UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under ss. 240.14a-12
CROWN CORK & SEAL COMPANY, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transaction applies:
N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
(5) Total fee paid:
N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
Crown Cork & Seal Company, Inc.
One Crown Way
Philadelphia, Pennsylvania 19154
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
2000
---------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of CROWN
CORK & SEAL COMPANY, INC. (the "Company") will be held at the Company's Office
located at One Crown Way, Philadelphia, Pennsylvania, on the 27th day of April
2000 at 11:00 a.m., to elect Directors, to consider and act upon an amendment to
the Company's 1997 Stock-Based Incentive Compensation Plan and to transact such
other business that may properly come before the Meeting.
The stock transfer books of the Company will not be closed prior to the
Meeting. Only Shareholders of Common Stock of record as of the close of business
on March 14, 2000 will be entitled to vote.
By Order of the Board of Directors
WILLIAM T. GALLAGHER
Secretary
Philadelphia, Pennsylvania 19154
March 24, 2000
WE CORDIALLY INVITE YOU AND HOPE THAT YOU WILL ATTEND THE
MEETING IN PERSON, BUT, IF YOU ARE UNABLE TO ATTEND,
THE BOARD OF DIRECTORS REQUESTS THAT YOU SIGN THE PROXY
AND RETURN IT, WITHOUT DELAY, IN THE ENCLOSED ENVELOPE.
1
<PAGE>
Crown Cork & Seal Company, Inc.
One Crown Way
Philadelphia, Pennsylvania 19154
---------------
PROXY STATEMENT - MEETING, April 27, 2000
TO ALL SHAREHOLDERS:
The accompanying Proxy is solicited by the Board of Directors of the
Company for use at the Annual Meeting of Shareholders to be held on April 27,
2000, and, if properly executed, shares represented thereby will be voted by the
named Proxies or attorneys at such Meeting. The cost of soliciting proxies will
be borne by the Company. The Company has engaged D.F. King & Co., Inc. ("King")
to assist in the solicitation of proxies for a fee of $7,000 plus reimbursement
for out-of-pocket expenses and certain additional fees for services rendered by
King in connection with such solicitation. Certain Officers and employees of the
Company may also solicit proxies by mail, telephone, facsimile or in person
without any extra compensation. Any Shareholder giving a Proxy has the power to
revoke it at any time before it is voted by giving written notice of revocation
to the Secretary of the Company, or by executing and delivering a later-dated
Proxy, or by voting in person at the Meeting.
The persons named as Proxies were selected by the Board of Directors of the
Company, and all are Officers of the Company.
The Annual Report for the year ended December 31, 1999, containing audited
financial statements, is being mailed to Shareholders contemporaneously with
this Proxy Statement, i.e., on or about March 24, 2000.
On March 1, 2000, there were 128,569,204 outstanding shares of Common
Stock, par value $5.00 per share ("Common Stock"). All of the previously issued
4.5% Convertible Preferred Stock of the Company has been converted to Common
Stock, and no shares of such Preferred Stock remain outstanding.
Shareholders of Common Stock of record as of March 14, 2000 are entitled to
vote at the Annual Meeting. Each share of Common Stock is entitled to one vote.
The presence, in person or by proxy, of Shareholders entitled to cast a majority
of votes will be necessary to constitute a quorum for the transaction of
business. Proxies solicited herein will be voted, and if the person solicited
specifies by means of the ballot provided in the Proxy a choice with respect to
matters to be acted upon, the shares will be voted in accordance with such
specification. Votes withheld from Director nominees, abstentions and broker
non-votes will be counted in determining the presence of a quorum. Under
Pennsylvania law and the Company's By-Laws, votes withheld from Director
nominees, abstentions and broker non-votes are not considered to be "votes" and,
therefore, will not be given effect either as affirmative or negative votes.
Directors are elected by plurality vote. Other matters are determined by a
majority of the votes cast.
2
<PAGE>
Other than as listed below, the Company has, to its knowledge, no other
beneficial owner of more than 5 percent of the Common Stock outstanding as of
March 1, 2000.
Security Ownership of Certain Beneficial Owners
Amount and Percentage of Common Stock of the Company
Owned Beneficially, Directly or Indirectly(1)
Name and Address Common
of Beneficial Owner Shares %
- ------------------- ------ ------
Sanford C. Bernstein
& Co., Inc.(2) 13,441,297 10.45%
Morgan Stanley
Dean Witter & Co.
and Morgan Stanley
Dean Witter Advisors, Inc.(3) 8,074,363 6.28%
----------------------------
(1) Based on information filed with the Securities and Exchange Commission.
Percentages are derived using the outstanding shares of Common Stock as of
March 1, 2000.
(2) Sanford C. Bernstein & Co., Inc., an investment advisor and broker dealer,
is located at 767 Fifth Avenue, New York, New York 10153. Sanford C.
Bernstein & Co., Inc. reported that it had sole dispositive power with
respect to 13,441,297 shares of Common Stock, including 7,073,093 shares of
Common Stock for which Sanford C. Bernstein & Co., Inc. has sole voting
power and 1,393,528 shares of Common Stock for which Sanford C. Bernstein &
Co., Inc. has shared voting power.
(3) Morgan Stanley Dean Witter & Co., an investment advisor registered under
Section 203 of the Investment Advisors Act of 1940, is located at 1585
Broadway, New York, New York 10036. Morgan Stanley Dean Witter Advisors,
Inc., a wholly owned subsidiary of Morgan Stanley Dean Witter & Co., is
also an investment advisor registered under Section 203 of the Investment
Advisors Act of 1940, and is located at Two World Trade Center, New York,
New York 10048. Morgan Stanley Dean Witter & Co. reported that it had
shared dispositive power with respect to 8,074,363 shares of Common Stock
and shared voting power with respect to 8,009,128 shares of Common Stock,
including 7,816,490 shares of Common Stock for which Morgan Stanley Dean
Witter Advisors, Inc. reported that it had shared dispositive power and
7,782,805 shares of Common Stock for which Morgan Stanley Dean Witter
Advisors, Inc. reported that it had shared voting power.
3
<PAGE>
ELECTION OF DIRECTORS
The persons named in the Proxy shall vote the shares for the nominees
listed below, all of whom are now Directors of the Company, to serve as
Directors for the ensuing year or until their successors shall be elected. None
of the persons named as a nominee for Director has indicated that he or she will
be unable or will decline to serve. In the event that any of the nominees are
unable or decline to serve, which the Nominating Committee of the Board of
Directors does not believe will happen, the persons named in the Proxy will vote
for the remaining nominees and others who may be selected by the Nominating
Committee.
