SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
Commission File Number 1-2227
C. Full title of the plan:
Crown Cork & Seal Company, Inc.
401(k) Retirement Savings Plan
D. Name of issuer of the Securities held pursuant to the plan
and the address of its principal executive office:
CROWN CORK & SEAL COMPANY, INC.
ONE CROWN WAY
PHILADELPHIA, PA 19154-4599
INDEX
Page(s)
Signatures.................................................................3
Report of Independent Accountants..........................................6
Audited Plan Financial Statements and Schedules in accordance
with the Financial Reporting Requirements of ERISA.......................7 - 16
Exhibit 23 - Consent of Independent Accountants...........................17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Committee has duly caused this annual report to be signed on its behalf by the
undersigned hereto duly authorized.
Crown Cork & Seal Company, Inc.
401 (k) Retirement Savings Plan
By: /s/ James T. Malec
------------------
James T. Malec
Member, Benefit Plan Committee
Date: June 28, 2001
-------------
CROWN CORK & SEAL COMPANY, INC.
401(k) RETIREMENT SAVINGS PLAN
Financial Statements as of and for the years ended
December 31, 2000 and 1999
Additional information required for Form 5500
as of and for the year ended December 31, 2000
Crown Cork & Seal Company, Inc.
401(k) Retirement Savings Plan
Table of Contents
- --------------------------------------------------------------------------------
Page(s)
Report of Independent Accountants 1
Basic Financial Statements
Statement of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4 - 8
Additional Information *
Schedule I - Schedule of Assets (Held at End of Year) 9
Schedule II - Schedule of Reportable Transactions 10
(Nonparticipant-Directed Investment Transaction
or Series of Transactions in Excess
of 5% of Plan Assets)
* Other supplemental schedules required by Section 2520.103-10 of the Department
of Labor Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 have been omitted because they are not
applicable.
Report of Independent Accountants
To the Benefit Plans Committee and Participants of the
Crown Cork & Seal Company, Inc. 401(k) Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Crown Cork & Seal Company, Inc. 401(k) Retirement Savings Plan (the
"Plan") at December 31, 2000 and 1999, and the changes in net assets available
for benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) and of reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
June 1, 2001
1
CROWN CORK & SEAL COMPANY, INC. 401(k)
RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
- ------------------------------------------------------------------------------------------------------------------------------------
As of December 31,
2000 1999
----------------------------------------------------
Investments, at fair value
Registered investment companies:
Vanguard 500 Index Fund $ 51,080,209 * $ 66,544,350 *
Vanguard Balanced Index Fund 10,719,072 * 12,446,534 *
Vanguard Explorer Fund 14,123,171 * 9,550,804 *
Vanguard International Growth Fund 5,624,707 6,710,321
Vanguard Total Bond Market Index Fund 5,527,941 5,064,428
STI Classic Prime Quality Money Market Fund - 68,332
-------------- --------------
87,075,100 100,384,769
Crown Cork & Seal Company, Inc. Stock Fund 12,325,249 ** 23,254,507 **
Participant Loans 3,726,717 3,761,625
-------------- --------------
103,127,066 127,400,901
-------------- --------------
Investments, at contract value
Crown Cork & Seal Fixed Income Fund 52,612,540 * 57,438,771 *
-------------- --------------
Total investments 155,739,606 184,839,672
-------------- --------------
Receivables
Employer's contributions 158,989 177,457
Participants' contributions 574,495 624,424
-------------- --------------
Total receivables 733,484 801,881
-------------- --------------
Net assets available for benefits $ 156,473,090 $ 185,641,553
============== ==============
<FN>
* Represents 5% or more of net assets available for benefits.
** Represents nonparticipant-directed investments that are 5% or more of net
assets available for benefits.
</FN>
The accompanying notes are an integral part of these financial statements.
2
CROWN CORK & SEAL COMPANY, INC. 401(k)
RETIREMENT SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31,
2000 1999
----------------------------------------------------
Additions
Investment income:
Interest and dividend income, investments $ 8,802,553 $ 7,553,898
Interest income, participant loans 303,600 267,745
Net (depreciation) appreciation in fair value of investments (24,532,379) 5,046,209
-------------- --------------
(15,426,226) 12,867,852
-------------- --------------
Contributions:
Employer 2,131,547 2,056,808
Participant 7,912,206 7,996,719
-------------- --------------
10,043,753 10,053,527
-------------- --------------
Asset transfers in - 23,290,214
-------------- --------------
Total additions (5,382,473) 46,211,593
-------------- --------------
Deductions
Payment of benefits 22,709,635 21,185,006
Asset transfers out 1,069,385 -
Administrative expenses 6,970 4,140
-------------- --------------
Total deductions 23,785,990 21,189,146
-------------- --------------
Net (decrease) increase (29,168,463) 25,022,447
Net assets available for plan benefits:
Beginning of year 185,641,553 160,619,106
-------------- --------------
End of year $ 156,473,090 $ 185,641,553
============== ==============
The accompanying notes are an integral part of these financial statements.
