CROWN CENTRAL PETROLEUM CORPORATION
One North Charles Street, Baltimore, Maryland 21201
Notice of Annual Meeting of Stockholders
April 27, 1995
Baltimore, Maryland
March 16, 1995
To the Stockholders of
CROWN CENTRAL PETROLEUM CORPORATION:
Notice is hereby given that the Annual Meeting of
Stockholders of Crown Central Petroleum Corporation
will be held at the office of the Corporation, One
North Charles Street, Baltimore, Maryland on Thursday,
the 27th day of April, 1995 at 2:00 o'clock in the
afternoon, Eastern Daylight Time, for the following
purposes:
1. To elect a Board of ten (10) directors, each to
serve until the next Annual Meeting of Stockholders and
until his or her successor is elected and has
qualified, eight (8) of such directors to be elected by
the holders of the Class A Common Stock and two (2) of
such directors to be elected by the holders of the
Class B Common Stock, and
2. To transact such other business as may properly
come before the meeting.
The Board of Directors has fixed the close of business
on March 13, 1995 as the record date for the
determination of stockholders entitled to notice of and
to vote at the meeting.
Further information regarding the meeting and nominees
for election as Directors is set forth in the
accompanying Proxy Statement.
By order of the Board of Directors,
DOLORES B. RAWLINGS
DOLORES B. RAWLINGS
Secretary
If you do not intend to be present at the meeting,
please mark, sign, date and return the accompanying
proxy promptly so that your shares may be represented
and voted at the meeting. A return envelope is
enclosed for your convenience.
PROXY STATEMENT
This statement is furnished in connection with the
solicitation of proxies on behalf of the Board of
Directors of Crown Central Petroleum Corporation
("Crown" or the "Company") for use at the Annual
Meeting of Stockholders to be held at the time and
place and for the purposes set forth in the foregoing
Notice of Annual Meeting of Stockholders.
Execution and return of the proxy in the accompanying
form will not in any way affect a stockholder's right
to attend the meeting and, if the proxy is revoked, to
vote in person. The stockholder giving the proxy has
the power to revoke it at any time before it is
exercised by filing with the Secretary of the Company a
written revocation or duly executed proxy bearing a
later date. Presence at the meeting will not, of
itself, revoke the proxy.
The expense of the solicitation of proxies will be
borne by the Company. In addition to mailings to
stockholders, the officers and other regular employees
of the Company may, to a limited extent, solicit
proxies personally or by telephone or other electronic
means. The Company will also request those persons who
hold stock in their names or custody, or in the names
of nominees, for the benefit of others to forward
copies of such material to the beneficial owners and to
request authority for the execution of proxies.
Outstanding Stock
On March 13, 1995, the Company had outstanding
4,817,392 shares of Class A Common Stock and 4,985,706
shares of Class B Common Stock. The holders of the
Class A Common Stock are entitled to elect eight (8)
directors, and the holders of the Class B Common Stock
are entitled to elect two (2) directors (who may not be
employees of the Company or any subsidiary of the
Company). Each share of Class A Common Stock is
entitled to one vote. Each share of Class B Common
Stock is entitled to one-tenth (1/10) vote. Only
holders of record at the close of business on March 13,
1995 are entitled to vote at the meeting.
Election of Directors
At the Annual Meeting, ten (10) directors will be
elected, each to serve until the next Annual Meeting of
Stockholders and until his or her successor is duly
elected and has qualified. Two (2) directors (who may
not be employees of the Company or any subsidiary of
the Company) will be elected by the holders of the
Class B Common Stock. All other directors will be
elected by the holders of the Class A Common Stock. A
plurality of all votes cast by the class will be
sufficient to elect a director. Abstentions and broker
non-votes will not be counted as votes cast. All of
the nominees are presently directors of the Company and
except for Mr. Holzer were elected at the Annual
Meeting of Stockholders on April 28, 1994. There are
no family relationships among any of the directors.
Edward L. Rosenberg, Senior Vice President -
Administration, Corporate Development and Long Range
Planning, and Frank B. Rosenberg, Vice President -
Marketing, are brothers and are the sons of Henry A.
Rosenberg, Jr., Chairman of the Board and Chief
Executive Officer. There are no other family
relationships among any of the directors and any
executive officer. Charles L. Dunlap's employment
contract with the Company provides that he will serve
as a director. There is no other arrangement or
understanding between any director and any other person
pursuant to which the director was elected.