The By-Laws of the Company provide for a variable number of Directors from
10 to 18. The Board of Directors has currently fixed the number of Directors at
11. It is intended that the Proxies will be voted for the election of the 11
nominees named below as Directors, and no more than 11 will be nominated. None
of the nominees, during the last five years, was involved as a defendant in any
legal proceedings that could adversely affect his or her capacity to serve as a
member of the Board of Directors. The principal occupations stated below are the
occupations which the nominees have had during the last five years.
The Board of Directors recommends that Shareholders vote FOR election of
each of the nominees named below. The names of the nominees and information
concerning them and their associations as of March 1, 2000, as furnished by the
nominees, follow:
<TABLE>
<CAPTION>
Year Amount and Percentage of
Became Securities of the Company Owned
Name Age Principal Occupation Director Beneficially, Directly or Indirectly
- ------------------------------------------------------------------------------------------------------------------------------
Common
Shares %
------ ------
<S> <C> <C> <C> <C> <C>
William J. Avery 59 Chairman of the Board 1979 6,355,861 4.944%
(a), (d), (e), (1), (2) and Chief Executive Officer; also a
Director of Rohm and Haas Company
Henry E. Butwel 71 Former Executive Vice President, 1975 50,298 0.039%
(a), (b) Administration and Chief Financial
Officer, Retired
John W. Conway 54 President and Chief Operating 1997 181,471 0.141%
(e), (3) Officer; also a Director of
West Pharmaceutical Services
Arnold W. Donald 45 Chairman and Chief Executive Officer 1999 3,000 0.002%
(c) of Merisant Company; former
Senior Vice President of Monsanto
Company; also a Director of Oil-Dri
Corporation of America and
Strategic Distribution
Marie L. Garibaldi 65 Former Associate Justice of the 2000 3,000 0.002%
Supreme Court of New Jersey
John B. Neff 68 Former Portfolio Manager of 1999 33,000 0.026%
(b), (d), (e) Wellington Management Company;
also a Director of CGU Corporation
(U.S.), Greenwich Associates, Amkor
Technology and Ani-Motion; also on
the Executive Board of Invemed
Catalyst Fund
<PAGE>
Year Amount and Percentage of
Became Securities of the Company Owned
Name Age Principal Occupation Director Beneficially, Directly or Indirectly
- ------------------------------------------------------------------------------------------------------------------------------
Common
Shares %
------ ------
James L. Pate 64 Chairman and Chief Executive 1999 4,000 0.003%
(c) Officer of Pennzoil-Quaker State
Company and Chairman of Devon
Energy Corporation; also a Director of
Bowater Incorporated
Thomas A. Ralph 59 Partner - Dechert Price & Rhoads 1998 3,700 0.003%
(b)
Alan W. Rutherford 56 Executive Vice President and 1991 5,583,635 4.343%
(a), (e), (2), (4) Chief Financial Officer
Harold A. Sorgenti 65 General Partner of Sorgenti 1990 8,750 0.007%
(c), (d), (e) Investment Partners; Chairman and
CEO of SpecChem International
Holdings; Chairman and CEO of
Sorgenti Chemical Industries;
also a Director of Provident Mutual
Life Insurance Company
Guy de Wouters 69 Director of Compagnie Generale 1996 3,676 0.003%
(b), (d), (e) d'Industrie et de Participations,
Marine-Wendel, Valeo, Eurotunnel
and Cap Gemini
<FN>
---------------------------------------
(a) Member of the Executive Committee (d) Member of the Nominating Committee
(b) Member of the Audit Committee (e) Member of the Strategic Committee
(c) Member of the Executive
Compensation Committee
---------------------------------------
(1) Includes 15,000 shares of Common Stock owned by a charitable foundation of
which Mr. Avery is one of three trustees and 787,800 shares of Common Stock
subject to presently exercisable options held by Mr. Avery.
(2) Includes 5,372,215 shares of Common Stock held in the Crown Cork & Seal
Company, Inc. Master Retirement Trust on behalf of various Company pension
plans (the "Trust Shares"). Under the Master Retirement Trust, the Benefits
Plan Investment Committee (the "Investment Committee") has sole voting and
dispositive power with respect to the Trust Shares. As members of the
Investment Committee, Mr. Avery and Mr. Rutherford may be deemed to own
beneficially the Trust Shares.
(3) Includes 136,250 shares of Common Stock subject to presently exercisable
options held by Mr. Conway.
(4) Includes 160,500 shares of Common Stock subject to presently exercisable
options held by Mr. Rutherford.
</FN>
</TABLE>
5
<PAGE>
As of March 1, 2000, all Directors and Executive Officers of the Company as
a group of 17, including the above, are beneficial owners of 7,327,561 shares of
Common Stock (including 5,372,215 shares of Common Stock which may be deemed to
be beneficially owned by certain Directors and Executive Officers by virtue of
their membership on the Investment Committee of the Company Master Retirement
Trust and 1,399,415 shares of Common Stock subject to presently exercisable
options held by certain Officers and Directors), constituting 5.70% of the
outstanding Common Stock.
The Directors and Executive Officers of the Company have sole voting and
investment power in respect to the securities of the Company listed in the table
above, except as to the shares held in the aforementioned trust and charitable
foundation, with respect to which the Trustees have shared voting and investment
power, and except as otherwise noted.
Not included in the table above are 1,845,775 shares of Common Stock owned
as of March 1, 2000 by the Connelly Foundation, a private, non-profit charitable
foundation. Mr. Avery is one of 14 trustees of this Foundation and disclaims any
beneficial ownership of these shares.
On September 29, 1998, five Company Executive Officers, four of whom are
Directors of the Company, borrowed money from the Company and used this money to
purchase shares of Common Stock from the Company. The loan amounts and the total
outstanding are $2,650,000 for Mr. Avery; $1,007,000 for Michael J. McKenna,
Vice Chairman; $742,000 for Mr. Conway; $540,000 for Mr. Rutherford; and
$2,014,000 for Ronald R. Thoma, former Executive Vice President - Procurement &
Traffic. All of these loans are to be repaid by September 29, 2001 and bear
interest at prime less 1% payable quarterly.
The Company and its subsidiaries utilized the services of Dechert Price &
Rhoads during 1999. Thomas A. Ralph, a Director of the Company, is a partner in
that law firm.
Effective January 3, 2000, the Company entered into employment agreements
with William J. Avery, John W. Conway and Alan W. Rutherford (the "Executives")
which provide for them to serve in their present positions at their annual base
salaries in effect in 2000. In each case, the base salary is reviewed and may be
increased in accordance with the Company's regular compensation review policy.
The agreements are for a continuous five year period with automatic one-year
extensions each year and will terminate at age 65. Each of the Executives shall
have the opportunity to receive an annual bonus under the Company's Management
Incentive Plan and awards under the Company's 1997 Stock-Based Incentive
Compensation Plan commensurate with each Executive's position with the Company.
