<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 26, 1996
REGISTRATION NO. 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
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. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED BE REGISTERED(1) PER SHARE OFFERING PRICE(2) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $5.00 par
value (including
associated
Rights)(3)........... 10,637,500 $45.44 $483,368,000 $166,678.62
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4.5% Convertible
Preferred Stock,
$41.8875 par
value(4)............. 3,450,000 $44.88 $154,836,000 $53,391.73
</TABLE>
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(1) Includes 1,387,500 shares of the Registrant's Common Stock and 450,000
shares of the Registrant's 4.5% Convertible Preferred Stock, which the
Underwriters have the option to purchase to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee. This
amount was calculated pursuant to Rule 457(c) on the basis of $45.44 and
$44.88 per share, the averages of the high and low prices for the Common
Stock and 4.5% Convertible Preferred Stock, respectively, on September 24,
1996 as reported on the New York Stock Exchange, Inc.
(3) Includes associated Rights (the "Rights") to purchase Common Stock. Until
the occurrence of certain prescribed events, none of which has occurred,
the Rights are not exercisable, are evidenced by the certificates
representing Common Stock, and will be transferred along with and only
with the Common Stock.
(4) Also being registered hereby are 3,143,510 shares of Common Stock to be
issued upon conversion of 4.5% Convertible Preferred Stock, which number
of shares is subject to adjustment upon the occurrence of certain events
affecting the Common Stock.
--------------
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 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 SEPTEMBER 26, 1996
PROSPECTUS
9,250,000 SHARES
[CROWN LOGO CROWN CORK & SEAL COMPANY, INC.
APPEARS HERE]
COMMON STOCK
------------
Of the 9,250,000 shares of Common Stock, par value $5.00 per share (the
"Common Stock"), of Crown Cork & Seal Company, Inc. (the "Company") being
offered, 7,400,000 shares are being offered by Compagnie Generale d'Industrie
et de Participations, a societe anonyme organized under the laws of the
Republic of France ("CGIP"), and Sofiservice, a societe anonyme organized under
the laws of the Republic of France and a wholly owned subsidiary of CGIP
("Sofiservice" and, together with CGIP, the "Selling Shareholders"), in the
United States and Canada and the remaining 1,850,000 shares are being offered
by the Selling Shareholders in a concurrent offering outside the United States
and Canada (collectively, the "Common Stock Offerings"). The Company will not
receive any of the proceeds from the sale of the shares of Common Stock offered
hereby. See "Selling Shareholders." The public offering price and aggregate
underwriting discount and commissions per share are identical for each of the
Common Stock Offerings. 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 closing 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 under the symbol
"CCK" and on the Paris Stock Exchange. The Preferred Stock is listed on the New
York Stock Exchange under the symbol "CCK Pr" and on the Paris Stock Exchange.
On September 24, 1996, the reported last sales prices of the Common Stock and
the Preferred Stock on the New York Stock Exchange were $45.50 per share and
$45.00 per share, respectively. See "Price Range of Capital Stock and Dividend
Policy."
----------
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.
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<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNT AND SELLING
PUBLIC COMMISSIONS(1) SHAREHOLDERS(2)
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<S> <C> <C> <C>
Per Share.............................. $ $ $
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Total(3)............................... $ $ $
</TABLE>
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(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) The Selling Shareholders have 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 New York Stock Exchange, Inc. (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 , 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 information contained herein (including, without
limitation, in "The Company" and "Unaudited Pro Forma Consolidated Condensed
Financial Information") or incorporated by reference herein contains 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 therein 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'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. 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.
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 ten 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.
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 $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.
THIRD QUARTER RESULTS
The Company expects to announce summary third quarter 1996 results in mid-
October. This information will be included in a Current Report on Form 8-K
which will be incorporated by reference herein. See "Incorporation of Certain
Documents by Reference."