3
CROWN CORK & SEAL COMPANY, INC. 401(k)
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF PLAN
The following description of the Crown Cork & Seal Company, Inc. 401 (k)
Retirement Savings Plan (the "Plan") provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
General
The plan is a defined contribution plan. The purpose of the Plan is to provide a
convenient method by which eligible employees of Crown Cork & Seal Company, Inc.
(the "Company") may save regularly through salary deferrals and through Company
matching contributions. Generally, employees are eligible to participate in the
Plan after completing one year of service and attaining age 21. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
The Plan is administered by the Crown Cork & Seal Company, Inc. Benefit Plans
Committee (the "Committee"). The Committee has appointed Vanguard Fiduciary
Trust Company ("VFTC") to assume both trustee and recordkeeping
responsibilities.
During 1999, the Company sold a segment of the Composite Can division. As a
result of this transaction, participant accounts of former Composite Can
employees were transferred out of the Plan in 2000 in the amount of $1,069,385.
The Crown Cork & Seal Company, Inc. 401(k) Retirement Savings Plan for Salaried
Employees of CONSTAR International, Inc. ("CONSTAR Salaried 401(k)"), the
participant accounts of the salaried employees of Zeller Plastik, Inc. 401(k)
Savings Plan ("Zeller") and the Crown Cork & Seal Company, Inc. 401(k)
Retirement Savings Plan for Employees of Golden Aluminum ("Golden Aluminum")
were merged with and into the Plan effective March 31, 1999, August 31, 1999 and
December 31, 1999, respectively. The assets transferred totaled $20,982,739,
$966,188 and $1,110,242 for CONSTAR Salaried 401(k), Golden Aluminun, and
Zeller, respectively. In addition, $231,045 of assets from the Crown Cork & Seal
Company, Inc. 401(k) Retirement Savings Plan for Employees of Risdon Corporation
("Risdon 401(k)") were transferred in February 1999. The other assets related to
the Risdon 401(k) were transferred upon completion of the plan merger, which
occurred in 1998.
During these conversions, freeze periods were enforced to restrict transactions.
Once the freeze periods were lifted participants could change investment
elections.
Contributions
Generally, the Plan has two components: a participant salary deferral 401(k)
component and a Company matching contribution component. The salary deferral
401(k) component of the plan allows before-tax employee contributions of 2% to
12% of annual compensation. Contribution amounts are subject to certain
limitations, $10,500 in 2000 and $10,000 in 1999, as prescribed by law. The
Company makes matching contributions equal to 50 percent of the employee's
contribution, from 3% up to 6% of compensation, depending on the employer
company. Participants direct the investment of their contributions into various
investment options offered by the Plan. Company contributions are invested in
Company common stock.
4
Participant Accounts
Each participant's account is credited with participant's contribution and the
participant's allocation of the Company's contribution, as described above. Plan
earnings are allocated to the participant's account based on participant's
account balances. The benefit to which a participant is entitled is the benefit
that can be provided from the participant's vested account.
Vesting
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company's contribution plus actual earnings thereon is
based on years of continuous service. Generally, a participant is 100 percent
vested after four years of credited service.
Participant Loans
Participants may borrow from their account a minimum of $1,000 up to a maximum
equal to the lesser of $50,000 or 50 percent of the participant's vested
balance. Loan transactions are treated as a transfer to (from) the investment
fund from (to) Participant loans. Loan terms range from 1 to 5 years or up to 10
years for the purchase of a primary residence. The loans are secured by the
balance in the participant's account and bear interest at a rate commensurate
with a prevailing commercial rate for a secured personal loan. Principal and
interest is paid ratably through monthly payroll deductions. A participant may
not have more than two outstanding loans at any one time.
Payment of Benefits
On termination of service due to death, disability or retirement, a participant
may elect to receive either a lump sum amount equal to the value of the
participant's vested interest in his or her account, or substantially equal
periodic installments over a period equal to the life expectancy of the
recipient or beneficiary. For termination of service due to other reasons, a
participant may receive the value of the vested interest in his or her account
as a lump-sum distribution. All distributions are paid in either cash or company
stock at the participant's election.