The agreements also entitle each of the Executives to participate in the
Company's qualified retirement plans, Senior Executive Retirement Plan and other
employee benefit plans and programs in accordance with the terms of those plans
and programs.
Each of the Executives has agreed that, during his employment and for two
years thereafter, he shall not compete with the Company or solicit Company
employees to terminate employment with the Company. The Company may waive the
Executive's non-competition restriction if the Executive gives up his right to
certain payments payable upon the termination of his employment under the
employment agreement.
6
<PAGE>
Under the agreements, if an Executive's employment is terminated because of
death or disability, the Company shall pay the Executive (or his estate, if
applicable), his base salary through the date of termination, continued base
salary through the calendar year in which the termination occurs, and any vested
retirement, incentive or other benefits. If an Executive's employment terminates
because of his retirement, the Company shall pay to the Executive his base
salary through his date of retirement and any vested retirement, incentive or
other benefits. If an Executive's employment is terminated for "Cause" (as
defined in the employment agreements), the Company shall pay to the Executive
only the base salary owed through his date of termination and his vested
retirement, incentive or other benefits. If an Executive's employment is
terminated by the Company without Cause or by the Executive for "Good Reason"
prior to a "Change in Control" (as defined in the employment agreements), in
addition to the Executive's base salary through the date of termination, the
Company shall pay to the Executive a lump sum payment equal to the sum of (i)
his expected annual bonus payment, (ii) any previously earned bonus payment and
(iii) an amount equal to three times the sum of the Executive's base salary and
his average bonus over the prior three years. The Company shall also pay to the
Executive any vested retirement, incentive or other benefits and shall continue
to provide the Executive with health benefits. If an Executive's employment is
terminated by the Company without Cause or by the Executive for Good Reason
during the one year period following a Change in Control (or if Mr. Avery's
employment is terminated by Mr. Avery for any reason during the one year period
following a Change of Control), the Executive will be entitled to the same
payments and benefits described in the two preceding sentences, and all stock
options granted to such Executive by the Company will become fully vested and
immediately exercisable. If any Executive voluntarily terminates his employment
without Good Reason (other than Mr. Avery in the one year period following a
Change of Control), the Company shall pay to the Executive his base salary
through his date of termination, a pro-rated annual bonus for the year of
termination, and any vested retirement, incentive or other benefits.
To the extent any of the Executives would be subject to the excise tax
under Section 4999 of the Internal Revenue Code on the amounts or benefits to be
received from the Company and required to be included in the calculation of
parachute payments for purposes of Sections 280G and 4999 of the Internal
Revenue Code, the Company will pay to the Executive an additional amount so that
the Executive will receive the full amount owed to him under his employment
agreement, without regard to the excise tax or any other taxes imposed on the
additional payment.
Michael J. McKenna is retiring as the Company's Vice Chairman on March 31,
2000 and is not standing for reelection to the Company's Board of Directors at
the Annual Meeting. Ronald R. Thoma retired as the Company's Executive Vice
President - Procurement and Traffic on January 31, 2000. In connection with
their retirements, Mr. McKenna and Mr. Thoma entered into two-year consulting
agreements with the Company under which they agree to provide advice and
consultation to the Company on any issue pertaining to the business or
operations of the Company. For these services, the Company will pay Mr. McKenna
$125,000 per year and Mr. Thoma $75,000 per year. The Company may terminate the
agreement on 30 days notice if Mr. McKenna or Mr. Thoma fails to provide the
required services.
7
<PAGE>
BOARD MEETINGS AND COMMITTEES
In 1999, there were six meetings of the Board of Directors and one meeting
of the Executive Committee.
In 1999, the Audit Committee had three meetings. The Audit Committee
provides assistance to the Board of Directors in discharging its
responsibilities in connection with the financial accounting practices of the
Company and the internal controls related thereto and represents the Board of
Directors in connection with the services rendered by the Company's independent
accountants.
The Strategic Committee met one time. The Strategic Committee has the
responsibility to consider and recommend changes to the Company's dividend and
debt rating policies, business combinations and other extraordinary
transactions, and succession planning.
The Executive Compensation Committee met four times. The Executive
Compensation Committee is responsible for the review of the executive
compensation program.
There were three meetings of the Nominating Committee in 1999. The
Nominating Committee is responsible for recruiting and recommending for
membership on the Board of Directors candidates to fill vacancies that may
occur. In recommending candidates to the Board of Directors, the Nominating
Committee seeks persons of proven judgment and experience. Shareholders who wish
to suggest qualified candidates may write, via Certified Mail-Return Receipt
Requested, to the Office of the Secretary, Crown Cork & Seal Company, Inc., One
Crown Way, Philadelphia, PA 19154, stating in detail the qualifications of the
persons they recommend. Shareholders must include a letter from each nominee
affirming that he or she will agree to serve as a director of the Company if
elected by Shareholders. However, through its own resources, the Committee
expects to be able to identify an ample number of qualified candidates. See
"Proposals of Shareholders" for information on bringing nominations for the
Board of Directors at the 2001 Annual Meeting.
Each incumbent Director of the Company attended at least 75% of the
aggregate meetings held by the Board of Directors and by the Committees on which
he or she served.
Directors who are not employees of the Company are paid $40,000 annually as
base Director's fees (of which $25,000 is paid in Company Common Stock valued at
market price when paid) and $750 per meeting attended. In addition, a
non-employee Director who is Chairperson of a Committee is paid $10,000
annually, while non-employee Director Committee members are paid $7,000
annually, with an attendance fee of $1,000 per meeting. In addition, each
non-employee Director has been granted 3,000 shares of Company Common Stock
subject to certain restrictions which lapse as to one-fifth of such shares each
year over a five-year period. The Company discontinued the Pension Plan for
Outside Directors as to future Directors elected after July 24, 1997.