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, the Selling Shareholders have 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(2)............128,207,136 shares (139,535,273 shares
assuming full conversion of the
outstanding Preferred Stock at the
current conversion price of $45.9715 per
share)
Use of Proceeds....................... The Company will not receive any of the
proceeds from the sale of the Common Stock
offered hereby.
New York Stock Exchange Symbol........ CCK
</TABLE>
- --------
(1) Does not include up to 1,387,500 shares of Common Stock that may be sold
by the Selling Shareholders pursuant to an over-allotment option granted
to the U.S. Underwriters. See "Underwriting."
(2) Based on shares outstanding as of September 24, 1996. Does not include up
to 4,823,007 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.
6
<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)
7
<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 were $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. 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.
8
<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 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 to meet the
requirements of the SEC. 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.
9
<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>
10
<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.
D. Income tax effect of increased interest net of decreased depreciation at
the statutory tax rate of 37%. The Company expects that its effective income
tax rate may be higher in the future since a significant portion of the
purchase price will be non-deductible for tax purposes.
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.
11
<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
(through September 24,
1996)
</TABLE>
As of September 24, 1996, there were approximately 5,735 holders of record
of the Common Stock and eight 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 $45.50 per share and $45.00 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.
12
<PAGE>
SELLING SHAREHOLDERS
The Selling Shareholders are CGIP and its wholly owned subsidiary
Sofiservice. CGIP was previously a stockholder of CarnaudMetalbox, and 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.
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, the Selling Shareholders have 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 closing 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 September 24, 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 1.57 2,006,928 -- --
------------- -------- --------- ---------- -----
Total............ 21,330,903 16.64% 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 September 24, 1996 and assuming no
conversion of the Preferred Stock outstanding as of such date. Does not
include up to 4,823,007 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 September 24, 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 on the outstanding Common Stock and Preferred Stock on
September 24, 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 September 24,
1996.
13
<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.
In connection with the Company's acquisition of CarnaudMetalbox, the Company
entered into a Shareholders Agreement with CGIP (the "Shareholders Agreement")
which contains standstill, board representation, registration rights and other
provisions. See "Description of Capital Stock--Shareholders Agreement and
Certain Other Agreements and Provisions."
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 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, 50,000,000 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 September 24, 1996, the Company had
outstanding 128,207,136 shares of Common Stock and 12,432,622 shares of
Preferred Stock, and 27,576,516 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
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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 of Preferred Stock and such other parity preferred
stock to the date of payment bear to each other. Dividends (other than in
shares of 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 any other stock of the Company ranking on a parity with
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 or set aside for payment; and no such parity 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
applicable 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 (i) the rights or
warrants referred to in clause (b) above, (ii) dividends or distributions in
cash solely out of retained earnings of the Company and (iii) dividends and
distributions payable in shares of Common Stock) 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 one percent 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
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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"), or at any earlier time prior to such date if less than 30% of the
number of shares of the Preferred Stock initially issued remain outstanding,
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. There is no restriction on 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, holders of
Preferred Stock will convert all accrued and unpaid dividends 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 will be 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.
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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.
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.
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.
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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 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.
After completion of the Offerings, CGIP will have the right to designate two
persons to be nominated for election as directors of the Company. The Company
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
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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 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 and, in the case of dividend amounts, will result in the appointment of
an additional CGIP Designee to the Company's Board of Directors prior to
termination of the Standstill Period.
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 September 24, 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
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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 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
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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.
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 and the Rights Plan, as well as CGIP's voting power and the
various provisions of the Shareholders Agreement (see "Selling Shareholders"),
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
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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."
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
22
<PAGE>
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.
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 or 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
23
<PAGE>
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 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
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.
SHARES ELIGIBLE FOR FUTURE RESALE
Upon consummation of the Offerings (assuming over-allotment options of the
underwriters in the Offerings are not exercised), the Selling Shareholders
will own a total of 4,110,300 shares of Preferred Stock and 12,080,903 shares
of Common Stock. 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.
Pursuant to the Shareholders Agreement, during the Standstill Period, 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
24
<PAGE>
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 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.