-1-
Proxies received will be voted in the manner directed
in the proxy or, if no direction is made, for the
election of the nominees named below. Although it is
not expected that such a contingency will occur, if any
nominee declines or is unable to serve, the proxies
will be voted for a substitute nominee and unless
otherwise directed, for the other nominees named below.
Name and Age on Principle Occupation for last 5 years; Director
January 31, 1995 Directorships in Public Corporations Since
- ----------------------- --------------------------------------------- -----
- ------
To be elected by the holders of the Class A Common Stock:
JACK AFRICK Retired. Formerly Vice Chairman, UST Inc. 1991
(66) from September 1990 through May 1993;
Executive Vice President from May 1985
through September 1990; President and
Chief Executive Officer, U.S. Tobacco
Company, a subsidiary of UST Inc. from
May 1987 through September 1990. Also
a director of Duty-Free International, Inc.,
Tanger Factory Outlet Centers, Inc. and
Transmedia Network, Inc.
GEORGE L President and Chief Executive Officer, 1992
BUNTING, JR. Bunting Management Group since July 1991;
(54) Chairman and Chief Executive Officer, Noxell
Corporation from April 1986 through June 1991.
Also a director of Mercantile Bankshares
Corporation, PHH Corporation and USF&G
Corporation.
MICHAEL F. Director, Gulftech International, Inc. since 1991
DACEY January 1995; North American Sector Executive
(50) and Executive Vice President, The Chase
Manhattan Corporation and The Chase Manhattan
Bank, N.A. from December 1987 through December 1994.
CHARLES L. DUNLAP President and Chief Operating Officer of the 1991
(51) Company since December 1991; Executive Vice
President and Director, Pacific Resources Inc. from
July 1985 through November 1991.
ROBERT M. Chairman of the Board and Chief Executive Officer, 1993
FREEMAN Signet Banking Corporation since April 1990;
(53) President and Chief Executive Officer from April 1989
through March 1990. Also a director of Signet
Banking Corporation.
PATRICIA A. Retired. Formerly Senior Vice President - Corporate 1989
GOLDMAN Communications, USAir, Inc. from February 1988
(52) through January 1994. Also a director of Erie Indemnity
Company.
WILLIAM L. JEWS President and Chief Executive Officer, Blue Cross and 1992
(43) Blue Shield of Maryland since April 1993; President
and Chief Executive Officer, Dimensions Health
Corporation from March 1990 through March 1993;
President and Chief Executive Officer, Liberty Medical
Center, Inc., and St. Luke's Lutheran Holding Company
from June 1986 through February 1990. Also a director
of NationsBank, N.A. and The Ryland Group.
HENRY A. Chairman of the Board and Chief Executive Officer1955
ROSENBERG, JR. of the Company since May 1975. Also a director of
(65) Signet Banking Corporation and USF&G Corporation.
-2-
Name and Age on Principal Occupation for last 5 years; Director
January 31, 1995 Directorships in Public Corporations Since
- ----------------------- -------------------------------------------- ---
- --------
To be elected by the holders of the Class B Common Stock:
THOMAS M. Retired. Formerly Chairman of the Board, 1988
GIBBONS The Chesapeake and Potomac Telephone Companies
(69) (part of Bell Atlantic Corporation) from January 1990
through April 1990; President and Chief Executive
Officer from January 1983 through January 1990.
PETER J. HOLZER Executive Vice President and Director - Strategic 1995
(49) Planning & Development, The Chase Manhattan
Bank, N.A. since October 1990; Senior Vice President
and Sector Executive - International Individual Banking
from July 1987 through October 1990.
Board of Directors
The Board of Directors held ten meetings during the
past year. All of the directors except for Mr. Jews
attended at least 75% of the aggregate of the total
number of meetings of the Board of Directors and the
committees on which he or she served during the year.
Compensation Of Directors:
Each director who is not an employee of the Company or
a subsidiary of the Company is paid $12,000 per year
for serving as a director and a meeting fee of $600,
plus travel expenses, for attendance at each meeting.
Each non-employee director who is a member of any
committee of the Board of Directors other than the
Executive Committee is paid $3,000 per year for serving
on each such committee. The Chairman of any committee
other than the Executive Committee is paid a fee of
$1,000 for serving in that capacity. Directors who are
employees receive no separate compensation for serving
on the Board, on any Board committee or as Chairman of
any committee. See the section Interest of Management
and Others in Transactions with the Company and its
Subsidiaries in this Proxy Statement for a description
of Mr. Africk's consulting agreement under which he is
paid a fee of $3,000 per month.
