SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
(X) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CROWN CENTRAL PETROLEUM CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
CROWN CENTRAL PETROLEUM CORPORATION
ONE NORTH CHARLES STREET
BALTIMORE, MARYLAND 21201
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 25, 1996
-------------------------
To the stockholders of CROWN CENTRAL PETROLEUM CORPORATION:
Notice is hereby given that the Annual Meeting of stockholders of Crown
Central Petroleum Corporation (the "Company") will be held at the principal
office of the Company, One North Charles Street, 22nd Floor, Baltimore,
Maryland, on Thursday, the 25th day of April, 1996 at two o'clock in the
afternoon, Eastern Daylight Time, for the following purposes:
1. Election of Directors. To elect a Board of eight (8)
directors, each to serve for the next succeeding year or until
his or her successor is elected and has qualified. Six (6) of
such directors will be elected by the holders of the Class A
Common Stock and two (2) of such directors will be elected by
the holders of the Class B Common Stock.
2. Amendment and Restatement of Charter. To consider and vote
upon proposed Articles of Amendment and Restatement of the
Company's Charter which will: (i) increase the number of
shares of Class A Common Stock and of Class B Common Stock
which the Company is authorized to issue, from 7,500,000
shares to 15,000,000 shares of each class; (ii) eliminate the
designation of the Company's Series A Cumulative Convertible
Preferred Stock and Series B $2.25 Cumulative Convertible
Exchangeable Preferred Stock, no shares of which are
presently outstanding; (iii) require indemnification of
directors and officers of the Corporation to the maximum
extent permitted by Maryland law; and (iv) effect certain
other changes to the Company's Charter.
3. Other Business. To transact such other business as may
properly come before the meeting. The Board of Directors of
the Company knows of no other business which will be presented
for consideration at the Annual Meeting other than the
matters set forth in the Proxy Statement.
Details respecting these matters are set forth in the Proxy Statement.
Only stockholders of record at the close of business on March 11, 1996 will be
entitled to notice of and to vote at the Annual Meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND
DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE PAID,
ADDRESSED ENVELOPE AS PROMPTLY AS POSSIBLE. YOU MAY REVOKE THE PROXY BY GIVING
WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY AT THE ADDRESS ABOVE OR BY
EXECUTION AND DELIVERY OF A LATER DATED PROXY.
By order of the Board of Directors,
Dolores B. Rawlings,
Secretary
CROWN CENTRAL PETROLEUM CORPORATION
ONE NORTH CHARLES STREET
BALTIMORE, MARYLAND 21201
-------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
to be held April 25, 1996
-------------------------
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy 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 Company's Annual Meeting
of Stockholders to be held at the principal office of the Company, One North
Charles Street, 22nd Floor, Baltimore, Maryland on Thursday, the 25th day of
April, 1996 at two o'clock in the afternoon (the "Annual Meeting").
The Board of Directors of the Company has fixed the close of business
on March 11, 1996 as the record date (the "Record Date") for the determination
of Company stockholders entitled to notice of and to vote at the Annual Meeting.
Accordingly, only holders of record of Class A Common Stock, par value $5.00 per
share ("Class A Stock"), and holders of record of Class B Common Stock, par
value $5.00 per share ("Class B Stock"), at the close of business on the Record
Date are entitled to notice of and to vote at the Annual Meeting.
The proxy card provided is for completion by both holders of Class A
Stock and holders of Class B Stock. If a stockholder owns shares of Class A
Stock, the stockholder should vote on the election of the directors to be
elected by the holders of Class A Stock.
If a stockholder owns shares of Class B Stock, the stockholder should vote on
the election of the directors to be elected by the holders of Class B Stock If a
stockholder owns shares of both Class A Stock and Class B Stock, the stockholder
should vote on the election of all directors. All properly executed proxies
delivered pursuant to this solicitation will be voted at the Annual Meeting, or
any adjournments thereof, in accordance with instructions contained therein, if
any. IF NO INSTRUCTIONS ARE INDICATED, SHARES OF CLASS A STOCK AND CLASS B STOCK
FOR WHICH EXECUTED PROXIES ARE RECEIVED WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES NAMED IN THE PROXY AS DIRECTORS OF THE COMPANY, FOR THE APPROVAL OF THE
ARTICLES OF AMENDMENT AND RESTATEMENT OF THE COMPANY'S CHARTER AND IN THE
DISCRETION OF THE PROXY HOLDER AS TO ANY OTHER MATTER WHICH MAY PROPERLY COME
BEFORE THE MEETING.
Execution and return of the accompanying Proxy Card will not in any way
affect a stockholder's right to attend the Annual Meeting and, if such
stockholder's 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 a duly executed proxy
bearing a later date. Presence at the Annual Meeting will not, of itself, revoke
the proxy.
The expense of the solicitation of proxies for the Annual Meeting,
including the cost of preparing and mailing this Proxy Statement, will be borne
by the Company. Proxies may be solicited by use of the mails, by personal
interview, or by telephone or other electronic means and may be solicited, to a
limited extent, by officers and directors, and by other employees of the
Company. Brokers, nominees, fiduciaries, and other custodians will be requested
to forward soliciting material to the beneficial owners of shares and to request
authority for the execution of proxies and will be reimbursed by the Company for
their expenses in forwarding such material.