Non-employee Directors first elected to the Board of Directors on or before July
24, 1997 continue to participate in the Company's Pension Plan for Outside
Directors which provides monthly retirement benefits equal to 1/12 of the sum of
(x) 50% of the base annual Director's fees paid to non-employee Directors and
(y) 10% of the base annual Director's fees for each full year of service in
excess of five, up to an annual maximum benefit of 100% of the base annual
Director's fee. Non-employee Directors may also participate in the Company's
Deferred Compensation Plan for Directors which permits Directors to defer
receipt of all, or any part, of their Director's fees, which deferred fees
accrue interest at a rate equal to the current interest rate on the Company's
commercial paper.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
earned during each of the Company's last three fiscal years by the Company's
five highest-paid Executive Officers during 1999:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation (1) Long Term Compensation
----------------------------------- --------------------------------------
Shares of Common Stock All Other
Name & Principal Year Salary Bonus Underlying Options Compensation (2)
Position ($) ($) (#) ($)
- ------------------------------- ----------------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C>
William J. Avery 1999 927,000 598,000(3) 353,000 2,400
- - Chairman of the Board 1998 927,000 648,950 234,000 2,400
and Chief Executive Officer 1997 900,000 675,000 167,000 2,400
Michael J. McKenna 1999 575,000 328,900 127,000 2,400
- - Vice Chairman 1998 575,000 327,031 100,000 2,400
1997 490,000 306,250 78,000 2,400
John W. Conway 1999 525,000 254,000(3) 149,000 2,400
- - President and Chief 1998 425,000 217,531 58,000 2,400
Operating Officer 1997 380,000 213,750 52,000 2,400
Alan W. Rutherford 1999 420,000 198,300(3) 100,000 2,400
- - Executive Vice 1998 412,000 210,275 44,000 2,400
President and Chief 1997 400,000 225,000 60,000 2,400
Financial Officer
Ronald R. Thoma(4) 1999 315,000 138,600 43,000 2,400
- - Executive Vice President - 1998 309,000 135,188 34,000 2,400
Procurement & Traffic 1997 300,000 150,000 36,000 2,400
<FN>
--------------------------------------
(1) The amount of perquisite and other personal benefits, as determined in
accordance with the rules of the Securities and Exchange Commission
relating to executive compensation, did not exceed the materiality
threshold of the lesser of $50,000 or 10% of the total of annual salary
plus bonus.
(2) The amounts shown in this column represent amounts contributed to the
401(k) Retirement Savings Plan by the Company.
(3) Messrs. Avery, Conway and Rutherford are receiving approximately half of
the bonus earned in 1999 in restricted Company Common Stock valued at the
market price when received.
(4) Mr. Thoma retired on January 31, 2000.
</FN>
</TABLE>
9
<PAGE>
Options Grants in Last Fiscal Year
The Company's 1994 Stock-Based Incentive Compensation Plan and 1997
Stock-Based Incentive Compensation Plan are administered by the Executive
Compensation Committee appointed by the Board of Directors. The following table
provides information related to Stock Options granted under these plans in the
last fiscal year to the five Named Executive Officers.
<TABLE>
<CAPTION>
Number of
Securities % of Total
Underlying Option Shares
Options Granted to Grant Date
Granted Employees in Exercise Price Expiration Present
(A) (B) Fiscal Year Per Share (C) Date Value (D)
----------- -------------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
William J. Avery 353,000 12.97% $30.625 1/04/09 $2,684,389
Michael J. McKenna 127,000 4.66% 30.625 1/04/09 965,772
John W. Conway 149,000 5.47% 30.625 1/04/09 1,133,071
Alan W. Rutherford 78,000 2.87% 30.625 1/04/09 593,151
22,000 0.81% 29.250 4/13/09 158,890
Ronald R. Thoma 43,000 1.58% 30.625 1/04/09 326,994
-----------------------------
<FN>
(A) All options were non-statutory options, have an exercise price equal to the
fair market value of the Company Common Stock on the date of grant, vest at
a rate of 25% per year on the first, second, third and fourth anniversaries
of the grant date, cannot be exercised sooner than January 5th (April 14th
with respect to the option for 22,000 shares granted to Mr. Rutherford) of
the year following the date of grant and have a term of ten years.
(B) The Executive Compensation Committee administering the 1994 Stock-Based
Incentive Compensation Plan and the 1997 Stock-Based Incentive Compensation
Plan has the discretion, subject to plan limits, to modify terms of
outstanding options and to reprice the options.
(C) The exercise price and tax withholding obligation related to exercise shall
be paid in cash or by delivery of already-owned shares valued at fair
market value on the date of exercise.
(D) The Grant Date Present Value was determined using the Black-Scholes option
pricing model.
</FN>
</TABLE>
10
<PAGE>
Aggregated Option Exercises in the Last Fiscal Year and
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Securities In-The-Money Options
Number of Value Underlying Unexercised at 12/31/99 (2)
Shares Acquired Realized (1) Options at 12/31/99 Exercisable/Unexercisable
Upon Exercise ($) Exercisable/Unexercisable ($)
--------------- ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
William J. Avery 1990 Plan 0 0 237,300 / 0 0 / 0
1994 Plan 0 0 303,500 / 276,500 0 / 0
1997 Plan 0 0 58,500 / 415,500 0 / 0
Michael J. McKenna 1990 Plan 0 0 26,175 / 0 0 / 0
1994 Plan 0 0 69,000 / 59,000 0 / 0
1997 Plan 0 0 25,000 / 202,000 0 / 0
John W. Conway 1990 Plan 0 0 10,000 / 0 0 / 0
1994 Plan 0 0 47,000 / 40,000 0 / 0
1997 Plan 0 0 14,500 / 192,500 0 / 0
Alan W. Rutherford 1990 Plan 0 0 38,500 / 0 0 / 0
1994 Plan 0 0 60,000 / 50,000 0 / 0
1997 Plan 0 0 11,000 / 133,000 0 / 0
Ronald R. Thoma 1990 Plan 0 0 22,200 / 0 0 / 0
1994 Plan 0 0 28,200 / 24,800 0 / 0
1997 Plan 0 0 8,500 / 68,500 0 / 0
-------------------------------------
<FN>
(1) Value Realized is the difference between the price of the Company Common
Stock on the date exercised and the option exercise price.
(2) Value of the Unexercised Options is the difference between the closing
market price on December 31, 1999 of the Company Common Stock and the
option exercise price.
</FN>
</TABLE>
11
<PAGE>
Retirement Program
The Company maintains a Salaried Pension Plan ("Pension Plan") for certain
salaried and non-union hourly employees in the United States meeting minimum
eligibility requirements in which the five Named Executive Officers participate.
The Pension Plan is designed and administered to qualify under Section 401(a) of
the Internal Revenue Code of 1986, as amended. The Pension Plan provides normal
retirement benefits at age 65 based on the average of the five highest
consecutive years of earnings in the last ten years. These average earnings are
multiplied by 1.25%. This result is then multiplied by years of service, which
yields the annual Company-funded pension benefit. Under federal law for 2000,
benefits from a qualified retirement plan are limited to $135,000 per year and
may be based only on the first $170,000 of an employee's annual earnings.