Effective September 1, 1983 the Company adopted a
Deferred Compensation Plan for non-employee directors
which permits each such director to defer all, or a
portion, of his or her compensation for payment after
his or her termination as a director. The Plan
provides for the accrual of interest quarterly on the
funds at the 90-day Treasury Bill rate in effect at the
beginning of the quarter. The director may elect to
receive the deferred compensation in one lump sum
payment or in a number of annual installments (not
exceeding ten).
The standing committees of the Board of Directors
include, in addition to the Executive Committee, which
has the authority to act on behalf of the Board of
Directors between meetings, the following:
Audit Committee:
During the past year the Audit Committee has been
composed of Messrs. Bunting, Dacey, Freeman, McNair,
Taff and Africk, Chairman. The Audit Committee met six
times during the past year. The functions which this
Committee performs under its charter include: (i)
recommend the selection of independent public
accountants and review with the independent public
accountants that are selected the audit scope and the
results of the audit engagement; (ii) review matters
pertaining to internal audits and other internal
control procedures; (iii) review the audited and the
unaudited statements to be submitted to the Board for
approval; (iv) review substantial claims by or against
the Company; (v) review the Company's financing plans
and its compliance with debt covenants; (vi) review
current accounting-related matters affecting the
Company; and (vii) review the effect of the scope of
non-audit services rendered by the independent public
accountants on their independence.
-3-
Executive Compensation And Bonus Committee:
During the past year the Executive Compensation and
Bonus Committee has been composed of Ms. Goldman and
Messrs. Dacey, Jews, McNair, Thomas and Gibbons,
Chairman. The Committee met six times during the past
year. The Committee has the principal responsibility
for the administration of the Annual Incentive Plan and
the 1994 Long-Term Incentive Plan and the authority and
duty to submit recommendations to the Board with
respect to the salaries of the Chairman of the Board
and President. In addition, the Committee has the
authority to submit recommendations to the Board with
respect to plans for the compensation of executives of
the Company, including amendments to any plans for
compensation.
Report Of Executive Compensation And Bonus Committee
Historically, the Executive Compensation and Bonus
Committee has considered a number of factors in
connection with its approval of salaries of the
Company's Executive Officers. The officer's position
description, salary history and individual performance
as reflected in the Chairman's report and
recommendations to the Committee are carefully
reviewed. The factors that are considered in fixing
officers' salaries are not, however, assigned a
specific weight, and they are not directly tied to
Company performance. The Company's compensation
practices and those adopted by other companies in the
Baltimore and Houston areas as well as industry
comparables (which to the extent practicable reflect
median data from companies of similar size and focus)
are also routinely considered. Approximately half of
the twelve companies most recently selected as industry
comparables are included in the more than two dozen
companies in the Value Line Integrated Petroleum Index
shown on the Performance Graph in this Proxy Statement.
The Company's most recent review of compensation
practices at other companies suggests that officers'
salaries are generally below the median. The Committee
is, to the extent practicable, attempting to insure
that increases in base salaries are targeted to median
levels. The April 1994 increase of 4.8% in the salary
previously established for Mr. Rosenberg in April 1992
reflects the Committee's desire to move his
compensation closer to the median salary for comparable
chief executive officers. Base compensation for Mr.
Dunlap is determined by a five-year employment contract
between the Company and Mr. Dunlap. The contract is
described in this Proxy Statement in the section
following the Summary Compensation Table.
In 1994, the Company adopted a new form of Annual
Incentive Plan and, with stockholder approval, the 1994
Long-Term Incentive Plan. These plans are intended to
provide additional incentives to officers and senior
managers and to pay for performance. Mr. Rosenberg's
performance under these plans is measured by the
Company's pre-tax profitability with specific
consideration given to refining gross margins and
marketing profitability. The timely completion of
various programs intended to increase productivity is
also considered.
The 1995 Annual Incentive Plan is a cash plan offered
to officers, senior management and other key
operational managers. Minimum performance levels,
targets and maximum awards are established by the
Committee for each plan year. Participants can earn a
percentage of base salary and from 25-60% of a
participant's award is based upon the individual's
performance which is measured by the Crown management
system. The balance of the award is determined by the
Company's performance which is based upon Income Before
Income Taxes. Income Before Income Taxes must meet the
annual minimum threshold approved by the Committee for
any awards to be earned in a plan year.