In addition, the Company has retained the services of D.F. King & Co.,
Inc., a proxy soliciting firm ("D.F. King"), for the purpose of assisting the
Company in the solicitation of proxies for the Annual Meeting. The Company's
arrangement with D.F. King provides that D.F. King will (i) assist in
distributing proxy materials and collecting proxies from stockholders, (ii)
telephone such stockholders as the Company may determine, (iii) advise the
Company regarding additional soliciting material, if any, that may be used,
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and (iv) assist the Inspector of Election in tabulating the votes and proxies
for the Annual Meeting. The Company estimates that the fees of D.F. King for
these services, excluding expenses of distributing proxy materials which the
Company will pay, will be approximately $5,000.
ALL STOCKHOLDERS ARE URGED TO COMPLETE, DATE, EXECUTE AND RETURN THE PROXY CARD
SENT TO THEM WITH THIS PROXY STATEMENT.
MATTERS TO BE VOTED ON AT THE ANNUAL MEETING
Election of Directors. Eight (8) directors are to be elected, each to
serve until the next annual meeting of the 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 Stock, and the other six (6) directors will be
elected by the holders of the Class A Stock. See "Voting at the Annual Meeting -
Voting Rights of Class A and Class B Stock" for a description of the voting
rights of the Class A Stock and of the Class B Stock in the election of
directors. A plurality of all votes cast by the applicable class will be
sufficient to elect each such director.
Amendment and Restatement of Charter. In order for the Articles of
Amendment and Restatement (the "Articles of Amendment") to be approved, an
affirmative vote of two-thirds of the total number of votes entitled to be cast
by holders of Class A Stock and Class B Stock, voting together, is required. See
"Voting at the Annual Meeting - Voting Rights of Class A and Class B Stock" for
a description of the voting rights of the Class A Stock and of the Class B Stock
as to the approval of the Articles of Amendment. Abstentions and broker
non-votes will count as votes against approval of the Articles of Amendment. A
"broker non-vote" occurs when a nominee holding shares for a beneficial holder
does not have discretionary voting power and does not receive voting
instructions from the beneficial owner. The Articles of Amendment increase the
Company's authorized Class A and Class B Stock and make certain other changes.
See the section "Amendment and Restatement of Charter" below.
VOTING AT THE ANNUAL MEETING
Outstanding Shares; Quorum. At the close of business on the Record
Date, there were 4,817,392 shares of Class A Stock outstanding and [5,135,506]
shares of Class B Stock outstanding. The presence, in person or by properly
executed and delivered proxy, of the holders of a majority of the votes of Class
A Stock and Class B Stock entitled to vote at the Annual Meeting, taken
together, is necessary to constitute a quorum at the Annual Meeting. For
information with respect to stockholders who own more than 5% of the outstanding
Class A Stock or Class B Stock, see "Security Ownership by Certain Beneficial
Owners and Management" below.
Voting Rights of Class A and Class B Stock. The holders of record of
the Class A Stock are entitled, voting separately as a class, to elect and to
remove all directors other than directors to be elected by any other class or
classes or series of stock. The holders of record of the Class B Stock may elect
and remove two (2) directors, who may not be employees of the Corporation or of
any subsidiary of the Corporation. There are no other classes of stock currently
outstanding.
Except with respect to the election of directors as described above, in
all proceedings in which action of the stockholders of the Company is to be
taken, each share of Class A Stock shall entitle the holder of record thereof to
one vote, and each share of Class B Stock shall entitle the holder of record
thereof to one-tenth (1/10) vote. Except with respect to the election of
directors, holders of Class A Stock vote together with holders of Class B Stock
as a single class.
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ELECTION OF DIRECTORS
At the Annual Meeting, eight (8) directors will be elected, each to
serve until the next annual meeting of the 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 Stock. The other six (6) directors will be elected by
the holders of the Class A Stock.
INFORMATION CONCERNING THE NOMINEES
Following are the names and ages (as of December 31, 1995) of those
persons nominated to be directors of the Company, as well as their principal
occupations for the last five years, directorships held by them in certain other
publicly held companies, the year in which they became a Director of the Company
and certain other information with respect to such nominees. The first six (6)
nominees listed will be elected by the holders of Class A Stock and the last two
(2) nominees listed will be elected by the holders of Class B Stock. All of the
nominees are presently directors of the Company and all of such nominees, except
for The Reverend Harold E. Ridley, Jr., were elected at the Annual Meeting of
Stockholders on April 27, 1995. Father Ridley was elected to the Board at a
December 14, 1995 meeting of the Board of Directors.
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
sons of Henry A. Rosenberg, Jr., Chairman of the Board, President and Chief
Executive Officer. There are no other family relationships among the directors
and the executive officers and there is no other arrangement or understanding
between any director and any other person pursuant to which the director was
elected.
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 Principal Occupation for last 5 years; Director
December 31, 1995 Directorships in Public Corporations Since
----------------- ------------------------------------ -----
To be elected by the holders of Class A Stock:
Jack Africk Retired. Formerly Vice Chairman, UST, Inc. from September 1990 through May 1993. 1991
(67) Also a director of Duty-Free International, Inc., Tanger Factory Outlet Centers,
Inc. and Transmedia Network, Inc.
George L. Bunting, Jr. President and Chief Executive Officer, Bunting Management Group since July 1991; 1992
(55) 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. Dacey President, The Evolution Consulting Group, Inc. since March 1995; Executive Vice 1991
(51) President, The Chase Manhattan Bank, N.A. from September 1987 through September
1994.
