or the consummation of the transactions contemplated
hereby, except such as
<PAGE>
have been obtained or made under the Act and such as may be required
under state securities and blue sky laws.
(iii) The execution, delivery and performance of this Agreement
by the Company and the sale of the Shares contemplated hereby will not
result in a material breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule,
regulation or order of any governmental agency or body of any court
having jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any material agreement or instrument to
which the Company or any such subsidiary is bound or to which any of
the properties of the Company or any such subsidiary is subject, or
the articles of incorporation or bylaws of the Company or any such
subsidiary; and to the best of such counsel's knowledge, neither the
Company nor any of its material subsidiaries is in violation of its
articles or incorporation or bylaws, or in material default under any
material agreement, indenture or instrument.
(iv) Except as disclosed in or incorporated by reference in the
Registration Statement, there is no action, suit or proceeding which
has been served upon the Company or any of its subsidiaries or of
which any of their properties or assets is the subject that is now
pending, or to such counsel's knowledge, overtly threatened, against
or affecting the Company or any of its subsidiaries or any of their
properties or assets that, if adversely determined, would have a
material adverse effect on the Company or its subsidiaries, taken as a
whole; and such counsel is not aware of any material contracts or
other material documents or legal or governmental proceedings which
are required to be filed as exhibits to the Registration Statement by
the Act or the Exchange Act which have not been so filed.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States of America
and laws of the Commonwealth of Pennsylvania.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Initial Closing Date to
the effect that (a) each document filed by the Company under the Exchange Act
and incorporated by reference in the Registration Statement and each amendment
or supplement thereto, as of their respective dates or as of the date of any
such amendment or supplement thereto, (other than the financial statements
(including pro forma financial statements and notes to financial statements or
pro forma financial statements) and related schedules and other financial,
accounting or statistical information included in or excluded from such
documents, as to which such counsel need not express an opinion) appear on their
face to be appropriately responsive in all material respects to the requirements
of the Exchange Act and the rules and regulations thereunder and (b) no facts
have come to the attention of such counsel which lead
<PAGE>
him to believe that (I) the Registration Statement, as of the Effective Date,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading (other than the information omitted therefrom in reliance
on Rule 430A), or (II) any of the Prospectuses as amended or supplemented, as of
its date and as of each Closing Date, contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that such
counsel need not express a belief as to any financial statements (including pro
forma financial statements and notes to financial statements or pro forma
financial statements) and related schedules, and other financial, accounting or
statistical information included in or excluded from the Registration Statement
or the Prospectuses.
(d) You shall have received an opinion of Sullivan & Cromwell,
special counsel for the Selling Stockholders, dated the Initial Closing
Date, that:
(i) All regulatory consents, authorizations, approvals and
filings required to be made or obtained by the Selling Stockholders
under the Federal laws of the United States and the laws of the State
of New York for the sale and delivery of the Shares by the Selling
Stockholders to the Underwriters have been obtained or made.
(ii) Insofar as New York law is concerned, upon delivery of and
payment for the Shares to be sold to the Underwriters in the State of
New York pursuant to this Agreement, the Underwriters will have
acquired the Shares free of any adverse claim within the meaning of
Section 8-302 of the New York Uniform Commercial Code (the "Code").
(iii) The execution and delivery by the Selling Stockholders of
this Agreement and the sale by the Selling Stockholders of the Shares
in accordance with this Agreement will not violate any existing
Federal law of the United States or law of the State of New York.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of America
and laws of the State of New York.
(e) You shall have received an opinion of Michel Renault, General
Counsel of CGIP, dated the Initial Closing Date, that:
(i) This Agreement has been duly authorized, executed and
delivered on behalf of the Selling Stockholders.
<PAGE>
19
(ii) The sale of the Shares to be sold by the Selling
Stockholders as contemplated by this Agreement and the execution
delivery and performance of this Agreement by the Selling Stockholders
will not conflict with or constitute a breach of any of the terms or
provisions of, or constitute a default under, any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument known to such counsel to which such Selling
Stockholder is a party or by which it may be bound (including the
restrictions contained in the Shareholders Agreement, which have been
fully waived or satisfied), nor will such action result in any
violation or breach of the provisions of the statuts of such Selling
Stockholder or any law or administrative regulation or administrative
or court decree or order of any court or governmental authority or
agency known by such counsel to be applicable to such Selling
Stockholder.
(iii) No consent, approval, authorization, order, filing,
registration or qualification of or with any court or governmental
authority or agency is required for the sale of the Shares by the
Selling Stockholders as contemplated by this Agreement (except such
counsel need express no opinion as to any necessary qualification
under the securities laws of any foreign country).
(iv) The Selling Stockholders have full right, power and
authority to sell, assign, transfer and deliver, or to cause to be
sold, assigned, transferred and delivered, the Shares to be sold by
the Selling Stockholders to the Underwriters.
(v) The sale of the Shares as contemplated by this Agreement
is not subject to any untracted restrictions on transfer, except the
restrictions on transfers contained in the Shareholders Agreement,
which have been fully waived or satisfied.
(vi) Upon delivery of the Shares to the Underwriters, and
payment therefor by the Underwriters pursuant to this Agreement, good
and valid title to the Shares, free and clear of all liens,
encumbrances, equities or claims has been transferred to each of the
several Underwriters.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the laws of the Republic of France. The foregoing
opinion does not address compliance by the Underwriters with foreign securities
laws with respect to resales of the Shares in France.
(f) The Underwriters shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, an opinion, dated the Initial Closing
Date, with respect to such matters as the U.S. Representatives may
reasonably request.
<PAGE>
20
(g) The Underwriters shall have received from the President or any
Vice President and a principal financial or accounting officer of the
Company a certificate, dated the Initial Closing Date, in which such
officers shall state that, to the best of their knowledge and after
reasonable investigation, (i) the Registration Statement as of the
Effective Time, and the Prospectuses as of the date of any filing pursuant
to Rule 424(b) and on the Closing Date, did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and since the Effective Time, no event has occurred which
should have been set forth in a supplement or amendment to the Registration
Statement or the Prospectuses; (ii) there has not been, since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, any change or event that would be likely to
have a Material Adverse Effect, whether or not arising in the ordinary
course of business; (iii) in the case of representations and warranties in
Section 2 qualified as to materiality, such representations and warranties
are true and correct in all respects, and in the case of representations
and warranties not so qualified, such representations and warranties are
true and correct in all material respects, in each case on the part of the
Company with the same force and effect as though made on and as of the
Initial Closing Date and the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Initial Closing Date; and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
(h) The Underwriters shall have received from the Selling
Stockholders a certificate, signed by the President or any Vice President
and a principal financial or accounting officer of CGIP, dated the Closing
Date, in which such officers shall state that, to the best of their
knowledge and after reasonable investigation, (i) the Selling Stockholders'
Information contained in the Registration Statement as of the Effective
Time, or in any Prospectus as of the date of any filing pursuant to Rule
424(b) and on the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
and (ii) in the case of representations and warranties in Section 3
qualified as to materiality, such representations and warranties are true
and correct in all respects, and in the case of representations and
warranties not so qualified, such representations and warranties are true
and correct in all material respects, in each case on the part of the
Selling Stockholders with the same force and effect as though made on the
Initial Closing Date and the Selling Stockholders have complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Initial Closing Date.
(i) The Underwriters shall have received from Price Waterhouse LLP,
independent public accountants, two letters, the first dated the date of
this Agreement and the other dated the Initial Closing Date, addressed to
the Board of Directors of
<PAGE>
21
the Company, the Underwriters and the Selling Stockholders (with conformed
copies for each of the Underwriters), substantially in the form of Annex A
hereto with such variations as are reasonably acceptable to the U.S.
Representatives.
(j) The Underwriters shall have received from Befec-Price Waterhouse,
independent public accountants, two letters, the first dated the date of
this Agreement and the other dated the Initial Closing Date, addressed to
the Board of Directors of the Company, the Underwriters and the Selling
Stockholders (with conformed copies for each of the Underwriters),
substantially in the form of Annex B hereto with such variations as are
reasonably acceptable to the U.S. Representatives.
The several obligations of the U.S. Underwriters to purchase the
Additional Shares hereunder are subject to (i) the accuracy (A) in all material
respects of the representations and warranties of the Company and the Selling
Stockholders contained herein that are qualified as to materiality and (B) in
all respects of such representations and warranties that are not so qualified,
in each case as though made on and as of the Option Closing Date, (ii) the
performance by the Company and the Selling Stockholders of their respective
obligations hereunder, (iii) satisfaction on and as of the Option Closing Date
of the conditions set forth in subsections (a) to (j) of this Section 7,
inclusive (and, for purposes thereof, each reference therein to the Initial
Closing Date shall be deemed to refer to the Option Closing Date), and (iv) the
absence of circumstances on or prior to the Option Closing Date which would
permit termination of this Agreement pursuant to Section 11.
SECTION 8. Payment of Expenses. Other than the fees and expenses of
-------------------
the Company's counsel and accountants, the Selling Stockholders will pay all
costs, expenses, fees, disbursements and taxes incident to the sale of the
Shares contemplated hereby and in the International Underwriting Agreement,
including without limitation (i) the preparation, printing, filing and
distribution of the Registration Statement (including financial statements and
exhibits), the Prospectuses, each Preliminary Prospectus and all amendments and
supplements to any of them prior to or during the period specified in Section
6(b), (ii) the printing, reproduction and distribution of this Agreement and the
International Underwriting Agreement, and all other underwriting and selling
group documents by mail, telex or other means, (iii) the registration with the
Commission of the Shares, (iv) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of the several states
and the preparation, printing and distribution of Preliminary and Supplemental
Blue Sky Memoranda and Legal Investment Survey (including the reasonable fees
and disbursements of the U.S. Underwriters' counsel relating to the foregoing),
(v) filing fees incurred in connection with the National Association of
Securities Dealers, Inc.'s review of the offering's underwriting terms and
arrangements, (vi) the fees and expenses of the Registrar and Transfer Agent for
the Shares and its counsel and (vii) the fees and expenses of the Selling
Stockholders' counsel and accountants.
<PAGE>
22
If the sale of the U.S. Shares provided for herein is not consummated
because of the failure to satisfy any condition to the obligations of the U.S.
Underwriters, because of any breach of any representation, warranty or covenant
of the Selling Stockholders contained in this Agreement, because of any
termination pursuant to Section 11 hereof or because of any refusal, failure or
inability of the Company or the Selling Stockholders to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
any U.S. Underwriter, the Selling Stockholders shall reimburse the U.S.
Underwriters for all of their reasonable out-of-pocket expenses incurred in
connection with marketing and preparing for the offering of the Shares,
including the reasonable fees and disbursements of counsel for the U.S.
Underwriters.
SECTION 9. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each of the
U.S. Underwriters and the Selling Stockholders and each person, if any, who
controls any U.S. Underwriter or any Selling Stockholder within the meaning
of either Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (or actions in
respect thereof) (including, without limiting the foregoing, the reasonable
legal and other expenses incurred in connection with investigating or
defending or preparing to defend or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action, as such
expenses are incurred), insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based on any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or the U.S. Prospectus or any U.S. Preliminary
Prospectus, or are caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except (i) the Company shall not be
liable to any U.S. Underwriter under the indemnity agreement in this
paragraph (a) with respect to any U.S. Preliminary Prospectus to the extent
that such losses, claims, damages, liabilities or expenses result from the
fact that such U.S. Underwriter sold Shares to a person as to whom there
was not sent or given, at or prior to the written confirmation of such
sale, a copy of the U.S. Prospectus or of the U.S. Prospectus as then
amended or supplemented in any case where such delivery is required by the
Act if the loss, claim, damage or liability of such U.S. Underwriter
results from an untrue
<PAGE>
23
statement or omission of a material fact contained in the U.S. Preliminary
Prospectus which was corrected in the U.S. Prospectus or in the U.S.
Prospectus as then amended or supplemented if the Company had previously
furnished copies thereof to such U.S. Underwriter and (ii) insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based
upon any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with (x) written
information furnished to the Company by or on behalf of the U.S.
Underwriters specifically for use in the Registration Statement, the U.S.
Prospectus or any U.S. Preliminary Prospectus, it being understood and
agreed that the only such information furnished by any U.S. Underwriter
consists of (A) the last paragraph of text on the cover page of the U.S.
Prospectus (and any U.S. Preliminary Prospectus) concerning the terms of
the offering by the U.S. Underwriters, (B) the second and third paragraphs
on page 3 of the U.S. Prospectus (and any U.S. Preliminary Prospectus)
concerning over-allotment and stabilization by the U.S. Underwriters and
exemptions from Rules 10b-6, 10b-7 and 10b-8 under the Exchange Act and (C)
the text under the caption "Underwriting" in the U.S. Prospectus (and any
U.S. Preliminary Prospectus) concerning the terms of the offering by the
U.S. Underwriters and the delivery of Shares pursuant thereto
(collectively, the "Underwriters' Information") or (y) written information
furnished to the Company by or on behalf of the Selling Stockholders
specifically for use in the Registration Statement, the U.S. Prospectus or
any U.S. Preliminary Prospectus, it being understood and agreed that the
only such information furnished by any Selling Stockholder consists of the
information under the caption "Selling Shareholders" in the U.S. Prospectus
(or any U.S. Preliminary Prospectus), other than in respect of the
Company's outstanding capitalization (collectively, the "Selling
Stockholders' Information"). This indemnity agreement will be in addition
to any liability which the Company may otherwise have to the persons
referred to above in this Section 9(a). Notwithstanding anything to the
contrary in this Agreement, the Company shall not be liable to any Selling
Stockholder under the indemnity agreement in this paragraph (a) or for any
breach of any representation or warranty of the Company set forth in
Section 2 with respect to the statements in the U.S. Prospectus (or any
U.S. Preliminary Prospectus) relating to the terms and provisions of the
Shareholders Agreement (the "Shareholders Agreement Information").
(b) The Selling Stockholders agree, jointly and severally, to
indemnify and hold harmless each of the U.S. Underwriters and each person,
if any, who controls any U.S. Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act and the Company,
its directors, its officers who sign the Registration Statement and each
person, if any, who controls the Company within the meaning of either such
Section, from and against any and all losses, claims, damages and
liabilities (or actions in respect thereof) (including, without limiting
the foregoing, the reasonable legal and other expenses incurred in
connection with investigating or defending or preparing to defend or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action, as such expenses
<PAGE>
24
are incurred) insofar as such losses, claims, damages, liabilities and
expenses arise out of or are based on any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
or the U.S. Prospectus or any U.S. Preliminary Prospectus or are caused by
any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
but only in each case with reference to the Selling Stockholders'
Information; provided, however, that the Selling Stockholders shall not be
-------- -------
liable to any U.S. Underwriter under the indemnity agreement in this
paragraph (b) with respect to any U.S. Preliminary Prospectus to the extent
that such losses, claims, damages, liabilities or expenses result solely
from the fact that such U.S. Underwriter sold Shares to a person as to whom
there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the U.S. Prospectus or of the U.S. Prospectus as then
amended or supplemented in any case where such delivery is required by the
Act if the loss, claim, damage or liability of such U.S. Underwriter
results from an untrue statement or omission of a material fact contained
in the U.S. Preliminary Prospectus which was corrected in the U.S.
Prospectus or in the U.S. Prospectus as then amended or supplemented if the
Company had previously furnished copies thereof to such U.S. Underwriter.
This indemnity agreement will be in addition to any liability which the
Selling Stockholders may otherwise have to the persons referred to above in
this Section 9(b). Notwithstanding anything to the contrary in this
Agreement, the Selling Stockholders shall not be liable to the Company
under the indemnity agreement in this paragraph (b) or for any breach of
any representation or warranty of the Selling Stockholders set forth in
Section 3 with respect to the Shareholders Agreement Information.
(c) Each U.S. Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholders, the
directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the Company or
any Selling Stockholder within the meaning of either Section 15 of the Act
or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities (or actions in respect thereof) (including,
without limiting the foregoing, the reasonable legal and other expenses
incurred in connection with investigating or defending or preparing to
defend or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action, as such expenses are incurred)
insofar as such losses, claims, damages, liabilities and expenses arise out
of or are based on any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the U.S.
Prospectus or any U.S. Preliminary Prospectus, or are caused by any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, but only with reference to the Underwriters' Information. This
indemnity agreement will be in addition to any liability which the U.S.
Underwriters may otherwise have to the persons referred to above in this
Section 9(c).
<PAGE>
25
(d) In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to any of the
three preceding paragraphs, such person (hereinafter called the indemnified
party) shall promptly notify the person against whom such indemnity may be
sought (hereinafter called the indemnifying party) in writing; however, the
omission to so notify the indemnifying party shall relieve the indemnifying
party from liability under the three preceding paragraphs only to the
extent prejudiced thereby. In case any action in respect of which
indemnification may be sought hereunder shall be brought against any
indemnified party and it shall notify an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it may desire, to assume the
defense thereof through counsel reasonably satisfactory to the indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 9
for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof, other than reasonable costs
of investigation (unless such indemnified party reasonably objects to such
assumption on the grounds that there may be defenses available to it which
are different from or in addition to those available to such indemnifying
party in which event the indemnified party shall be reimbursed by the
indemnifying party for the reasonable expenses incurred in connection with
retaining separate legal counsel). No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement
of any claim or pending or threatened proceeding in respect of the
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability arising out of such claim or proceeding.
(e) If the indemnification provided for in this Section 9 is
insufficient or unavailable to an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities and expenses in such proportion as is appropriate to reflect
the relative fault of the Company, the Selling Stockholders and the U.S.
Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any
other relevant equitable considerations.
<PAGE>
26
The relative fault of the Company, the Selling Stockholders and the U.S.
Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholders or by the
U.S. Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(f) The Company, each Selling Stockholder and each of the U.S.
Underwriters agree that it would not be just and equitable if contribution
pursuant to Section 9(e) were determined by pro rata allocation (even if
the U.S. Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
in the immediately preceding paragraph shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of Section 9(e), in no event shall any U.S.
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the U.S. Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which such U.S. Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
U.S. Underwriters' obligations to contribute pursuant to Section 9(e) are
several in proportion to the respective number of U.S. Firm Shares set
forth opposite their names in Schedule I hereto and not joint.
(g) The Company, the Selling Stockholders and the U.S. Underwriters
agree that any indemnity provision contained in Section 5.5 of the
Shareholders Agreement or any other agreement between the Company on the
one
<PAGE>
27
hand and the Selling Stockholders on the other shall be superseded for all
purposes by this Section 9 in respect of the offer and sale of the Shares.
SECTION 10. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
- --------
Agreement, or contained in certificates of officers of the Company or the
Selling Stockholders submitted pursuant hereto, including indemnity and
contribution agreements, shall remain operative and in full force and effect,
regardless of any investigation, or any statement as to the results thereof,
made by or on behalf of any U.S. Underwriter or any person controlling any U.S.
Underwriter or by or on behalf of the Company, its officers or directors or
controlling persons, or by any Selling Stockholder or any person controlling any
Selling Stockholder, and shall survive acceptance of and payment for the U.S.
Shares hereunder.
