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, 1996
Commission File Number 1-2227
G. Full title of the plan:
Crown Cork & Seal Company, Inc.
401(K) Retirement Savings Plan
H. 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
Pages
Signatures...................................................... 3
Report of Independent Accountants............................... 6
Audited Plan Financial Statements and Schedules in
accordance with the Financial Reporting Requirements of ERISA... 7 to 14
Exhibit 23 - Consent of Independent Accountants................ 15
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 hereunto 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 25, 1997
Crown Cork & Seal Company, Inc.
401(k) Retirement Savings Plan
Financial Statements
and Supplemental Information
December 31, 1996
Crown Cork & Seal Company, Inc. 401(k) Retirement Savings Plan
Financial Statements and Supplemental Information
December 31, 1996
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Index
Page
Report of Independent Accountants 1
Statement of Net Assets Available for Plan Benefits 2
December 31, 1996 and 1995
Statement of Changes in Net Assets Available for Plan Benefits,
with Fund Information For the Year Ended December 31, 1996 3
Notes to Financial Statements 4 - 7
Schedule I - Item 27a - Schedule of Assets Held for
Investment Purposes at December 31, 1996 8
Schedule II - Item 27d - Schedule of Reportable Transactions 9
For the Year Ended December 31, 1996
Note: Other schedules required by ERISA are not applicable.
Report of Independent Accountants
June 18, 1997
To the Benefit Plans Committee and Participants
of the Crown Cork & Seal Company, Inc.
401(k) Retirement Savings Plan
In our opinion, the accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Crown Cork & Seal Company, Inc. 401(k) Retirement Savings
Plan (the "Plan") at December 31, 1996 and 1995, and the changes in net assets
available for plan benefits for the year ended December 31, 1996, in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Plan's administrator; 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 generally accepted auditing
standards 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 the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules I and II is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by ERISA. The fund information in the statement of changes in net
assets available for plan benefits is presented for purposes of additional
analysis rather than to present the changes in net assets available for plan
benefits of each fund. Schedules I and II and the fund information 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.
PRICE WATERHOUSE LLP
Crown Cork & Seal Company, Inc. 401(k) Retirement Savings Plan
Statement of Net Assets Available for Plan Benefits
December 31, 1996 and 1995
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1996 1995*
---- -----
Investments:
Fixed Income Fund $ 62,722,492 $ 65,401,645
Crown Stock Fund 42,880,689 35,706,664
Vanguard Index Trust Fund 18,524,077 13,297,699
Vanguard International Growth Portfolio Fund 4,153,092 2,689,236
Vanguard Explorer Fund 3,014,648 2,040,725
Vanguard Balanced Index Fund 2,374,046 2,118,224
Vanguard Bond Index Fund 548,538 529,861
Participant loans 545,888 485,060
------------ ------------
Total investments 134,763,470 122,269,114
Employer contributions receivable 82,454 83,216
Employee contributions receivable 321,778 327,749
Other receivables 9,112 9,219
------------ ------------
Net assets available for plan benefits $135,176,814 $122,689,298
============ ============
* Certain prior year amounts have been reclassified to conform to the current
year presentation.
The accompanying notes are an integral part of these financial statements.
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Crown Cork & Seal Company, Inc. 401(k) Retirement Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits,
with Fund Information
For the Year Ended December 31, 1996
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Vanguard
Vanguard International Vanguard Vanguard
Fixed Crown Index Growth Vanguard Balanced Bond
Income Stock Trust Portfolio Explorer Index Index Participant Accrued
Fund Fund Fund Fund Fund Fund Fund Loans Receivable Total
--------- -------- --------- ---------- ---------------- ------- ----------- ---------- ------
Additions:
Contributions:
Employer $961,928 $82,454 $1,044,382
Participants $1,012,541 1,464,309 $772,079 $237,484 $227,091 $134,566 $79,874 321,778 4,249,722
Participant loan
repayments 35,857 35,650 20,748 3,410 3,757 665 149 ($109,348) 9,112
Investment income 3,372,396 767,104 396,087 175,680 168,075 101,623 32,844 45,057 5,058,866
Net realized
gains (losses)
on investments 892,208 241,639 26,528 31,822 38,825 (2,626) 1,228,396
Net unrealized
gains (losses)
on investments 9,353,706 2,662,142 285,721 94,076 163,306 (9,100) 12,549,851
Other receipts 14,975 21,005 22,181 9,135 40,397 4,069 111,762
---------- ---------- --------- -------- -------- ------- ------- ---------- ------- ----------