Patricia A. Goldman Retired. Formerly Senior Vice President - Corporate Communications, USAir, Inc. 1989
(53) from February 1988 through January 1994. Also a director of Erie Indemnity Company.
William L. Jews President and Chief Executive Officer, Blue Cross and Blue Shield of Maryland since 1992
(43) April 1993; President and Chief Executive Officer, Dimensions Health Corporation
from March 1990 through March 1993. Also a director of NationsBank, N.A. and The
Ryland Group, Inc.
Henry A. Rosenberg, Jr. Chairman of the Board and Chief Executive Officer of the Company since May 1975. 1955
(66) Also a director of Signet Banking Corporation and USF&G Corporation.
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To be elected by the holders of the Class B Stock:
Thomas M. Gibbons Retired. Formerly Chairman of the Board, The Chesapeake and Potomac Telephone 1988
(70) Companies, part of Bell Atlantic Corporation.
The Reverend Harold E. President, Loyola College in Maryland since July 1994; Professor of English and 1995
Ridley, Jr., S. J. Department Chair, LeMoyne College from September 1985 through June 1994.
(56)
The Board of Directors recommends that the stockholders vote FOR the nominees
presented herein.
BOARD OF DIRECTORS AND COMMITTEES
Attendance. The Board of Directors held nine meetings during the past
year. All of the directors 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 "Interest of
Management and Others in Transactions with the Company and its Subsidiaries"
below for a description of Mr. Africk's consulting agreement under which he is
paid a fee of $3,000 per month.
Deferred Compensation Plan. 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).
Committees. 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, and Africk, Chairman. The Audit Committee met five
times during the past year. The functions which this Committee performs under
its charter include: (i) recommending the selection of independent public
accountants and reviewing with such accountants the audit scope and the results
of the audit engagement; (ii) reviewing matters pertaining to internal audit and
other internal control procedures; (iii) reviewing the audited and the unaudited
statements to be submitted to the Board for approval; (iv) reviewing substantial
claims by or against the Company; (v) reviewing the Company's financing plans
and its compliance with debt covenants; (vi) reviewing current accounting
related matters affecting the Company; and (vii) reviewing the effect of the
scope of non-audit services rendered by the independent public accountants on
their independence.
Executive Compensation and Bonus Committee.
During the past year the Executive Compensation and Bonus Committee
(the "Compensation Committee") has been composed of Ms. Goldman and Messrs.
Jews, Holzer, McNair, and Gibbons, Chairman. The Compensation Committee met four
times during the past year. The Compensation Committee has the principal
responsibility for the administration of the Annual Incentive Plan and the 1994
Long-Term Incentive Plan (the "1994 Plan") and the authority and duty to submit
recommendations to the Board with respect to the salaries of the Chairman of the
Board and the President. In addition, the Compensation 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 Compensation Committee has considered a number of
factors in connection with its approval of salaries of the Company's executive
officers. The officers' position description, salary history and individual
performance as reflected in the
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Chairman's report and recommendations to the Compensation 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. Five 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 Compensation Committee is, to the
extent practicable, attempting to insure that increases in base salaries are
targeted to median levels. The July 1, 1995 increase of 4.5% in the salary
previously established for Mr. Rosenberg in April 1994 reflects the Compensation
Committee's desire to move his compensation closer to the median salary for
comparable chief executive officers.
In 1994, the Company adopted a new form of Annual Incentive Plan and,
with stockholder approval, it also adopted the 1994 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 1996 Annual Incentive Plan is a cash plan offered to officers,
senior management and other salaried employees. Minimum performance levels,
targets and maximum awards are established by the Compensation Committee for
each plan year. Participants can earn an award of 30-55% of base salary based
upon the Company's performance, and the attainment of key operational goals.
Company performance is measured by EBITDAAL, defined as earnings before
interest, taxes, depreciation, amortization, abandonments and LIFO accounting
provisions. EBITDAAL must meet the annual minimum threshold approved by the
Compensation Committee for any awards to be earned in a plan year.
The 1994 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 1994 Plan provides for awards of non-qualified stock options
("Options") for the purchase of the Company's Class B Stock and Performance
Vested Restricted Stock ("PVR Stock") which is also awarded in shares of Class B
Stock. Awards are made by the Compensation Committee, and no participant may
receive more than 150,000 shares of Options or 50,000 shares of PVR Stock in any
one year.
PVR Stock is issued to a participant subject to the attainment of
performance goals and the satisfaction of various restrictions established by
the Compensation Committee. The performance goals are currently based upon the
Company's Net Margin, which is defined as Refining Gross Margin minus Total
Refining Costs plus the Marketing and Wholesale Contributions minus
Administrative Cost. In addition, Income Before Income Taxes must meet the
minimum threshold approved by the Compensation Committee for any Awards of PVR
Stock to vest at the end of the performance cycle. The Compensation Committee
recently adopted a new feature permitting PVR Stock that has not vested at the
end of the performance cycle to vest at the end of five years, rather than
revert to the Company. This feature is intended to help the Company retain the
services of participants in the 1994 Plan and to simplify the accounting
treatment of PVR Stock.