SECTION 11. Termination. This Agreement may be terminated for any
-----------
reason at any time prior to the delivery of and payment for the U.S. Shares on
the Initial Closing Date or the Option Closing Date, as the case may be, by the
U.S. Underwriters upon the giving of written notice by Lazard Freres & Co. LLC
of such termination to the Company and the Selling Stockholders, if prior to
such time (i) there has been, since the respective dates as of which information
is given in the Registration Statement and the U.S. Prospectus, any Material
Adverse Effect, whether or not arising in the ordinary course of business, (ii)
there has occurred any outbreak or escalation of major hostilities or other
national or international calamity or crisis or material adverse change in
existing national or international financial, political, economic or securities
market conditions, the effect of which is such as to make it, in the judgement
of Lazard Freres & Co. LLC, impracticable or inadvisable to market the Shares in
the manner contemplated in the Prospectuses or enforce contracts for the sale of
the Shares, or (iii) trading in the Common Stock of the Company has been
suspended by the Commission or a national securities exchange, or trading
generally on either the American Stock Exchange or the New York Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of said
exchanges or by order of the Commission or any other governmental authority, or
a banking moratorium has been declared by either Federal or New York
authorities. In the event of any such termination, the provisions of Section 8,
the indemnity agreement and contribution provisions set forth in Section 9, and
the provisions of Section 15 shall remain in effect and, if the U.S.
Underwriters shall have purchased any U.S. Shares on the Initial Closing Date
prior to such termination, then all representations and warranties of the
Company and the Selling Stockholders set forth in or made pursuant to this
Agreement and all obligations of the Company pursuant to Section 6 hereof shall
survive such termination.
SECTION 12. Default of U.S. Underwriters. If, on the Initial Closing
----------------------------
Date or the Option Closing Date, as the case may be, any one or more of the U.S.
Underwriters shall fail or refuse to purchase U.S. Shares that it or they have
agreed to purchase hereunder on such date, and the aggregate number of U.S.
Shares which such defaulting U.S. Underwriter or U.S. Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the U.S. Shares to be purchased on such date by all
<PAGE>
28
U.S. Underwriters, the other U.S. Underwriters shall be obligated severally in
the proportions that the number of U.S. Firm Shares set forth opposite their
respective names in Schedule I bear to the aggregate number of U.S. Firm Shares
set forth opposite the names of all such non-defaulting U.S. Underwriters, or in
such other proportions as the U.S. Representatives may specify, to purchase the
U.S. Shares which such defaulting U.S. Underwriter or U.S. Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
--------
the number of U.S. Shares that any U.S. Underwriter has agreed to purchase
pursuant to Section 4 be increased pursuant to this Section 12 by an amount in
excess of one-ninth of such number of U.S. Shares without the written consent of
such U.S. Underwriter. If, on the Initial Closing Date or the Option Closing
Date, as the case may be, any U.S. Underwriter or U.S. Underwriters shall fail
or refuse to purchase U.S. Shares and the aggregate number of U.S. Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of U.S. Shares to be purchased on such date, and arrangements
satisfactory to the U.S. Representatives, the Company and the Selling
Stockholders for the purchase of such U.S. Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any nondefaulting U.S. Underwriter or the Company or the Selling
Stockholders, except for the expenses to be paid or reimbursed by the Company
pursuant to Section 8 and the respective obligations of the Company, the Selling
Stockholders and the U.S. Underwriters pursuant to Section 9; provided, however,
-------- -------
that if the U.S. Underwriters shall have purchased any U.S. Shares on the
Initial Closing Date prior to such termination, then all representations and
warranties of the Company and the Selling Stockholders set forth in or made
pursuant to this Agreement and all obligations of the Company pursuant to
Section 6 hereof shall survive such termination. In any such case either the
U.S. Representatives or the Company shall have the right to postpone the Initial
Closing Date or the Option Closing Date, as the case may be, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectuses or in any other documents or
arrangements may be effected. As used in this Agreement, the term "U.S.
Underwriter" includes any person substituted for a U.S. Underwriter under this
Section. Any action taken under this paragraph shall not relieve any defaulting
U.S. Underwriter from liability in respect of any default of such U.S.
Underwriter under this Agreement.
SECTION 13. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives c/o Lazard Freres &
Co. LLC, 30 Rockefeller Plaza, New York, NY 10020, Attention: Syndicate
Department; notices to the Company shall be directed to it at Crown Cork & Seal
Company, Inc., 9300 Ashton Road, Philadelphia, PA 19136, facsimile transmission
no. (215) 698-7050, Attention: Alan W. Rutherford, Executive Vice President and
Chief Financial Officer, and Richard L. Krzyzanowski, Executive Vice President,
Secretary and General Counsel; and notices to the Selling Stockholders shall be
directed to Compagnie Generale d'Industrie et de Participations, 89 rue
Taitbout, 75009 Paris, France, Attention: Michel Renault, with a copy to
Sullivan & Cromwell, 125 Broad Street, New York, NY 10004, facsimile
transmission no. (212) 558-3588, Attention: Allan M. Chapin.
<PAGE>
29
SECTION 14. Parties. This Agreement shall inure to the benefit of
-------
and be binding upon the Company, its directors and officers who signed the
Registration Statement, the U.S. Underwriters, the Selling Stockholders, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of U.S. Shares from any U.S.
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 15. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the law of the State of New York.
SECTION 16. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
<PAGE>
30
If the foregoing is in accordance with your understanding of our
agreement, please sign this Agreement and return to us seven counterparts
hereof.
Very truly yours,
CROWN CORK & SEAL COMPANY, INC.,
By
---------------------------------
Name:
Title:
COMPAGNIE GENERALE D'INDUSTRIE ET DE
PARTICIPATIONS,
By
---------------------------------
Name:
Title:
SOFISERVICE,
By
---------------------------------
Name:
Title:
<PAGE>
31
Confirmed and Accepted, as of the
date first above written:
LAZARD FRERES & CO. LLC
CS FIRST BOSTON CORPORATION
SALOMON BROTHERS INC
By: LAZARD FRERES & CO. LLC
By:
--------------------------
Name:
Title:
Acting severally on behalf of themselves
and as U.S. Representatives
of the several U.S. Underwriters
named in Schedule I hereto.
<PAGE>
Schedule I
----------
Number of U.S. Firm Shares
U.S. Underwriters to be Purchased
- ----------------- ---------------
Lazard Freres & Co. LLC
CS First Boston Corporation
Salomon Brothers Inc
__________
Total 7,400,000
==========
<PAGE>
Schedule II
-----------
<TABLE>
<CAPTION>
Number of Additional
--------------------
Shares to be Sold if
--------------------
Number of U.S. Firm Maximum Option
------------------- --------------
Selling Stockholder Shares to be Sold Exercised
- ------------------- ----------------- ---------
<S> <C> <C>
Compagnie Generale d'Industrie et 1,387,500
de Participations
Sofiservice 0
--------- ---------
Total 7,400,000 1,387,500
========= =========
</TABLE>
<PAGE>
Schedule III
------------
Material Subsidiaries
---------------------
CONSTAR International Inc.
Crown Beverage Packaging, Inc.
<PAGE>
Schedule IV
-----------
Directors and Officers
----------------------
<PAGE>
ANNEX A
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(i) of the U.S. Underwriting Agreement, Price
Waterhouse LLP, shall furnish letters to the Board of Directors of the Company,
the Underwriters and the Selling Stockholders to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Prospectuses or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, and/or condensed financial statements derived
from audited financial statements of the Company for the periods specified
in such letter, as indicated in their reports attached to such letters,
copies of which have been furnished to the Underwriters;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with U.S. GAAP, consisting of a reading of the unaudited
financial statements and other information referred to below, a reading of
the latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Board of Directors and
the committees thereof of the Company and its subsidiaries since the date
of the latest audited financial statements included in the Prospectuses,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their attention that
caused them to believe that:
(A) the unaudited consolidated balance sheets and statements of
income, cash flows and stockholders' equity included or incorporated
by reference in the Prospectuses do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations, or are not in
conformity with U.S. GAAP applied on a basis substantially consistent
with the basis for the audited consolidated balance sheets and
statements of income, cash flows and stockholders' equity included or
incorporated by reference in the Prospectuses;
(B) any other unaudited income statement or cash flow statement
data and balance sheet items included in the Prospectuses do not agree
with the corresponding items in the unaudited consolidated financial
statements from
<PAGE>
2
which such data and items were derived, and any such unaudited data
and items were not determined on a basis substantially consistent with
the basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Prospectuses;
(C) the unaudited financial statements which were not included in
the Prospectuses but from which were derived any unaudited condensed
financial statements referred to in paragraph (A) and any unaudited
income statement or cash flow statement data and balance sheet items
included in the Prospectuses and referred to in paragraph (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included or incorporated by
reference in the Prospectuses;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectuses
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Rules and Regulations or
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than three days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or minority interest in consolidated subsidiaries or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets, net
assets or stockholders' equity, or any changes in any other items
specified by the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectuses, except in each case for changes,
increases or decreases which the Prospectuses disclose have occurred
or may occur or which are described in such letter;
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectuses
to the specified date referred to in paragraph (E) there were any
decreases in consolidated net sales, operating income or income before
minority interest, or the total or per share amounts of consolidated
net income, or any changes in any other items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for decreases or
increases which the Prospectuses disclose have occurred or may occur
and which are described in such letter; and
(G) certain sections of the Prospectuses do not comply in all
material respects with the disclosure obligations under Regulation S-K
under the
<PAGE>
3
Exchange Act (e.g., "Selected Consolidated Financial Information"
----
(Item 301)) if (i) the information disclosed may be obtained
directly or indirectly from the Company's accounting records and
(ii) such information can be evaluated against reasonable criteria
established by the Commission;
(iv) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectuses and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. GAAP
standards, with respect to certain amounts, percentages and financial
information specified by the Underwriters, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectuses, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the U.S. and International
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All capitalized terms used herein have the meanings ascribed to
them in the underwriting agreement to which this Description is annexed.
<PAGE>
ANNEX B
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(j) of the U.S. Underwriting Agreement, Befec-
Price Waterhouse, shall furnish letters to the Board of Directors of the
Company, the Underwriters and the Selling Stockholders to the effect that:
(i) They are independent certified public accountants with respect
to CarnaudMetalbox and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Prospectuses or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, and/or condensed financial statements derived
from audited financial statements of CarnaudMetalbox for the periods
specified in such letter, as indicated in their reports attached to such
letters, copies of which have been furnished to the Underwriters;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with U.S. GAAP, consisting of a reading of the unaudited
financial statements and other information referred to below, a reading of
the latest available interim financial statements of CarnaudMetalbox and
its subsidiaries, inspection of the minute books of the Board of Directors
and the committees thereof of CarnaudMetalbox and its subsidiaries since
the date of the latest audited financial statements included in the
Prospectuses, inquiries of officials of CarnaudMetalbox and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) the unaudited consolidated balance sheets and statements of
income, cash flows and stockholders' equity included or incorporated
by reference in the Prospectuses do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations, or are not in
conformity with U.S. GAAP applied on a basis substantially consistent
with the basis for the audited consolidated balance sheets and
statements of income, cash flows and stockholders' equity included or
incorporated by reference in the Prospectuses;
(B) any other unaudited income statement or cash flow statement
data and balance sheet items included in the Prospectuses do not agree
with the
<PAGE>
2
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included or incorporated by
reference in the Prospectuses;
(C) the unaudited financial statements which were not included in
the Prospectuses but from which were derived any unaudited condensed
financial statements referred to in paragraph (A) and any unaudited
income statement or cash flow statement data and balance sheet items
included in the Prospectuses and referred to in paragraph (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included or incorporated by
reference in the Prospectuses;
(D) as of a specified date not more than three days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or minority interest in consolidated subsidiaries or any
increase in the consolidated long-term debt of CarnaudMetalbox and its
subsidiaries, or any decreases in consolidated net current assets, net
assets or stockholders' equity, or any changes in any other items
specified by the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectuses, except in each case for changes,
increases or decreases which the Prospectuses disclose have occurred
or may occur or which are described in such letter; and
(E) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectuses
to the specified date referred to in paragraph (D) there were any
decreases in consolidated net sales, operating income or income before
minority interest, or the total or per share amounts of consolidated
net income, or any changes in any other items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for decreases or
increases which the Prospectuses disclose have occurred or may occur
and which are described in such letter;
(iv) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectuses and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. GAAP standards,
with respect to certain amounts, percentages and financial information
specified by the Underwriters, which are derived from the general accounting
records of CarnaudMetalbox and its subsidiaries, which appear in the
Prospectuses, or in Part II of, or in exhibits and schedules to, the
Registration
<PAGE>
3
Statement specified by the U.S. and International Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of CarnaudMetalbox and its subsidiaries and
have found them to be in agreement.
All capitalized terms used herein have the meanings ascribed to them
in the underwriting agreement to which this Description is annexed.
<PAGE>
Exhibit 1.2
1,850,000 Shares
Crown Cork & Seal Company, Inc.
COMMON STOCK
($5.00 PAR VALUE)
INTERNATIONAL UNDERWRITING AGREEMENT
------------------------------------
October __, 1996
Lazard Capital Markets
CS First Boston Limited
Salomon Brothers International Limited
c/o Lazard Capital Markets
21 Moorfields
London EC2P 2HT England
Dear Sirs:
SECTION 1. Introductory. 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 Stockholders"), propose to sell to the several
Underwriters named in Schedule I hereto (the "International Underwriters"), for
whom Lazard Capital Markets, CS First Boston Limited and Salomon Brothers
International Limited are acting as representatives (the "International
Representatives"), an aggregate of 1,850,000 shares (the "International Shares")
of Common Stock, par value $5.00 per share (the "Common Stock"), of Crown Cork &
Seal Company, Inc. (the "Company"), each Selling Stockholder selling the amount
set forth opposite such Selling Stockholder's name in Schedule II hereto.
It is understood that the Company and the Selling Stockholders are
concurrently entering into an underwriting agreement dated the date hereof (the
"U.S. Underwriting Agreement") in which the Selling Stockholders propose to sell
to the several Underwriters named therein (the "U.S. Underwriters") for whom
Lazard Freres & Co. LLC, CS First Boston Corporation and Salomon Brothers Inc
are acting as representatives (the "U.S. Representatives") an aggregate of
7,400,000 shares (the "U.S Firm Shares") of the Company's Common Stock. In
addition, CGIP has agreed to sell to the U.S. Underwriters,
<PAGE>
2
upon the terms and conditions set forth in the U.S. Underwriting Agreement, up
to an additional 1,387,500 shares of Common Stock (the "Additional Shares").
The U.S. Firm Shares and the Additional Shares are hereinafter sometimes
collectively referred to as the "U.S. Shares". The respective closings under
this Agreement and the U.S. Underwriting Agreement are hereby expressly made
conditional on one another.
The International Shares and the U.S. Shares are herein collectively
referred to as the "Shares". The International Underwriters and the U.S.
Underwriters are herein collectively referred to as the "Underwriters".
It is further understood that the International Representatives on
behalf of the International Underwriters and the U.S. Representatives on behalf
of the U.S. Underwriters have entered into an agreement of even date herewith
(the "Agreement Among U.S. and International Underwriters"), contemplating the
coordination of certain transactions among the International and U.S.
Underwriters and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may purchase from or sell to the International
Underwriters a portion of the U.S. Shares and the International Underwriters may
purchase from or sell to the U.S. Underwriters a portion of the International
Shares. Any such purchases or sales shall be governed by the Agreement Among
U.S. and International Underwriters and not by the terms of this Agreement.
It is further understood that the Company and the Selling Stockholders
are concurrently entering into an underwriting agreement dated the date hereof
(the "Preferred Underwriting Agreement") in which the Selling Stockholders
propose to sell to the several Underwriters named therein (the "Preferred
Underwriters") an aggregate of 3,000,000 shares (the "Preferred Firm Shares") of
the Company's 4.5% Convertible Preferred Stock, par value $41.8875 per share
(the "Preferred Stock"). In addition, CGIP has agreed to sell to the Preferred
Underwriters, upon the terms and conditions set forth in the Preferred
Underwriting Agreement, up to an additional 450,000 shares of Preferred Stock
(the "Preferred Additional Shares" and, collectively with the Preferred Firm
Shares, the "Preferred Shares"). The respective closings under this Agreement
and the U.S. Underwriting Agreement, on the one hand, and the Preferred
Underwriting Agreement, on the other hand, are not conditional on one another.
The Company and the Selling Stockholders hereby agree with the
International Underwriters as follows (it being understood and agreed that the
obligations set forth herein are several in nature, unless expressly stated to
the contrary):
<PAGE>
3
SECTION 2. Representations, Warranties and Agreements of the Company.
---------------------------------------------------------
The Company represents and warrants to, and agrees with, (i) the several
International Underwriters and (ii) in the case of clauses (a), (b), (c), (j)
and (n) and the second sentence of clause (g) below only, the Selling
Stockholders (it being understood and agreed that such representations and
warranties to the Selling Stockholders are being made solely in connection with
the sale of the Shares under this Agreement and the U.S. Underwriting Agreement
and subject to the last sentence of Section 9(a)), that:
(a) The Company meets the registrant requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). A registration
statement on Form S-3 (File No. 333-12787), including forms of prospectuses
relating to the Shares, has been filed by the Company pursuant to the Act
with the Securities and Exchange Commission (the "Commission"). The
Company may have filed one or more amendments thereto, including the
related Preliminary Prospectuses (as defined below), each of which (other
than documents incorporated by reference therein) has previously been
furnished to you. The Company will file with the Commission either (i)
prior to effectiveness of such registration statement, a further amendment
to such registration statement (including the forms of final prospectuses
relating to the Shares) or (ii) after effectiveness of such registration
statement, final prospectuses relating to the Shares in accordance with
Rules 430A and 424(b)(1) or (4) under the Act. In the case of clause (ii),
the Company has included or shall include in such registration statement,
as amended at the Effective Time (as defined below), all information (other
than information permitted to be omitted from such registration statement
when it becomes effective pursuant to Rule 430A ("Rule 430A Information"))
required by the Act and the rules and regulations thereunder (the "Rules
and Regulations") to be included in the final prospectuses with respect to
the Shares and the offering thereof. As filed, such amendment and forms of
final prospectuses, or such final prospectuses, shall contain all Rule 430A
Information, together with all other such required information, with
respect to the Shares and the offering thereof, and, except to the extent
you shall agree in writing to a modification (which shall not be
unreasonably withheld or delayed), shall be in all substantive respects in
the form furnished to you prior to the execution of this Agreement or, to
the extent not in such form, shall contain only such specific additional
information and other changes (beyond that contained in the latest
Preliminary Prospectuses) as the Company has advised the International
Representatives, prior to the execution of this Agreement, will be included
or made therein. For purposes of this Agreement, "Effective Time" means
the time as of which such registration statement or the most recent post-
effective amendment thereto, if any, was or is declared effective by the
Commission and each date after the date hereof on which a document
incorporated by reference in the Registration Statement is filed.
"Effective Date" means the date of the Effective Time. The registration
statement contains two prospectuses to be used in connection with the
offering and sale of the Shares: the U.S. prospectus relating to the U.S.
Shares and the international prospectus relating to the International
Shares. The international prospectus is identical to the U.S. prospectus,
except the international
<PAGE>
4
prospectus contains different front and back cover pages and different
descriptions of the plan of distribution (contained under the caption
"Underwriting" in each of the U.S. and international prospectus). Such
registration statement, as amended at the Effective Time, including
incorporated documents, exhibits and financial statements, and including
all Rule 430A Information, if any, and, any post-effective amendment
thereto that becomes effective prior to the Closing Date (as defined below)
is hereinafter referred to as the "Registration Statement", and the U.S.
prospectus relating to the U.S. Shares and the international prospectus
relating to the International Shares in the forms first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)")
under the Act or, if no such filing is required, as included in the
Registration Statement, are hereinafter referred to as the "U.S.