The 1994 Long-Term Incentive Plan (the "Plan") is
designed to encourage a high level of performance from
officers and key employees who have significant
responsibilities and who can contribute, in a
meaningful way, to the success of the Company and its
subsidiaries. The Plan provides for Awards of Non-
qualified Stock Options for the purchase of the
Company's Class B Common Stock and Performance Vested
Restricted Stock ("PVR Stock") which is also awarded in
shares of Class B Common Stock. Awards are made by the
Executive Compensation and Bonus Committee, and no
participant may receive more than 150,000 shares of
Option Stock or 50,000 shares of PVR Stock in any one
year.
-4-
Performance Vested Restricted Stock is issued to a
participant subject to the attainment of performance
goals and the satisfaction of various restrictions
established by the Committee. The performance goals
are currently based upon the Company's Net Margin which
is defined in the Plan as Refining Gross Margin minus
Total Refining Costs plus the Marketing Contribution
minus Administrative Cost. In addition, Income Before
Income Taxes must meet the minimum threshold approved
by the Committee for any Awards of PVR Stock to be
earned under the Plan.
It is not currently anticipated that any officer could
earn annual compensation in excess of one million
dollars under the existing compensation plans.
Stockholder approval of the 1995 Annual Incentive Plan
would be required for compensation under this plan to
qualify for deductibility under Section 162(m) of the
Internal Revenue Code. Some additional limitations on
the performance vested restricted stock portion (but
not the non-qualified stock option portion) of the 1994
Long-Term Incentive Plan might also be required to
qualify that compensation for deductibility. The
Committee will consider recommending such steps as may
be required to qualify either annual or long-term
incentive compensation for deductibility if that
appears appropriate at some time in the future.
This Report has been submitted by the Executive
Compensation and Bonus Committee: Thomas M. Gibbons,
Chairman; Patricia A. Goldman; William L. Jews and
Malcolm McNair.
-5-
Security Ownership by Certain
Beneficial Owners and Management
The following table sets forth the shares of each class
of the Company's stock and the percentage of each class
owned by all persons known by the Company to be the
beneficial owner of more than 5% of the shares of any
class on January 31, 1995:
Name and Address of Percent
Beneficial Owner Title of class Amount of
Class
- ---------------------------------------------------------- ---------- ----
- ------
American Trading Class A Common Stock 2,471,098 51.30
and Production Class B Common Stock 661,282 13.26
Corporation
"group" (a)
Blaustein Building
P.0. Box 238
Baltimore, MD 21203
A.I.C. Limited Class A Common Stock 448,900 9.32
"group" (b)
7930 Clayton Road
St. Louis, MO 63117
Heine Securities Class B Common Stock 345,100 6.92
Corporation (c)
1 John F. Kennedy Parkway
Short Hills, NJ 07078
Donald Smith & Co., Class B Common Stock 490,000 9.83
Inc. (d)
15 Essex Road
Paramus, NJ 07652
<FN>
(a) American Trading and Production Corporation ("ATAPCO") and
various persons who (or whose spouse) hold stock in ATAPCO either
individually or in a fiduciary or beneficial capacity are a "group"
as that term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934 (the "Exchange Act"). ATAPCO, Inc., a Delaware
corporation and a wholly-owned subsidiary of ATAPCO, is the holder
of 2,366,526 shares of Class A Common Stock and 591,629 shares of
Class B Common Stock, and other members of the ATAPCO group are the
holders of 104,572 shares of Class A Common Stock and 69,653 shares
of Class B Common Stock. The Class B Common Stock shown in the
table includes the stock granted in 1994 to members of the group as
Performance Vested Restricted Stock under the 1994 Long-Term
Incentive Plan and 11,699 shares that members of the group have a
right to acquire on or after February 24, 1995 pursuant to options
granted under that Plan.
(b) This information was obtained from a report on Schedule 13D
dated January 14, 1983 and Amendment No. 7 dated June 18, 1990,
which were filed with the Securities and Exchange Commission (the
"Commission"). A.I.C. Limited, the record owner of 448,900 shares
of Class A Common Stock, and two associates, who have no record
ownership of Class A Common Stock, are a "group" as that term is
used in Section 13(d)(3) of the Exchange Act.
(c) This information was obtained from a report on Schedule 13G
dated February 12, 1993 and Amendment No. 2 dated January 18, 1995
filed with the Commission. Heine Securities Corporation is a
registered investment advisor.