CGIP will continue to have registration rights in respect of its shares of
Common Stock and Preferred Stock following the Offerings. However, 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."
25
<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...................................
Salomon Brothers Inc......................................
CS First Boston Corporation...............................
-----
Total.................................................
=====
</TABLE>
In addition, pursuant to the U.S. Underwriting Agreement, the Selling
Shareholders have granted the U.S. Underwriters an option, exercisable for 30
days after the date hereof, to purchase up to 1,387,500 additional shares of
Common Stock to cover over-allotments, if any, at the public offering price
less the underwriting discount and commissions set forth on the cover page of
this prospectus.
The U.S. Underwriting Agreement provides that the several obligations of the
U.S. Underwriters to pay for and accept delivery of the U.S. Shares are
subject to certain conditions. The U.S. Underwriters are obligated to purchase
all U.S. Shares (other than shares covered by the over-allotment option) if
any are purchased.
Concurrently with the sale of U.S. Shares to the U.S. Underwriters, the
Selling Shareholders have agreed to sell to certain underwriters outside the
United States and Canada (the "International Underwriters" and, together with
the U.S. Underwriters, the "Underwriters"), and the International Underwriters
severally have agreed to purchase from the Selling Shareholders, an aggregate
of 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
26
<PAGE>
indirectly, any International Shares in the United States or Canada or to any
United States or Canadian Person. The foregoing limitations do not apply to
stabilization transactions or to certain other transactions specified in the
Intersyndicate Agreement. As used herein, "United States or Canadian Person"
means any national or resident of the United States or Canada or any
corporation, pension, profit-sharing, or other trust or other entity organized
under the laws of the United States or Canada or of any political subdivision
thereof (other than a branch located outside the United States and Canada of
any United States or Canadian Person) and includes any United States or
Canadian branch of a person who is otherwise not a United States or Canadian
Person.
Pursuant to the Intersyndicate Agreement, sales may be made between the U.S.
Underwriters and International Underwriters of any number of shares of Common
Stock as may be mutually agreed. The per share price of any such shares of
Common Stock sold shall be the price to the public set forth on the cover page
hereof, less an amount not greater than the per share amount of concession to
dealers set forth below.
Pursuant to the Intersyndicate Agreement, each U.S. Underwriter has
represented that is has not offered or sold, and has agreed not to offer or
sell, any shares of Common Stock, directly or indirectly, in Canada in
contravention of the securities laws of Canada or any province or territory
thereof and has represented that any offer of shares of Common Stock in Canada
will be made only pursuant to an exemption from the requirement to file a
prospectus in the province or territory of Canada in which such offer is made.
Each U.S. Underwriter has further agreed to send to any dealer who purchases
from it any shares of Common Stock a notice stating in substance that, by
purchasing such shares of Common Stock, such dealer represents and agrees that
is has not offered or sold, and will not offer or sell, directly or
indirectly, any of such shares of Common Stock in violation of the laws of
Canada or any province or territory thereof and that any offer of shares of
Common Stock in Canada will be made only pursuant to an exemption from the
requirement to file a prospectus in the province of Canada in which such offer
is made, and that such dealer will deliver to any other dealer to whom it
sells any of such shares of Common Stock a notice to the foregoing effect.
The Selling Shareholders have been advised by Lazard Freres & Co. LLC that
the several U.S. Underwriters propose to offer the U.S. Shares offered hereby
directly to the public at the public offering price set forth on the cover
page of this Prospectus and to certain dealers at such price less a concession
not in excess of $ 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 and certain executive officers and directors of the Company have
agreed 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 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.
27
<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 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 Richard L. Krzyzanowski, Executive Vice President, Secretary and
General Counsel for the Company and Dechert Price & Rhoads, Philadelphia,
Pennsylvania. Certain legal matters in connection with the offering are being
passed upon for the Underwriters by Cravath, Swaine & Moore, New York, New
York. Chester C. Hilinski, of counsel to Dechert Price & Rhoads, is a Director
of the Company.