Prospectus" and the "International Prospectus", respectively, and
collectively as the "Prospectuses". Any preliminary prospectus relating to
the U.S. Shares or the International Shares included in such Registration
Statement or filed pursuant to Rule 424(a) under the Act is hereinafter
referred to as a "U.S. Preliminary Prospectus" or an "International
Preliminary Prospectus", respectively, and collectively as "Preliminary
Prospectuses". Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectuses shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Securities Exchange Act of 1934 (the
"Exchange Act") on or before the Effective Time of the Registration
Statement or the issue date of such Preliminary Prospectus or the
Prospectuses, as the case may be, and references to information being
"included", "contained" or "set forth in" any such document (or similar
expressions) shall be similarly construed; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectuses shall be deemed
to refer to and include the filing of any document under the Exchange Act
after the Effective Time of the Registration Statement, or the issue date
of any Preliminary Prospectus or the Prospectuses, as the case may be,
deemed to be incorporated therein by reference.
(b) At the Effective Time, the Registration Statement did or will,
and when the Prospectuses are first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined in Section 4), the
Prospectuses (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the Rules and
Regulations; at the Effective Time, the Registration Statement did not or
will not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, at the Effective Time, the
Prospectuses, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the Closing
Date, the Prospectuses (and any supplements thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply
<PAGE>
5
to information contained in or omitted from the Registration Statement or
the Prospectuses (or any supplement thereto) in reliance upon and in
conformity with the Underwriters' Information or the Selling Stockholders'
Information (as defined in Section 9(a)).
(c) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and no proceedings for that
purpose shall have been instituted or threatened by the Commission, and
each Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the Rules and
Regulations, and did not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; except that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
the Underwriters' Information or the Selling Stockholders' Information.
(d) The historical consolidated financial statements included in the
Registration Statement and the Prospectuses (and any amendment or
supplement thereto) present fairly in all material respects the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their operations,
the statements of their cash flows and the changes in their financial
position for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as
described in the notes to such financial statements); and the supporting
schedules, if any, included in the Registration Statement present fairly in
all material respects the information required to be stated therein. The
pro forma financial statements included in the Registration Statement and
the Prospectuses (and any amendment or supplement thereto) have been
prepared on a basis consistent with such historical financial statements
(except as described in such pro forma financial statements), include all
material adjustments to the historical financial data required to reflect
the transactions to which pro forma effect is given, give effect to
assumptions made on a reasonable basis, and present fairly in all material
respects on a pro forma basis the estimated consolidated financial position
and results of operations of the Company and its consolidated subsidiaries
assuming that such transactions had occurred on the date specified therein.
(e) There has not been sustained since the date of the latest audited
financial statements included in the Prospectuses any material adverse
change in the financial condition, results of operations or business of the
Company and its subsidiaries considered as a whole (a "Material Adverse
Effect"), except as set forth in the Prospectuses.
(f) The Company and each of its subsidiaries have been duly
incorporated and are validly existing in good standing under the laws of
their respective
<PAGE>
6
jurisdictions of organization with power and authority to own, lease and
operate their properties and conduct their businesses as described in the
Registration Statement and the Prospectuses; and each of them is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases properties or in
which the conduct of its business requires such qualification, except to
the extent that any such failure to be so qualified or be in good standing
would not, individually or in the aggregate, have a Material Adverse
Effect.
(g) The Company has an authorized capitalization as set forth in the
Prospectuses, and all shares of capital stock of the Company outstanding,
including the Shares, have been duly authorized, are validly issued, fully
paid and non-assessable, and conform in all material respects to the
description thereof contained in the Prospectuses. The sale of the Shares
is not subject to pre-emptive or other similar rights or restrictions on
transfer created by the Company under the Company's articles of
incorporation or bylaws, under applicable law or under any agreement to
which the Company is a party or of which the Company has actual knowledge
(other than those imposed by the Act, the Rules and Regulations, foreign
securities laws or state securities or Blue Sky laws and other than
restrictions on transfers contained in that certain Shareholders Agreement,
dated February 22, 1996, between the Company and CGIP (the "Shareholders
Agreement") which have been fully waived or satisfied); and the Shares are
duly listed and admitted for trading on the New York Stock Exchange (the
"NYSE").
(h) All of the issued and outstanding capital stock of each material
subsidiary of the Company listed on Schedule III hereto has been duly
authorized and validly issued and is fully paid and non-assessable, and,
except as set forth in the Prospectuses, all the issued and outstanding
capital stock of each such material subsidiary is owned, directly or
through subsidiaries, by the Company, free and clear of any pledge, lien,
encumbrance, adverse claim or equity (collectively, a "Lien"), except for
any such Liens that would not, individually or in the aggregate, have a
Material Adverse Effect.
(i) Neither the Company nor any of its subsidiaries is in violation
of its or any of their charters or by-laws or other organizational
documents or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement or
instrument to which it or any of them is a party or by which it or any of
them or their properties may be bound, except any violations or defaults
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(j) No consent, approval, authorization, order, registration, filing
or qualification by or on behalf of the Company or any of its subsidiaries
of or with any court or governmental authority or agency or of the NYSE is
required for the sale of
<PAGE>
7
the Shares or the consummation of the transactions contemplated by this
Agreement and the U.S. Underwriting Agreement, except such as may be
required under the Act, the Rules and Regulations or state securities or
Blue Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters; and the execution and delivery of this
Agreement and the U.S. Underwriting Agreement, and the consummation of the
transactions contemplated herein and therein will not (i) conflict with or
constitute a breach of any of the terms or provisions of, or default under,
or result in the creation or imposition of any Lien upon any property or
assets of the Company or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them may be bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject
that is material to the Company and its subsidiaries taken as a whole, (ii)
result in any violation or breach of the provisions of the charter or by-
laws or other organizational documents of the Company or any of its
subsidiaries or (iii) result in any violation of any law, administrative
regulation or administrative or court decree or order applicable to the
Company, any of its material subsidiaries or their respective property.
(k) The Company and its subsidiaries are in compliance with all laws
and regulations applicable to them and their respective properties and
possess all certificates, authorities or permits issued by, and have made
all filings with, the appropriate state, local, Federal or foreign
regulatory agencies or bodies necessary or desirable to conduct the
business now operated by them, except where noncompliance with such laws or
regulations or the failure to possess or make the same would not,
individually or in the aggregate, have a Material Adverse Effect, and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation, termination or modification of any
such certificate, authority, permit or filing, other than any such
revocation, termination or modification that would not, individually or in
the aggregate, have a Material Adverse Effect.
(l) Except as described in the Prospectuses, there are no actions,
suits or proceedings before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
contemplated or threatened against the Company or any of its subsidiaries,
or to which any of their respective properties is subject, which, (i) if
adversely determined, would, individually or in the aggregate, result in
any Material Adverse Effect or (ii) questions the validity of this
Agreement or any action taken or required to be taken pursuant hereto.
(m) Each of the Company and its subsidiaries has good and marketable
title to all real and personal property owned by it, in each case free and
clear of any Lien, except (i) such as are referred to in the Prospectuses
or (ii) such as would not, individually or in the aggregate, have a
Material Adverse Effect; and any real
<PAGE>
8
property and buildings held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases with such
exceptions as would not, individually or in the aggregate, have a Material
Adverse Effect.
(n) This Agreement has been duly authorized, executed and delivered
by the Company.
(o) Other than the Shareholders Agreement, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include such
securities under the Registration Statement.
(p) Except as set forth in the Prospectuses under the caption
"Underwriting", neither the Company nor, to the Company's knowledge, any of
its officers or directors or any of their respective affiliates is a member
of, or is associated or affiliated with a member of, the National
Association of Securities Dealers, Inc. ("NASD").
SECTION 3. Representations, Warranties and Agreements of the Selling
---------------------------------------------------------
Stockholders. Each Selling Stockholder, jointly and severally, represents and
- ------------
warrants to, and agrees with, (i) the several International Underwriters and
(ii) the Company (it being understood and agreed that such representations and
warranties to the Company are being made solely in connection with the sale of
the Shares under this Agreement and the U.S. Underwriting Agreement and subject
to the last sentence of Section 9(b)), that:
(a) This Agreement has been duly authorized, executed and delivered
by or on behalf of such Selling Stockholder.
(b) Such Selling Stockholder has the legal right and power to execute
and deliver this Agreement and to sell, transfer and deliver the Shares to
be sold by such Selling Stockholder in the manner provided in this
Agreement and the U.S. Underwriting Agreement, and no such action will
result in any violation or breach of the provisions of the charter or by-
laws or other organizational documents of such Selling Stockholder or any
agreement or other instrument binding upon such Selling Stockholder
(including the restrictions on transfer contained in the Shareholders
Agreement, which have been fully waived or satisfied) or any law,
administrative regulation or administrative or court decree or order
applicable to such Selling Stockholder; and no consent, approval,
authorization, order, registration, filing or qualification of or with any
court or governmental authority or agency or of the NYSE is required for
the consummation of the transactions contemplated by this Agreement and the
U.S. Underwriting Agreement in connection with the sale of the Shares by
such Selling Stockholder, except such as may be required under the Act,
<PAGE>
9
the Rules and Regulations or state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters.
(c) Such Selling Stockholder has, and will deliver to the
Underwriters upon payment therefor good and marketable title to the Shares
to be sold by such Selling Stockholder, free and clear of any Lien.
(d) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
(e) At the Effective Time, the Selling Stockholders' Information
contained in the Registration Statement did not or will not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
in the Selling Stockholders' Information not misleading; and, at the
Effective Time, the Selling Stockholders' Information contained in the
Prospectuses, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the Closing
Date, the Selling Stockholders' Information contained in the Prospectuses
(and any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements in the Selling Stockholders' Information, in the light of
the circumstances under which they were made, not misleading.
(f) There are no contracts, agreements or understandings between the
Selling Stockholders and any person that would give rise to a valid claim
against the Selling Stockholders or any Underwriter for a brokerage
commission, finder's fee or other like payment.
SECTION 4. Purchase, Sale and Delivery of International Shares. On
---------------------------------------------------
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, each Selling
Stockholder, severally and not jointly, hereby agrees to sell to the
International Underwriters, and each International Underwriter agrees, severally
and not jointly, to purchase from such Selling Stockholder, at a purchase price
of $______ per International Share, the respective number of International
Shares (subject to adjustment by the International Representatives to eliminate
fractions) that bear the same proportion to the number of International Shares
to be sold by such Selling Stockholder as the number of International Shares set
forth opposite the name of such International Underwriter in Schedule I hereto
bears to the total number of International Shares.
The obligations of the Selling Stockholders hereunder to sell the
International Shares, and the obligations of the International Underwriters to
purchase the International
<PAGE>
10
Shares, are subject to the closing of the sale and purchase of the U.S. Firm
Shares pursuant to the U.S. Underwriting Agreement.
Each Selling Stockholder will deliver the International Shares to be
purchased by the International Underwriters to the International Representatives
for the accounts of the International Underwriters, against payment of the
purchase price therefor by wire transfer of same day funds to an account
specified in writing by such Selling Stockholder. Payment for the International
Shares shall be made at the offices of Cravath, Swaine & Moore at 10:00 A.M.,
New York Time, on _____________, 1996 or at such other place or time not later
than seven full business days thereafter as the International Representatives
and the Selling Stockholders determine (the "Closing Date").
The certificates for all the International Shares so to be delivered
will be in such denominations and registered in such names as the International
Representatives request two full business days prior to the Closing Date, and
will be made available at the offices of Lazard Freres & Co. LLC, New York, New
York or, upon your request, through the facilities of The Depository Trust
Company, for checking and packaging at least one full business day prior to the
Closing Date.
Each Selling Stockholder will not, without the prior written consent
of the International Representatives, offer, sell, pledge 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 Agreement; provided, however, that the foregoing restriction shall not
-------- -------
apply to (i) the sale of the Shares to be sold hereunder and under the U.S.
Underwriting Agreement, (ii) the sale of the Preferred Shares to be sold under
the Preferred Underwriting Agreement, (iii) any conversion of shares of
Preferred Stock into shares of Common Stock pursuant to the terms of the
Preferred Stock and (iv) any disposition of any shares of Common Stock or
Preferred Stock pursuant to a bona fide pledge or grant of a security interest
to a major brokerage firm or financial institution to secure bona fide
indebtedness, or the sale of such shares upon foreclosure on such pledge,
provided that each purchaser of such shares upon foreclosure agrees to be bound
- --------
by the provisions of this paragraph.
SECTION 5. Offering by International Underwriters. After the
--------------------------------------
Registration Statement becomes effective, the several International Underwriters
will offer the International Shares for sale to the public on the terms and
conditions as set forth in the International Prospectus.
SECTION 6. Covenants of the Company. The Company covenants and
------------------------
agrees with the several International Underwriters and the Selling Stockholders
that:
(a) If the Effective Time is prior to the execution and delivery of
this Agreement, the Company will file the Prospectuses with the Commission
pursuant to
<PAGE>
11
and in accordance with subparagraph (1) (or, if applicable, and with the
International Representatives' consent, subparagraph (4)) of Rule 424(b)
within the time period prescribed by such rule. The Company will advise
the International Representatives promptly of any proposal to amend or
supplement the Registration Statement as filed, or the Prospectuses, and
will not effect such amendment or supplement or filing without the
International Representatives' consent (which shall not be unreasonably
withheld or delayed). The Company will also advise the International
Representatives promptly after the Company receives notice of the
effectiveness of the Registration Statement (if the Effective Time is
subsequent to the execution and delivery of this Agreement), of the filing
and effectiveness of any amendment or supplement to the Registration
Statement or the Prospectuses, and of the issuance by the Commission of any
stop order in respect of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or any
prospectus relating to the Shares or the initiation of proceedings for any
such purpose, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, or of any request by the Commission to
amend or supplement the Registration Statement or the Prospectuses or for
additional information and will use its best efforts to prevent the
issuance of any such stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or any prospectus relating to the
Shares or suspending any such qualification and to obtain as soon as
possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any event occurs as a result of
which the Prospectuses as then amended or supplemented would include an
untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend or supplement the Prospectuses or the Registration Statement
to comply with the Act, the Rules and Regulations or any other law, the
Company promptly will prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 6, an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance and will notify the International
Representatives and, upon their request, prepare and furnish without charge
to each International Underwriter, each Selling Stockholder (except as
provided below) and to any dealer in securities as many copies as the
International Representatives may from time to time reasonably request, of
amended Prospectuses or any supplement to the Prospectuses complying with
Section 10(a) of the Act which will correct such statement or omission or
effect such compliance, it being understood and agreed that the Selling
Stockholders will pay all costs and expenses incident to the preparation,
printing, filing and distribution of any such amendment or supplement.
<PAGE>
12
(c) The Company will make generally available to the Company's
security holders as soon as practicable, but in any event not later than 18
months after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Act), an earnings statement that satisfies the
provisions of Section 11(a) of the Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(d) The Company will deliver to each of the International
Representatives as many conformed copies of the Registration Statement (as
originally filed) and of each amendment thereto (including exhibits filed
therewith and documents incorporated therein by reference) and copies of
the Preliminary Prospectuses and the Prospectuses as the International
Representatives may reasonably request and will also deliver to the
International Representatives a conformed copy of the Registration
Statement and each amendment thereto (including exhibits filed therewith
and documents incorporated therein by reference) for each of the
International Underwriters.
(e) The Company will take such action as the International
Representatives may reasonably request, in cooperation with the
International Representatives to qualify the Shares for offering and sale
under the applicable securities laws of such states and other jurisdictions
of the United States as the International Representatives may designate,
and will maintain such qualifications in effect for as long as may be
required for the distribution of the Shares; provided, however, that in no
-------- -------
event shall the Company be obligated in connection therewith to qualify as
a foreign corporation in any jurisdiction in which it shall not then be
qualified, or to execute a general consent to service of process in any
jurisdiction in which such a consent has not been previously filed, or
subject itself to taxation in any jurisdiction wherein it would not
otherwise be subject to tax but for the requirements of this paragraph.
The Company will file such statements and reports as may be required by the
laws of each jurisdiction in which the Shares have been qualified as above
provided.
(f) The Company agrees that neither it nor any of its directors or
the principal executive officers set forth in Item 10 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 will,
without the prior written consent of the International Representatives,
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 90 days after the date of this Agreement; provided,
--------
however, that the foregoing restriction shall not apply to any issuances or
-------
sales (a) in connection with stock option, savings, benefit or compensation
plans or dividend reinvestment plans in existence on the date of this
Agreement 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 of, or acquisition of assets
of, another entity, (c) required in the Company's judgment to prevent
termination of the Standstill Period (as defined in the Shareholders
Agreement), or (d) by such directors and officers of up to 300,000 shares
of capital stock in the aggregate;
<PAGE>
13
provided, further, that (i) in the case of clauses (b), (c) and (d) above,
-------- -------
the Company shall give the International Underwriters at least 2 Business
Days' prior written notice of such issuance or sale and (ii) in the case of
clauses (b) and (c) above, the recipients of any such securities shall
agree to be bound by the provisions of this paragraph.
SECTION 7. Conditions of the Obligations of the International
--------------------------------------------------
Underwriters. The obligations of the several International Underwriters to
- ------------
purchase and pay for the International Shares on the Closing Date will be
subject (i) to the provisions of Section 11 herein, (ii) in the case of
representations and warranties qualified as to materiality, to the accuracy of
such representations and warranties in all respects, and in the case of
representations and warranties not so qualified, to the accuracy of such
representations and warranties in all material respects, in each case on the
part of the Company and the Selling Stockholders herein as of the date hereof
and as of the Closing Date with the same force and effect as if made as of that
date, (iii) to the accuracy of the statements of Company officers and Selling
Stockholder officers made in any certificates furnished pursuant to the
provisions hereof, (iv) to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and (v) to the following
additional conditions precedent:
(a) If the Effective Time is not prior to the execution and delivery
of this Agreement, the Effective Time shall have occurred not later than
(i) 6:00 p.m. New York City time on the date of determination of the
offering price, if such determination occurred at or prior to 3:00 p.m. New
York City time on such date or (ii) 12:00 noon New York City time on the
business day following the day on which the offering price was determined
if such determination occurred after 3:00 p.m. New York City time on such
date. If the Effective Time is prior to the execution and delivery of this
Agreement, the Company shall have filed the Prospectuses with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the Rules and Regulations and in accordance
with Section 6(a) hereof. In either case, prior to the Closing Date no
stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened by the Commission; and the Company shall have
complied with all requests for additional information on the part of the
Commission to the International Representatives' reasonable satisfaction.
(b) The Underwriters shall have received an opinion of Dechert Price
& Rhoads, counsel for the Company, dated the Closing Date, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania; and the Company has the corporate power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged as described in the Prospectuses.
<PAGE>
14
(ii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iii) The execution, delivery and performance of this Agreement
by the Company and the sale of the Shares contemplated hereby do not
(a) conflict with or result in a violation of any of the provisions of
the articles of incorporation or bylaws of the Company, (b) conflict
with or violate in any material respect any Pennsylvania, New York or
United States Federal law, rule or regulation, or, to such counsel's
knowledge, any order, judgment or decree known to such counsel that
is applicable to the Company or by which any property or asset of the
Company or any of its subsidiaries is or may be bound (other than
Federal or state securities or blue sky laws, other anti-fraud laws
and fraudulent transfer laws and bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights, as to which such counsel
need not express any opinion) or (c) to such counsel's knowledge,
result in a material breach of any of the terms or provisions of, or
constitute a default under, any material loan or credit agreement,
indenture, deed of trust, mortgage, note or other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which any of them or any of its
properties or assets is or may be bound.