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 1996 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 PVR
Stock portion (but not the portion relating to Options) of the 1994 Plan might
also be required to qualify that compensation for deductibility. The
Compensation 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 Compensation Committee: Thomas
M. Gibbons, Chairman; Patricia A. Goldman; Peter J. Holzer; and William L. Jews.
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SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Owners of More than Five Percent. The following table sets forth the
class of shares of the Company's stock, and the amount and percentage of that
class, owned by all persons known by the Company to be the beneficial owners of
more than 5% of the shares of any class of the Company's stock on December 31,
1995:
Name and Address Percent
of Beneficial Owner Title of Class Amount of Class
American Trading and Production Class A Stock 2,471,098 51.30
Corporation "group" (a) Class B Stock 740,509 14.42
Blaustein Building
P.O. Box 238
Baltimore, MD 21203
A.I.C. Limited "group" (b) Class A Stock 448,900 9.32
7930 Clayton Road
St. Louis, MO 63117
Franklin Resources, Inc. (c) Class B Stock 500,000 9.74
777 Mariners Island Boulevard
P.O. Box 7777
San Mateo, CA 94403
Heine Securities Corporation (d) Class B Stock 327,700 6.38
51 John F. Kennedy Parkway
Short Hills, NJ 07078
The Killen Group, Inc. (e) Class B Stock 307,200 5.98
1189 Lancaster Avenue
Berwyn, PA 19312
Donald Smith & Co., Inc. (f) Class B Stock 490,000 9.54
15 Essex Road
Paramus, NJ 07652
(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" (the "Atapco 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
Stock and 591,629 shares of Class B Stock, and other members of the Atapco
Group are the holders of 104,572 shares of Class A Stock and 148,880 shares
of Class B Stock. The Class B Stock shown in the table includes 83,000
shares of stock granted to members of the Atapco Group as PVR Stock under
the 1994 Plan and 40,765 shares that members of the Atapco Group have a
right to acquire on or after February 24, 1996 pursuant to Options granted
under the 1994 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 Stock, and two associates, who
have no record ownership of Class A 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, 1996 filed with the Commission. Franklin Resources, Inc. is a
registered investment advisor.
(d) This information was obtained from a report on Schedule 13G dated February
12, 1993 and Amendment No. 3 dated February 1, 1996 filed with the
Commission. Heine Securities Corporation is a registered investment
advisor.
(e) This information was obtained from a report on Schedule 13G dated February
14, 1996 filed with the Commission. The Killen Group, Inc. is a registered
investment advisor.
(f) 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 -
Directors and Officers. 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 December 31, 1995:
Shares of Securities Beneficially Owned
on December 31, 1995 (a)
Class A Common Stock Class B Common Stock
Name Amount % Amount %
Jack Africk --- 500 (b)
George L. Bunting, Jr. --- 1,000 (b)
Michael F. Dacey 1,000 (b) ---
Charles L. Dunlap --- 56,333(c) 1.10
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)
Rev. Harold E. Ridley, Jr. --- ---
Henry A. Rosenberg, Jr.(d) 2,471,098 51.30 740,509 14.42
George R. Sutherland, Jr.(e) 250 (b) 19,591(c) (b)
Phillip W. Taff --- 20,732(c) (b)
Randall M. Trembly 11,774 (b) 20,479(c) (b)
All Directors, Nominees and 2,502,314 51.94 943,918 18.38 (f)
Officers as a group including
those listed above
(21 individuals)
(a) Unless otherwise noted, the director holds sole voting and investment power
over the shares listed; however, in one or more cases the stock may be
registered in the name of a trust or retirement fund for the benefit of the
director. 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 Employees Supplemental Savings Plan (collectively, the "Savings
Plans"), and the Class B Stock granted as PVR Stock under the 1994 Plan.
(b) Represents less than one percent.
(c) Includes for Mr. Dunlap, 17,833 shares; for each of Mr. Sutherland and Mr.
Trembly, 5,966 shares; and for Mr. Taff, 5,433 shares, that may be acquired
on or after February 24, 1996 pursuant to Options granted under the 1994
Plan.
(d) Henry A. Rosenberg, Jr. is a director and stockholder of Atapco which is a
member of the Atapco Group. See "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 Stock and 60,828 shares (including
PVR Stock) of Class B Stock individually and in the Company's Savings
Plans. The Class B Stock shown on the table also includes 28,366 shares
that may be acquired on or after February 24, 1996 pursuant to Options
granted to Mr. Rosenberg under the 1994 Plan and Options for 12,399 shares
that may be acquired by other members of the Atapco Group on or after
February 24, 1996.
(e) Mr. Sutherland holds all of his Class A and 1,225 shares of his Class B
stock jointly with his wife, with whom he shares voting and investment
power.
(f) Includes 102,861 shares that may be acquired on or after February 24, 1996
pursuant to Options granted under the 1994 Plan.
Compliance with Section 16(a). 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
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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 1995 the total rent paid including escalation was $938,635
which was no greater than the rent charged others for comparable space in the
building. In addition, the Company paid $65,622 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 and relationships with, including from time to time
borrowings from, The Chase Manhattan Bank, N.A., of which Mr. Holzer is an
officer; NationsBank, N.A., of which Mr. Jews is a director; and Signet Bank, 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. In September 1995, the
Company entered into a $130,000,000 Credit Agreement (the "Credit Agreement")
with NationsBank of Texas, N.A., as Administrative Agent and Letter of Credit
Agent for a group of banks. NationsBank of Texas, N.A. is an affiliate of
NationsBank, N.A. Signet Bank was also one of the Banks party to the Credit
Agreement and is the Trustee of the Company's Retirement Plan.
