CROWN CENTRAL PETROLEUM CORPORATION
1995 ANNUAL INCENTIVE PLAN
Section 1: Purpose
The purpose of the Crown Central Petroleum Corporation 1995
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 Schedule" means the Award Schedule established
pursuant to Section 3(d)(i).
c. "Board of Directors" means the Board of Directors of
the Corporation as it may be comprised from time to
time.
d. "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.
e. "Committee" means the Committee as defined in Section
4.
f. "Corporation" means Crown Central Petroleum Corporation
and any successor corporation.
g. "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.
h. "Exchange Act" means the Securities Exchange Act of
1934, and any successor statute, as it may be amended
from time to time.
i. "Participant" means an Employee selected from time to
time by the Committee to participate in the Plan.
j. "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.
k. "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.
l. "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.
m. "Plan Year" means the calendar year.
n. "Retirement" means retirement at or after age 65 or,
with the advance consent of the Committee, at or after
age 55.
o. "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.
p. "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.
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; provided, however, that the Committee
may not increase the amount of the Award that would
otherwise be payable upon achievement of the
Performance Goal or Goals.
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;
provided, however, that no Awards shall be paid except
to the extent that the Committee has certified in
writing that the Performance Goals have been met. 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, 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 outstanding
voting securities of the surviving or resulting
corporation shall then be owned in the aggregate
by the former stockholders of the Corporation,
other than affiliates within the meaning of the
Exchange Act or any party to such merger or
consolidation.
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.
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 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.
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 other documents related to this Plan) 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 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, 1995.
IN WITNESS WHEREOF, Crown Central Petroleum Corporation has
caused this Plan to be executed.
CROWN CENTRAL PETROLEUM CORPORATION
By: J. Michael Mims
J. Michael Mims