(d) This information was obtained from a report on Schedule 13G
dated January 27, 1995 filed with the Commission. Donald Smith &
Co., Inc. is a registered investment advisor.
-6-
The following table sets forth the number of shares of each
class of the Company's stock and the percentage of each
class owned by each of the directors and nominees, by
certain executive officers and by all directors and officers
as a group on January 31, 1995:
Shares of Securities Beneficially Owned
on January 31, 1995 (a)
------------------------------------------------
- --
CLASS A
CLASS B
COMMON STOCK
COMMON STOCK
Amount % Amount %
------------ -------- ------------- --------
Jack Africk --- 500 (b)
George L. Bunting, Jr. --- 1,000 (b)
Michael F. Dacey 1,000 (b) ---
Charles L. Dunlap --- 23,366 (b) (c)
Robert M. Freeman 1,000 (b) ---
Thomas M. Gibbons 200 (b) ---
Patricia A. Goldman 100 (b) ---
Peter J. Holzer 500 (b) ---
William L. Jews --- 200 (b)
Malcolm McNair 251 (b) (d) 36 (b)
Thomas L. Owsley 8,963 (b) 6,386 (b) (e)
Henry A. Rosenberg, Jr. (f)2,471,09851.30 661,282 13.23
George R. Sutherland, Jr. (g)250 (b) 7,291 (b) (e)
Randall M. Trembly 11,962 (b) 7,023 (b) (e)
All Directors. Nominees and
Officers as a group including
those listed above
(21 individuals) 2,503,253 51.96 738,746 14.81 (h)
<FN>
(a) Unless otherwise noted, the director holds sole voting and
investment power over the shares listed. In the case of officers of
the Company, the table includes interest in shares held by the
trustee under the Employees Savings Plan, and the Class B Common
Stock granted in 1994 as Performance Vested Restricted Stock under
the 1994 Long-Term Incentive Plan.
(b) Represents less than one percent.
(c) Includes 5,266 shares that may be acquired on or after
February 24, 1995 pursuant to options granted under the 1994 Long-
Term Incentive Plan.
(d) Mr. McNair holds 100 shares jointly with his wife with whom he
shares voting and investment power.
(e) Includes 1,566 shares that may be acquired on or after
February 24, 1995 pursuant to options granted under the 1994 Long-
Term Incentive Plan.
(f) Henry A. Rosenberg, Jr. is a director and stockholder of
ATAPCO which is a member of the "group" (as that term is used in
Section 13(d)(3) of the Exchange Act) referred to in the first
table under this heading, "Security Ownership by Certain Beneficial
Owners and Management." The shares listed are the shares owned by
the ATAPCO "group." Henry A. Rosenberg, Jr. owns shares of
preferred stock and is a beneficiary of a trust of which he is one
of the trustees holding common stock of ATAPCO. In addition, Mr.
Rosenberg is one of the trustees of other trusts, in which he has
no beneficial interest, which own shares of preferred and common
stock of ATAPCO. Of the shares listed above, Mr. Rosenberg holds
21,544 shares of Class A Common Stock and 27,383 shares (including
Performance Vested Restricted Stock) of Class B Common Stock
individually and in the Company's Employees Savings Plan. The Class
B Common Stock shown on the table also includes 8,333 shares that
may be acquired on or after February 24, 1995 pursuant to options
granted to Mr. Rosenberg under the 1994 Long-Term Incentive Plan
and similar options for 3,366 shares held by other members of the
group.
-7-
(g) Mr. Sutherland holds his stock jointly with his wife with whom
he shares voting and investment power.
(h) Includes 27,927 shares that may be acquired on or after
February 24, 1995 pursuant to options granted under the 1994 Long-
Term Incentive Plan.
Based upon a review of the Forms 3, 4 and 5 and any
amendments thereto, filed with the Commission and
furnished to the Company as well as letters provided to
the Company by various reporting persons, the Company
is of the opinion that no reporting person has failed
to file on a timely basis the reports required by
Section 16(a) of the Exchange Act during the Company's
most recent fiscal year.
Interest of Management and Others
in Transactions with the Company and its Subsidiaries
In the ordinary course of business, the Company leases
offices in an office building owned by American Trading
Real Estate Company, Inc., all of the stock of which is
owned by American Trading Real Estate Properties, Inc.,
a wholly-owned subsidiary of ATAPCO of which Messrs.