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.
On February 29, 1996, Mr. Dunlap resigned as President, Chief Operating
Officer, and a director of the Company. The Company paid Mr. Dunlap $738,000
upon his resignation in full settlement of all present and future obligations
under his employment contract and under the Company's Supplemental Retirement
Income Plan.
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 the Company.
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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
Annual Compensation Compensation Awards
Name and Other Securities All
Principal Annual Underlying Other
Position Year Salary Compensation (a) Options (b) Compensation (c)
-------- ---- ------ ------------ ------- ------------
Henry A. Rosenberg, Jr. 1995 $ 562,506 $ 20,231 88,800 $ 20,358
Chairman of the Board, 1994 541,672 19,774 25,000 20,260
President and Chief 1993 525,000 17,734 N/A 15,736
Executive Officer
Charles L. Dunlap 1995 $ 407,508 $ 22,229 60,960 $ 12,582
Former President and 1994 395,008 19,492 15,800 13,895
Chief Operating Officer (d) 1993 381,672 16,224 N/A 13,777
George R. Sutherland, Jr. 1995 $ 169,008 $ 16,465 24,420 $ 7,598
Senior Vice President - 1994 159,924 14,728 4,700 9,033
Supply and 1993 152,504 12,265 N/A 5,322
Transportation
Phillip W. Taff 1995 $ 207,504 $ 16,853 30,430 $ 78,910
Senior Vice President - 1994 141,669 9,450 5,400 12,462
Finance and Chief 1993 N/A N/A N/A 21,000
Financial Officer (e)
Randall M. Trembly 1995 $ 167,508 $ 15,600 27,250 $ 8,332
Senior Vice President - 1994 156,672 14,000 4,700 7,528
Refining 1993 145,000 12,000 N/A 7,034
(a) These amounts include bonuses, automobile allowances, gasoline allowances,
and the tax gross-ups applicable to the gasoline allowances. Prerequisites
below the required reporting levels are not included in this table.
(b) The Options are for the purchase of shares of Class B Stock.
(c) These amounts include imputed income related to excess life insurance,
payments for executive medical insurance and the Company's matching
payments under the Savings Plans. In 1995, the imputed income for Mr.
Rosenberg was $8,640; for Mr. Dunlap $864; and for Mr. Taff, $864. The
executive medical payments for the officers listed in the table were
$1,718. The Company's matching payments under the Savings Plans were
$10,000 for Messrs. Rosenberg and Dunlap, $5,880 for Mr.
Sutherland, $3,188 for Mr. Taff and $6,614 for Mr. Trembly.
(d) On February 29, 1996, Mr. Dunlap resigned as President, Chief Operating
Officer, and a director of the Company.
(e) In May 1994, Mr. Taff resigned as a director of the Company, and following
his resignation he was employed as Senior Vice President - Finance and
Chief Financial Officer, effective June 1, 1994. His 1994 salary includes a
$25,000 signing bonus. The amounts shown for Mr. Taff in All Other
Compensation include the reimbursement of moving expenses of $73,140 in
1995, and fees paid for services as a director and member of the Audit
Committee and for meeting fees of $10,500 in 1994 and $21,000 in 1993.
- 9 -
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
% of Total
Number of Options
Securities Granted to
Underlying Employees Grant Date
Options in Fiscal Exercise Expiration Present
Name Granted (a) Year Price Date Value (b)
Henry A. Rosenberg, Jr. 35,100 4.09 $ 12.813 Feb. 23, 2005 $ 222,031
53,700 6.26 13.750 Apr. 13, 2005 364,552
Charles L. Dunlap 21,900 2.55 $ 12.813 Feb. 23, 2005 $ 138,532
39,060 4.55 13.750 Apr. 13, 2005 265,165
George R. Sutherland, Jr. 8,500 0.99 $ 12.813 Feb. 23, 2005 $ 53,769
15,920 1.86 13.750 Apr. 13, 2005 108,076
Phillip W. Taff 10,900 1.27 $ 12.813 Feb. 23, 2005 $ 68,950
19,530 2.28 13.750 Apr. 13, 2005 132,583
Randall M. Trembly 8,500 0.99 $ 12.813 Feb. 23, 2005 $ 53,769
18,750 2.19 13.750 Apr. 13, 2005 127,288
(a) For each grant, one-third of the Options granted are exercisable one year
from the date of the grant; an additional one-third will be exercisable on
the second anniversary of the grant; and the final one-third will be
exercisable on the third anniversary of the grant. Tax withholding
obligations may be satisfied upon exercise by the deduction of Option
shares.
(b) For the purposes of this presentation, the Company valued its 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 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 Stock does not increase or if it declines. The
following assumptions were used to calculate the Black-Scholes value: a
ten-year option term; a 0.27 percent stock price volatility; a 5.8 percent
risk free rate of return; an annual dividend yield of 0 percent; and an
exercise price equal to the stock price on the date of grant. This resulted
in an Option value of $6.62 per share. The Company has used the historical
annual dividend yield and stock prices as assumptions for the Black-Scholes
model. 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 FISCAL YEAR-END OPTION VALUES (a)
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at FY-End Options at FY-End
Name Exercisable Unexercisable Exercisable Unexercisable
Henry A. Rosenberg, Jr. 8,333 105,467 0 $ 110,589
Charles L. Dunlap 5,266 71,494 0 73,860
George R. Sutherland, Jr. 1,566 27,554 0 29,332
Phillip W. Taff 1,800 34,030 0 36,840
Randall M. Trembly 1,566 30,384 0 31,808
(a) The Options are for the purchase of Class B Stock.