Total Additions 4,435,769 13,495,910 4,114,876 737,958 565,218 443,054 101,141 (64,291) 413,344 24,242,979
---------- ---------- --------- -------- -------- ------- ------- ---------- ------- ----------
Deductions:
Distributions
to participants (7,344,657) (2,282,728)(1,464,469) (191,396) (172,569) (228,043) (6,847) (64,754) (11,755,463)
Participant loans (61,686) (70,980) (45,104) (1,826) (8,532) (1,557) (188) 189,873
------------ ---------- ---------- --------- --------- -------- -------- --------- ------- -----------
Total Deductions (7,406,343) (2,353,708)(1,509,573) (193,222) (181,101) (229,600) (7,035) 125,119 (11,755,463)
------------ ---------- ---------- --------- --------- -------- -------- --------- ------- -----------
Increase(decrease)
in net assets prior
to interfund
transfers (2,970,574) 11,142,202 2,605,303 544,736 384,117 213,454 94,106 60,828 413,344 12,487,516
Interfund
transfers 291,421 (3,968,177) 2,621,075 919,120 589,806 42,368 (75,429) (420,184)
----------- ---------- --------- -------- -------- -------- ------- ------ --------- -----------
Net increase
(decrease)in
net assets
available for
benefits (2,679,153) 7,174,025 5,226,378 1,463,856 973,923 255,822 18,677 60,828 (6,840) 12,487,516
Net assets at
beginning
of year* 65,401,645 35,706,664 13,297,699 2,689,236 2,040,725 2,118,224 529,861 485,060 420,184 122,689,298
----------- ---------- ---------- --------- --------- --------- ------- ------- -------- ------------
Net assets
at end of year $62,722,492 $42,880,689 $18,524,077 $4,153,092 $3,014,648 $2,374,046 $548,538 $545,888 $413,344 $135,176,814
=========== =========== =========== ========== ========== ========== ======== ======== ======== ============
* Prior year amounts have been reclassified to conform to the current year
presentation. See Note 3.
The accompanying notes are an integral part of these financial statements.
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Crown Cork & Seal Company, Inc 401(k) Retirement Savings Plan
Notes to Financial Statements
December 31, 1996
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1. Description of Plan
The following description of the Crown Cork & Seal Company, Inc.
(the "Company") 401(k) Retirement Savings Plan (the "Plan") provides
only general information. Participants should refer to the Plan
Agreement 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
may save regularly through salary elections and through Company
matching contributions. Generally, salaried 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 appointed The
Vanguard Fiduciary Trust Company ("Vanguard") to assume both trustee
and recordkeeping responsibilities.
Contributions. 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.
The Plan also allows after-tax employee contributions of 1 to 8% of
annual compensation. Contribution rates are subject to certain
limitations, as prescribed by law. The Company makes matching
contributions equal to 50% of the employee's contribution, up to a
maximum of 3% of compensation. Company contributions are made in the
form of Company common stock.
Vesting. All employee contributions are 100% vested when
contributed to the Plan. Company matching contributions vest 25% for
each year of service. Upon the completion of four years of service all
Company matching contributions vest immediately. Any forfeitures
arising under the Plan are used to reduce future Company
contributions.
Investment Options. Participants may direct employee
contributions in 10% increments in any of the following seven
investment options:
(1) Fixed Income Fund - A fixed income fund which invests primarily
in investment contracts issued by insurance companies and
commercial banks .
(2) Crown Stock Fund - A fund which invests in shares of Company
common stock.
(3) Vanguard Index Trust Fund - A growth and income stock fund which
invests in all stocks included in the Standard & Poor's 500
Index in approximately the same proportions as they are
represented in the S&P index.
-4-
Crown Cork & Seal Company, Inc 401(k) Retirement Savings Plan
Notes to Financial Statements
December 31, 1996
- --------------------------------------------------------------------------------
1. Description of Plan (continued)
(4) Vanguard International Growth Portfolio Fund - An international
stock fund which invests in the common stocks of foreign
corporations located outside the United States.
(5) Vanguard Explorer Fund - An aggressive growth stock fund which
invests in the common stocks of small companies.
(6) Vanguard Balanced Index Fund - A balanced fund which invests 60%
of its assets in a portfolio of stocks expected to parallel the
returns of the Wilshire 5000 Index and 40% of its assets in a
fixed income portfolio that is structured to track the
Lehman Brothers Aggregate Bond Index.
(7) Vanguard Bond Index Fund - An intermediate-term bond fund which
invests in a combination of securities expected to perform
similarly to the Total Bond Market Portfolio of Lehman Brothers
Aggregate Bond Index.