For illustration purposes, the following table shows estimated maximum
annual Company-funded retirement benefits payable from the Pension Plan to
employees who retire at age 65, assuming the employees receive their benefit as
a single life annuity, without survivor benefits:
Final Years of Service
Average
Earnings 25 30 35 40 45
--------------------------------------------------------------------------
$ 50,000 $15,625 $18,750 $21,875 $25,000 $28,125
100,000 31,250 37,500 43,750 50,000 56,250
150,000 46,875 56,250 65,625 75,000 84,375
170,000 53,125 63,750 74,375 85,000 95,625
and above
The Company also maintains the Senior Executive Retirement Plan ("SERP") in
which thirteen key executives, including the five above-Named Executive
Officers, participate. In general, the annual benefit for executives eligible to
participate in the SERP is based upon a formula equal to (i) 2.25% of the
average of the five highest consecutive years of earnings times years of service
up to twenty years plus (ii) 1.67% of such earnings for the next fifteen years
plus (iii) 1% of such earnings for years of service beyond thirty-five less (iv)
Social Security old-age benefits and the Company-funded portion of the
executive's Pension Plan benefits and 401(k) Retirement Savings Plan benefits.
The annual benefit for executives first eligible to participate in the SERP
before 1994 (including Mr. Avery, Mr. McKenna and Mr. Thoma) can be no less than
certain amounts specified for each participant provided they continue as
employees until specified ages. The specified amounts and ages are: Mr. Avery -
$911,000 at age 61, Mr. McKenna - $330,000 at age 63 and Mr. Thoma - $305,000 at
age 65. Based upon the above, the annual benefit, estimated as of December 31,
1999, under the SERP at retirement at age 65, assuming annual salary increases
of 5%, would be $1,330,678 for Mr. Avery, $448,297 for Mr. McKenna, $603,178 for
Mr. Conway and $530,714 for Mr. Rutherford. The annual benefit under the SERP
for Mr. Thoma, who retired on January 31, 2000, is $305,000.
The SERP also provides a lump-sum death benefit of five times the annual
retirement benefit and subsidized survivor benefits.
12
<PAGE>
SERP participants vest in their benefits at the earliest of five years of
participation, specified retirement dates, total disability or employment
termination (other than for cause) after a change in control of the Company. A
"change in control" under the SERP occurs if: 1) a person (other than a Company
employee benefit plan) becomes the beneficial owner of 25% or more of the voting
power of the Company; 2) there is a change in the identity of a majority of
Directors of the Company over any two year period; or 3) the Shareholders
approve certain mergers or consolidations, a sale of substantially all of the
Company's assets or a complete liquidation of the Company.
Years of service credited under the Pension Plan and the SERP for the
above-Named Executive Officers are: Mr. Avery - 40 years, Mr. McKenna - 43
years, Mr. Conway - 25 years, Mr. Rutherford - 26 years and Mr Thoma - 45 years.
13
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COMPARATIVE STOCK PERFORMANCE
Comparison of Cumulative Total Return (a)
Crown Cork & Seal, S&P 500 Index, Dow Jones "Containers & Packaging" Index (b)
Five Year Comparison
(The Performance Graph appears here. See the table below for plot points.)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Crown Cork & Seal 100 111 147 138 87 66
S&P 500 Index 100 138 169 226 290 351
Dow Jones "Containers & Packaging" Index 100 108 137 155 135 126
</TABLE>
Ten Year Comparison
(The Performance Graph appears here. See the table below for plot points.)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Crown Cork & Seal 100 107 169 225 236 213 236 314 295 186 140
S&P 500 Index 100 97 126 136 150 152 209 257 342 440 533
Dow Jones "Containers & Packaging" Index 100 86 135 147 141 142 154 194 221 193 180
</TABLE>
(a) Assumes, for the five and ten year graphs, that the value of the investment
in Crown Cork & Seal Common Stock and each index was $100 on December 31,
1994 and December 31, 1989, respectively, and that all dividends were
reinvested.
(b) Industry index is weighted by market capitalization and is comprised of
Crown Cork & Seal, Ball, Bemis, Owens-Illinois, Pactiv, Sealed Air,
Smurfit-Stone Container, Sonoco Products and Temple-Inland.
14
<PAGE>
EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Committee of the Board of Directors is composed
entirely of Independent Directors and is responsible for establishing and
administering the executive compensation program at Crown Cork & Seal Company,
Inc. We submit this report to Shareholders describing both the principles under
which the program is administered and the decisions that directly impacted the
Chief Executive Officer during 1999.
Our guiding principle is to provide a program that enables the Company to
retain and motivate a team of high quality executives who will create long-term
value for the Shareholders. We do this by:
o developing an ownership-oriented program that rewards for long-term
improvement in total Shareholder return;
o integrating all facets of the executive compensation program with the
Company's short and long-term objectives and strategies;
o regularly commissioning studies of competitive pay practices within
the container industry and other manufacturing companies to ensure pay
opportunities are generally within competitive norms; and
o working with independent management consultants to monitor the
effectiveness of the entire program.
Over the last several years, your Company has undergone a dramatic change
reflecting the changing markets in which the Company operates. To improve the
Company's performance and continue its growth where appropriate, we must
continue to motivate existing management as well as attract and retain
experienced managers at all levels in the Company. During the last few years a
number of modifications were made to the four primary components of the
Company's executive compensation program. The program has been redirected from
an orientation on length of service and retirement compensation to a program
more closely aligned with sustained improvement in Company performance and
increased Shareholder value. The specific components of the program are
described below.
Historically, the Company's annual base salary levels have been well below
competitive market levels. In order to attract and retain high quality
executives and also to recognize the substantial growth and performance of the
Company, we continue to move senior executive salaries toward competitive market
rates as defined by the container and manufacturing industries. The competitive
market includes, but is not limited to, companies of Crown's size in the
container, non-durable manufacturing and general industry segments.
The Management Incentive Plan, which was implemented in 1990, calls for the
achievement of the Company's net income and other targets, as well as specific
financial operating goals, before incentive awards are earned by Plan
participants. These goals stem directly from the Company's strategic and
operating plans. In 1999, the Plan called for the Company to achieve a specified
target net income from current operations and also to substantially improve free
cash flow and to reduce debt levels. Long-term considerations included, but were
not limited to, continuing restructuring throughout Europe and the Americas to
meet the changing market conditions and conserving the Company's assets in
Asia-Pacific to benefit from expansion in the future.
15
<PAGE>
The Committee believes that stock options are an important link between the
executive and Shareholder interest, and it is for that reason that grants have
always been a part of the executive compensation program. The program
administered by the Committee offers annual grants that vary in size based on
the Company's and the executive's performance. As part of its ongoing review of
the competitiveness and effectiveness of the Company's executive compensation
programs, the Committee is presently evaluating the desired components of the
compensation system for the Company's senior executives as well as the desired
mix of compensation among these components. The Committee believes that a
substantial portion of the compensation paid to the Company's executives should
be, and has been, at risk contingent on the Company's operating and market
performance. Consistent with this philosophy, the Committee will consider
placing greater emphasis on stock-based compensation and performance measures,
in an effort to more closely align compensation with Shareholder interests and
to increase executives' focus on the Company's long-term performance. To that
end, amendments to the 1997 Stock-Based Incentive Compensation Plan were
approved subject to Shareholder approval at the Annual Meeting.