- 10 -
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR (a)
Estimated Future Payouts
Number Performance Threshold Target Maximum
Name of Shares Period (Shares) (Shares) (Shares) (b)
Henry A. Rosenberg, Jr. 32,700 Jan. 1, 1995- 16,350 32,700 32,700
Dec. 31, 1997 plus cash
Charles L. Dunlap 20,400 Jan. 1, 1995- 10,200 20,400 20,400
Dec. 31, 1997 plus cash
George R. Sutherland, Jr. 7,900 Jan. 1, 1995- 3,950 7,900 7,900
Dec. 31, 1997 plus cash
Phillip W. Taff 10,100 Jan. 1, 1995- 5,050 10,100 10,100
Dec. 31, 1997 plus cash
Randall M. Trembly 7,900 Jan. 1, 1995- 3,950 7,900 7,900
Dec. 31, 1997 plus cash
(a) The shares listed are Class B Stock which was issued as PVR Stock and was
awarded to participants under the 1994 Plan. The performance goals
applicable to these awards are based upon the Company's Net Margin which is
defined in the 1994 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 of this PVR Stock to be earned.
(b) 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
Remuneration 15 20 25 30 35 40
------------ -- -- -- -- -- --
$ 150,000 $ 54,000 $ 72,000 $ 94,500 $ 117,000 $ 139,500 $ 184,500
200,000 72,000 96,000 126,000 156,000 186,000 246,000
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
600,000 216,000 288,000 378,000 468,000 558,000 738,000
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.
is currently, and Charles L. Dunlap was, covered by the Supplemental Retirement
Income Plan and George R. Sutherland, Jr., Phillip W. Taff, 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. Except for Mr. Dunlap, who has resigned, the estimated years
of credited service projected to normal retirement for the other executives
listed in the Summary Compensation Table are: George R. Sutherland, Jr., 17.42;
Phillip W. Taff, 12.58; and Randall M. Trembly, 27.88.
- 11 -
PERFORMANCE GRAPH
The graph above plots the cumulative shareholder's return on a $100
investment in Crown Common Stock (Class A and Class B Stock combined on a
weighted market value basis) over a five-year period assuming that all dividends
are reinvested. The American
1990 1991 1992 1993 1994 1995
Crown Common 100 101 60 68 57 68
AMEX Market Value index 100 128 130 155 141 178
Value Line Int. Pet. Index 100 109 108 129 138 178
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 -
AMENDMENT AND RESTATEMENT OF CHARTER
INTRODUCTION
Holders of the Company's Class A Stock and Class B Stock are being
asked to consider and vote upon the Articles of Amendment which will increase
the number of shares of stock that the Company has authority to issue from
20,000,000 to 35,000,000 by increasing each of the authorized Class A Stock and
the authorized Class B Stock from 7,500,000 shares to 15,000,000 shares, and
will update and shorten the Charter by eliminating certain provisions which are
no longer of relevance and by changing or adding other provisions.
If approved by the stockholders, the Articles of Amendment will become
effective upon their filing with the Maryland State Department of Assessments
and Taxation. The Board of Directors, at a meeting held on February 29, 1996,
considered the Articles of Amendment, determined the Articles of Amendment to be
in the best interest of the Company and its stockholders, declared the Articles
of Amendment advisable, and recommended that the Articles of Amendment be
submitted to the Company's stockholders for approval. A description of the
effects of the Articles of Amendment is set forth below. A copy of the Articles
of Amendment is set forth in Appendix A to the Proxy Statement, and is
incorporated herein by reference. The description of the Articles of Amendment
set forth below is qualified in its entirety by the Articles of Amendment.
INCREASE IN AUTHORIZED SHARES
Current Authorized and Outstanding Stock. The Company presently has two
classes of common stock authorized and outstanding, Class A Stock and Class B
Stock. As of the Record Date, 7,500,000 shares of Class A Stock were authorized,
of which 4,817,392 were issued and outstanding. As of the Record Date, 7,500,000
shares of Class B Stock were authorized, of which [5,135,506] were issued and
outstanding. The Company also has 5,000,000 shares of Series Preferred Stock
authorized, none of which is currently outstanding.
Increase in Authorized Stock. If approved, the Articles of Amendment
will increase the total number of shares of stock which the Company has
authority to issue from 20,000,000 to 35,000,000 by increasing each of the
authorized Class A Stock and the authorized Class B Stock from 7,500,000 shares
to 15,000,000 shares. As so increased, the Company's authorized shares would be
divided into 15,000,000 shares of Class A Stock, par value $5.00 per share,
15,000,000 shares of Class B Stock, par value $5.00 per share, and 5,000,000
shares of Series Preferred Stock, without par value. The Articles of Amendment
would effect no other changes to the Company's capital stock, except as
described below under "Elimination of Certain Series Preferred Stock
Designations."