Henry A. Rosenberg, Jr. and Edward L. Rosenberg are
directors and stockholders, and Mr. Frank B. Rosenberg
is a stockholder. For 1994 the total rent paid
including escalation was $1,131,809 which was no
greater than the rent charged others for comparable
space in the building. In addition, the Company paid
$64,871 for maintenance and miscellaneous charges which
was no greater than charges to others for comparable
services.
In the ordinary course of business, the Company and its
subsidiaries maintain bank accounts in and
relationships with, including from time to time
borrowings from, The Chase Manhattan Bank, N.A., of
which Mr. Holzer is an officer, and Signet
Bank/Maryland, a subsidiary of Signet Banking
Corporation, of which Mr. Freeman is an officer and a
director and Mr. Henry A. Rosenberg, Jr. is a director.
Signet Bank/Maryland is also the Trustee of the
Company's Retirement Plan. Chase Securities, Inc., an
affiliate of The Chase Manhattan Bank, N.A., was an
underwriter in the Company's recent offering of $125
million of its 10 7/8% Senior Notes due 2005.
Effective November 1, 1993, Mr. Africk became a general
business advisor and consultant to the Company for
which he is paid a consultancy fee of $3,000 per month.
His work in this capacity is in addition to his service
as a Director, member of the Executive Committee and
Chairman of the Audit Committee.
Additional Information with Respect to Compensation
Committee
Interlocks and Insider Participation in Compensation
Decisions
Mr. Henry A. Rosenberg, Jr. serves as a member of the
Organization and Compensation Committee of Signet
Banking Corporation, and Mr. Freeman, Chairman of the
Board and Chief Executive Officer of Signet Banking
Corporation, is a director of Crown.
-8-
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation awarded to, earned
by or paid to the chief executive officer and the other four most
highly compensated executive officers for all services rendered in
all capacities to the Company and its subsidiaries during the last
three fiscal years:
Long-Term
Compensation
---------------
Annual Compensation Awards
--------------------------- ---------------
Name Other All
and AnnualSecurities Other
Principle Compen-Underlying Compen-
Position Year Salary sation (1)Options (2)sation (3)
- ---------- ------ -------- -----------------------------------
Henry A. Rosenberg, Jr. 1994 $ 541,672 $19,774 25,000 $20,260
Chairman of the Board 1993 525,000 17,734 N/A 15,736
and Chief Executive 1992 521,668 17,460 N/A 15,670
Officer
Charles L. Dunlap 1994 $395,008 $19,492 15,800 $13,895
President and Chief 1993 381,672 16,224 N/A 13,777
Operating Officer 1992 375,000 15,210 N/A 3,833
George R. Sutherland, Jr. 1994 $159,924 $14,728 4,700 $ 9,033
Vice President - Supply 1993 152,504 12,265 N/A 5,322
and Transportation 1992 75,577 6,000 N/A 1,241
Thomas L. Owsley 1994 $156,672 $15,525 4,700 $ 8,039
Vice President - Legal 1993 148,000 13,225 N/A 7,038
1992 137,000 13,044 N/A 6,914
Randall M. Trembly 1994 $156,672 $14,000 4,700 $ 7,528
Vice President - 1993 145,000 12,000 N/A 7,034
Refining 1992 135,000 12,000 N/A 6,945
<FN>
(1) These amounts include automobile allowances, gasoline allowances,
and the tax gross-ups applicable to the gasoline allowances.
Perquisites below the required reporting levels are not included in
this table.
(2) The options are for the purchase of shares of Class B Common Stock.
(3) These amounts include imputed income related to excess life
insurance, payments for executive medical insurance and the Company's
matching payments under the Employees Savings Plan. In 1994, the
imputed income for Mr. Rosenberg was $8,640; for Mr. Dunlap $2,275; for
Mr. Sutherland, $1,843; and for Mr. Owsley, $611. The executive
medical payments for the officers listed in the table were $1,620. The
balance of the amount reported for 1994 represents the Company's
matching payments under the Employees Savings Plan.
Employment Agreement with Charles L. Dunlap
Mr. Dunlap has an employment agreement with the
Company to serve as the President and Chief Operating
Officer for a term of five years beginning on December
1, 1991 and ending on November 30, 1996. The contract
is automatically extended from year to year unless
either party gives a proper notice of termination to
the other party. Under the agreement, Mr. Dunlap is
entitled to receive a minimum base salary of $375,000
per year and to participate in the Company's bonus,
incentive and benefit plans including the Company's
Supplemental Retirement Income Plan for Senior
Executives. The agreement fixes the rights of the
parties in the event of termination of employment
during the term of the agreement, and it includes a non-
compete provision which places certain limitations upon
Mr. Dunlap's activities.