Forfeited Accounts
Total unallocated forfeitures, which will be used to reduce future employer
contributions, were $23,580 and $1,485 at December 31, 2000 and 1999,
respectively. These amounts will be used to reduce future employer
contributions. In 2000 and 1999, $668 and $74,181, respectively, of unallocated
forfeitures were used to offset employer contributions.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100 percent vested in their accounts.
5
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
The following accounting policies, which conform with accounting principles
generally accepted in the United States of America, have been used consistently
in the preparation of the Plan's financial statements:
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method of
accounting.
Use of Estimates
The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States of America, requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, as well as reported amounts of additions
and deductions during the reporting period. Actual results could differ from
those estimates.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value except for its investment
contracts, which are valued at contract value (Note 5). Shares of registered
investment companies are valued at quoted market prices which represent the net
asset value of shares held by the Plan at year-end. The Company stock fund is
valued at its year-end unit closing price (comprised of year-end market price
plus uninvested cash position). Units of the Company's fixed income fund are
valued at net asset value at year-end. Participant loans are valued at cost,
which approximates fair value.
Purchases and sales of investments are recorded on a trade-date basis. Interest
income is accrued when earned. Dividend income is recorded on the ex-dividend
date. Capital gain distributions are included in dividend income.
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133")
which requires that an entity recognize all derivatives and measure those
instruments at fair value.
SFAS No. 133 was effective for the Plan January 1, 2001. Management has not yet
been able to determine the impact of SFAS No. 133 on the Plan financial
statements as a result of the inconsistency in accounting literature between
SFAS No. 133, requiring derivatives to be measured at fair value, and the AICPA
Audit and Accounting Guide on "Audits of Employee Benefit Plans" and Statement
of Position 94-4, "Reporting of Investment Contracts Held by Health and Welfare
Benefit Plans and Defined-Contribution Pension Plans", requiring benefit
responsive investment contracts (including synthetic investment contracts) to be
measured at contract value. Until this discrepancy is resolved, management is
unable to determine the impact that SFAS No. 133 will have on the Plan financial
statements. The carrying value of the Plan's synthetic benefit responsive
investment contracts was $3,186,594 at December 31, 2000.
The actual impact on the Plan's net assets available for plan benefits of
adopting SFAS No. 133 will be made based on the derivative positions and hedging
relationships at the date of adoption.
6
NOTE 3 - NON PARTICIPANT-DIRECTED INVESTMENTS
Information about the significant components of changes in net assets relating
to the nonparticipant-directed investments is as follows:
Crown Cork & Seal Company, Inc. Stock Fund
------------------------------------------
2000 1999
---- ----
Changes in Net Assets:
Interest & dividend income $ 1,089,087 $ 949,443
Net appreciation/(depreciation) (15,004,797) (8,094,832)
Contributions 3,263,770 3,339,432
Distributions (1,483,927) (2,165,507)
Asset transfers out (109,497) -
Interfund transfers 1,287,251 (1,626,671)
Asset transfers in - 1,862,670
NOTE 4 - INVESTMENTS
During 2000 and 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) in value as follows:
2000 1999
---- ----
Registered investment companies $ (9,527,582) $ 13,141,041
Common stock (15,004,797) (8,094,832)
-----------------------------------------
$ (24,532,379) $ 5,046,209
=========================================
NOTE 5 - CROWN CORK & SEAL FIXED INCOME FUND
The Crown Cork & Seal Fixed Income Fund (the "Fund") consists of guaranteed
investment contracts of $15,349,211 and synthetic investment contracts with
various banks and insurance companies ("Issuers"). Additionally, the Fund holds
units of the Vanguard Retirement Savings Trust, a common/commingled trust
sponsored by VFTC with a value of $34,111,299. The Vanguard Retirement Savings
Trust (the "Trust") is a tax-exempt collective trust invested primarily in
investment contracts issued by insurance companies and commercial banks, and
similar types of fixed-principal investments. The Trust intends to maintain a
constant net asset value of $1.00 per unit. The Fund is credited with earnings
on the underlying investments and charged for Plan withdrawals and
administrative expenses charged by the Issuers. The investment contracts
included in the Fund are carried at contract value, which approximates fair
value, because the contracts are fully benefit responsive. The synthetic
investment contracts constitute investments in common collective trusts,
$3,186,370, and wrapper contracts, $224. The value provided (reduced) by the
wrapper contracts represents the difference between the value of the synthetic
investment contracts and the underlying investments. The Fund also included net
other liabilities (including units receivable and payable) in the amount of
$34,564. The crediting interest rates of the investment contracts ranged from
2.16% to 6.69% at December 31, 2000. As the contracts mature, the proceeds are
invested in the Vanguard Retirement Savings Trust.