Payment of Benefits. Participants are eligible to receive
distributions of the vested portions of their account balances upon
meeting certain criteria as specified in the Plan document. All
distributions are paid in a lump sum or periodic annuity payments
(either cash or Company stock).
Participant Loans. The Plan allows for loans to participant's
in excess of $1,000 and not to exceed 50% of the participant's
vested account balance up to $50,000 (subject to restrictions
further described in the Plan document). Loan terms range from one
to five years or up to 10 years for the purchase of primary residence.
The loans bear interest at a fixed rate (Prime Rate plus 1%)prevailing
on the date the loan is granted. Principal and interest is paid
ratably through payroll deductions.
Plan Termination. In the event of Plan termination, each
participant will become fully vested and will be entitled to receive a
benefit equaling the participant's interest in the Plan, including
that portion attributable to Company contributions.
Related Party Transactions. Certain Plan investments include
shares of mutual funds managed by the Trustee. These transactions
qualify as party-in-interest transactions which are exempt from
prohibited transaction rules.
-5-
Crown Cork & Seal Company, Inc 401(k) Retirement Savings Plan
Notes to Financial Statements
December 31, 1996
- --------------------------------------------------------------------------------
2. Summary of Significant Accounting Policies
Basis of Presentation. The Plan maintains its financial records and
prepares its financial statements using the accrual basis of accounting.
Purchases and sales of investments are recorded on the trade date. Dividend
income is recorded on the ex-dividend date. Investment income earned, but
not received, is accrued. Distributions to participants are recorded in the
period when remitted to participants.
Investments in securities listed on a national exchange are valued on the
basis of year-end closing prices. Guaranteed investment contracts are fully
benefit responsive and stated at contract value, which approximates fair
value. Interest rates on guaranteed investment contracts ranged between
4.9% and 7.0% at December 31, 1996 and 4.9% and 8.3% at December 31, 1995.
Average yields on guaranteed investment contracts were 6.0% in 1996 and
6.2% in 1995. Shares of registered investment companies are valued at quote
market prices, which represent the net asset value of shares held by the
Plan at year end. Participant loans receivable are valued at cost, which
approximates fair value.
Realized gains or losses on the sale of investments are determined based on
average cost. Such gains and losses are computed on a current value basis
for Form 5500. A difference may result in the classification between
realized and unrealized, but the total gain or loss will be unaffected.
Plan Expenses. All recordkeeping expenses for the administration of the
Plan, with the exception of certain miscellaneous fees, are paid by the
Company.
3. Reclassification of Prior Year Balances
The Statement of Changes in Net Assets Available for Plan Benefits has been
modified from the prior presentation to separately disclose accrued
receivables. Accordingly, net assets at the beginning of 1996 have been
reclassified as follows:
As Previously Reclassified to Revised
Reported At Accrued Balance at
December 31, 1995 Receivables December 31, 1995
------------------ ------------ ------------------
Fixed Income Fund $ 65,503,082 ($ 101,437) $ 65,401,645
Crown Stock Fund 35,913,867 (207,203) 35,706,664
Index Trust Fund 13,356,752 (59,053) 13,297,699
International Growth -
Portfolio Fund 2,707,262 (18,026) 2,689,236
Explorer Fund 2,057,869 (17,144) 2,040,725
Balanced Index Fund 2,129,361 (11,137) 2,118,224
Bond Index Fund 536,045 (6,184) 529,861
Participant loans 485,060 485,060
Accrued receivables 420,184 420,184
------------ -------------- ------------
$122,689,298 $ 0 $122,689,298
============== ============== ============
-6-
Crown Cork & Seal Company, Inc 401(k) Retirement Savings Plan
Notes to Financial Statements
December 31, 1996
- --------------------------------------------------------------------------------
4. Investments
At December 31, 1996 and 1995, the Plan held the following investments
which represent 5% or more of the total fair value of Plan assets:
1996 1995
Fixed Income Fund (contract value):
Metropolitan Life Insurance Company
Guaranteed Investment Contract #GAC-12704 $6,991,832 $6,585,176
The Prudential Asset Management Group
Guaranteed Investment Contract - 7,270,783
Caisse Des Depots et Consignations
Guaranteed Investment Contract 9,539,777 9,682,762
Crown Cork & Seal Common Stock 42,880,689 35,706,664
Vanguard Index Trust Fund 18,524,077 13,297,699
5. Tax Status of the Plan
The Plan was amended and restated, effective January 1, 1994 to comply with
all provisions of the Internal Revenue Code (IRC) and ERISA. The Committee
has received a favorable determination letter from the Internal Revenue
Service (IRS) dated February 22, 1996, and accordingly, the Trust is not
subject to federal or local income taxes.