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.
28
<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 Offering............................................................. 6
Selected Historical Financial Information................................ 7
Unaudited Pro Forma Consolidated Condensed Financial Information......... 9
Price Range of Capital Stock and Dividends............................... 12
Use of Proceeds.......................................................... 12
Selling Shareholders..................................................... 13
Description of Capital Stock............................................. 14
Certain United States Federal Tax Considerations for Non-U.S. Holders of
Capital Stock........................................................... 22
Shares Eligible for Future Resale........................................ 24
Underwriting............................................................. 26
Legal Matters............................................................ 28
Experts.................................................................. 28
</TABLE>
===============================================================================
===============================================================================
9,250,000 SHARES
[LOGO OF CROWN CORK & SEAL COMPANY, INC. APPEARS HERE]
CROWN CORK & SEAL COMPANY, INC.
COMMON STOCK
----------------
PROSPECTUS
================
LAZARD FRERES & CO. LLC
CS FIRST BOSTON
SALOMON BROTHERS INC
OCTOBER , 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 SEPTEMBER 26, 1996
PROSPECTUS
9,250,000 SHARES
CROWN CORK & SEAL COMPANY, INC.
[CROWN LOGO
APPEARS HERE] COMMON STOCK
----------
Of the 9,250,000 shares of Common Stock, par value $5.00 per share (the
"Common Stock"), of Crown Cork & Seal Company, Inc. (the "Company") being
offered, 7,400,000 shares are being offered by Compagnie Generale d'Industrie
et de Participations, a societe anonyme organized under the laws of the
Republic of France ("CGIP"), and Sofiservice, a societe anonyme organized under
the laws of the Republic of France and a wholly owned subsidiary of CGIP
("Sofiservice" and, together with CGIP, the "Selling Shareholders"), in the
United States and Canada and the remaining 1,850,000 shares are being offered
by the Selling Shareholders in a concurrent offering outside the United States
and Canada (collectively, the "Common Stock Offerings"). The Company will not
receive any of the proceeds from the sale of the 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. 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 closing 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 under the symbol
"CCK" and on the Paris Stock Exchange. The Preferred Stock is listed on the New
York Stock Exchange under the symbol "CCK Pr" and on the Paris Stock Exchange.
On September 24, 1996, the reported last sales price of the Common Stock and
the Preferred Stock on the New York Stock Exchange were $45.50 per share and
$45.00 per share, respectively. See "Price Range of Capital Stock and Dividend
Policy."
----------
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) The Selling Shareholders have 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.....................................................
===
</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 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 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.
25
<PAGE>
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 of 1995; (b) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 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. The International
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 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 and certain executive officers and directors of the Company have
agreed 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 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
International Underwriters against certain liabilities, including liabilities
under the Securities Act.
26
<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 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.
27
<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 Offering............................................................. 6
Selected Historical Financial Information................................ 7
Unaudited Consolidated Condensed Financial Information................... 9
Price Range of Capital Stock and Dividends............................... 12
Use of Proceeds.......................................................... 12
Selling Shareholders..................................................... 13
Description of Capital Stock............................................. 14
Certain United States Federal Tax Considerations for Non-U.S. Holders of
Capital Stock........................................................... 22
Shares Eligible for Future Resale........................................ 24
Underwriting............................................................. 25
Legal Matters............................................................ 27
Experts.................................................................. 27
</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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED SEPTEMBER 26, 1996
PROSPECTUS
3,000,000 SHARES
CROWN CORK & SEAL COMPANY, INC.
4.5% CONVERTIBLE PREFERRED STOCK
[LOGO OF CROWN CORK
& SEAL COMPANY, INC.
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."