In summary, the Committee believes that its role in administering the
executive compensation program is critical to the objective of driving
performances to the ultimate benefit of the Shareholders. Base salaries need to
be within competitive norms so that executives will be attracted, retained and
motivated to fulfill their roles and responsibilities over the long-term. This
is especially important in the current economic climate with almost full
employment in the United States and severe competition for experienced
management coming from the new technology companies at a time when companies
such as Crown, in basic industries, are not easily attracting investment. Annual
performance based incentive awards deliver the message that competitive pay is
received only when earnings and other strategic goals are achieved. In addition,
benefits realized from annual stock option grants require continuous improvement
in value created for the Shareholder.
Specific Decisions Impacting Compensation
for the Chairman and Chief Executive Officer
In considering the compensation for the Named Executive Officers, including
the Chairman of the Board and Chief Executive Officer, William J. Avery, for the
fiscal year 1999, the Committee reviewed the goals and objectives established at
the beginning of the year and concluded that the management group continued to
perform in an exceptional manner during difficult conditions for the industry.
During 1999 Mr. Avery continued to devote a considerable amount of time to
visiting many operations around the world and overseeing the ongoing
restructuring efforts. In a challenging year the Company maintained or improved
profitability in most product lines with the notable exception being in European
food can operations where competitive issues continued to impact margins.
Following several years of higher levels, Mr. Avery ensured that capital
expenditure was substantially reduced in 1999, and this, along with improved
working capital levels, enabled the Company to meet its free cash flow targets
and reduce debt. In difficult market conditions for basic industries, the
Company's financial position remains strong.
Based on the policies and practices described above, Mr. Avery's base
salary was maintained at $927,000 on January 1, 1999; a bonus of $598,000 was
earned in 1999 as part of the Management Incentive Plan; and options to purchase
353,000 shares of Common Stock were granted during the year. Mr. Avery will take
approximately half of his 1999 bonus in restricted Company Common Stock.
16
<PAGE>
Section 162(m) of the Internal Revenue Code generally disallows a deduction
for annual compensation to a public company's chief executive officer and any of
the four other most highly compensated officers in excess of $1,000,000, unless
such compensation is "performance based" as defined under Section 162(m). A
portion of Mr. Avery's 1999 compensation exceeded the threshold. Because the
Company's costs in realizing tax benefits under Section 162(m) may outweigh
those benefits, the Committee intends to maintain flexibility to pay
compensation that is not entirely deductible when sound direction of the Company
would make that advisable. All stock options granted in 1999 to Crown executive
officers are "performance based."
This report is respectfully submitted by the members of the Executive
Compensation Committee of the Board of Directors.
Harold A. Sorgenti, Chairman
Charles F. Casey
Jean-Pierre Rosso
17
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors, Officers and persons who own more than 10% of a registered class of
the Company's equity securities to file initial reports of ownership and reports
of changes in ownership with the Securities & Exchange Commission (the "SEC")
and the New York Stock Exchange. Such persons are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on the review of the copies of SEC forms received by the
Company with respect to fiscal year 1999, or written representations from
reporting persons, the Company believes that its Directors and Executive
Officers have complied with all applicable filing requirements.
AMENDMENT TO THE 1997 STOCK-BASED INCENTIVE COMPENSATION PLAN
Subject to Shareholder approval, the Board of Directors has adopted an
amendment to the Company's 1997 Stock-Based Incentive Compensation Plan (the
"Plan") to include additional performance goals upon which the granting of
awards (e.g., stock options), or the lapse of any restriction, under the Plan
may be based. The additional performance goals are: (i) cash flow, (ii) return
on total assets, (iii) return on invested capital, (iv) return on net assets,
(v) operating income and (vi) net income. The Plan currently contains the
following performance goals: (i) the price of the Common Stock, (ii) market
share, (iii) sales, (iv) earnings per share of Common Stock, (v) return on
shareholder equity and (vi) costs. All Officers or key employees of the Company
(or its subsidiaries and affiliates), including employee Directors, are eligible
to receive awards under the Plan.
The Board is adding these additional Plan performance goals to create
additional flexibility in establishing performance-based incentives. The
Shareholders are being asked to consider and approve these additional Plan
performance goals to ensure that awards granted under the Plan continue to
qualify as "performance based" for purposes of Section 162(m) of the Internal
Revenue Code.
Following is a description of the material features of the Plan, as
amended:
Purpose
The purpose of the Plan is to assist the Company, its subsidiaries and
affiliates in attracting and retaining valued employees by offering them a
greater stake in the Company's success and a closer identity with it and to
encourage ownership of the Company's stock by such employees. The Plan will
accomplish these goals by allowing eligible employees of the Company, its
subsidiaries and affiliates to receive awards of Deferred Stock, Restricted
Stock, Options or Stock Appreciation Rights (the "Awards"). The total number of
shares of Company Common Stock available for Awards under the Plan, as of March
1, 2000, is 2,312,544 (subject to adjustments for stock splits, stock dividends
and the like), which equals approximately 1.80% of the outstanding shares of
Common Stock of the Company as of March 1, 2000. No individual employee may
receive more than 250,000 shares under the Plan during any calendar year.
Eligibility
Any Officer or other key employee of the Company, a subsidiary or an
affiliate (including a Director who is such an employee) is eligible to
participate in the Plan.
18
<PAGE>
Administration and Implementation
A Committee designated by the Board of Directors, comprised of at least two
Directors, each of whom is an outside Director and a non-employee director, has
the authority to administer the Plan. This Committee also has full authority to
select the employees to whom Awards will be granted, to determine the type and
amount of Awards to be granted to each eligible employee, the terms and
conditions of Awards granted under the Plan and the terms of agreements which
will be entered into with holders of such Awards.
The Committee may condition the grant of any Award upon the holder's
achievement of a performance goal that is established by the Committee before
the grant of the Award. A performance goal is a goal that must be met by the end
of a period specified by the Committee (but that is substantially uncertain to
be met before the grant of the Award) based upon: (i) the price of the Common
Stock, (ii) market share, (iii) sales, (iv) earnings per share of Common Stock,
(v) return on shareholder equity, (vi) costs, (vii) cash flow, (viii) return on
total assets, (ix) return on invested capital, (x) return on net assets, (xi)
operating income or (xii) net income. Performance goals can also be based upon
the performance of a particular business unit of the Company. The Committee will
interpret the provisions of the Plan and make all determinations necessary for
the administration of the Plan (including the determination of the effect of a
"change in control" upon outstanding Awards).
Deferred Stock Awards
An Award of Deferred Stock is an agreement by the Company to deliver to the
recipient a specified number of shares of Common Stock at the end of a specified
deferral period or periods and will be evidenced by a Deferred Stock agreement.