(iv) No consent, approval, authorization or other action by or
filing with any Pennsylvania, New York or United States Federal
governmental agency or body or Pennsylvania, New York or United States
Federal court having jurisdiction over the Company or any of its
properties is required to be obtained by the Company in connection
with the execution and delivery of this Agreement by the Company or
the consummation of the transactions contemplated hereby, except
filings and other actions required under the Act and the Rules and
Regulations and state securities and blue sky laws, as to which such
counsel need not express any opinion.
(v) The Company has an authorized capitalization as set forth
in the Prospectuses; the Shares have been duly and validly authorized
and have been duly and validly issued, and are fully paid and
nonassessable; the Shares conform in all material respects to the
description thereof in the Prospectuses.
(vi) The Registration Statement was declared effective under the
Act as of the date and time specified in such opinion, and, to the
knowledge of such counsel, no stop order has been issued and no
proceeding for that purpose is pending or threatened by the
Commission.
(vii) The statements set forth or referred to in the
Prospectuses under the headings "Description of Capital Stock--
General", "Description of Capital
<PAGE>
15
Stock--Common Stock", "Description of Capital Stock--Preferred Stock"
and "Certain United States Federal Tax Considerations for Non-U.S.
Holders of Capital Stock" and in the Registration Statement under Item
15, insofar as such statements constitute a summary of the legal
matters or documents referred to therein fairly present the
information called for with respect to such legal matters or
documents.
In rendering such opinion, such counsel may state that their opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the Commonwealth of Pennsylvania.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Closing Date to the
effect that (i) the Registration Statement and the Prospectuses and any further
amendments or supplements thereto made by the Company prior to the Closing Date
(other than the financial statements (including pro forma financial statements
and notes to financial statements or pro forma financial statements) and related
schedules and other financial, accounting or statistical information included in
or excluded from the Registration Statement or the Prospectuses, as to which
such counsel need express no belief) appear on their face to be appropriately
responsive in all material respects to the requirements of the Act and the Rules
and Regulations and (ii) such counsel participated in conferences with officers
and representatives of the Company, Price Waterhouse LLP, the Underwriters, the
Selling Stockholders and Cravath, Swaine & Moore in connection with the
preparation of the Registration Statement, and based on the foregoing and
without assuming responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or making any independent
check or verification thereof (and relying as to factual matters upon the
statements of officers and other representatives of the Company, the Selling
Stockholders and others), no facts have come to the attention of such counsel
which lead them to believe that (I) the Registration Statement, as of the
Effective Date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading (other than the information omitted
therefrom in reliance on Rule 430A), or (II) any of the Prospectuses as amended
or supplemented, as of its date and as of each Closing Date, contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except
that such counsel need not express a belief as to any financial statements
(including pro forma financial statements and notes to financial statements or
pro forma financial statements) and related schedules, and other financial,
accounting or statistical information included in or excluded from the
Registration Statement or the Prospectuses.
(c) The Underwriters shall also have received from Richard L.
Krzyzanowski, Executive Vice President, Secretary and General Counsel of
the Company, an opinion, dated the Closing Date, to the effect that:
<PAGE>
16
(i) Each of the Company and its material subsidiaries listed on
Schedule III hereto is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, with corporate power and authority to own, lease and
operate its properties and to conduct its business as presently
conducted and as described in the Registration Statement; and each of
the Company and such material subsidiaries is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or the ownership or leasing of its
property requires such qualification, except to the extent that the
failure to be so qualified or to be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole.
(ii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
made by the Company for the execution and delivery of this Agreement
by the Company or the consummation of the transactions contemplated
hereby, except such as have been obtained or made under the Act and
such as may be required under state securities and blue sky laws.
(iii) The execution, delivery and performance of this Agreement
by the Company and the sale of the Shares contemplated hereby will not
result in a material breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule,
regulation or order of any governmental agency or body of any court
having jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any material agreement or instrument to
which the Company or any such subsidiary is bound or to which any of
the properties of the Company or any such subsidiary is subject, or
the articles of incorporation or bylaws of the Company or any such
subsidiary; and to the best of such counsel's knowledge, neither the
Company nor any of its material subsidiaries is in violation of its
articles or incorporation or bylaws, or in material default under any
material agreement, indenture or instrument.
(iv) Except as disclosed in or incorporated by reference in the
Registration Statement, there is no action, suit or proceeding which
has been served upon the Company or any of its subsidiaries or of
which any of their properties or assets is the subject that is now
pending, or to such counsel's knowledge, overtly threatened, against
or affecting the Company or any of its subsidiaries or any of their
properties or assets that, if adversely determined, would have a
material adverse effect on the Company or its subsidiaries, taken as a
whole; and such counsel is not aware of any material contracts or
other material documents or legal or governmental proceedings which
are required to be filed as exhibits to the Registration Statement by
the Act or the Exchange Act which have not been so filed.
<PAGE>
17
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States of America
and laws of the Commonwealth of Pennsylvania.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Closing Date to the
effect that (a) each document filed by the Company under the Exchange Act and
incorporated by reference in the Registration Statement and each amendment or
supplement thereto, as of their respective dates or as of the date of any such
amendment or supplement thereto, (other than the financial statements (including
pro forma financial statements and notes to financial statements or pro forma
financial statements) and related schedules and other financial, accounting or
statistical information included in or excluded from such documents, as to which
such counsel need not express an opinion) appear on their face to be
appropriately responsive in all material respects to the requirements of the
Exchange Act and the rules and regulations thereunder and (b) no facts have come
to the attention of such counsel which lead him to believe that (I) the
Registration Statement, as of the Effective Date, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading
(other than the information omitted therefrom in reliance on Rule 430A), or (II)
any of the Prospectuses as amended or supplemented, as of its date and as of
each Closing Date, contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except that such counsel need not express a belief as
to any financial statements (including pro forma financial statements and notes
to financial statements or pro forma financial statements) and related
schedules, and other financial, accounting or statistical information included
in or excluded from the Registration Statement or the Prospectuses.
(d) You shall have received an opinion of Sullivan & Cromwell,
special counsel for the Selling Stockholders, dated the Closing Date, that:
(i) All regulatory consents, authorizations, approvals and
filings required to be made or obtained by the Selling Stockholders
under the Federal laws of the United States and the laws of the State
of New York for the sale and delivery of the Shares by the Selling
Stockholders to the Underwriters have been obtained or made.
(ii) Insofar as New York law is concerned, upon delivery of and
payment for the Shares to be sold to the Underwriters in the State of
New York pursuant to this Agreement, the Underwriters will have
acquired the Shares free of any adverse claim within the meaning of
Section 8-302 of the New York Uniform Commercial Code (the "Code").
(iii) The execution and delivery by the Selling Stockholders of
this Agreement and the sale by the Selling Stockholders of the Shares
in
<PAGE>
18
accordance with this Agreement will not violate any existing Federal
law of the United States or law of the State of New York.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of America
and laws of the State of New York.
(e) You shall have received an opinion of Michel Renault, General
Counsel of CGIP, dated the Closing Date, that:
(i) This Agreement has been duly authorized, executed and
delivered on behalf of the Selling Stockholders.
(ii) The sale of the Shares to be sold by the Selling
Stockholders as contemplated by this Agreement and the execution
delivery and performance of this Agreement by the Selling Stockholders
will not conflict with or constitute a breach of any of the terms or
provisions of, or constitute a default under, any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument known to such counsel to which such Selling
Stockholder is a party or by which it may be bound (including the
restrictions contained in the Shareholders Agreement, which have been
fully waived or satisfied), nor will such action result in any
violation or breach of the provisions of the statuts of such Selling
Stockholder or any law or administrative regulation or administrative
or court decree or order of any court or governmental authority or
agency known by such counsel to be applicable to such Selling
Stockholder.
(iii) No consent, approval, authorization, order, filing,
registration or qualification of or with any court or governmental
authority or agency is required for the sale of the Shares by the
Selling Stockholders as contemplated by this Agreement (except such
counsel need express no opinion as to any necessary qualification
under the securities laws of any foreign country).
(iv) The Selling Stockholders have full right, power and
authority to sell, assign, transfer and deliver, or to cause to be
sold, assigned, transferred and delivered, the Shares to be sold by
the Selling Stockholders to the Underwriters.
(v) The sale of the Shares as contemplated by this Agreement is
not subject to any contractual restrictions on transfer, except the
restrictions on transfers contained in the Shareholders Agreement,
which have been fully waived or satisfied.
<PAGE>
19
(vi) Upon delivery of the Shares to the Underwriters, and
payment therefor by the Underwriters pursuant to this Agreement, good
and valid title to the Shares, free and clear of all liens,
encumbrances, equities or claims has been transferred to each of the
several Underwriters.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the laws of the Republic of France. The
foregoing opinion does not address compliance by the Underwriters with foreign
security laws with respect to resales of the Charge in France.
(f) The Underwriters shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, an opinion, dated the Closing Date,
with respect to such matters as the International Representatives may
reasonably request.
(g) The Underwriters shall have received from the President or any
Vice President and a principal financial or accounting officer of the
Company a certificate, dated the Closing Date, in which such officers shall
state that, to the best of their knowledge and after reasonable
investigation, (i) the Registration Statement as of the Effective Time, and
the Prospectuses as of the date of any filing pursuant to Rule 424(b) and
on the Closing Date, did not include any untrue statement of a material
fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
since the Effective Time, no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statement or the
Prospectuses; (ii) there has not been, since the respective dates as of
which information is given in the Registration Statement and the
Prospectuses, any change or event that would be likely to have a Material
Adverse Effect, whether or not arising in the ordinary course of business;
(iii) in the case of representations and warranties in Section 2 qualified
as to materiality, such representations and warranties are true and correct
in all respects, and in the case of representations and warranties not so
qualified, such representations and warranties are true and correct in all
material respects, in each case on the part of the Company with the same
force and effect as though made on and as of the Closing Date and the
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing
Date; and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission.
(h) The Underwriters shall have received from the Selling
Stockholders a certificate, signed by the President or any Vice President
and a principal financial or accounting officer of CGIP, dated the Closing
Date, in which such officers shall state that, to the best of their
knowledge and after reasonable investigation, (i) the Selling Stockholders'
Information contained in the Registration Statement as of the Effective
Time, or in any Prospectus as of the date of any filing pursuant to Rule
424(b) and on the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
and (ii) in the case of representations and
<PAGE>
20
warranties in Section 3 qualified as to materiality, such representations
and warranties are true and correct in all respects, and in the case of
representations and warranties not so qualified, such representations and
warranties are true and correct in all material respects, in each case on
the part of the Selling Stockholders with the same force and effect as
though made on the Closing Date and the Selling Stockholders have complied
with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date.
(i) The Underwriters shall have received from Price Waterhouse LLP,
independent public accountants, two letters, the first dated the date of
this Agreement and the other dated the Closing Date, addressed to the Board
of Directors of the Company, the Underwriters and the Selling Stockholders
(with conformed copies for each of the Underwriters), substantially in the
form of Annex A hereto with such variations as are reasonably acceptable to
the International Representatives.
(j) The Underwriters shall have received from Befec-Price Waterhouse,
independent public accountants, two letters, the first dated the date of
this Agreement and the other dated the Closing Date, addressed to the Board
of Directors of the Company, the Underwriters and the Selling Stockholders
(with conformed copies for each of the Underwriters), substantially in the
form of Annex B hereto with such variations as are reasonably acceptable to
the International Representatives.
SECTION 8. Payment of Expenses. Other than the fees and expenses of
-------------------
the Company's counsel and accountants, the Selling Stockholders will pay all
costs, expenses, fees, disbursements and taxes incident to the sale of the
Shares contemplated hereby and in the U.S. Underwriting Agreement, including
without limitation (i) the preparation, printing, filing and distribution of the
Registration Statement (including financial statements and exhibits), the
Prospectuses, each Preliminary Prospectus and all amendments and supplements to
any of them prior to or during the period specified in Section 6(b), (ii) the
printing, reproduction and distribution of this Agreement and the U.S.
Underwriting Agreement, and all other underwriting and selling group documents
by mail, telex or other means, (iii) the registration with the Commission of the
Shares, (iv) the registration or qualification of the Shares for offer and sale
under the securities or Blue Sky laws of the several states and the preparation,
printing and distribution of Preliminary and Supplemental Blue Sky Memoranda and
Legal Investment Survey (including the reasonable fees and disbursements of the
U.S. Underwriters' counsel relating to the foregoing), (v) filing fees incurred
in connection with the National Association of Securities Dealers, Inc.'s review
of the offering's underwriting terms and arrangements, (vi) the fees and
expenses of the Registrar and Transfer Agent for the Shares and its counsel and
(vii) the fees and expenses of the Selling Stockholders' counsel and
accountants.
<PAGE>
21
If the sale of the International Shares provided for herein is not
consummated because of the failure to satisfy any condition to the obligations
of the International Underwriters, because of any breach of any representation,
warranty or covenant of the Selling Stockholders contained in this Agreement,
because of any termination pursuant to Section 11 hereof or because of any
refusal, failure or inability of the Company or the Selling Stockholders to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any International Underwriter, the Selling Stockholders
shall reimburse the International Underwriters for all of their reasonable out-
of-pocket expenses incurred in connection with marketing and preparing for the
offering of the Shares, including the reasonable fees and disbursements of
counsel for the International Underwriters.
SECTION 9. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each of the
International Underwriters and the Selling Stockholders and each person, if
any, who controls any International Underwriter or any Selling Stockholder
within the meaning of either Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (or actions in respect thereof) (including, without limiting
the foregoing, the reasonable legal and other expenses incurred in
connection with investigating or defending or preparing to defend or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action, as such expenses are incurred), insofar as
such losses, claims, damages, liabilities and expenses arise out of or are
based on any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the International
Prospectus or any International Preliminary Prospectus, or are caused by
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except (i) the Company shall not be liable to any International
Underwriter under the indemnity agreement in this paragraph (a) with
respect to any International Preliminary Prospectus to the extent that such
losses, claims, damages, liabilities or expenses result from the fact that
such International Underwriter sold Shares to a person as to whom there was
not sent or given, at or prior to the written confirmation of such sale, a
copy of the International Prospectus or of the International Prospectus as
then amended or supplemented in any case where such delivery is required by
the Act if
<PAGE>
22
the loss, claim, damage or liability of such International Underwriter
results from an untrue statement or omission of a material fact contained
in the International Preliminary Prospectus which was corrected in the
International Prospectus or in the International Prospectus as then amended
or supplemented if the Company had previously furnished copies thereof to
such International Underwriter and (ii) insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with (x) written information furnished to
the Company by or on behalf of the International Underwriters specifically
for use in the Registration Statement, the International Prospectus or any
International Preliminary Prospectus, it being understood and agreed that
the only such information furnished by any International Underwriter
consists of (A) the last paragraph of text on the cover page of the
International Prospectus (and any International Preliminary Prospectus)
concerning the terms of the offering by the International Underwriters, (B)
the second and third paragraphs on page 3 of the International Prospectus
(and any International Preliminary Prospectus) concerning over-allotment
and stabilization by the U.S. Underwriters and exemptions from Rules 10b-6,
10b-7 and 10b-8 under the Exchange Act and (C) the text under the caption
"Underwriting" in the International Prospectus (and any International
Preliminary Prospectus) concerning the terms of the offering by the
International Underwriters and the delivery of Shares pursuant thereto
(collectively, the "Underwriters' Information") or (y) written information
furnished to the Company by or on behalf of the Selling Stockholders
specifically for use in the Registration Statement, the International
Prospectus or any International Preliminary Prospectus, it being understood
and agreed that the only such information furnished by any Selling
Stockholder consists of the information under the caption "Selling
Shareholders" in the International Prospectus (or any International
Preliminary Prospectus), other than in respect of the Company's outstanding
capitalization (collectively, the "Selling Stockholders' Information").
This indemnity agreement will be in addition to any liability which the
Company may otherwise have to the persons referred to above in this Section
9(a). Notwithstanding anything to the contrary in this Agreement, the
Company shall not be liable to any Selling Stockholder under the indemnity
agreement in this paragraph (a) or for any breach of any representation or
warranty of the Company set forth in Section 2 with respect to the
statements in the International Prospectus (or any International
Preliminary Prospectus) relating to the terms and provisions of the
Shareholders Agreement (the "Shareholders Agreement Information").
(b) The Selling Stockholders agree, jointly and severally, to
indemnify and hold harmless each of the International Underwriters and each
person, if any, who controls any International Underwriter within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act
and the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the
meaning of either such Section, from and against any and all losses,
claims, damages and liabilities (or actions in respect thereof) (including,
without limiting the foregoing, the reasonable legal and other expenses
incurred in
<PAGE>
23
connection with investigating or defending or preparing to defend or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action, as such expenses are incurred) insofar as such
losses, claims, damages, liabilities and expenses arise out of or are based
on any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the International Prospectus or
any International Preliminary Prospectus or are caused by any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only in each
case with reference to the Selling Stockholders' Information; provided,
--------
however, that the Selling Stockholders shall not be liable to any
-------
International Underwriter under the indemnity agreement in this paragraph
(b) with respect to any International Preliminary Prospectus to the extent
that such losses, claims, damages, liabilities or expenses result solely
from the fact that such International Underwriter sold Shares to a person
as to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the International Prospectus or of the
International Prospectus as then amended or supplemented in any case where
such delivery is required by the Act if the loss, claim, damage or
liability of such International Underwriter results from an untrue
statement or omission of a material fact contained in the International
Preliminary Prospectus which was corrected in the International Prospectus
or in the International Prospectus as then amended or supplemented if the
Company had previously furnished copies thereof to such International
Underwriter. This indemnity agreement will be in addition to any liability
which the Selling Stockholders may otherwise have to the persons referred
to above in this Section 9(b). Notwithstanding anything to the contrary in
this Agreement, the Selling Stockholders shall not be liable to the Company
under the indemnity agreement in this paragraph (b) or for any breach of
any representation or warranty of the Selling Stockholders set forth in
Section 3 with respect to the Shareholders Agreement Information.
(c) Each International Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, the Selling Stockholders, the
directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the Company or
any Selling Stockholder within the meaning of either Section 15 of the Act
or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities (or actions in respect thereof) (including,
without limiting the foregoing, the reasonable legal and other expenses
incurred in connection with investigating or defending or preparing to
defend or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action, as such expenses are incurred)
insofar as such losses, claims, damages, liabilities and expenses arise out
of or are based on any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the International
Prospectus or any International Preliminary Prospectus, or are caused by
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, but only with reference to the Underwriters' Information. This
indemnity agreement will be in addition to any liability which the
International Underwriters may otherwise have to the persons referred to
above in this Section 9(c).
<PAGE>
24
(d) In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to any of the
three preceding paragraphs, such person (hereinafter called the indemnified
party) shall promptly notify the person against whom such indemnity may be
sought (hereinafter called the indemnifying party) in writing; however, the
omission to so notify the indemnifying party shall relieve the indemnifying
party from liability under the three preceding paragraphs only to the
extent prejudiced thereby. In case any action in respect of which
indemnification may be sought hereunder shall be brought against any
indemnified party and it shall notify an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it may desire, to assume the
defense thereof through counsel reasonably satisfactory to the indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 9
for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof, other than reasonable costs
of investigation (unless such indemnified party reasonably objects to such
assumption on the grounds that there may be defenses available to it which
are different from or in addition to those available to such indemnifying
party in which event the indemnified party shall be reimbursed by the
indemnifying party for the reasonable expenses incurred in connection with
retaining separate legal counsel). No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement
of any claim or pending or threatened proceeding in respect of the
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability arising out of such claim or proceeding.