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 under the symbol
"CCK Pr" and on the Paris Stock Exchange. The Common Stock is listed on the New
York Stock Exchange under the symbol "CCK" and on the Paris Stock Exchange. On
September 24, 1996, the reported last sales prices of the Preferred Stock and
the Common Stock on the New York Stock Exchange were $45.00 per share and
$45.50 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) The Selling Shareholders have 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 New York Stock Exchange, Inc. (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 , 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 information contained herein (including, without
limitation, in "The Company" and "Unaudited Pro Forma Consolidated Condensed
Financial Information") or incorporated by reference herein contains 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 therein 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'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. 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.
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 ten 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.
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 $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.
THIRD QUARTER RESULTS
The Company expects to announce summary third quarter 1996 results in mid-
October. This information will be included in a Current Report on Form 8-K
which will be incorporated by reference herein. See "Incorporation of Certain
Documents by Reference."
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, the Selling Shareholders have 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
Offered(1).............. 3,000,000 shares
Preferred Stock
Outstanding(2).......... 12,432,622 shares
Common Stock
Outstanding(3).......... 128,207,136 shares (139,535,273 shares assuming
full conversion of the outstanding Preferred Stock
at the current conversion price of $45.9715 per
share)
Dividends................ The holders of Preferred Stock are entitled to
receive, when, as and if declared by the Board of
Directors of the Company, a quarterly cumulative
cash dividend of $.4712 per share, payable in
arrears on each November 20, February 20, May 20
and August 20 until February 26, 2000. The
anticipated record date for the quarterly dividend
payable November 20, 1996 is November 4, 1996.
Accumulated unpaid dividends on the Preferred Stock
will not bear interest.
6
<PAGE>
Conversion at Option of
Holder.................. At any time prior to February 26, 2000, each share
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 the Selling Shareholders pursuant to an over-allotment option granted
to the Underwriters. See "Underwriting."
(2) Based on shares outstanding as of September 24, 1996.
(3) Based on shares outstanding as of September 24, 1996. Does not include up
to 4,823,007 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.
7
<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)
8
<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 were $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. 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.
9
<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 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 to meet the
requirements of the SEC. 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.
10
<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>
11
<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.
D. Income tax effect of increased interest net of decreased depreciation at
the statutory tax rate of 37%. The Company expects that its effective income
tax rate may be higher in the future since a significant portion of the
purchase price will be non-deductible for tax purposes.
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.
12
<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
(through September 24,
1996)
</TABLE>
As of September 24, 1996, there were approximately 5,735 holders of record
of the Common Stock and eight 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 $45.50 per share and $45.00 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.
13
<PAGE>
SELLING SHAREHOLDERS
The Selling Shareholders are CGIP and its wholly owned subsidiary
Sofiservice. CGIP was previously a stockholder of CarnaudMetalbox, and 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.
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, the Selling Shareholders have 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 closing 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 September 24, 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 1.57 2,006,928 -- --
------------- -------- --------- ---------- -----
Total............ 21,330,903 16.64% 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 September 24, 1996 and assuming no
conversion of the Preferred Stock outstanding as of such date. Does not
include up to 4,823,007 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 September 24, 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 on the outstanding Common Stock and Preferred Stock on
September 24, 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 September 24,
1996.
14
<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.
In connection with the Company's acquisition of CarnaudMetalbox, the Company
entered into a Shareholders Agreement with CGIP (the "Shareholders Agreement")
which contains standstill, board representation, registration rights and other
provisions. See "Description of Capital Stock--Shareholders Agreement and
Certain Other Agreements and Provisions."
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 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, 50,000,000 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 September 24, 1996, the Company had
outstanding 128,207,136 shares of Common Stock and 12,432,622 shares of
Preferred Stock, and 27,576,516 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
15
<PAGE>
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 of Preferred Stock and such other parity preferred
stock to the date of payment bear to each other. Dividends (other than in
shares of 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 any other stock of the Company ranking on a parity with
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 or set aside for payment; and no such parity 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
applicable 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 (i) the rights or
warrants referred to in clause (b) above, (ii) dividends or distributions in
cash solely out of retained earnings of the Company and (iii) dividends and
distributions payable in shares of Common Stock) 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 one percent 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
16
<PAGE>
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"), or at any earlier time prior to such date if less than 30% of the
number of shares of the Preferred Stock initially issued remain outstanding,
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. There is no restriction on 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, holders of
Preferred Stock will convert all accrued and unpaid dividends 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 will be 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.
