EXHIBIT 19.a
CROWN CENTRAL PETROLEUM CORPORATION
1994 ANNUAL INCENTIVE PLAN
Section 1: Purpose
The purpose of the Crown Central Petroleum Corporation 1994 Annual
Incentive Plan (the "Plan") is to provide an annual performance-based
incentive for executives and other key employees who are in a position
to contribute materially to the success of the Corporation and its
Subsidiaries.
Section 2: Definitions
The following terms, as used herein, will have the meaning specified:
a. "Award" means an award made pursuant to the Plan.
b. "Award Agreement" means the agreement entered into between the
Corporation and a Participant, setting forth the terms and
conditions applicable to an Award granted to the Participant.
c. "Award Schedule" means the Award Schedule established pursuant
to Section 4(c)(i).
d. "Board of Directors" means the Board of Directors of the
Corporation as it may be comprised from time to time.
e. "Code" means the Internal Revenue Code of 1986, and any
successor statute, and the regulations promulgated thereunder,
as it or they may be amended from time to time.
f. "Committee" means the Committee as defined in Section 5.
g. "Corporation" means Crown Central Petroleum Corporation and any
successor corporation.
h. "Employee" means executive officers and other key employees of
the Corporation or a Subsidiary, but excludes directors who are
not also officers or employees of the Corporation.
i. "Exchange Act" means the Securities Exchange Act of 1934, and
any successor statute, as it may be amended from time to time.
j. "Participant" means an Employee selected from time to time by
the Committee to participate in the Plan.
k. "Performance Adjustment" means the percentage(s), as set forth
in the Award Schedule, that will, when multiplied by a
Participant's Target Award, determine the amount of a
Participant's Award.
l. "Performance Criteria" means the criteria selected by the
Committee to measure performance for a Plan Year from among one
or more of the following:
i. Income before income taxes, as shown in the Corporation's
annual report to shareholders, but excluding extraordinary
items, discontinued operations, and the cumulative effect of
accounting changes, in accordance with generally accepted
accounting principles consistently applied by the
Corporation;
ii. Any other criteria related to Corporate performance,
Subsidiary, division or unit performance, individual
performance or any other category of performance selected by
the Committee.
m. "Performance Goal" means the level of performance as to each
Performance Criteria, as established by the Committee, that will
result in a 100 percent Performance Adjustment.
n. "Plan Year" means the calendar year.
o. "Retirement" means retirement at or after age 65 or, with the
advance consent of the Committee, at or after age 55.
p. "Subsidiary" means any corporation in which the Corporation,
directly or indirectly, controls 50% or more of the total
combined voting power of all classes of such corporation's
stock.
q. "Target Award" means the Target Award established pursuant to
Section 4(a).
Section 3: Eligibility
The Committee shall from time to time determine those Employees
eligible for Awards.
Section 4: Awards
a. Awards. Target Awards will be established by the Committee for
each Award made to each Participant. Each Award shall be
evidenced by an Award Agreement setting forth the Award Schedule
and such other terms and conditions applicable to the Award, as
determined by the Committee, not inconsistent with the terms of
the Plan. In the event of any conflict between an Award
Agreement and the Plan, the terms of the Plan shall govern.
b. Performance Criteria and Performance Goals. Performance
Criteria and Performance Goals will be established by the
Committee for the Corporation and/or its Subsidiaries each Plan
Year. The Committee shall also determine the extent to which
each Performance Criteria shall be weighted in determining
Awards. The Committee may vary the Performance Criteria,
Performance Goals and weightings from Participant to
Participant, Award to Award and Plan Year to Plan Year.
c. Performance Adjustment. The Award payable to any Participant
may range from zero (0) to 150 percent of the Participant's
Target Award, depending upon whether, or the extent to which,
the Performance Goals have been achieved. All such
determinations regarding the achievement of any Performance
Goals will be made by the Committee.
i . Award Schedules. The Committee will establish an Award
Schedule for each Award to each Participant setting forth
the percentage of the Target Award for such Participant
payable at specified levels of performance, based on the
Performance Goal for each Performance Criteria and the
weighting established for such criteria.
ii. Award Determination. Actual Awards will be derived from the
Award Schedule based on the level of performance. The
actual Award for a Participant will be calculated by
multiplying the Participant's Target Award by the
Performance Adjustments in accordance with the Award
Schedule.