Amounts equal to any dividends paid during this deferral period will be paid to
the holder currently, or deferred, on such terms as are determined by the
Committee.
Restricted Stock Awards
An Award of Restricted Stock is a grant to the recipient of a specified
number of shares of Common Stock which are subject to forfeiture upon specified
events and which are held in escrow by the Company during the restriction
period. Such Award will be evidenced by a Restricted Stock agreement which will
specify the duration of the restriction period and the performance, employment
or other conditions under which the Restricted Stock may be forfeited to the
Company. During the restriction period, the holder has the right to receive
dividends on, and to vote, the shares of Restricted Stock.
Options
An Award of Options is a grant by the Company to the recipient of the right
to purchase a specified number of shares of Common Stock from the Company for a
specified time period at a fixed price. Options may be either Incentive Stock
Options or Non-Qualified Stock Options. Grants of Options will be evidenced by
Option agreements. The price per share at which Common Stock may be purchased
upon exercise of an Option will be determined by the Committee, but, in the case
of grants of Incentive Stock Options, will be not less than the fair market
value of a share of Common Stock on the date of grant. The Option price per
share for Non-Qualified Options may be less than the fair market value of a
share of Common Stock on the date of the grant.
The Option agreements will specify when an Option may be exercisable and
the terms and conditions applicable thereto. If a holder terminates employment
because of a disability, the holder will be able to exercise any portion of the
Option, to the extent it was exercisable at the time of termination
19
<PAGE>
or on an accelerated basis if decided by the Committee, for a period of 24
months (3 months for an Incentive Stock Option) or until the expiration of the
Option term, whichever is shorter. If a holder retires, the holder will be able
to exercise any portion of the Option, to the extent it was exercisable at the
time of retirement or on an accelerated basis if decided by the Committee, for a
period of five years (3 months for an Incentive Stock Option) or until the
expiration of the Option term, whichever is shorter. The term of an Option will
in no event be greater than fifteen years (ten years in the case of an Incentive
Stock Option unless granted to a ten percent owner, in which case the term shall
be no greater than five years), and no Option may be exercisable sooner than six
months from its date of grant.
Stock Appreciation Rights
An Award of Stock Appreciation Rights ("SARs") is a grant by the Company to
the recipient of the right to receive, upon exercise of the SAR, the increase in
the fair market value of a specified number of shares of Common Stock from the
date of grant of the SAR to the date of exercise. SARs are rights to receive a
payment in cash, Common Stock, Restricted Stock or Deferred Stock as selected by
the Committee. The value of these rights, determined by the appreciation in the
number of shares of Common Stock subject to the SAR, will be evidenced by SAR
agreements. An SAR will entitle the recipient to receive a payment equal to the
excess of the fair market value of the shares of Common Stock covered by the SAR
on the date of exercise over the base price of the SAR.
Amendment and Termination
The Board of Directors has authority to amend, suspend or terminate the
Plan at any time. However, certain amendments require the approval of a majority
of the Company's Shareholders. Without Shareholder approval, no amendment may be
made: (i) increasing the maximum number of shares available for purchase under
the Plan (except for adjustments for stock splits, stock dividends and similar
events); (ii) changing the class of employees eligible under the Plan; (iii)
modifying the maximum number of Awards that an eligible employee may receive or
the categories of performance goals that must be met; or (iv) changing the
Plan's term or the Board of Directors' power to amend, suspend or terminate the
Plan. The Plan will remain in effect until 5 years from the date of its
adoption, unless earlier terminated by the Board of Directors. Such termination
will not affect Awards outstanding under the Plan.
Federal Tax Treatment
Except as provided below, a recipient realizes no taxable income, and the
Company is not entitled to a deduction, when a Restricted Stock or Deferred
Stock Award is made. When the restrictions on the shares of Restricted Stock
lapse or the deferral period for Deferred Stock ends, the recipient will realize
ordinary income equal to the fair market value of the shares, and, provided the
applicable conditions of Section 162(m) of the Internal Revenue Code are met,
the Company will be entitled to a corresponding deduction. Upon sale of the
shares, the recipient will realize short-term or long-term capital gain or loss,
depending upon whether the shares have been held for more than one year. Such
gain or loss will be equal to the difference between the sale price of the
shares and the fair market value of the shares on the date that the recipient
recognizes income.
In the case of Awards of Restricted Stock, a recipient may choose to make
an election under Section 83(b) of the Internal Revenue Code. Such an election
will have the effect of inclusion in the recipient's income of the fair market
value of the Restricted Stock on the date the Award is made, and, subject to the
provisions of Section 162(m) of the Internal Revenue Code, the Company will be
entitled to a corresponding deduction at that time. The recipient will not
recognize additional income or loss as a result of the lapse of the restrictions
on the Restricted Stock, nor will the Company be entitled to a deduction at such
time.
20
<PAGE>
A recipient recognizes no taxable income, and the Company is not entitled
to a deduction, when an Incentive Stock Option is granted or exercised. If a
recipient sells shares acquired upon exercise, after complying with the
requisite holding periods, any gain or loss realized upon such sale will be
long-term capital gain or loss. The Company will not be entitled to take a
deduction as a result of any such sale. If the recipient disposes of such shares
before complying with the requisite holding periods, the recipient will
recognize ordinary income, and the Company will be entitled to a corresponding
deduction.
A recipient recognizes no taxable income, and the Company is not entitled
to a deduction, when a Non-Qualified Option is granted. Upon exercise of a
Non-Qualified Option, a recipient will realize ordinary income in an amount
equal to the excess of the fair market value of the shares over the exercise
price, and, provided that the applicable conditions of Section 162(m) of the
Internal Revenue Code are met, the Company will be entitled to a corresponding
deduction. Upon sale of the Option shares, the recipient will realize short-term
or long-term capital gain or loss, depending upon whether the shares have been
held for more than one year, equal to the difference between the sale price of
the shares and the fair market value of the shares on the date that the
recipient recognizes income with respect to the Option exercise. A recipient
recognizes no taxable income, and the Company is not entitled to a deduction,
when an SAR is granted. Upon exercising an SAR, a recipient will realize
ordinary income in an amount equal to the difference between the fair market
value of the stock on the date of exercise and its fair market value on the date
of the grant, and, provided the applicable conditions of Section 162(m) of the
Internal Revenue Code are met, the Company will be entitled to a corresponding
deduction.
Recipients shall be responsible to make appropriate provision for all taxes
required to be withheld in connection with any Award, the exercise thereof and
the transfer of shares of Common Stock pursuant to the 1997 Plan. Such
responsibility shall extend to all applicable federal, state, local or foreign
withholding taxes. In the case of the payment of Awards in Common Stock or the
exercise of Options or SARs, the Company shall, at the election of the
recipient, have the right to retain the number of shares of Common Stock whose
fair market value equals the withholding tax obligation of such employee.