17
<PAGE>
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.
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.
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.
18
<PAGE>
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 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.
After completion of the Offerings, CGIP will have the right to designate two
persons to be nominated for election as directors of the Company. The Company
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
19
<PAGE>
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 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 and, in the case of dividend amounts, will result in the appointment of
an additional CGIP Designee to the Company's Board of Directors prior to
termination of the Standstill Period.
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 September 24, 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
20
<PAGE>
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 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
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<PAGE>
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.
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 and the Rights Plan, as well as CGIP's voting power and the
various provisions of the Shareholders Agreement (see "Selling Shareholders"),
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
22
<PAGE>
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."
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
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<PAGE>
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.
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 or 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
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<PAGE>
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 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
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.
SHARES ELIGIBLE FOR FUTURE RESALE
Upon consummation of the Offerings (assuming over-allotment options of the
underwriters in the Offerings are not exercised), the Selling Shareholders
will own a total of 4,110,300 shares of Preferred Stock and 12,080,903 shares
of Common Stock. 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.
Pursuant to the Shareholders Agreement, during the Standstill Period, 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
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<PAGE>
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 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.
CGIP will continue to have registration rights in respect of its shares of
Common Stock and Preferred Stock following the Offerings. However, 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."
26
<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, the Selling
Shareholders have 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 and certain executive officers and directors of the Company have
agreed 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 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.
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<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 Richard L. Krzyzanowski, Executive Vice President, Secretary
and General Counsel for the Company and Dechert Price & Rhoads, Philadelphia,
Pennsylvania. Certain legal matters in connection with the offering are being
passed upon for the Underwriters by Cravath, Swaine & Moore, New York, New
York. Chester C. Hilinski, of counsel to Dechert Price & Rhoads, is a Director
of the Company.
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.
28
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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............................................................ 6
Selected Historical Financial Information................................ 8
Unaudited Pro Forma Consolidated Condensed Financial Information......... 10
Price Range of Capital Stock and Dividends............................... 13
Use of Proceeds.......................................................... 13
Selling Shareholders..................................................... 14
Description of Capital Stock............................................. 15
Certain United States Federal Tax Considerations for Non-U.S. Holders of
Capital Stock........................................................... 23
Shares Eligible for Future Resale........................................ 25
Underwriting............................................................. 27
Legal Matters............................................................ 28
Experts.................................................................. 28
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3,000,000 SHARES
[CROWN CORK & SEAL COMPANY LOGO 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 $ ) and the Registrant's
accountants (estimated to be $ ), will be borne by the Selling Shareholders.
<TABLE>
<S> <C>
SEC registration fees......................................... $220,070
NASD filing fee............................................... 46,484
Legal fees and expenses....................................... **
Accounting fees and expenses.................................. **
Blue Sky fees and expenses.................................... 10,000
Printing expenses............................................. **
Miscellaneous................................................. **
--------
Total.......................................................
</TABLE>
- --------
*All items estimated except for SEC registration and NASD filing fees.
**To be filed by amendment.
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 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
September 26, 1996.
Crown Cork & Seal Company, Inc.
By: /s/ William J. Avery
---------------------------------
Name: William J. Avery
Title: Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes William J.
Avery, Alan W. Rutherford and Richard L. Krzyzanowski, and each of them, his
or her true and lawful attorneys-in-fact and agents each with full power of
substitution and resubstitution for him or her in any and all capacities to
sign any and all amendments (including pre- or post-effective amendments) to
this Registration Statement on Form S-3, making such changes in the
Registration Statement as appropriate, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, hereby
ratifying and confirming all that each such attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue thereof.