(e) If the indemnification provided for in this Section 9 is
insufficient or unavailable to an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities and expenses in such proportion as is appropriate to reflect
the relative fault of the Company, the Selling Stockholders and the
International Underwriters in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations.
<PAGE>
25
The relative fault of the Company, the Selling Stockholders and the
International Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholders or by the
International Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission.
(f) The Company, each Selling Stockholder and each of the
International Underwriters agree that it would not be just and equitable if
contribution pursuant to Section 9(e) were determined by pro rata
allocation (even if the International Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to in the immediately preceding
paragraph shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of
Section 9(e), in no event shall any International Underwriter be required
to contribute any amount in excess of the amount by which the total price
at which the International Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such International Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The International
Underwriters' obligations to contribute pursuant to Section 9(e) are
several in proportion to the respective number of International Shares set
forth opposite their names in Schedule I hereto and not joint.
(g) The Company, the Selling Stockholders and the International
Underwriters agree that any indemnity provision contained in Section 5.5 of
the Shareholders Agreement or any other agreement between the Company on
the one hand and the Selling Stockholders on the other shall be superseded
for all purposes by this Section 9 in respect of the offer and sale of the
Shares.
<PAGE>
26
SECTION 10. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
- --------
Agreement, or contained in certificates of officers of the Company or the
Selling Stockholders submitted pursuant hereto, including indemnity and
contribution agreements, shall remain operative and in full force and effect,
regardless of any investigation, or any statement as to the results thereof,
made by or on behalf of any International Underwriter or any person controlling
any International Underwriter or by or on behalf of the Company, its officers or
directors or controlling persons, or by any Selling Stockholder or any person
controlling any Selling Stockholder, and shall survive acceptance of and payment
for the International Shares hereunder.
SECTION 11. Termination. This Agreement may be terminated for any
-----------
reason at any time prior to the delivery of and payment for the International
Shares on the Closing Date, by the International Underwriters upon the giving of
written notice by Lazard Capital Markets of such termination to the Company and
the Selling Stockholders, if prior to such time (i) there has been, since the
respective dates as of which information is given in the Registration Statement
and the International Prospectus, any Material Adverse Effect, whether or not
arising in the ordinary course of business, (ii) there has occurred any outbreak
or escalation of major hostilities or other national or international calamity
or crisis or material adverse change in existing national or international
financial, political, economic or securities market conditions, the effect of
which is such as to make it, in the judgement of Lazard Capital Markets,
impracticable or inadvisable to market the Shares in the manner contemplated in
the Prospectuses or enforce contracts for the sale of the Shares, or (iii)
trading in the Common Stock of the Company has been suspended by the Commission
or a national securities exchange, or trading generally on either the American
Stock Exchange or the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or a banking moratorium has been
declared by either Federal or New York authorities. In the event of any such
termination, the provisions of Section 8, the indemnity agreement and
contribution provisions set forth in Section 9, and the provisions of Section 15
shall remain in effect and, if the International Underwriters shall have
purchased any International Shares on the Closing Date prior to such
termination, then all representations and warranties of the Company and the
Selling Stockholders set forth in or made pursuant to this Agreement and all
obligations of the Company pursuant to Section 6 hereof shall survive such
termination.
SECTION 12. Default of International Underwriters. If, on the
-------------------------------------
Closing Date, any one or more of the International Underwriters shall fail or
refuse to purchase International Shares that it or they have agreed to purchase
hereunder on such date, and the aggregate number of International Shares which
such defaulting International Underwriter or International Underwriters agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
number of the International Shares to be purchased on such date by all
International Underwriters, the other International Underwriters shall be
obligated severally in the proportions that the number of International Shares
set forth opposite their respective names in Schedule I bear to the aggregate
number of International Shares set forth opposite
<PAGE>
27
the names of all such non-defaulting International Underwriters, or in such
other proportions as the International Representatives may specify, to purchase
the International Shares which such defaulting International Underwriter or
International Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of International Shares that
--------
any International Underwriter has agreed to purchase pursuant to Section 4 be
increased pursuant to this Section 12 by an amount in excess of one-ninth of
such number of International Shares without the written consent of such
International Underwriter. If, on the Closing Date, any International
Underwriter or International Underwriters shall fail or refuse to purchase
International Shares and the aggregate number of International Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of International Shares to be purchased on such date, and arrangements
satisfactory to the International Representatives, the Company and the Selling
Stockholders for the purchase of such International Shares are not made within
36 hours after such default, this Agreement shall terminate without liability on
the part of any nondefaulting International Underwriter or the Company or the
Selling Stockholders, except for the expenses to be paid or reimbursed by the
Company pursuant to Section 8 and the respective obligations of the Company, the
Selling Stockholders and the International Underwriters pursuant to Section 9;
provided, however, that if the International Underwriters shall have purchased
- -------- -------
any International Shares on the Closing Date prior to such termination, then all
representations and warranties of the Company and the Selling Stockholders set
forth in or made pursuant to this Agreement and all obligations of the Company
pursuant to Section 6 hereof shall survive such termination. In any such case
either the International Representatives or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectuses or in any other documents or arrangements may be effected. As used
in this Agreement, the term "International Underwriter" includes any person
substituted for an International Underwriter under this Section. Any action
taken under this paragraph shall not relieve any defaulting International
Underwriter from liability in respect of any default of such International
Underwriter under this Agreement.
SECTION 13. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Underwriters shall be directed to the International
Representatives c/o Lazard Capital Markets, 21 Moorfields, London EC2P 2HT
England, Attention: Syndicate Department; notices to the Company shall be
directed to it at Crown Cork & Seal Company, Inc., 9300 Ashton Road,
Philadelphia, PA 19136, facsimile transmission no. (215) 698-7050, Attention:
Alan W. Rutherford, Executive Vice President and Chief Financial Officer, and
Richard L. Krzyzanowski, Executive Vice President, Secretary and General
Counsel; and notices to the Selling Stockholders shall be directed to Compagnie
Generale d'Industrie et de Participations, 89 rue Taitbout, 75009 Paris, France,
Attention: Michel Renault, with a copy to Sullivan & Cromwell, 125 Broad Street,
New York, NY 10004, facsimile transmission no. (212) 558-3588, Attention: Allan
M. Chapin.
<PAGE>
28
SECTION 14. Parties. This Agreement shall inure to the benefit of
-------
and be binding upon the Company, its directors and officers who signed the
Registration Statement, the International Underwriters, the Selling
Stockholders, any controlling persons referred to herein and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person, firm or corporation any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. No purchaser of International Shares from
any International Underwriter shall be deemed to be a successor by reason merely
of such purchase.
SECTION 15. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the law of the State of New York.
SECTION 16. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign this Agreement and return to us seven counterparts
hereof.
Very truly yours,
CROWN CORK & SEAL COMPANY, INC.,
By
--------------------------------
Name:
Title:
COMPAGNIE GENERALE D'INDUSTRIE ET DE
PARTICIPATIONS,
By
--------------------------------
Name:
Title:
SOFISERVICE,
By
--------------------------------
Name:
Title:
<PAGE>
30
Confirmed and Accepted, as of the
date first above written:
LAZARD CAPITAL MARKETS
CS FIRST BOSTON LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
By: LAZARD CAPITAL MARKETS
By:
-----------------------------
Name:
Title:
Acting severally on behalf of
themselves and as International
Representatives of the several
International Underwriters
named in Schedule I hereto.
<PAGE>
Schedule I
----------
Number of International
International Underwriters Shares to be Purchased
- -------------------------- ----------------------
Lazard Capital Markets
CS First Boston Limited
Salomon Brothers International
Limited
-----------
Total 1,850,000
==========
<PAGE>
Schedule II
-----------
Selling Stockholder Number of International Shares to
- ------------------- ---------------------------------
be Sold
-------
Compagnie Generale d'Industrie et de
Participations
Sofiservice
---------
Total 1,850,000
=========
<PAGE>
Schedule III
------------
Material Subsidiaries
---------------------
CONSTAR International Inc.
Crown Beverage Packaging, Inc.
<PAGE>
Schedule IV
-----------
Directors and Officers
----------------------
<PAGE>
ANNEX A
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(i) of the International Underwriting Agreement,
Price Waterhouse LLP, shall furnish letters to the Board of Directors of the
Company, the Underwriters and the Selling Stockholders to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Prospectuses or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, and/or condensed financial statements derived
from audited financial statements of the Company for the periods specified
in such letter, as indicated in their reports attached to such letters,
copies of which have been furnished to the Underwriters;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with U.S. GAAP, consisting of a reading of the unaudited
financial statements and other information referred to below, a reading of
the latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Board of Directors and
the committees thereof of the Company and its subsidiaries since the date
of the latest audited financial statements included in the Prospectuses,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their attention that
caused them to believe that:
(A) the unaudited consolidated balance sheets and statements of
income, cash flows and stockholders' equity included or incorporated
by reference in the Prospectuses do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations, or are not in
conformity with U.S. GAAP applied on a basis substantially consistent
with the basis for the audited consolidated balance sheets and
statements of income, cash flows and stockholders' equity included or
incorporated by reference in the Prospectuses;
(B) any other unaudited income statement or cash flow statement
data and balance sheet items included in the Prospectuses do not agree
with the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and
<PAGE>
2
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Prospectuses;
(C) the unaudited financial statements which were not included in
the Prospectuses but from which were derived any unaudited condensed
financial statements referred to in paragraph (A) and any unaudited
income statement or cash flow statement data and balance sheet items
included in the Prospectuses and referred to in paragraph (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included or incorporated by
reference in the Prospectuses;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectuses
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Rules and Regulations or
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than three days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or minority interest in consolidated subsidiaries or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets, net
assets or stockholders' equity, or any changes in any other items
specified by the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectuses, except in each case for changes,
increases or decreases which the Prospectuses disclose have occurred
or may occur or which are described in such letter;
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectuses
to the specified date referred to in paragraph (E) there were any
decreases in consolidated net sales, operating income or income before
minority interest, or the total or per share amounts of consolidated
net income, or any changes in any other items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for decreases or
increases which the Prospectuses disclose have occurred or may occur
and which are described in such letter; and
(G) certain sections of the Prospectuses do not comply in all
material respects with the disclosure obligations under Regulation S-K
under the Exchange Act (e.g., "Selected Consolidated Financial
----
Information" (Item 301)) if (i) the information disclosed may be
obtained directly or
<PAGE>
3
indirectly from the Company's accounting records and (ii) such
information can be evaluated against reasonable criteria established
by the Commission;
(iv) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectuses and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. GAAP
standards, with respect to certain amounts, percentages and financial
information specified by the Underwriters, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectuses, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the U.S. and International
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All capitalized terms used herein have the meanings ascribed to
them in the underwriting agreement to which this Description is annexed.
<PAGE>
ANNEX B
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(j) of the International Underwriting Agreement,
Befec-Price Waterhouse, shall furnish letters to the Board of Directors of the
Company, the Underwriters and the Selling Stockholders to the effect that:
(i) They are independent certified public accountants with respect to
CarnaudMetalbox and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Prospectuses or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, and/or condensed financial statements derived
from audited financial statements of CarnaudMetalbox for the periods
specified in such letter, as indicated in their reports attached to such
letters, copies of which have been furnished to the Underwriters;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with U.S. GAAP, consisting of a reading of the unaudited
financial statements and other information referred to below, a reading of
the latest available interim financial statements of CarnaudMetalbox and
its subsidiaries, inspection of the minute books of the Board of Directors
and the committees thereof of CarnaudMetalbox and its subsidiaries since
the date of the latest audited financial statements included in the
Prospectuses, inquiries of officials of CarnaudMetalbox and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) the unaudited consolidated balance sheets and statements of
income, cash flows and stockholders' equity included or incorporated
by reference in the Prospectuses do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations, or are not in
conformity with U.S. GAAP applied on a basis substantially consistent
with the basis for the audited consolidated balance sheets and
statements of income, cash flows and stockholders' equity included or
incorporated by reference in the Prospectuses;
(B) any other unaudited income statement or cash flow statement
data and balance sheet items included in the Prospectuses do not agree
with the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis substantially
consistent with the basis for
<PAGE>
2
the corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the Prospectuses;
(C) the unaudited financial statements which were not included in
the Prospectuses but from which were derived any unaudited condensed
financial statements referred to in paragraph (A) and any unaudited
income statement or cash flow statement data and balance sheet items
included in the Prospectuses and referred to in paragraph (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included or incorporated by
reference in the Prospectuses;
(D) as of a specified date not more than three days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or minority interest in consolidated subsidiaries or any
increase in the consolidated long-term debt of CarnaudMetalbox and its
subsidiaries, or any decreases in consolidated net current assets, net
assets or stockholders' equity, or any changes in any other items
specified by the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectuses, except in each case for changes,
increases or decreases which the Prospectuses disclose have occurred
or may occur or which are described in such letter; and
(E) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectuses
to the specified date referred to in paragraph (D) there were any
decreases in consolidated net sales, operating income or income before
minority interest, or the total or per share amounts of consolidated
net income, or any changes in any other items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for decreases or
increases which the Prospectuses disclose have occurred or may occur
and which are described in such letter;
(iv) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectuses and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. GAAP
standards, with respect to certain amounts, percentages and financial
information specified by the Underwriters, which are derived from the
general accounting records of CarnaudMetalbox and its subsidiaries, which
appear in the Prospectuses, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the U.S. and International
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of CarnaudMetalbox and
its subsidiaries and have found them to be in agreement.
<PAGE>
3
All capitalized terms used herein have the meanings ascribed to them
in the underwriting agreement to which this Description is annexed.
<PAGE>
Exhibit 1.3
3,000,000 Shares
Crown Cork & Seal Company, Inc.
CONVERTIBLE PREFERRED STOCK
($41.8875 PAR VALUE)
UNDERWRITING AGREEMENT
----------------------
October __, 1996
Lazard Freres & Co. LLC
CS First Boston Corporation
Salomon Brothers Inc
c/o Lazard Freres & Co. LLC
30 Rockefeller Plaza
New York, New York 10020
Dear Sirs:
SECTION 1. Introductory. 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 Stockholders"), propose to sell to Lazard
Freres & Co. LLC, CS First Boston Corporation and Salomon Brothers Inc (the
"Underwriters") an aggregate of 3,000,000 shares (the "Firm Shares") of
Convertible Preferred Stock, par value $41.8875 per share (the "Convertible
Preferred Stock"), of Crown Cork & Seal Company, Inc. (the "Company"), each
Selling Stockholder selling the amount set forth opposite such Selling
Stockholder's name in Schedule II hereto. The Selling Stockholders also propose
to sell to the Underwriters, upon the terms and conditions set forth in Section
4 hereof, up to an additional 450,000 shares of Convertible Preferred Stock (the
"Additional Shares"), each Selling Stockholder selling the amount set forth
opposite such Selling Stockholder's name in Schedule II hereto. The Firm Shares
and the Additional Shares are hereinafter sometimes collectively referred to as
the "Shares".
It is understood that the Company and the Selling Stockholders are
concurrently entering into underwriting agreements dated the date hereof (the
"U.S. Common
<PAGE>
2
Stock Underwriting Agreement" and the "International Common Stock Underwriting
Agreement") in which the Selling Stockholders propose to sell to the several
Underwriters named therein (the "U.S. Common Stock Underwriters" and the
"International Common Stock Underwriters") an aggregate of 9,250,000 shares (the
"Common Firm Shares") of the Company's Common Stock, par value $5.00 per share
(the "Common Stock"). In addition, CGIP has agreed to sell to the U.S. Common
Stock Underwriters, upon the terms and conditions set forth in the U.S. Common
Stock Underwriting Agreement, up to an additional 1,387,500 shares of Common
Stock (the "Common Additional Shares" and, collectively with the Common Firm
Shares, the "Common Shares"). The respective closings under this Agreement, the
U.S. Common Stock Underwriting Agreement and the International Common Stock
Underwriting Agreement are not conditional on one another.
The Company and the Selling Stockholders hereby agree with the
Underwriters as follows (it being understood and agreed that the obligations set
forth herein are several in nature, unless expressly stated to the contrary):
SECTION 2. Representations, Warranties and Agreements of the Company.
---------------------------------------------------------
The Company represents and warrants to, and agrees with, (i) the several
Underwriters and (ii) in the case of clauses (a), (b), (c), (j) and (n) and the
second sentence of clause (g) below only, the Selling Stockholders (it being
understood and agreed that such representations and warranties to the Selling
Stockholders are being made solely in connection with the sale of the Shares
under this Agreement and subject to the last sentence of Section 9(a)), that:
(a) The Company meets the registrant requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). A registration
statement on Form S-3 (File No. 333-12787), including a form of prospectus
relating to the Shares, has been filed by the Company pursuant to the Act
with the Securities and Exchange Commission (the "Commission"). The
Company may have filed one or more amendments thereto, including the
related Preliminary Prospectus (as defined below), each of which (other
than documents incorporated by reference therein) has previously been
furnished to you. The Company will file with the Commission either (i)
prior to effectiveness of such registration statement, a further amendment
to such registration statement (including the form of final prospectus
relating to the Shares) or (ii) after effectiveness of such registration
statement, a final prospectus relating to the Shares in accordance with
Rules 430A and 424(b)(1) or (4) under the Act. In the case of clause (ii),
the Company has included or shall include in such registration statement,
as amended at the Effective Time (as defined below), all information (other
than information permitted to be omitted from such registration statement
when it becomes effective pursuant to Rule 430A ("Rule 430A Information"))
required by the Act and the rules and regulations thereunder (the "Rules
and Regulations") to be included in the final prospectus with respect to
the Shares and the offering thereof. As filed, such amendment and form of
final prospectus, or such final prospectus, shall contain all Rule 430A
Information, together with all other such required information, with
respect to the Shares and the offering thereof, and, except to the extent
you shall
<PAGE>
3
agree in writing to a modification (which shall not be unreasonably
withheld or delayed), shall be in all substantive respects in the form
furnished to you prior to the execution of this Agreement or, to the extent
not in such form, shall contain only such specific additional information
and other changes (beyond that contained in the latest Preliminary
Prospectus) as the Company has advised the Underwriters, prior to the
execution of this Agreement, will be included or made therein. For
purposes of this Agreement, "Effective Time" means the time as of which
such registration statement or the most recent post-effective amendment
thereto, if any, was or is declared effective by the Commission and each
date after the date hereof on which a document incorporated by reference in
the Registration Statement is filed. "Effective Date" means the date of
the Effective Time. The registration statement contains a prospectus to be
used in connection with the offering and sale of the Shares. Such
registration statement, as amended at the Effective Time, including
incorporated documents, exhibits and financial statements, and including
all Rule 430A Information, if any, and, any post-effective amendment
thereto that becomes effective prior to the Closing Date (as defined below)
is hereinafter referred to as the "Registration Statement", and the
prospectus relating to the Shares in the form first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)")
under the Act or, if no such filing is required, as included in the
Registration Statement is hereinafter referred to as the "Prospectus". Any
preliminary prospecus relating to the Shares included in such Registration
Statement or filed pursuant to Rule 424(a) under the Act is hereinafter
referred to as a "Preliminary Prospectus". Any reference herein to the
Registration Statement, a Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934 (the "Exchange Act") on or before the
Effective Time of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
references to information being "included", "contained" or "set forth in"
any such document (or similar expressions) shall be similarly construed;
and any reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement, any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Time of the
Registration Statement, or the issue date of any Preliminary Prospectus or
the Prospectus, as the case may be, deemed to be incorporated therein by
reference.