d. Payment of Awards. Awards will be paid, in a lump sum cash
payment, as soon as practicable after the close of the Plan Year
for which they are made. No Award will be payable to any
Participant who is not an Employee on the last day of the year,
except that if, during the last six months of the Plan Year, the
Participant dies, or becomes disabled, the Participant may be
entitled to a prorated Award as and to the extent determined by
the Committee. If a Participant terminates employment due to
Retirement, the Participant shall be entitled to a prorated
Award but only as and to the extent that the Performance Goals
have been met. Notwithstanding the foregoing provisions of this
Section 4(d), the Committee shall have the right to defer, or to
allow Participants to elect to defer, the payment of Awards
subject to such terms and conditions as it may determine.
Section 5: Administration
a. Committee. The Plan and all Awards will be administered by a
Committee of the Board of Directors, which Committee shall
consist of not less than three members of such Board of
Directors. The members of the Committee shall be designated by
the Board and, unless the Board provides otherwise, the
Committee shall be the Executive Compensation and Bonus
Committee of the Board of Directors. A majority of the members
of the Committee shall constitute a quorum. The vote of a
majority of a quorum shall constitute action by the Committee.
b. Authority. The Committee will have full and complete authority,
in its sole absolute discretion, (i) to exercise all of the
powers granted to it under the Plan, (ii) to construe, interpret
and implement the Plan and any related document, (iii) to
prescribe, amend and rescind rules relating to the Plan, (iv) to
make all determinations necessary or advisable in administering
the Plan, and (v) to correct any defect, supply any omission and
reconcile any inconsistency in the Plan.
c. Determinations. The actions and determinations of the Committee
on all matters relating to the Plan and any Awards will be final
and conclusive.
d. Liability. No member of the Committee or the Board will be
liable for any action taken or determination made in good faith
with respect to the Plan or any Award thereunder, and the
Corporation will defend Committee and Board members for any
actions taken or decisions made in good faith under the Plan.
e. Awards. Subject to the terms of the Plan, the Committee will
have full and complete authority, to determine, among other
things, the Employees to whom, and the time or times at which,
Awards will be made and the requisite conditions thereof.
f. Delegation. The Committee may delegate to the officers or
employees of the Corporation and/or a Subsidiary the authority
to execute and deliver such instruments and documents, to do all
such acts and things, and to take all such other steps deemed
necessary, advisable or convenient for the effective
administration of the Plan in accordance with its terms and
purpose.
Section 6: Change of Control
a. Effect of Change of Control. In the event of a change in
control of the Corporation, in addition to any action required
or authorized by the terms of an Award Agreement, the Committee
may, in its sole discretion, take any of the following actions
as a result, or in anticipation, of any such event to assure
fair and equitable treatment of Participants:
i. accelerate time periods for purposes of vesting in, or
receiving any payment with regard to, any outstanding Award,
or
ii. make adjustments or modifications to outstanding Awards as
the Committee deems appropriate to maintain and protect the
rights and interests of Participants following such change
of control.
Any such action approved by the Committee shall be conclusive and
binding on the Corporation and all Participants.
b. Change of Control Defined. For purposes of this Section, a
change of control shall means the following:
i. A tender offer or exchange offer is made whereby the effect of
such offer is to take over and control the affairs of the
Corporation, and such offer is consummated for the ownership of
securities of the Corporation representing twenty percent (20%)
or more of the combined voting power of the Corporation's then
outstanding voting securities.
ii. The Corporation is merged or consolidated with another
corporation and, as a result of such merger or
consolidation, less than seventy-five percent (75%) of the
combined voting power of the outstanding voting securities
of the surviving or resulting corporation shall then be
owned in the aggregate by the former stockholders of the
Corporation.
iii. The Corporation transfers substantially all of its assets to
another corporation or entity that is not a wholly owned
subsidiary of the Corporation.
iv. Any person (as such term is used in Sections 3(a)(9) and
13(d)(3) of the Exchange Act) is or becomes the beneficial
owner, directly or indirectly, of securities of the
Corporation representing twenty percent (20%) or more of the
combined voting power of the Corporation's then outstanding
securities, and the effect of such ownership is to take over
and control the affairs of the Corporation.
v. As the result of a tender offer, merger, consolidation, sale of
assets, or contested election, or any combination of such
transactions, the persons who were members of the Board of
Directors immediately before the transaction, cease to
constitute at least a majority thereof.