Requisite Vote
In order for the amendment to become effective, the amendment must receive
approval of a majority of the votes cast by all Shareholders entitled to vote
thereon.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE AMENDMENT OF THE 1997 STOCK-BASED INCENTIVE
COMPENSATION PLAN
21
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PROPOSALS OF SHAREHOLDERS
In order to be considered for inclusion in the Proxy Statement for the 2001
Annual Meeting of the Company, any Shareholder proposal intended to be presented
at the meeting, in addition to meeting the shareholder eligibility and other
requirements of the SEC rules governing such proposals, must be received in
writing, via Certified Mail - Return Receipt Requested, by the Office of the
Secretary, Crown Cork & Seal Company, Inc., One Crown Way, Philadelphia,
Pennsylvania 19154 not later than November 24, 2000. In addition, the Company's
By-Laws currently provide that a Shareholder of record at the time that notice
of the meeting is given and who is entitled to vote at the meeting may bring
business before the meeting or nominate a person for election to the Board of
Directors if the Shareholder has given timely notice of such business or
nomination. To be timely, and subject to certain exceptions, notice in writing
to the Secretary must be delivered or mailed, via Certified Mail-Return Receipt
Requested, and received at the above address not less than 90 days nor more than
120 days prior to the first anniversary of the preceding year's annual meeting.
The notice must describe various matters regarding the nominee or proposed
business. Any Shareholder desiring a copy of the Company's By-Laws will be
furnished one copy without charge upon written request to the Secretary.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP is the independent accountant for
the most recently completed fiscal year and has been selected by the Board of
Directors to continue in that capacity for the current year.
PricewaterhouseCoopers LLP performs annual audits of the Company's financial
statements and assists the Company in the preparation of federal tax returns. A
representative or representatives of PricewaterhouseCoopers LLP are expected to
be present at the Annual Meeting and will have the opportunity to make a
statement if they desire to do so. Such representatives are also expected to be
available to respond to questions raised orally at the Meeting or submitted in
writing to the Office of the Secretary of the Company before the Meeting.
OTHER MATTERS
The Board of Directors knows of no other matter which may be presented for
Shareholders' action at the Meeting, but if other matters do properly come
before the Meeting, or if any of the persons named above to serve as Directors
are unable to serve, it is intended that the persons named in the Proxy or their
substitutes will vote on such matters and for other nominees in accordance with
their best judgment.
The Company will file its 1999 Annual Report on Form 10-K with the
Securities & Exchange Commission on or before March 30, 2000. A copy of the
Report, including the financial statements and schedules thereto and a list
describing all the exhibits not contained therein, may be obtained without
charge by any Shareholder after March 30, 2000. Requests for copies of the
Report should be sent to: Corporate Treasurer, Crown Cork & Seal Company, Inc.,
One Crown Way, Philadelphia, Pennsylvania 19154.
WILLIAM T. GALLAGHER
Secretary
Philadelphia, Pennsylvania 19154
March 24, 2000
22
<PAGE>
CROWN CORK & SEAL COMPANY, INC.
One Crown Way, Philadelphia, PA 19154
PROXY FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON APRIL 27, 2000
The undersigned hereby appoints William J. Avery, John W. Conway and Alan W.
Rutherford as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated on the reverse side, all
the shares of stock of Crown Cork & Seal Company, Inc. held of record by the
undersigned on March 14, 2000 at the Annual Meeting of Shareholders to be held
on April 27, 2000 or any adjournments thereof, for the items shown below and in
any other matter that may properly come before the Meeting:
P
R
O
X
Y
1. FOR the election of a Board of eleven Directors:
William J. Avery, Henry E. Butwel, John W. Conway, Arnold W. Donald,
Marie L. Garibaldi, John B. Neff, James L. Pate, Thomas A. Ralph,
Alan W. Rutherford, Harold A. Sorgenti and Guy de Wouters.
(change of address/comments)
(If you have written in the above space, please mark the corresponding box on
the reverse side.)
2. FOR approval of an amendment to the Crown Cork & Seal Company, Inc. 1997
Stock-Based Incentive Compensation Plan.
You are encouraged to specify your choices by marking the appropriate box (SEE
REVERSE SIDE), but you need not mark any box if you wish to vote in accordance
with the Board of Directors' recommendation. The Proxies cannot vote your shares
unless you sign and return this card.
SEE REVERSE
SIDE
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x Please mark your
votes as in this
example.
<PAGE>
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. This proxy, when
properly executed, will be voted in the manner directed herein by the
Shareholder. If no direction is made, this proxy will be voted "FOR" Proposal 1
and Proposal 2.
The Board of Directors recommends a vote for Proposal 1 and Proposal 2.
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FOR against abstain
FOR withheld
1. Election of Directors (See Reverse Side)
2. Approval of an amendment to the Crown Cork & Seal Company, Inc. 1997
Stock-Based Incentive Compensation Plan.
For, except vote withheld from the following nominee(s):
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If you receive more than one Annual Report at the address set forth on the proxy
card and have no need for the extra copy, please check the box at the right.
This will not affect the distribution of dividends or proxy materials.
MARK HERE FOR ADDRESS
CHANGE AND NOTE ON
REVERSE SIDE
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SIGNATURE(S)
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DATE
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Note: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
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Fold and Detach Here
Directions to One Crown Way
From points South, Center City and Philadelphia International Airport:
o Take I-95 North to Exit 24, Woodhaven Road (Route 63)
o Take Woodhaven Road West (3 miles) to Roosevelt Boulevard (Route 1)
o Take Roosevelt Boulevard North to the first traffic light
o Turn right onto Crown Way
From New York City and Northern New Jersey:
o Take the New Jersey Turnpike South to Exit 6
o Take the Pennsylvania Turnpike West to Exit 28, Philadelphia
o Take Roosevelt Boulevard (Route 1) South
o Stay to the extreme left as Roosevelt Boulevard splits into parallel lanes
o Turn left at the fourth traffic light below the Turnpike (2 miles) onto
Crown Way
From points West and Northern Pennsylvania:
o Take Pennsylvania Turnpike (I-276) East to Exit 28, Philadelphia
o Take Roosevelt Boulevard (Route 1) South
o Stay to the extreme left as Roosevelt Boulevard splits into parallel lanes
o Turn left at the fourth traffic light below the Turnpike (2 miles) onto
Crown Way
From Trenton and Princeton area:
o Take Route 1 South which becomes Roosevelt Boulevard in Philadelphia
o Stay to the extreme left as Roosevelt Boulevard splits into parallel lanes
o Turn left at the fourth traffic light below the Turnpike (2 miles) onto
Crown Way
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