(b) At the Effective Time, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined in Section 4), the
Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the Rules and
Regulations; at the Effective Time, the Registration Statement did not or
will not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, at the Effective Time, the
Prospectus, if not filed
<PAGE>
4
pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Prospectus (and any
supplements thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to information
contained in or omitted from the Registration Statement or the Prospectus
(or any supplement thereto) in reliance upon and in conformity with the
Underwriters' Information or the Selling Stockholders' Information (as
defined in Section 9(a)).
(c) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and no proceedings for that
purpose shall have been instituted or threatened by the Commission, and
each Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the Rules and
Regulations, and did not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; except that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
the Underwriters' Information or the Selling Stockholders' Information.
(d) The historical consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) present fairly in all material respects the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
indicated and the results of their operations, the statements of their cash
flows and the changes in their financial position for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved (except as described in the notes to such
financial statements); and the supporting schedules, if any, included in
the Registration Statement present fairly in all material respects the
information required to be stated therein. The pro forma financial
statements included in the Registration Statement and the Prospectus (and
any amendment or supplement thereto) have been prepared on a basis
consistent with such historical financial statements (except as described
in such pro forma financial statements), include all material adjustments
to the historical financial data required to reflect the transactions to
which pro forma effect is given, give effect to assumptions made on a
reasonable basis, and present fairly in all material respects on a pro
forma basis the estimated consolidated financial position and results of
operations of the Company and its consolidated subsidiaries assuming that
such transactions had occurred on the date specified therein.
(e) There has not been sustained since the date of the latest audited
financial statements included in the Prospectus any material adverse change
in the financial condition, results of operations or business of the
Company and its subsidiaries
<PAGE>
5
considered as a whole (a "Material Adverse Effect"), except as set forth in
the Prospectus.
(f) The Company and each of its subsidiaries have been duly
incorporated and are validly existing in good standing under the laws of
their respective jurisdictions of organization with power and authority to
own, lease and operate their properties and conduct their businesses as
described in the Registration Statement and the Prospectus; and each of
them is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which it owns or leases properties
or in which the conduct of its business requires such qualification, except
to the extent that any such failure to be so qualified or be in good
standing would not, individually or in the aggregate, have a Material
Adverse Effect.
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all shares of capital stock of the Company outstanding,
including the Shares, have been duly authorized, are validly issued, fully
paid and non-assessable, and conform in all material respects to the
description thereof contained in the Prospectus. The sale of the Shares is
not subject to pre-emptive or other similar rights or restrictions on
transfer created by the Company under the Company's articles of
incorporation or bylaws, under applicable law or under any agreement to
which the Company is a party or of which the Company has actual knowledge
(other than those imposed by the Act, the Rules and Regulations, foreign
securities laws or state securities or Blue Sky laws and other than
restrictions on transfers contained in that certain Shareholders Agreement,
dated February 22, 1996, between the Company and CGIP (the "Shareholders
Agreement") which have been fully waived or satisfied); and the Shares are
duly listed and admitted for trading on the New York Stock Exchange (the
"NYSE").
(h) All of the issued and outstanding capital stock of each material
subsidiary of the Company listed on Schedule III hereto has been duly
authorized and validly issued and is fully paid and non-assessable, and,
except as set forth in the Prospectus, all the issued and outstanding
capital stock of each such material subsidiary is owned, directly or
through subsidiaries, by the Company, free and clear of any pledge, lien,
encumbrance, adverse claim or equity (collectively, a "Lien"), except for
any such Liens that would not, individually or in the aggregate, have a
Material Adverse Effect.
(i) Neither the Company nor any of its subsidiaries is in violation
of its or any of their charters or by-laws or other organizational
documents or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement or
instrument to which it or any of them is a party or by which it or any of
them or their properties may be bound, except any violations or defaults
that would not, individually or in the aggregate, have a Material Adverse
Effect.
<PAGE>
6
(j) No consent, approval, authorization, order, registration, filing
or qualification by or on behalf of the Company or any of its subsidiaries
of or with any court or governmental authority or agency or of the NYSE is
required for the sale of the Shares or the consummation of the transactions
contemplated by this Agreement, except such as may be required under the
Act, the Rules and Regulations or state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters; the execution and delivery of this Agreement, and the
consummation of the transactions contemplated herein will not (i) conflict
with or constitute a breach of any of the terms or provisions of, or
default under, or result in the creation or imposition of any Lien upon any
property or assets of the Company or any of its subsidiaries pursuant to,
any contract, indenture, mortgage, deed of trust, loan agreement, note,
lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject that is material to the Company and its
subsidiaries taken as a whole, (ii) result in any violation or breach of
the provisions of the charter or by-laws or other organizational documents
of the Company or any of its subsidiaries or (iii) result in any violation
of any law, administrative regulation or administrative or court decree or
order applicable to the Company, any of its material subsidiaries or their
respective property.
(k) The Company and its subsidiaries are in compliance with all laws
and regulations applicable to them and their respective properties and
possess all certificates, authorities or permits issued by, and have made
all filings with, the appropriate state, local, Federal or foreign
regulatory agencies or bodies necessary or desirable to conduct the
business now operated by them, except where noncompliance with such laws or
regulations or the failure to possess or make the same would not,
individually or in the aggregate, have a Material Adverse Effect, and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation, termination or modification of any
such certificate, authority, permit or filing, other than any such
revocation, termination or modification that would not, individually or in
the aggregate, have a Material Adverse Effect.
(l) Except as described in the Prospectus, there are no actions,
suits or proceedings before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
contemplated or threatened against the Company or any of its subsidiaries,
or to which any of their respective properties is subject, which, (i) if
adversely determined, would, individually or in the aggregate, result in
any Material Adverse Effect or (ii) questions the validity of this
Agreement or any action taken or required to be taken pursuant hereto.
(m) Each of the Company and its subsidiaries has good and marketable
title to all real and personal property owned by it, in each case free and
clear of any Lien,
<PAGE>
7
except (i) such as are referred to in the Prospectus or (ii) such as would
not, individually or in the aggregate, have a Material Adverse Effect; and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as would not, individually or in the aggregate,
have a Material Adverse Effect.
(n) This Agreement has been duly authorized, executed and delivered
by the Company.
(o) Other than the Shareholders Agreement, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include such
securities under the Registration Statement.
(p) Except as set forth in the Prospectus under the caption
"Underwriting", neither the Company nor, to the Company's knowledge, any of
its officers or directors or any of their respective affiliates is a
member of, or is associated or affiliated with a member of, the National
Association of Securities Dealers, Inc. ("NASD").
SECTION 3. Representations, Warranties and Agreements of the Selling
---------------------------------------------------------
Stockholders. Each Selling Stockholder, jointly and severally, represents and
- ------------
warrants to, and agrees with, (i) the several Underwriters and (ii) the Company
(it being understood and agreed that such representations and warranties to the
Company are being made solely in connection with the sale of the Shares under
this Agreement and subject to the last sentence of Section 9(b)), that:
(a) This Agreement has been duly authorized, executed and delivered
by or on behalf of such Selling Stockholder.
(b) Such Selling Stockholder has the legal right and power to execute
and deliver this Agreement and to sell, transfer and deliver the Shares to
be sold by such Selling Stockholder in the manner provided in this
Agreement, and no such action will result in any violation or breach of the
provisions of the charter or by-laws or other organizational documents of
such Selling Stockholder or any agreement or other instrument binding upon
such Selling Stockholder (including the restrictions on transfer contained
in the Shareholders Agreement, which have been fully waived or satisfied)
or any law, administrative regulation or administrative or court decree or
order applicable to such Selling Stockholder; and no consent, approval,
authorization, order, registration, filing or qualification of or with any
court or governmental authority or agency or of the NYSE is required for
the consummation of the transactions contemplated by this Agreement in
connection with the sale of the Shares by such Selling Stockholder, except
such as may be required under the Act, the Rules
<PAGE>
8
and Regulations or state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters.
(c) Such Selling Stockholder has, and will deliver to the
Underwriters upon payment therefor good and marketable title to the Shares
to be sold by such Selling Stockholder, free and clear of any Lien.
(d) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
(e) At the Effective Time, the Selling Stockholders' Information
contained in the Registration Statement did not or will not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
in the Selling Stockholders' Information not misleading; and, at the
Effective Time, the Selling Stockholders' Information contained in the
Prospectus, if not filed pursuant to Rule 424(b), did not or will not, and
on the date of any filing pursuant to Rule 424(b) and on the Closing Date,
the Selling Stockholders' Information contained in the Prospectus (and any
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements in the Selling Stockholders' Information, in the light of the
circumstances under which they were made, not misleading.
(f) There are no contracts, agreements or understandings between the
Selling Stockholders and any person that would give rise to a valid claim
against the Selling Stockholders or any Underwriter for a brokerage
commission, finder's fee or other like payment.
SECTION 4. Purchase, Sale and Delivery of Shares. On the basis of the
-------------------------------------
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, each Selling Stockholder, severally and
not jointly, hereby agrees to sell to the Underwriters, and each Underwriter
agrees, severally and not jointly, to purchase from such Selling Stockholder, at
a purchase price of $______ per Share (the "purchase price per Share"), the
respective number of Firm Shares (subject to adjustment by Lazard Freres & Co.
LLC to eliminate fractions) that bear the same proportion to the number of Firm
Shares to be sold by such Selling Stockholder as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto bears to the
total number of Firm Shares.
CGIP hereby agrees to sell to the Underwriters and, on the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Underwriters shall have the right
to purchase, severally and
<PAGE>
9
not jointly, from CGIP, pursuant to an option to be exercised in the 30-day
period commencing on the date of this Agreement, up to 450,000 Additional Shares
at the purchase price per Share. Additional Shares may be purchased solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase from CGIP that proportion of the
total number of Additional Shares (subject to adjustment by Lazard Freres & Co.
LLC to eliminate fractions) to be purchased from CGIP as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto
bears to the total number of Firm Shares.
Each Selling Stockholder will deliver the Firm Shares to the
Underwriters, against payment of the purchase price therefor by wire transfer of
same day funds to an account specified in writing by such Selling Stockholder.
Payment for the Firm Shares shall be made at the offices of Cravath, Swaine &
Moore at 10:00 A.M., New York Time, on _____________, 1996 or at such other
place or time not later than seven full business days thereafter as the
Underwriters and the Selling Stockholders determine (the "Initial Closing
Date").
CGIP will deliver the Additional Shares to the Underwriters, against
payment of the purchase price therefor by wire transfer of same day funds to an
account specified in writing by CGIP, at the offices of Cravath, Swaine & Moore
on such date and at such time (the "Option Closing Date"), as shall be specified
in the notice from Lazard Freres & Co. LLC to CGIP exercising the option to
purchase the Additional Shares. The Option Closing Date may be the same as the
Initial Closing Date but shall in no event be earlier than the Initial Closing
Date nor earlier than two nor later than ten business days after the giving of
the notice hereinafter referred to. Such notice may be given, by letter or by
telecopy or other facsimile transmission or by telephone (if subsequently
confirmed in writing), to CGIP at any time within 30 days after the date of this
Agreement. The Option Closing Date may be varied by agreement between the
Underwriters and CGIP. The Initial Closing Date and the Option Closing Date are
herein collectively referred to as the "Closing Date."
The certificates for all the Firm Shares and the Additional Shares so
to be delivered will be in such denominations and registered in such names as
the Underwriters request two full business days prior to the Initial Closing
Date or the Option Closing Date, as the case may be, and will be made available
at the offices of Lazard Freres & Co. LLC, New York, New York or, upon your
request, through the facilities of The Depository Trust Company, for checking
and packaging at least one full business day prior to the Initial Closing Date
or the Option Closing Date, as the case may be.
Each Selling Stockholder will not, without the prior written consent
of the Underwriters, offer, sell, pledge 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 Agreement;
provided, however, that the foregoing restriction shall not apply to
- -------- -------
<PAGE>
10
(i) the sale of the Shares to be sold hereunder, (ii) the sale of the Common
Shares to be sold under the U.S. Common Stock Underwriting Agreement and the
International Common Stock Underwriting Agreement, (iii) any conversion of
shares of Preferred Stock into shares of Common Stock pursuant to the terms of
the Preferred Stock and (iv) any disposition of any shares of Common Stock or
Preferred Stock pursuant to a bona fide pledge or grant of a security interest
to a major brokerage firm or financial institution to secure bona fide
indebtedness, or the sale of such shares upon foreclosure on such pledge,
provided that each purchaser of such shares upon foreclosure agrees to be bound
- --------
by the provisions of this paragraph.
SECTION 5. Offering by Underwriters. After the Registration
------------------------
Statement becomes effective, the several Underwriters will offer the Shares for
sale to the public on the terms and conditions as set forth in the Prospectus.
SECTION 6. Covenants of the Company. The Company covenants and
------------------------
agrees with the several Underwriters and the Selling Stockholders that:
(a) If the Effective Time is prior to the execution and delivery of
this Agreement, the Company will file the Prospectus with the Commission
pursuant to and in accordance with subparagraph (1) (or, if applicable, and
with the Underwriters' consent, subparagraph (4)) of Rule 424(b) within the
time period prescribed by such rule. The Company will advise the
Underwriters promptly of any proposal to amend or supplement the
Registration Statement as filed, or the Prospectus, and will not effect
such amendment or supplement or filing without the Underwriters' consent
(which shall not be unreasonably withheld or delayed). The Company will
also advise the Underwriters promptly after the Company receives notice of
the effectiveness of the Registration Statement (if the Effective Time is
subsequent to the execution and delivery of this Agreement), of the filing
and effectiveness of any amendment or supplement to the Registration
Statement or the Prospectus, and of the issuance by the Commission of any
stop order in respect of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or any
prospectus relating to the Shares or the initiation of proceedings for any
such purpose, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, or of any request by the Commission to
amend or supplement the Registration Statement or the Prospectus or for
additional information and will use its best efforts to prevent the
issuance of any such stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or any prospectus relating to the
Shares or suspending any such qualification and to obtain as soon as
possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of
<PAGE>
11
the circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the Prospectus or the
Registration Statement to comply with the Act, the Rules and Regulations or
any other law, the Company promptly will prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section
6, an amendment or supplement which will correct such statement or omission
or an amendment which will effect such compliance and will notify the
Underwriters and, upon their request, prepare and furnish without charge to
each Underwriter, each Selling Stockholder (except as provided below) and
to any dealer in securities as many copies as the Underwriters may from
time to time reasonably request, of the amended Prospectus or any
supplement to the Prospectus complying with Section 10(a) of the Act which
will correct such statement or omission or effect such compliance, it being
understood and agreed that the Selling Stockholders will pay all costs and
expenses incident to the preparation, printing, filing and distribution of
any such amendment or supplement.
(c) The Company will make generally available to the Company's
security holders as soon as practicable, but in any event not later than 18
months after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Act), an earnings statement that satisfies the
provisions of Section 11(a) of the Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(d) The Company will deliver to each of the Underwriters as many
conformed copies of the Registration Statement (as originally filed) and of
each amendment thereto (including exhibits filed therewith and documents
incorporated therein by reference) and copies of the Preliminary Prospectus
and the Prospectus as the Underwriters may reasonably request.
(e) The Company will take such action as the Underwriters may
reasonably request, in cooperation with the Underwriters to qualify the
Shares for offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as the Underwriters may
designate, and will maintain such qualifications in effect for as long as
may be required for the distribution of the Shares; provided, however, that
-------- -------
in no event shall the Company be obligated in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it shall not
then be qualified, or to execute a general consent to service of process in
any jurisdiction in which such a consent has not been previously filed, or
subject itself to taxation in any jurisdiction wherein it would not
otherwise be subject to tax but for the requirements of this paragraph.
The Company will file such statements and reports as may be required by the
laws of each jurisdiction in which the Shares have been qualified as above
provided.
<PAGE>
12
(f) The Company agrees that neither it nor any of its directors or
the principal executive officers set forth in Item 10 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 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 exercisable 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 Agreement; provided, however, that the
-------- -------
foregoing restriction shall not apply to any issuances or sales (a) in
connection with stock option, savings, benefit or compensation plans or
dividend reinvestment plans in existence on the date of this Agreement 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 of, or acquisition of assets of, another entity,
(c) required in the Company's judgment to prevent termination of the
Standstill Period (as defined in the Shareholders Agreement), or (d) by
such directors and officers of up to 300,000 shares of capital stock in the
aggregate; provided, further, that (i) in the case of clauses (b), (c) and
-------- -------
(d) above, the Company shall give the Underwriters at least 2 Business
Days' prior written notice of such issuance or sale and (ii) in the case of
clauses (b) and (c) above, the recipients of any such securities shall
agree to be bound by the provisions of this paragraph.
SECTION 7. Conditions of the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the Initial Closing Date will be subject (i) to the provisions of Section 11
herein, (ii) in the case of representations and warranties qualified as to
materiality, to the accuracy of such representations and warranties in all
respects, and in the case of representations and warranties not so qualified, to
the accuracy of such representations and warranties in all material respects, in
each case on the part of the Company and the Selling Stockholders herein as of
the date hereof and as of the Initial Closing Date with the same force and
effect as if made as of that date, (iii) to the accuracy of the statements of
Company officers and Selling Stockholder officers made in any certificates
furnished pursuant to the provisions hereof, (iv) to the performance by the
Company and the Selling Stockholders of their respective obligations hereunder
and (v) to the following additional conditions precedent:
(a) If the Effective Time is not prior to the execution and delivery
of this Agreement, the Effective Time shall have occurred not later than
(i) 6:00 p.m. New York City time on the date of determination of the
offering price, if such determination occurred at or prior to 3:00 p.m. New
York City time on such date or (ii) 12:00 noon New York City time on the
business day following the day on which the offering price was determined
if such determination occurred after 3:00 p.m. New York City time on such
date. If the Effective Time is prior to the execution and delivery of this
Agreement, the Company shall have filed the Prospectus with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
<PAGE>
13
such filing by the Rules and Regulations and in accordance with Section
6(a) hereof. In either case, prior to the Initial Closing Date no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted
or threatened by the Commission; and the Company shall have complied with
all requests for additional information on the part of the Commission to
the Underwriters' reasonable satisfaction.
(b) The Underwriters shall have received an opinion of Dechert Price
& Rhoads, counsel for the Company, dated the Initial Closing Date, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania; and the Company has the corporate power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged as described in the Prospectus.
(ii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iii) The execution, delivery and performance of this Agreement
by the Company and the sale of the Shares contemplated hereby do not
(a) conflict with or result in a violation of any of the provisions of
the articles of incorporation or bylaws of the Company, (b) conflict
with or violate in any material respect any Pennsylvania, New York or
United States Federal law, rule or regulation, or, to such counsel's
knowledge, any order, judgment or decree known to such counsel that
is applicable to the Company or by which any property or asset of the
Company or any of its subsidiaries is or may be bound (other than
Federal or state securities or blue sky laws, other anti-fraud laws
and fraudulent transfer laws and bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights, as to which such counsel
need not express any opinion) or (c) to such counsel's knowledge,
result in a material breach of any of the terms or provisions of, or
constitute a default under, any material loan or credit agreement,
indenture, deed of trust, mortgage, note or other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which any of them or any of its
properties or assets is or may be bound.
(iv) No consent, approval, authorization or other action by or
filing with any Pennsylvania, New York or United States Federal
governmental agency or body or Pennsylvania, New York or United States
Federal court having jurisdiction over the Company or any of its
properties is required to be obtained by the Company in connection
with the execution and delivery of this Agreement by the Company or
the consummation of the transactions contemplated hereby, except
filings and
<PAGE>
14
other actions required under the Act and the Rules and Regulations and
state securities and blue sky laws, as to which such counsel need not
express any opinion.