Reasons for Increase. The Board of Directors believes that it is
important to ensure that the Company will continue to have an adequate number of
authorized and unissued shares of stock available for future use. If this
amendment is approved by the stockholders, the additional authorized Class A and
Class B Stock would be available for issuance from time to time for such
corporate purposes, including stock splits and stock dividends, financings, and
acquisitions, as the Board may deem advisable, without the necessity of further
stockholder action, unless otherwise required by law. The ability to issue
additional shares of Class A Stock or Class B Stock or both would provide
desirable flexibility in carrying out corporate purposes.
The flexibility that would be gained from increasing the Company's
authorized shares of stock would augment the Company's business strategy, which
includes an expansion of the Company's retail volume through the selective
acquisition of additional retail properties. The Company believes that there is
a substantial opportunity to improve margins and reduce earnings volatility by
improving the balance between its Pasadena refinery production and its marketing
of gasoline through retail units. See "Business - Business Strategy" in the
Company's Annual Report on Form 10-K, which is included in the Annual Report to
Shareholders and accompanies this Proxy Statement. The Company from time to time
reviews potential acquisition candidates to acquire additional retail
properties, but currently has no commitments or agreements which would involve
the acquisition of multiple units and is not involved in any definitive
negotiations with respect to any such transactions.
OTHER CHANGES
Elimination of Certain Series Preferred Stock Designations. The
Company's Charter authorizes 5,000,000 shares of Series Preferred Stock which
may be issued in one or more series, with such voting powers and with such
designations, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions as the Company's Board
may decide. The Charter currently designates two series of the Series Preferred
Stock, the Series A Cumulative Convertible Preferred Stock (the "Series A
Stock") and the Series B $2.25 Cumulative Convertible Exchangeable Preferred
Stock (the "Series B Stock"), both of which were previously issued in accordance
with those designations but neither of which is currently outstanding. The
series designations for
- 13 -
the Series A Stock and for the Series B Stock established for each the
preferences, rights, qualifications, limitations and restrictions thereof.
The Charter does not require that if any Series Preferred Stock is
issued it be issued as either Series A Stock or Series B Stock, or reserve any
of the authorized shares of Series Preferred Stock for issuance as either Series
A Stock or Series B Stock. Rather, pursuant to the Charter, the Board may issue
any or all of the 5,000,000 authorized shares of Series Preferred Stock with
whatever voting powers, designations, preferences, rights, qualifications,
limitations, or restrictions it may deem advisable, without being constrained by
the series designations with respect to the Series A Stock and Series B Stock.
The designation of both the Series A Stock and the Series B Stock, and other
provisions related thereto, are eliminated from the Charter by the Articles of
Amendment.
The Articles of Amendment do not change the Charter provision which
allows the Board of Directors to classify or reclassify any unissued stock of
any class.
Indemnification of Directors and Officers. The Company's Bylaws contain
detailed provisions with respect to the indemnification of the Company's
directors and officers. The Articles of Amendment would insert into the Charter
a provision authorizing indemnification of directors and officers of the
Corporation to the maximum extent permitted by Maryland law.
Vote to Elect Directors. The Articles of Amendment will make explicit
the requirement that the election of directors be by plurality vote. This
requirement is currently set forth only in the Company's Bylaws.
Filling Vacancies on the Board of Directors. The Articles of Amendment
eliminate the detailed provisions in the Charter for filling vacancies on the
Board of Directors, since specific procedures for filling vacancies are set
forth in the Maryland General Corporation Law. For corporations with directors
elected separately by the stockholders of a class or series, Maryland law
provides that vacancies shall be filled by a majority of the remaining directors
or the sole remaining director elected by that class or series.
Other Changes. The Articles of Amendment also would (i) eliminate
certain Charter provisions applicable to the Company's 1937 consolidation with
Crown Central Petroleum Corporation, a Delaware Corporation, the relevance of
which is purely historic; (ii) update information relating to the Company's
principal place of business, resident agent and directors; (iii) replace the
Charter's detailed, lengthy "Purposes" provisions with a brief general statement
that the Company is formed to engage in petroleum refining and marketing
operations and to engage in any lawful business for which corporations may be
organized under Maryland law; (iv) describe the power of the Board of Directors
to make distributions to stockholders; and (v) include a provision that the
powers of the Board of Directors enumerated in the Charter, as amended, shall in
no way be limited by reference to or inference from the terms of any other
clause of the Charter.
BYLAW AMENDMENTS
The increase in the Company's authorized share capital should be
considered in conjunction with amendments to the Company's Bylaws (the "Bylaw
Amendments") which were adopted by the Board of Directors at a meeting held on
February 29, 1996 and which became effective as of such date without the
necessity of stockholder approval. A description of the effects of Bylaw
Amendments is set forth below.
Annual and Special Meetings of Stockholders. The Bylaw Amendments
changed certain procedural matters relating to the Company's annual and special
meetings of stockholders. Under the Bylaws, as amended, the annual meeting of
stockholders shall be held as set by the Board of Directors on a business day
during the thirty day period beginning on the fourth Thursday of April. At
annual meetings, the business to be conducted is limited to those matters which
were (i) included in the notice relating to such meeting, (ii) brought before
the meeting at the direction of the Board of Directors or (iii) brought properly
by a stockholder of record entitled to vote on such matter. In order for a
stockholder properly to bring a matter before an annual meeting, such
stockholder must give notice of such matter 120 days prior to the anniversary of
the date on which the Company's proxy statement was released to its stockholders
in connection with the previous year's annual meeting. Such notice must include,
among other things, a representation that such stockholder intends to appear in
person or by proxy at the meeting to present the business specified in the
notice and a brief description of the business desired to be brought before the
meeting, including the complete text of any resolutions to be presented and the
reasons for wanting to conduct such business. Such notice must also disclose any
interest which the stockholder may have in such business.