7
NOTE 6 - RELATED PARTY TRANSACTIONS
The Plan invests in shares of registered investment companies and
common/collective trusts managed by affiliates of VFTC. VFTC acts as trustee for
investments of the Plan. The Plan also invests in shares of the Company's stock
through the Crown Cork & Seal Company, Inc. Stock Fund. Transactions in such
investments qualify as party-in-interest transactions and are exempt from the
prohibited transaction rules.
NOTE 7 - PLAN EXPENSES
All recordkeeping expenses for the administration of the Plan, with the
exception of certain miscellaneous fees, are paid by the Company.
NOTE 8 - TAX STATUS
The Internal Revenue Service has determined and informed the company by a letter
dated February 22, 1996 that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code ("IRC"). The
Plan has been amended since receiving the determination letter. However, the
Plan administrator believes that the Plan is designed and is currently being
operated in compliance with the applicable provisions of the IRC.
8
Additional Information
Required for Form 5500
CROWN CORK & SEAL COMPANY, INC. 401(k) Schedule I
RETIREMENT SAVINGS PLAN
Schedule of Assets (Held at End of Year)
As of December 31, 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Crown Cork & Seal Company, Inc. 401(k) Retirement Savings Plan, EIN 23-1526444
Form 5500, Schedule H, Part IV, Line i
Identity of Participant-Directed Issues Investment Type Current Value
- ------------------------------------------------------------------------------------------------------------------------------------
* Vanguard 500 Index Fund Registered Investment Company $ 51,080,209
* Vanguard Balanced Index Fund Registered Investment Company 10,719,072
* Vanguard Explorer Fund Registered Investment Company 14,123,171
* Vanguard International Growth Fund Registered Investment Company 5,624,707
* Vanguard Total Bond Market Index Fund Registered Investment Company 5,527,941
* Vanguard Retirement Savings Trust Common/Commingled Trust 34,111,299
* Crown Cork & Seal Company, Inc. 401(k)
Retirement Savings Plan Participant Loans (7.0% - 13.7%) 3,726,717
Life of Virginia 6.37% 5/31/2001 Guaranteed Investment Contract 2,515,274
Massachusetts Mutual Life Insurance Company 6.42% 6/25/2002 Guaranteed Investment Contract 732,160
Metropolitan Life 6.00% 1/2/2001 Guaranteed Investment Contract 1,768,137
New York Life Insurance Company 6.28% 9/30/2001 Guaranteed Investment Contract 5,131,621
Principal Mutual Life Insurance 6.07% 6/30/2001 Guaranteed Investment Contract 5,202,019
West Deutsche Landesbank 6.32% 3/31/2001 Synthetic Investment Contract 3,186,594
Identity of Nonparticipant-Directed Issues Investment Type Cost Current Value
- ------------------------------------------------------------------------------------------------------------------------------------
* Crown Cork & Seal Company, Inc. Common Stock $ 34,789,344 $ 12,325,249
<FN>
* Party in Interest
</FN>
9
CROWN CORK & SEAL COMPANY, INC. 401(k) Schedule II
RETIREMENT SAVINGS PLAN
Schedule of Reportable Transactions *
Year Ended December 31, 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Crown Cork & Seal Company, Inc. 401(k) Retirement Savings Plan, EIN 23-1526444
Form 5500, Schedule H, Part IV, Line j
Current Value
Identity of Party Description of Asset Purchase Price Selling Price Historical Cost of Asset on Historical
Involved of Asset Transaction Date Gain (Loss)
- ------------------------------------------------------------------------------------------------------------------------------------
The Vanguard Group Crown Cork & Seal Company, Inc.
Stock Fund $7,911,638 $7,911,638
The Vanguard Group Crown Cork & Seal Company, Inc.
Stock Fund $3,835,682 $6,947,022 3,835,682 $(3,111,340)
<FN>
* Nonparticipant-directed transactions or a series of transactions in excess of
5% of the current value of the Plan's assets as of the beginning of the plan
year as defined in section 2520.103-6 of the Department of Labor Rules and
Regulations for Reporting and Disclosure under ERISA.
</FN>
10