-9-
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
% of Total
Number of Options
SecuritiesGranted to Grant
Underlying Employees Date
Options in Fiscal Exercise Expiration Present
Granted (1) Year Price Date Value (2)
------------------------------------------------------------------
Henry A. Rosenberg, Jr.25,000 22.77 $16 7/8 Feb. 24, 2004 $100,000
Charles L. Dunlap 15,800 14.39 16 7/8 Feb. 24, 2004 63,200
George R. Sutherland, Jr. 4,700 4.28 16 7/8Feb. 24, 2004
18,800
Thomas L. Owsley 4,700 4.28 16 7/8 Feb. 24, 2004 18,800
Randall M. Trembly 4,700 4.28 16 7/8 Feb. 24, 2004 18,800
(1) One-third of the options granted became exercisable on February
24, 1995; an additional one-third will be exercisable on February
24, 1996; and the final one-third will be exercisable on February
24, 1997. Tax withholding obligations may be satisfied upon
exercise by the deduction of option shares.
(2) The Company retained an outside advisor to value its stock
options based upon the Black-Scholes model, a widely-used and
accepted formula for valuing traded stock options. The actual
increase in value will occur directly with the appreciation of the
per share market price of the Company's Class B Common Stock as
stockholders' return on investment increases. There is no gain to
the executives, however, if the per share market price of the
Company's Class B Common Stock does not increase or if it declines.
The following assumptions were used to calculate the Black-Scholes
value: a ten-year option term, 17.03 percent stock price
volatility, 7.0 percent risk-free rate of return, annual dividend
yield of 3.75 percent and an exercise price equal to the stock price
on the date of grant. This resulted in an option value of $4.00 per
share. The advisor has used the historical annual dividend yield
and stock price volatility rate as assumptions for the Black-Scholes
model. The companies in the Value Line Integrated Petroleum Index
shown on the Performance Graph in this Proxy Statement were used by
the advisor to establish a stock price volatility. These
calculations are not projections, and there is, therefore, no
guarantee that the assumptions will be the actual annual dividend
yield or stock price volatility rate over the next ten years.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION VALUES
Number of Securities
Underlying Unexercised
Options at FY-End (1)
Exercisable Unexercisable
-------------- -----------------
Henry A. Rosenberg, Jr. 8,333 16,667
Charles L. Dunlap 5,266 10,534
George R. Sutherland, Jr. 1,566 3,134
Thomas L. Owsley 1,566 3,134
Randall M. Trembly 1,566 3,134
<FN>
(1) The options are for the purchase of Class B Common Stock.
-10-
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR (1)
Estimated Future Payouts
---------------------------
- ----
Number
of Performance Threshold Target Maximum
Name Shares Period (Shares) (Shares)(Shares) (2)
- ------- -----------------------------------------------------------
- ----
Henry A. Rosenberg, Jr. 24,800Jan. 1, 1994 - 12,400 24,800 24,800
Dec. 31, 1996 plus cash
Charles L. Dunlap 15,600Jan.1, 1994 - 7,800 15,600 15,600
Dec. 31, 1996 plus cash
George R. Sutherland, Jr. 4,500Jan.1, 1994 - 2,250 4,500 4,500
Dec. 31, 1996 plus cash
Thomas L. Owsley 4,500Jan.1, 1994 - 2,250 4,500 4,500
Dec. 31, 1996 plus cash
Randall M. Trembly 4,500Jan.1, 1994 - 2,250 4,500 4,500
Dec. 31, 1996 plus cash
(1) The shares listed are Class B Common Stock which was issued as
Performance Vested Restricted Stock ("PVR Stock") and was awarded
to participants under the 1994 Long-Term Incentive Plan. The
performance goals applicable to these awards are based upon the
Company's Net Margin which is defined in the Plan as Refining
Gross Margin minus Total Refining Costs plus Marketing
Contribution minus Administrative Costs. Income Before Income
Taxes must meet the minimum threshold established for the cycle
for any PVR Stock to be earned.
(2) The cash earned at the maximum level is equal to 50% of the
value of the stock earned on the date the restrictions lapse.