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 September 26, 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
/s/ Henry E. Butwel Director
- -------------------------------------
HENRY E. BUTWEL
II-3
<PAGE>
SIGNATURES TITLE
/s/ Charles F. Casey Director
- -------------------------------------
CHARLES F. CASEY
/s/ Francis X. Dalton Director
- -------------------------------------
FRANCIS X. DALTON
/s/ Guy de Wouters Director
- -------------------------------------
GUY DE WOUTERS
/s/ Chester C. Hilinski Director
- -------------------------------------
CHESTER C. HILINSKI
/s/ Richard L. Krzyzanowski Director
- -------------------------------------
RICHARD L. KRZYZANOWSKI
/s/ Josephine C. Mandeville Director
- -------------------------------------
JOSEPHINE C. MANDEVILLE
/s/ Michael J. McKenna Director
- -------------------------------------
MICHAEL J. MCKENNA
/s/ Felix G. Rohatyn Director
- -------------------------------------
FELIX G. ROHATYN
/s/ Jean-Pierre Rosso Director
- -------------------------------------
JEAN-PIERRE ROSSO
/s/ J. Douglass Scott Director
- -------------------------------------
J. DOUGLASS SCOTT
/s/ Ernest-Antoine Seilliere Director
- -------------------------------------
ERNEST-ANTOINE SEILLIERE
/s/ Robert J. Siebert Director
- -------------------------------------
ROBERT J. SIEBERT
/s/ Harold A. Sorgenti Director
- -------------------------------------
HAROLD A. SORGENTI
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NO. DESCRIPTION NUMBERED PAGE
----------- ----------- -------------
<C> <S> <C>
1.1 Form of Underwriting Agreement (U.S. version).*
1.2 Form of Underwriting Agreement (International
version).*
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>
- --------
* To be filed by amendment.
** Included on Signature Page.
II-5
<PAGE>
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
EXHIBIT 12.1
<TABLE>
<CAPTION>
Six Months ended
June 30,
----------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Computation of Earnings:
- -----------------------
Pretax income from continuing operations 200.1 137.0 109.5 182.7 279.8 254.7 208.8
Adjustments to income:
Add: Distributed income from
less than 50%
owned companies 3.4 3.8 5.4 7.3 7.1 4.6 3.3
Add: Portion of rent expense
representative of
interest expense 0.0 0.0 0.0 0.0 0.0 .6 2.0
Add: Interest incurred
net of amounts capitalized 172.9 73.5 148.6 98.8 89.5 77.4 76.6
Add: Amortization of
interest previously capitalized 1.5 .6 1.9 .6 0.0 0.0 0.0
Add: Amortization of
debt issue costs and discount
or premium on indebtedness .4 .4 .8 .5 .3 0.0 0.0
----- ----- ----- ----- ----- ----- -----
Earnings 378.3 215.3 266.2 289.9 376.7 337.3 290.7
----- ----- ----- ----- ----- ----- -----
Computation of Fixed Charges:
- ----------------------------
Interest incurred 177.4 76.5 154.4 104.4 89.5 77.4 76.6
Amortization of debt issue costs
and discount or premium
on indebtedness .4 .4 .8 .5 .3 0.0 0.0
Portion of rental expense
representative of interest 0.0 0.0 0.0 0.0 0.0 .6 2.0
Preferred Stock dividend requirements 10.0
----- ----- ----- ----- ----- ----- -----
Fixed Charges: 187.8 76.9 155.2 104.9 89.8 78.0 78.6
----- ----- ----- ----- ----- ----- -----
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends 2.0x 2.8x 1.7x 2.8x 4.2x 4.3x 3.7x
</TABLE>
- -------------------------
<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
September 25, 1996
<PAGE>
Accountants Consent
We hereby consent to the incorporation by reference in this Form S-3 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 references to us under the heading "Experts" in such Form S-3.
Paris, 25 September 1996
Arthur Andersen LLP(1) Befec-Price Waterhouse(1)
J.P. Caroff
Salustro Reydol(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.