Section 7: Miscellaneous
a. Nonassignability. No Award will be assignable or transferable
except by will or by the laws of descent and distribution.
b. Withholding Taxes. Whenever payments under the Plan are to be
made, the Corporation and/or the Subsidiary will withhold
therefrom an amount sufficient to satisfy any applicable
governmental withholding tax requirements related thereto.
c. Amendment or Termination of the Plan. The Board of Directors
may at any time amend, suspend or discontinue the Plan, in whole
or in part. The Committee may at any time alter or amend any or
all Award Agreements under the Plan to the extent permitted by
law. However, a termination or amendment of the Plan shall not,
without the consent of the Participant, detrimentally affect a
Participant's rights under an Award previously granted to him.
d. Non-Uniform Determinations. The Committee's determinations
under the Plan need not be uniform and may be made by it
selectively among persons who receive, or are eligible to
receive, Awards under the Plan, whether or not such persons are
similarly situated. Without limiting the generality of the
foregoing, the Committee will be entitled, among other things,
to make non-uniform and selective determinations and to
establish non-uniform and selective Performance Criteria,
Performance Goals, the weightings thereof, and Target Awards.
e. Other Payments or Awards. Nothing contained in the Plan will be
deemed in any way to limit or restrict the Corporation, its
Subsidiaries, or the Committee from making any award or payment
to any person under any other plan, arrangement or
understanding, whether now existing or hereafter in effect.
f. Payments to Other Persons. If payments are legally required to
be made to any person other than the person to whom any amount
is available under the Plan, payments will be made accordingly.
Any such payment will be a complete discharge of the liability
of the Committee.
g. Unfunded Plan. The Plan shall be unfunded. No provision of the
Plan or any Award Agreement will require the Corporation or its
Subsidiaries, for the purpose of satisfying any obligations
under the Plan, to purchase assets or place any assets in a
trust or other entity to which contributions are made or
otherwise to segregate any assets, nor will the Corporation or
its Subsidiaries maintain separate bank accounts, books, records
or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Participants
will have no rights under the Plan other than as unsecured
general creditors of the Corporation and its Subsidiaries,
except that insofar as they may have become entitled to payment
of additional compensation by performance of services, they will
have the same rights as other employees under generally
applicable law.
h. Limits of Liability.
i. Any liability of the Corporation or a Subsidiary to any
Participant with respect to an Award shall be based solely
upon contractual obligations created by the Plan and the
Award Agreement.
ii. Neither the Corporation nor a Subsidiary, nor any member of
the Board of Directors or of the Committee, nor any other
person participating in any determination of any question
under the Plan, or in the interpretation, administration or
application of the Plan, shall have any liability to any
party for any action taken or not taken in good faith under
the Plan.
i. Rights of Employees.
i. Status as an eligible Employee shall not be construed as a
commitment that any Award will be made under this Plan to
such eligible Employee or to eligible Employees generally.
ii. Nothing contained in this Plan or in any Award Agreement (or
in any other documents related to this Plan or to any Award
or Award Agreement) shall confer upon any Employee or
Participant any right to continue in the employ or other
service of the Corporation or a Subsidiary or constitute any
contract or limit in any way the right of the Corporation or
a Subsidiary to change such person's compensation or other
benefits or to terminate the employment or other service of
such person with or without cause.
j. Section Headings. The section headings contained herein are for
the purposes of convenience only, and in the event of any
conflict, the text of the Plan, rather than the section
headings, will control.
k. Invalidity. If any term or provision contained herein will to
any extent be invalid or unenforceable, such term or provision
will be reformed so that it is valid, and such invalidity or
unenforceability will not affect any other provision or part
hereof.
l. Applicable Law. The Plan, the Award Agreements and all actions
taken hereunder or thereunder shall be governed by, and
construed in accordance with, the laws of the state of Maryland
without regard to the conflict of law principles thereof.
m. Effective Date. The Plan shall be effective as of January 1,
1994.