PENSION PLAN TABLE
Years of Service
---------------------------------------------------------------------------------------------------
Renumeration 15 20 25 30 35 45
- -------------------------------------------------------------------------------
$150,000 $ 54,000$ 72,000$ 94,500$117,000$139,500
$184,500
200,000 72,000 96,000 126,000 156,000
186,000246,000
250,000 90,000 120,000 157,500 195,000 232,500
307,500
300,000 108,000 144,000 189,000 234,000 279,000
369,000
400,000 144,000 192,000 252,000 312,000 372,000
492,000
500,000 180,000 240,000 315,000 390,000 465,000
615,000
<FN>
The table above reflects the retirement benefits (life annuity with
60 months certain) which would be payable under the Company's
Retirement Plan at various base salary levels and years of service
projected to normal retirement. The Retirement Plan is a career
average plan with benefits based on taxable compensation.
Limitations imposed by the Internal Revenue Code or any other
statute are not reflected in the table since the Company's
Supplemental Retirement Income Plan for Senior Executives is
designed to provide or restore to participants the benefits that
would have been received under the Retirement Plan if calculated
without regard to such limitations. Henry A. Rosenberg, Jr. and
Charles L. Dunlap are currently covered by the Supplemental
Retirement Income Plan and George R. Sutherland, Jr., Thomas L.
Owsley, and Randall M. Trembly will be eligible to participate at
age 55 if they are designated as participants by the Board of
Directors. Henry A. Rosenberg, Jr.'s normal retirement date was
December 1, 1994. His years of credited service at that time were
42.33 years. The estimated years of credited service projected to
normal retirement for the other executives listed in the Summary
Compensation Table are: Charles L. Dunlap, 16.5; George R.
Sutherland, Jr., 17.42; Thomas L. Owsley, 23.58; and Randall M.
Trembly, 27.88.
-11-
Performance Graph
TOTAL SHAREHOLDER RETURN COMPARISON
(Amounts in Dollars)
1989 1990 1991 1992 1993 1994
------- ------- -------- ------- ------- -------
Crown Common
Stock $100 $ 78 $ 79 $ 46 $ 53 $ 45
Amex Market
Value Index 100 82 105 106 126 115
Value Line Int.
Pet. Index 100 105 114 113 136 145
<FN>
The graph above plots the cumulative shareholder's return on a $100
investment in Crown Common Stock (Class A and Class B combined on a
weighted market value basis) over a five-year period assuming that all
dividends are reinvested. The American Stock Exchange Market Value
Index and the Value Line Integrated Petroleum Index are also shown on
the graph for comparative purposes. It should be noted that the Value
Line Index includes a number of major oil companies that are
significantly larger than Crown. Many of these companies are also
engaged in the upstream production of both crude oil and natural gas
and are in other lines of business in addition to their refining and
marketing activities.
-12-
Relationship with Independent Public Accountants
The principal independent public accountant for the
Company and its subsidiaries since the organization of
the Company has been Ernst & Young or its predecessors,
and such firm has been selected again for the current
fiscal year. A representative of Ernst & Young will be
present at the Annual Meeting of Stockholders and while
no statement is intended to be made by such
representative, he will respond to any questions
directed to him.
Stockholders' Proposals for the 1996 Annual Meeting
Proposals of stockholders of the Company intended to be
presented at the Annual Stockholders Meeting of the
Company in 1996 must be received by the Secretary of
the Company, One North Charles Street, P.O. Box 1168,
Baltimore, Maryland 21203 not later than November 17,
1995 and must otherwise comply with the rules of the
Commission to be eligible for inclusion in the Proxy
Statement for the Annual Meeting in 1996.
Other Matters
Management does not know of any other business to come
before the meeting other than as set forth in the
Notice of Annual Meeting of Stockholders. However, if
any other business should properly come before the
meeting, the proxies will be voted with respect thereto
in accordance with the direction of the proxy holders.
Information Incorporated by Reference
The Company's Financial Statements and Supplementary
Data (Item 8), Management's Discussion and Analysis of
Financial Condition and Results of Operations (Item 7),
Changes in and Disagreements with Auditors on
Accounting and Financial Disclosure (Item 9) and
supplementary financial information with respect to
Quarterly Results of Operations are set forth in the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994, and are hereby
incorporated by reference.
By Order of the
Board of
Directors
DOLORES B. RAWLINGS
DOLORES B. RAWLINGS
Secretary
March 16, 1995