(v) The Company has an authorized capitalization as set forth in
the Prospectus; the Shares have been duly and validly authorized and
have been duly and validly issued, and are fully paid and
nonassessable; the Shares conform in all material respects to the
description thereof in the Prospectus.
(vi) The Registration Statement was declared effective under the
Act as of the date and time specified in such opinion, and, to the
knowledge of such counsel, no stop order has been issued and no
proceeding for that purpose is pending or threatened by the
Commission.
(vii) The statements set forth or referred to in the Prospectus
under the headings "Description of Capital Stock--General",
"Description of Capital Stock--Common Stock", "Description of Capital
Stock--Preferred Stock" and "Certain United States Federal Tax
Considerations for Non-U.S. Holders of Capital Stock" and in the
Registration Statement under Item 15, insofar as such statements
constitute a summary of the legal matters or documents referred to
therein fairly present the information called for with respect to such
legal matters or documents.
In rendering such opinion, such counsel may state that their opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the Commonwealth of Pennsylvania.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Initial Closing Date to
the effect that (i) the Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to the
Initial Closing Date (other than the financial statements (including pro forma
financial statements and notes to financial statements or pro forma financial
statements) and related schedules and other financial, accounting or statistical
information included in or excluded from the Registration Statement or the
Prospectus, as to which such counsel need express no belief) appear on their
face to be appropriately responsive in all material respects to the requirements
of the Act and the Rules and Regulations and (ii) such counsel participated in
conferences with officers and representatives of the Company, Price Waterhouse
LLP, the Underwriters, the Selling Stockholders and Cravath, Swaine & Moore in
connection with the preparation of the Registration Statement, and based on the
foregoing and without assuming responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or making any
independent check or verification thereof (and relying as to factual matters
upon the statements of officers and other representatives of the Company, the
Selling Stockholders and others), no facts have come to the attention of such
counsel which lead them to believe that (I) the Registration Statement, as
<PAGE>
15
of the Effective Date, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading (other than the information
omitted therefrom in reliance on Rule 430A), or (II) the Prospectus as amended
or supplemented, as of its date and as of each Closing Date, contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except
that such counsel need not express a belief as to any financial statements
(including pro forma financial statements and notes to financial statements or
pro forma financial statements) and related schedules, and other financial,
accounting or statistical information included in or excluded from the
Registration Statement or the Prospectus.
(c) The Underwriters shall also have received from Richard L.
Krzyzanowski, Executive Vice President, Secretary and General Counsel of the
Company, an opinion, dated the Initial Closing Date, to the effect that:
(i) Each of the Company and its material subsidiaries listed
on Schedule III hereto is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, with corporate power and authority to own, lease and
operate its properties and to conduct its business as presently
conducted and as described in the Registration Statement; and each of
the Company and such material subsidiaries is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or the ownership or leasing of its
property requires such qualification, except to the extent that the
failure to be so qualified or to be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole.
(ii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
made by the Company for the execution and delivery of this Agreement
by the Company or the consummation of the transactions contemplated
hereby, except such as have been obtained or made under the Act and
such as may be required under state securities and blue sky laws.
(iii) The execution, delivery and performance of this Agreement
by the Company and the sale of the Shares contemplated hereby will not
result in a material breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule,
regulation or order of any governmental agency or body of any court
having jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any material agreement or instrument to
which the Company or any such subsidiary is bound or to which any of
the properties of the Company or any such subsidiary is subject, or
the articles of incorporation or bylaws of the
<PAGE>
16
Company or any such subsidiary; and to the best of such counsel's
knowledge, neither the Company nor any of its material subsidiaries is
in violation of its articles or incorporation or bylaws, or in
material default under any material agreement, indenture or
instrument.
(iv) Except as disclosed in or incorporated by reference in the
Registration Statement, there is no action, suit or proceeding which
has been served upon the Company or any of its subsidiaries or of
which any of their properties or assets is the subject that is now
pending, or to such counsel's knowledge, overtly threatened, against
or affecting the Company or any of its subsidiaries or any of their
properties or assets that, if adversely determined, would have a
material adverse effect on the Company or its subsidiaries, taken as a
whole; and such counsel is not aware of any material contracts or
other material documents or legal or governmental proceedings which
are required to be filed as exhibits to the Registration Statement by
the Act or the Exchange Act which have not been so filed.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States of America
and laws of the Commonwealth of Pennsylvania.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Initial Closing Date to
the effect that (a) each document filed by the Company under the Exchange Act,
and incorporated by reference in the Registration Statement and each amendment
or supplement thereto, as of their respective dates or as of the date of any
such amendment or supplement thereto, (other than the financial statements
(including pro forma financial statements and notes to financial statements or
pro forma financial statements) and related schedules and other financial,
accounting or statistical information included in or excluded from such
documents, as to which such counsel need not express an opinion) appear on their
face to be appropriately responsive in all material respects to the requirements
of the Exchange Act and the rules and regulations thereunder and (b) no facts
have come to the attention of such counsel which lead him to believe that (I)
the Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading (other than the information omitted therefrom in reliance on Rule
430A), or (II) the Prospectus as amended or supplemented, as of its date and as
of each Closing Date, contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except that such counsel need not express a belief as
to any financial statements (including pro forma financial statements and notes
to financial statements or pro forma financial statements) and related
schedules, and other financial, accounting or statistical information included
in or excluded from the Registration Statement or the Prospectus.
<PAGE>
17
(d) You shall have received an opinion of Sullivan & Cromwell,
special counsel for the Selling Stockholders, dated the Initial Closing
Date, that:
(i) All regulatory consents, authorizations, approvals and
filings required to be made or obtained by the Selling Stockholders
under the Federal laws of the United States and the laws of the State
of New York for the sale and delivery of the Shares by the Selling
Stockholders to the Underwriters have been obtained or made.
(ii) Insofar as New York law is concerned, upon delivery of and
payment for the Shares to be sold to the Underwriters in the State of
New York pursuant to this Agreement, the Underwriters will have
acquired the Shares free of any adverse claim within the meaning of
Section 8-302 of the New York Uniform Commercial Code (the "Code").
(iii) The execution and delivery by the Selling Stockholders of
this Agreement and the sale by the Selling Stockholders of the Shares
in accordance with this Agreement will not violate any existing
Federal law of the United States or law of the State of New York.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of America
and laws of the State of New York.
(e) You shall have received an opinion of Michel Renault, General
Counsel of CGIP, dated the Initial Closing Date, that:
(i) This Agreement has been duly authorized, executed and
delivered on behalf of the Selling Stockholders.
(ii) The sale of the Shares to be sold by the Selling
Stockholders as contemplated by this Agreement and the execution
delivery and performance of this Agreement by the Selling Stockholders
will not conflict with or constitute a breach of any of the terms or
provisions of, or constitute a default under, any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument known to such counsel to which such Selling
Stockholder is a party or by which it may be bound (including the
restrictions contained in the Shareholders Agreement, which have been
fully waived or satisfied), nor will such action result in any
violation or breach of the provisions of the statuts of such Selling
Stockholder or any law or administrative regulation or administrative
or court decree or order of any court or governmental authority or
agency known by such counsel to be applicable to such Selling
Stockholder.
<PAGE>
18
(iii) No consent, approval, authorization, order, filing,
registration or qualification of or with any court or governmental
authority or agency is required for the sale of the Shares by the
Selling Stockholders as contemplated by this Agreement (except such
counsel need express no opinion as to any necessary qualification
under the securities laws of any foreign country).
(iv) The Selling Stockholders have full right, power and
authority to sell, assign, transfer and deliver, or to cause to be
sold, assigned, transferred and delivered, the Shares to be sold by
the Selling Stockholders to the Underwriters.
(v) The sale of the Shares as contemplated by this Agreement
is not subject to any contractual restrictions on transfer, except the
restrictions on transfers contained in the Shareholders Agreement,
which have been fully waived or satisfied.
(vi) Upon delivery of the Shares to the Underwriters, and
payment therefor by the Underwriters pursuant to this Agreement, good
and valid title to the Shares, free and clear of all liens,
encumbrances, equities or claims has been transferred to each of the
several Underwriters.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the laws of the Republic of France. The foregoing
opinion does not address compliance by the Underwriters with foreign securities
laws with respect to resales of the Shares in France.
(f) The Underwriters shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, an opinion, dated the Initial Closing
Date, with respect to such matters as the Underwriters may reasonably
request.
(g) The Underwriters shall have received from the President or any
Vice President and a principal financial or accounting officer of the
Company a certificate, dated the Initial Closing Date, in which such
officers shall state that, to the best of their knowledge and after
reasonable investigation, (i) the Registration Statement as of the
Effective Time, and the Prospectus as of the date of any filing pursuant to
Rule 424(b) and on the Closing Date, did not include any untrue statement
of a material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and since the Effective Time, no event has occurred which should have been
set forth in a supplement or amendment to the Registration Statement or the
Prospectus; (ii) there has not been, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
change or event that would be likely to have a Material Adverse Effect,
whether or not arising in the ordinary course of business; (iii) in the
case of representations and warranties in Section 2 qualified as to
materiality, such representations and warranties are true and correct in
all respects, and in the case of
<PAGE>
19
representations and warranties not so qualified, such representations and
warranties are true and correct in all material respects, in each case on
the part of the Company with the same force and effect as though made on
and as of the Initial Closing Date and the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Initial Closing Date; and (iv) no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been initiated or
threatened by the Commission.
(h) The Underwriters shall have received from the Selling
Stockholders a certificate, signed by the President or any Vice President
and a principal financial or accounting officer of CGIP, dated the Closing
Date, in which such officers shall state that, to the best of their
knowledge and after reasonable investigation, (i) the Selling Stockholders'
Information contained in the Registration Statement as of the Effective
Time, or in any Prospectus as of the date of any filing pursuant to Rule
424(b) and on the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
and (ii) in the case of representations and warranties in Section 3
qualified as to materiality, such representations and warranties are true
and correct in all respects, and in the case of representations and
warranties not so qualified, such representations and warranties are true
and correct in all material respects, in each case on the part of the
Selling Stockholders with the same force and effect as though made on the
Initial Closing Date and the Selling Stockholders have complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Initial Closing Date.
(i) The Underwriters shall have received from Price Waterhouse LLP,
independent public accountants, two letters, the first dated the date of
this Agreement and the other dated the Initial Closing Date, addressed to
the Board of Directors of the Company, the Underwriters and the Selling
Stockholders (with conformed copies for each of the Underwriters),
substantially in the form of Annex A hereto with such variations as are
reasonably acceptable to the Underwriters.
(j) The Underwriters shall have received from Befec-Price Waterhouse,
independent public accountants, two letters, the first dated the date of
this Agreement and the other dated the Initial Closing Date, addressed to
the Board of Directors of the Company, the Underwriters and the Selling
Stockholders (with conformed copies for each of the Underwriters),
substantially in the form of Annex B hereto with such variations as are
reasonably acceptable to the Underwriters.
The several obligations of the Underwriters to purchase the Additional
Shares hereunder are subject to (i) the accuracy (A) in all material respects of
the representations and warranties of the Company and the Selling Stockholders
contained herein that are qualified as to materiality and (B) in all respects of
such representations and warranties that are not so
<PAGE>
20
qualified, in each case as though made on and as of the Option Closing Date,
(ii) the performance by the Company and the Selling Stockholders of their
respective obligations hereunder, (iii) satisfaction on and as of the Option
Closing Date of the conditions set forth in subsections (a) to (j) of this
Section 7, inclusive (and, for purposes thereof, each reference therein to the
Initial Closing Date shall be deemed to refer to the Option Closing Date), and
(iv) the absence of circumstances on or prior to the Option Closing Date which
would permit termination of this Agreement pursuant to Section 11.
SECTION 8. Payment of Expenses. Other than the fees and expenses of
-------------------
the Company's counsel and accountants, the Selling Stockholders will pay all
costs, expenses, fees, disbursements and taxes incident to the sale of the
Shares contemplated hereby, including without limitation (i) the preparation,
printing, filing and distribution of the Registration Statement (including
financial statements and exhibits), the Prospectus, each Preliminary Prospectus
and all amendments and supplements to any of them prior to or during the period
specified in Section 6(b), (ii) the printing, reproduction and distribution of
this Agreement and all other underwriting and selling group documents by mail,
telex or other means, (iii) the registration with the Commission of the Shares,
(iv) the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the several states and the preparation,
printing and distribution of Preliminary and Supplemental Blue Sky Memoranda and
Legal Investment Survey (including the reasonable fees and disbursements of the
Underwriters' counsel relating to the foregoing), (v) filing fees incurred in
connection with the National Association of Securities Dealers, Inc.'s review of
the offering's underwriting terms and arrangements, (vi) the fees and expenses
of the Registrar and Transfer Agent for the Shares and its counsel and (vii) the
fees and expenses of the Selling Stockholders' counsel and accountants.
If the sale of the Shares provided for herein is not consummated
because of the failure to satisfy any condition to the obligations of the
Underwriters because of any breach of any representation, warranty or covenant
of the Selling Stockholders contained in this Agreement, because of any
termination pursuant to Section 11 hereof or because of any refusal, failure or
inability of the Company or the Selling Stockholders to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
any Underwriter, the Selling Stockholders shall reimburse the
<PAGE>
21
Underwriters for all of their reasonable out-of-pocket expenses incurred in
connection with marketing and preparing for the offering of the Shares,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 9. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each of the
Underwriters and the Selling Stockholders and each person, if any, who
controls any Underwriter or any Selling Stockholder within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (or actions in
respect thereof) (including, without limiting the foregoing, the reasonable
legal and other expenses incurred in connection with investigating or
defending or preparing to defend or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action, as such
expenses are incurred), insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based on any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or any Preliminary Prospectus, or
are caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except (i) the Company shall not be liable to any
Underwriter under the indemnity agreement in this paragraph (a) with
respect to any Preliminary Prospectus to the extent that such losses,
claims, damages, liabilities or expenses result from the fact that such
Underwriter sold Shares to a person as to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the
Prospectus or of the Prospectus as then amended or supplemented in any case
where such delivery is required by the Act if the loss, claim, damage or
liability of such Underwriter results from an untrue statement or omission
of a material fact contained in the Preliminary Prospectus which was
corrected in the Prospectus or in the Prospectus as then amended or
supplemented if the Company had previously furnished copies thereof to such
Underwriter and (ii) insofar as such losses, claims, damages, liabilities
or expenses arise out of or are based upon any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in
conformity with (x) written information furnished to the Company by or on
behalf of the Underwriters specifically for use in the Registration
Statement, the Prospectus or any Preliminary Prospectus, it being
understood and agreed that the only such information furnished by any
Underwriter consists of (A) the last paragraph of text on the cover page of
the Prospectus (and any Preliminary Prospectus) concerning the terms of the
offering by the Underwriters, (B) the second and third paragraphs on page 3
of the Prospectus (and any Preliminary Prospectus) concerning over-
allotment and stabilization by the Underwriters and exemptions from Rules
10b-6, 10b-7 and 10b-8 under the Exchange Act and (C) the text under the
caption "Underwriting" in the Prospectus (and any Preliminary Prospectus)
concerning the terms of the offering by the Underwriters and the delivery
of Shares pursuant thereto (collectively, the "Underwriters' Information")
or (y) written information furnished to the Company by
<PAGE>
22
or on behalf of the Selling Stockholders specifically for use in the
Registration Statement, the Prospectus or any Preliminary Prospectus, it
being understood and agreed that the only such information furnished by any
Selling Stockholder consists of the information under the caption "Selling
Shareholders" in the Prospectus (or any Preliminary Prospectus), other than
in respect of the Company's outstanding capitalization (collectively, the
"Selling Stockholders' Information"). This indemnity agreement will be in
addition to any liability which the Company may otherwise have to the
persons referred to above in this Section 9(a). Notwithstanding anything
to the contrary in this Agreement, the Company shall not be liable to any
Selling Stockholder under the indemnity agreement in this paragraph (a) or
for any breach of any representation or warranty of the Company set forth
in Section 2 with respect to the statements in the Prospectus (or any
Preliminary Prospectus) relating to the terms and provisions of the
Shareholders Agreement (the "Shareholders Agreement Information").
(b) The Selling Stockholders agree, jointly and severally, to
indemnify and hold harmless each of the Underwriters and each person, if
any, who controls any Underwriter within the meaning of either Section 15
of the Act or Section 20 of the Exchange Act and the Company, its
directors, its officers who sign the Registration Statement and each
person, if any, who controls the Company within the meaning of either such
Section, from and against any and all losses, claims, damages and
liabilities (or actions in respect thereof) (including, without limiting
the foregoing, the reasonable legal and other expenses incurred in
connection with investigating or defending or preparing to defend or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action, as such expenses are incurred) insofar as such
losses, claims, damages, liabilities and expenses arise out of or are based
on any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus or are caused by any omission or alleged omission to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only in each case with reference
to the Selling Stockholders' Information; provided, however, that the
-------- -------
Selling Stockholders shall not be liable to any Underwriter under the
indemnity agreement in this paragraph (b) with respect to any Preliminary
Prospectus to the extent that such losses, claims, damages, liabilities or
expenses result solely from the fact that such Underwriter sold Shares to a
person as to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus or of the Prospectus
as then amended or supplemented in any case where such delivery is required
by the Act if the loss, claim, damage or liability of such Underwriter
results from an untrue statement or omission of a material fact contained
in the Preliminary Prospectus which was corrected in the Prospectus or in
the Prospectus as then amended or supplemented if the Company had
previously furnished copies thereof to such Underwriter. This indemnity
agreement will be in addition to any liability which the Selling
Stockholders may otherwise have to the persons referred to above in this
Section 9(b). Notwithstanding anything to the contrary in
<PAGE>
23
this Agreement, the Selling Stockholders shall not be liable to the Company
under the indemnity agreement in this paragraph (b) or for any breach of a
representation or warranty of the Selling Stockholders set forth in Section
3 with respect to the Shareholders Agreement Information.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Selling Stockholders, the directors of
the Company, the officers of the Company who sign the Registration
Statement and each person, if any, who controls the Company or any Selling
Stockholder within the meaning of either Section 15 of the Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages
and liabilities (or actions in respect thereof) (including, without
limiting the foregoing, the reasonable legal and other expenses incurred in
connection with investigating or defending or preparing to defend or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action, as such expenses are incurred) insofar as such
losses, claims, damages, liabilities and expenses arise out of or are based
on any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or are caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only with reference to
the Underwriters' Information. This indemnity agreement will be in
addition to any liability which the Underwriters may otherwise have to the
persons referred to above in this Section 9(c).
(d) In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to any of the
three preceding paragraphs, such person (hereinafter called the indemnified
party) shall promptly notify the person against whom such indemnity may be
sought (hereinafter called the indemnifying party) in writing; however, the
omission to so notify the indemnifying party shall relieve the indemnifying
party from liability under the three preceding paragraphs only to the
extent prejudiced thereby. In case any action in respect of which
indemnification may be sought hereunder shall be brought against any
indemnified party and it shall notify an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it may desire, to assume the
defense thereof through counsel reasonably satisfactory to the indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 9
for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof, other than reasonable costs
of investigation (unless such indemnified party reasonably objects to such
assumption on the grounds that there may be defenses available to it which
are different from or in addition to those available to such indemnifying
party in which event the indemnified party shall be reimbursed by the
indemnifying party for the reasonable expenses incurred in
<PAGE>
24
connection with retaining separate legal counsel). No indemnifying party
shall, without the prior written consent of the indemnified party, effect
any settlement of any claim or pending or threatened proceeding in respect
of the indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability arising out of such claim or proceeding.