6. Insurance Company Seizure
On August 11, 1994, regulators in both the United States and Canada seized
control of Confederation Life Insurance Company. These actions were taken
to prevent the possibility of massive demands for cash following a failed
business combination. At the time of the seizure, the Plan's Fixed Income
Fund included an investment contract with a value of approximately $4.8
million. The recognition of interest income was suspended coincident with
the seizure on August 11, 1994. The portion of participants' account
balances related to this investment are not currently subject to withdrawal
except in very limited circumstances (e.g., hardships and death).
On October 23, 1996, regulators approved a plan of rehabilitation and a
liquidation order for the Confederation Life Insurance Company. In
accordance with the provisions of this plan, the assets subject to seizure
will be distributed to contract holders (i.e., the Plan) under a variety of
payment options. Based on information currently available from the
goverment regulators, it appears the liquidation payment option selected by
the Company will result in a recoupment of 100% of the original frozen
assets plus an established rate of return. The frozen assets are scheduled
for recoupment in 1997, however, no interest has been accrued by the Plan
at December 31, 1996.
-7-
Schedule I
Crown Cork & Seal Company, Inc. 401(k) Retirement Savings Plan
Item 27a - Schedule of Assets Held for Investment Purposes at December 31, 1996
- --------------------------------------------------------------------------------
Units/Shares
Description Outstanding Cost Current Value
Fixed Income Fund
Guaranteed Investment Contracts:
Caisse Des Depots et Consignations $ 9,539,777 $ 9,539,777
Confederation Life Insurance
Company #62469(1) 4,760,482 4,760,482
Metropolitan Life Insurance
Company #GAC-12704 6,991,832 6,991,832
Massachusetts Mutual PGIC #10490 1,725,772 1,725,772
New York Life #GAC-6495 5,328,033 5,328,033
New York Life #GAC-30025 5,853,080 5,853,080
Peoples Insurance Security
Company #BDA00036TR-1 2,223,368 2,223,368
Peoples Insurance Security
Company #BDA00036TR-2 2,015,834 2,015,834
Peoples Insurance Security
Company #BDA00036TR-3 1,502,103 1,502,103
Peoples Insurance Security
Company #BDA00036TR-4 2,508,566 2,508,566
The Prudential Asset
Management Group #7871 4,125,675 4,125,675
Union Bank of Switzerland #2126 5,354,887 5,354,887
John Hancock #GAC-8605 5,111,218 5,111,218
Vanguard Money Market Prime 5,681,865 5,681,865
------------ -----------
Total Fixed Income Fund 62,722,492 62,722,492
Crown Stock Fund
Crown Cork & Seal Company, Inc.
common stock(2) 788,610 23,610,402 42,880,689
Vanguard Index Trust Fund (3) 267,844 13,496,511 18,524,077
Vanguard International Growth
Portfolio Fund (3) 252,314 3,654,423 4,153,092
Vanguard Explorer Fund (3) 56,003 2,790,896 3,014,648
Vanguard Balanced Index Fund (3) 170,549 2,050,940 2,374,046
Vanguard Bond Index Fund (3) 55,746 541,152 548,538
Participant loans receivable
(at 9.5% - 9.75% interest rates
and maturity dates between
1997 and 2006) 545,888 545,888
----------- ------------
Total assets held for investment
purposes at December 31, 1996 $109,412,704 $134,763,470
============ ============
(1) See Note 6 to the accompanying financial statements.
(2) The Trustee accounts for the Plan's investment in the Crown Stock Fund
based on units. At December 31, 1996 the total units owned by the Plan and
net asset value per unit were 3,326,663 and $12.89, respectively.
(3) Party-in-interest.
-8-
Schedule II
Crown Cork & Seal Company, Inc. 401(k) Retirement Savings Plan
Item 27d - Schedule of Reportable Transactions*
For the Year Ended December 31, 1996
- --------------------------------------------------------------------------------------------------------------------------------
Identity of Number of Number Cost of Proceeds Historical Net gain
Party Involved Description of Assets Purchases of Sales Purchases from Sales Cost on Sale
-------------- -------------------- --------- -------- --------- ---------- ---- -------
Various Financial Institutions Fixed Income Fund 159 159 $11,631,447 $14,208,193 $14,208,193
Crown Cork & Seal Company, Inc. Crown Stock Fund 80 155 7,201,036 10,275,176 8,368,888 $1,906,288
The Vanguard Group Vanguard Index
Trust Fund 110 100 6,041,495 3,818,899 3,227,760 591,139
* Transaction 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.
-9-