(e) If the indemnification provided for in this Section 9 is
insufficient or unavailable to an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities and expenses in such proportion as is appropriate to reflect
the relative fault of the Company, the Selling Stockholders and the
Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any
other relevant equitable considerations. The relative fault of the Company,
the Selling Stockholders and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Stockholders or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(f) The Company, each Selling Stockholder and each of the
Underwriters agree that it would not be just and equitable if contribution
pursuant to Section 9(e) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take
<PAGE>
25
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to in the immediately preceding paragraph shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of Section 9(e), in
no event shall any Underwriter be required to contribute any amount in
excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to Section 9(e) are several in proportion to the respective number
of Firm Shares set forth opposite their names in Schedule I hereto and not
joint.
(g) The Company, the Selling Stockholders and the Underwriters agree
that any indemnity provision contained in Section 5.5 of the Shareholders
Agreement or any other agreement between the Company on the one hand and
the Selling Stockholders on the other shall be superseded for all purposes
by this Section 9 in respect of the offer and sale of the Shares.
SECTION 10. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
- --------
Agreement, or contained in certificates of officers of the Company or the
Selling Stockholders submitted pursuant hereto, including indemnity and
contribution agreements, shall remain operative and in full force and effect,
regardless of any investigation, or any statement as to the results thereof,
made by or on behalf of any Underwriter or any person controlling any
Underwriter or by or on behalf of the Company, its officers or directors or
controlling persons, or by any Selling Stockholder or any person controlling any
Selling Stockholder, and shall survive acceptance of and payment for the Shares
hereunder.
SECTION 11. Termination. This Agreement may be terminated for any
-----------
reason at any time prior to the delivery of and payment for the Shares on the
Initial Closing Date or the Option Closing Date, as the case may be, by the
Underwriters upon the giving of written notice by Lazard Freres & Co. LLC of
such termination to the Company and the Selling Stockholders, if prior to such
time (i) there has been, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any Material Adverse
Effect, whether or not arising in the ordinary course of business, (ii) there
has occurred any outbreak or escalation of major hostilities or other national
or international calamity or crisis or material adverse change in existing
national or international financial, political, economic or securities market
conditions, the effect of which is such as to make it, in the judgement of
Lazard Freres & Co. LLC, impracticable or inadvisable to market the Shares in
the manner contemplated in the
<PAGE>
26
Prospectus or enforce contracts for the sale of the Shares, or (iii) trading in
the Common Stock of the Company has been suspended by the Commission or a
national securities exchange, or trading generally on either the American Stock
Exchange or the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or a banking moratorium has been
declared by either Federal or New York authorities. In the event of any such
termination, the provisions of Section 8, the indemnity agreement and
contribution provisions set forth in Section 9, and the provisions of Section 15
shall remain in effect and, if the Underwriters shall have purchased any Shares
on the Initial Closing Date prior to such termination, then all representations
and warranties of the Company and the Selling Stockholders set forth in or made
pursuant to this Agreement and all obligations of the Company pursuant to
Section 6 hereof shall survive such termination.
SECTION 12. Default of Underwriters. If, on the Initial Closing Date
-----------------------
or the Option Closing Date, as the case may be, any one or more of the
Underwriters shall fail or refuse to purchase Shares that it or they have agreed
to purchase hereunder on such date, and the aggregate number of Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of the Shares to be
purchased on such date by all Underwriters, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bear to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as Lazard Freres & Co. LLC may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
--------
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Section 4 be increased pursuant to this Section 12 by an
amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Initial Closing Date or the Option
Closing Date, as the case may be, any Underwriter or Underwriters shall fail or
refuse to purchase Shares and the aggregate number of Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Shares to be purchased on such date, and arrangements satisfactory to the
Underwriters, the Company and the Selling Stockholders for the purchase of such
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any nondefaulting Underwriter or the
Company or the Selling Stockholders, except for the expenses to be paid or
reimbursed by the Company pursuant to Section 8 and the respective obligations
of the Company, the Selling Stockholders and the Underwriters pursuant to
Section 9; provided, however, that if the Underwriters shall have purchased any
-------- -------
Shares on the Initial Closing Date prior to such termination, then all
representations and warranties of the Company and the Selling Stockholders set
forth in or made pursuant to this Agreement and all obligations of the Company
pursuant to Section 6 hereof shall survive such termination. In any such case
either the Underwriters or the Company shall have the right to postpone the
Initial Closing Date or the Option Closing Date, as the case may be, but in no
event for longer than seven days, in order that the required changes, if any, in
the Registration Statement and in the Prospectus or
<PAGE>
27
in any other documents or arrangements may be effected. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
SECTION 13. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters c/o Lazard Freres & Co. LLC,
30 Rockefeller Plaza, New York, NY 10020, Attention: Syndicate Department;
notices to the Company shall be directed to it at Crown Cork & Seal Company,
Inc., 9300 Ashton Road, Philadelphia, PA 19136, facsimile transmission no. (215)
698-7050, Attention: Alan W. Rutherford, Executive Vice President and Chief
Financial Officer, and Richard L. Krzyzanowski, Executive Vice President,
Secretary and General Counsel; and notices to the Selling Stockholders shall be
directed to Compagnie Generale d'Industrie et de Participations, 89 rue
Taitbout, 75009 Paris, France, Attention: Michel Renault, with a copy to
Sullivan & Cromwell, 125 Broad Street, New York, NY 10004, facsimile
transmission no. (212) 558-3588, Attention: Allan M. Chapin.
SECTION 14. Parties. This Agreement shall inure to the benefit of
-------
and be binding upon the Company, its directors and officers who signed the
Registration Statement, the Underwriters, the Selling Stockholders, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Shares from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
SECTION 15. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the law of the State of New York.
SECTION 16. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
<PAGE>
28
If the foregoing is in accordance with your understanding of our
agreement, please sign this Agreement and return to us seven counterparts
hereof.
Very truly yours,
CROWN CORK & SEAL COMPANY, INC.,
By
--------------------------------
Name:
Title:
COMPAGNIE GENERALE D'INDUSTRIE ET DE
PARTICIPATIONS,
By
--------------------------------
Name:
Title:
SOFISERVICE,
By
--------------------------------
Name:
Title:
<PAGE>
29
Confirmed and Accepted, as of the
date first above written:
LAZARD FRERES & CO. LLC
CS FIRST BOSTON CORPORATION
SALOMON BROTHERS INC
By: LAZARD FRERES & CO. LLC
---------------------------
By:
---------------------------
Name:
Title:
Acting severally on behalf of
themselves as Underwriters
<PAGE>
Schedule I
----------
Number of Firm Shares
Underwriters to be Purchased
- ------------ ---------------------
Lazard Freres & Co. LLC
CS First Boston Corporation
Salomon Brothers Inc
_________
Total 3,000,000
=========
<PAGE>
Schedule II
-----------
<TABLE>
<CAPTION>
Number of
Additional
Shares to be
Number of Firm Sold if Maximum
Selling Stockholder Shares to be Sold Option Exercised
- ------------------- ----------------- ----------------
<S> <C> <C>
Compagnie Generale d'Industrie
et de Participations 2,331,024 450,000
Sofiservice 668,976 0
--------- -------
Total 3,000,000 450,000
========= =======
</TABLE>
<PAGE>
Schedule III
------------
Material Subsidiaries
---------------------
CONSTAR International Inc.
Crown Beverage Packaging, Inc.
<PAGE>
Schedule IV
-----------
Directors and Officers
----------------------
<PAGE>
ANNEX A
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(i) of the Underwriting Agreement, Price
Waterhouse LLP, shall furnish letters to the Board of Directors of the Company,
the Underwriters and the Selling Stockholders to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, and/or condensed financial statements derived
from audited financial statements of the Company for the periods specified
in such letter, as indicated in their reports attached to such letters,
copies of which have been furnished to the Underwriters;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with U.S. GAAP, consisting of a reading of the unaudited
financial statements and other information referred to below, a reading of
the latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Board of Directors and
the committees thereof of the Company and its subsidiaries since the date
of the latest audited financial statements included in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their attention that
caused them to believe that:
(A) the unaudited consolidated balance sheets and statements of
income, cash flows and stockholders' equity included or incorporated
by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations, or are not in
conformity with U.S. GAAP applied on a basis substantially consistent
with the basis for the audited consolidated balance sheets and
statements of income, cash flows and stockholders' equity included or
incorporated by reference in the Prospectus;
(B) any other unaudited income statement or cash flow statement
data and balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated financial
statements from
<PAGE>
2
which such data and items were derived, and any such unaudited data
and items were not determined on a basis substantially consistent with
the basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Prospectus;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived any unaudited condensed
financial statements referred to in paragraph (A) and any unaudited
income statement or cash flow statement data and balance sheet items
included in the Prospectus and referred to in paragraph (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included or incorporated by
reference in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Rules and Regulations or
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than three days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or minority interest in consolidated subsidiaries or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets, net
assets or stockholders' equity, or any changes in any other items
specified by the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter;
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in paragraph (E) there were any
decreases in consolidated net sales, operating income or income before
minority interest, or the total or per share amounts of consolidated
net income, or any changes in any other items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for decreases or
increases which the Prospectus discloses have occurred or may occur
and which are described in such letter; and
(G) certain sections of the Prospectus do not comply in all
material respects with the disclosure obligations under Regulation S-K
under the
<PAGE>
3
Exchange Act (e.g., "Selected Consolidated Financial Information"
(Item 301)) if (i) the information disclosed may be obtained directly
or indirectly from the Company's accounting records and (ii) such
information can be evaluated against reasonable criteria established
by the Commission;
(iv) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. GAAP
standards, with respect to certain amounts, percentages and financial
information specified by the Underwriters, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Underwriters and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
All capitalized terms used herein have the meanings ascribed to them
in the underwriting agreement to which this Description is annexed.
<PAGE>
ANNEX B
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(j) of the Underwriting Agreement, Befec-Price
Waterhouse, shall furnish letters to the Board of Directors of the Company, the
Underwriters and the Selling Stockholders to the effect that:
(i) They are independent certified public accountants with respect to
CarnaudMetalbox and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, and/or condensed financial statements derived
from audited financial statements of CarnaudMetalbox for the periods
specified in such letter, as indicated in their reports attached to such
letters, copies of which have been furnished to the Underwriters;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with U.S. GAAP, consisting of a reading of the unaudited
financial statements and other information referred to below, a reading of
the latest available interim financial statements of CarnaudMetalbox and
its subsidiaries, inspection of the minute books of the Board of Directors
and the committees thereof of CarnaudMetalbox and its subsidiaries since
the date of the latest audited financial statements included in the
Prospectus, inquiries of officials of CarnaudMetalbox and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated balance sheets and statements of
income, cash flows and stockholders' equity included or incorporated
by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations, or are not in
conformity with U.S. GAAP applied on a basis substantially consistent
with the basis for the audited consolidated balance sheets and
statements of income, cash flows and stockholders' equity included or
incorporated by reference in the Prospectus;
(B) any other unaudited income statement or cash flow statement
data and balance sheet items included in the Prospectus do not agree
with the
<PAGE>
2
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included or incorporated by
reference in the Prospectus;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived any unaudited condensed
financial statements referred to in paragraph (A) and any unaudited
income statement or cash flow statement data and balance sheet items
included in the Prospectus and referred to in paragraph (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included or incorporated by
reference in the Prospectus;
(D) as of a specified date not more than three days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or minority interest in consolidated subsidiaries or any
increase in the consolidated long-term debt of CarnaudMetalbox and its
subsidiaries, or any decreases in consolidated net current assets, net
assets or stockholders' equity, or any changes in any other items
specified by the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(E) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in paragraph (D) there were any
decreases in consolidated net sales, operating income or income before
minority interest, or the total or per share amounts of consolidated
net income, or any changes in any other items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for decreases or
increases which the Prospectus discloses have occurred or may occur
and which are described in such letter;
(iv) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. GAAP
standards, with respect to certain amounts, percentages and financial
information specified by the Underwriters, which are derived from the
general accounting records of CarnaudMetalbox and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement
<PAGE>
3
specified by the Underwriters, and have compared certain of such amounts,
percentages and financial information with the accounting records of
CarnaudMetalbox and its subsidiaries and have found them to be in
agreement.
All capitalized terms used herein have the meanings ascribed to them
in the underwriting agreement to which this Description is annexed.
<PAGE>
EXHIBIT 1.4
October 24, 1996
Lazard Freres & Co. LLC
CS First Boston Corporation
Salomon Brothers Inc
c/o Lazard Freres & Co. LLC
30 Rockefeller Plaza
New York, New York 10020
Lazard Capital Markets
CS First Boston Limited
Salomon Brothers International Limited
c/o Lazard Capital Markets
21 Moorfields
London EC2P 2HT England
Dear Sirs:
This letter is in reference to (i) the U.S. Underwriting Agreement
(the "U.S. Underwriting Agreement"), to be entered into today among Crown
Cork & Seal Company, Inc. ("Crown"), Compagnie Generale d'Industrie et de
Participations ("CGIP"), Sofiservice ("Sofiservice" and, together with CGIP the
"Selling Stockholders") and Lazard Freres & Co. LLC, CS First Boston Corporation
and Salomon Brothers Inc, as representatives of several U.S. underwriters to be
named in Schedule I thereto (the "U.S. Underwriters") with respect to up to
8,787,500 shares (the "U.S. Common Shares") of Common Stock, par value $5.00 per
share ("Common Stock"), of Crown, (ii) the International Underwriting Agreement
(the "International Underwriting Agreement"), to be entered into today among
Crown, the Selling Stockholders and Lazard Capital Markets, CS First Boston
Limited and Salomon Brothers International Limited, as representatives of the
several international underwriters to be named in Schedule I thereto (the
"International Underwriters") with respect to up to 1,850,000 shares (the
"International Shares") of Common Stock, and (iii) the Underwriting Agreement
(together with the U.S. Underwriting Agreement and the International
Underwriting Agreement, the "Underwriting Agreements"), to be entered into today
among Crown, the Selling Stockholders and Lazard Freres & Co. LLC, CS First
Boston Corporation and Salomon Brothers Inc (together with the U.S. and
International Underwriters, the "Underwriters") with respect to up to 3,450,000
shares (the "Preferred Shares" and together with the U.S. Shares and the
<PAGE>
International Shares, the "Shares") of 4.5% Convertible Preferred Stock, par
value $41.8875 per share, of Crown.
In the event that the indemnification provided under Section 9 of the
respective Underwriting Agreements and the contribution provided for under
Section 9(e) of the respective Underwriting Agreements is insufficient or
unavailable to the respective Underwriters thereunder (or any person who
controls an Underwriter within the meaning of Section 15 of the Securities Act
of 1933 or Section 20 of the Securities Exchange Act of 1934) with respect to
any losses, claims, damages or liabilities ("Losses") referred to in Sections
9(a) and 9(b) of the respective Underwriting Agreements of such Underwriters or
such controlling persons (other than any Losses referred to in Section 9(a)(i)
and (ii)(x) of the Underwriting Agreements), the Selling Stockholders shall
contribute to such Underwriters and such controlling persons in respect of such
Losses in such proportion as is appropriate to reflect the relative benefits
received by the Selling Stockholders on the one hand and such Underwriters on
the other from the offering of the Shares or, if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect
both such relative benefits as well as the relative fault (as determined
pursuant to the respective Underwriting Agreements) of such Underwriters, on the
one hand, and the Selling Stockholders and Crown, on the other, in connection
with the statements or omissions which resulted in such Losses as well as other
relevant equitable considerations. The relative benefits received by the Selling
Stockholders on the one hand and such Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Selling Stockholders bear to the total
Underwriting discounts and commissions received by such Underwriters, in each
case as set forth in the table on the cover page of the prospectuses relating
to the offerings.
-2-
<PAGE>
Please sign in the space indicated below to
indicate your agreement with the foregoing.
Very truly yours,
COMPAGNIE GENERALE D'INDUSTRIE
ET DE PARTICIPATIONS
By:
-------------------------------------
Name:
Title:
SOFISERVICE
By:
-------------------------------------
Name:
Title:
Accepted as of the date hereof:
Lazard Freres & Co. LLC
CS First Boston Corporation
Salomon Brothers Inc.
By:
-------------------------------------
Name:
Title:
Lazard Capital Markets
CS First Boston Limited
Salomon Brothers International Limited
By:
-------------------------------------
Name:
Title:
On behalf of each of the Underwriters
-3-
<PAGE>
October 24, 1996
Crown Cork & Seal Company, Inc.
9300 Ashton Road
Philadelphia, PA 19136
Dear Sirs:
We have acted as counsel to Crown Cork & Seal Company, Inc., a Pennsylvania
corporation (the "Company"), in connection with the filing by the Company of its
Registration Statement (File No. 333-12787), as amended, on Form S-3 (the
"Registration Statement"), with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act").
The Registration Statement relates to the offering of up to 10,637,500
shares of the Company's common stock, par value $5.00 per share, and 3,450,000
shares of the Company's 4.5% convertible preferred stock, par value $41.8875 per
share (collectively, the "Shares"), by Compagnie Generale d'Industrie et de
Participations and Sofiservice, each a societe anonyme organized under the laws
---------------
of the Republic of France (collectively, the "Selling Stockholders").
We have examined such records and documents as we have deemed necessary in
order to enable us to express the opinion set forth below.
In our examination, we have assumed the genuiness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity to
authentic original documents of all documents submitted to us as copies.
Upon the basis of the foregoing, we are of the opinion that the Shares to
be sold by the Selling Stockholders pursuant to the Registration Statement have
been duly authorized and validly issued and are fully paid and nonassessable.
<PAGE>
The opinion expressed herein is rendered solely for your benefit in
connection with the transaction contemplated herein. The opinion expressed
herein may not be used or relied on by any other person, nor may this letter or
any copies thereof be furnished to a third party, filed with a government
agency, quoted, cited or otherwise referred to without our prior written
consent, except as noted below.
We hereby consent to the filing of this opinion letter as Exhibit 5.1 to
the Registration Statement and to the reference to this opinion letter under the
caption "Legal Matters" in the prospectus forming a part of the Registration
Statement. In giving such consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act.
Very truly yours,
DECHERT PRICE & RHOADS
<PAGE>
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
March 5, 1996, appearing on page 25 of Crown Cork & Seal Company, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1995. We also consent to the
references to us under the headings "Experts" and "Selected Historical Financial
Information" in such Prospectus. However, it should be noted that Price
Waterhouse LLP has not prepared or certified such "Selected Historical Financial
Information."
PRICE WATERHOUSE LLP
Philadelphia, PA
October 23, 1996
<PAGE>
Exhibit 23.2
Accountants' Consent
We hereby consent to the incorporation by reference in this Amendment No. 2 to
the Registration Statement on Form S-3 and each related Prospectus of Crown Cork
& Seal Company, Inc. of our report dated February 21, 1996 relating to the
consolidated financial statements of CarnaudMetalbox, which report is
incorporated by reference into item 7(a) and appears in Exhibit 99.1 of Crown's
Form 8-K filed on March 1, 1996, as amended by Amendment Nos. 1, 2 and 3. We
also consent to the references to us under the heading "Experts" in both such
Form S-3 and related Prospectus.
Paris, 24 October 1996
Arthur Andersen LLP (1) Befec-Price Waterhouse (1)
J. P. Caroff
Salustro Reydel (2) C. Chevalier (3)
J.P. Crouzet
(1) For the years ended December 31, 1995, 1994 and 1993.
(2) For the year ended December 31, 1995.
(3) For the years ended December 31, 1994 and 1993.