As a result of the Bylaw Amendments, the percentage of stockholders
required to call special meetings of stockholders has been reduced from a
majority to 25%. However, a special meeting need not be called if the matter to
be considered at such meeting has been considered at a special meeting within
the prior twelve (12) months. Stockholders wishing to call a special meeting
must provide the Company with a written request which must include, among other
things, the names and addresses, as they appear on the
- 14 -
Company's stock transfer books, of the stockholders making such request, the
class and number of shares beneficially owned by such stockholders, a
representation that such stockholders intend to appear in person or by proxy at
the meeting to present the business specified in the request and a brief
description of the business desired to be brought before the meeting, including
the complete text of any resolutions to be presented and the reasons for wanting
to conduct such business. Such request must also disclose any interest which the
requesting stockholders may have in such business. In addition to the
requirements set forth with respect to the stockholder request, the Bylaws, as
amended, also require that requesting stockholders pay to the Company the
reasonably estimated cost of preparing and mailing the notice of the meeting
prior to the Company giving notice to stockholders of such meeting. If a special
meeting is called, matters to be considered shall be limited to those addressed
in the notice to stockholders relating to such meeting.
Other Amendments. The Bylaw Amendments also (i) establish procedures
pursuant to Maryland law for filling vacancies on the Board of Directors; (ii)
provide that the Board shall set the record date for stockholder meetings on a
date not more than 90 nor less than 10 days before the related meeting; and
(iii) provide that either the Board or stockholders entitled to vote in the
election of such directors may nominate persons to serve as directors; provided,
however, that in order for a stockholder to nominate any person, the stockholder
must give timely notice to the Company and include in such notice, among other
things, a description of all arrangements or understandings among such
stockholder, the proposed nominee, and any other person pursuant to which such
nomination is to be made and a written consent of the proposed nominee to serve
as a director if elected.
CERTAIN MATTERS RELEVANT TO CONSIDERATION OF ARTICLES OF AMENDMENT
The Atapco Group owns 51.30% of the Class A Stock and 14.42% of the
Class B Stock. The issuance of additional shares of stock would have the effect
of diluting existing stockholders, including dilution with respect to their
voting power. If there were to be a material reduction in the percentage of the
Class A Stock owned by the Atapco Group, the changes effected by the Articles of
Amendment together with the Bylaw Amendments could have the effect of
discouraging, delaying or impeding a third party from seeking to acquire control
of the Company. The Company is not aware of any intention on the part of the
Atapco Group to dispose of any part of the Class A Stock or the Class B Stock
held by it.
The Board of Directors recommends that the stockholders vote FOR
approval of the Articles of Amendment and Restatement.
- 15 -
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 stockholders.
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 LLP or
its predecessors, and such firm has been selected again for the current fiscal
year. A representative of Ernst & Young LLP will be present at the Annual
Meeting. Their representative does not intend to make any formal statement, but
will respond to any questions.
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), 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, 1995, and are hereby
incorporated by reference.
STOCKHOLDERS' PROPOSALS FOR THE 1997 ANNUAL MEETING
Proposals of stockholders of the Company intended to be presented at
the Annual Meeting of stockholders of the Company in 1997 must be received by
the Secretary of the Company, One North Charles Street, P.O. Box 1168,
Baltimore, Maryland 21203 on or before November 16, 1996, and must otherwise
comply with the rules of the Commission and the Bylaws of the Company to be
eligible for inclusion in the Proxy Statement for the Annual Meeting in 1997.
By Order of the Board of Directors,
DOLORES B. RAWLINGS
Secretary
March __, 1996
- 16 -
APPENDIX A
CROWN CENTRAL PETROLEUM CORPORATION
ARTICLES OF AMENDMENT AND RESTATEMENT
Crown Central Petroleum Corporation, a Maryland corporation,
having its principal office at One North Charles Street, Baltimore, Maryland
(the "Corporation") hereby certifies to the State Department of Assessments and
Taxation of Maryland as follows:
Article I
Amendment and Restatement of Charter
Section 1.1. Amend and Restate Charter. The Corporation desires to
amend and restate its Charter as heretofore in effect (as defined by the
Maryland General Corporation Law, the "Charter") as hereinafter provided. The
Charter is hereby amended and restated in its entirety to read as set forth
in Exhibit A hereto (as so amended and restated, the "Amended and Restated
Charter"), the terms of which are incorporated herein by this reference as
fully as if they had been set forth herein.
Section 1.2. Approval by Board of Directors. The Board of Directors,
at a duly called meeting held on February 29, 1996, unanimously declared
these Articles of Amendment and Restatement to be advisable and directed
that such Articles be submitted to the Stockholders for consideration at
the Annual Meeting of Stockholders to be held on April 25, 1996.
Section 1.3. Approval by Stockholders. The Stockholders, at a duly
called meeting held on April 25, 1996, approved these Articles of
Amendment and Restatement by the affirmative vote of two-thirds of all the
votes entitled to be cast on the matter.
Section 1.4. All Provisions of Charter. The provisions set forth
in the Amended and Restated Charter are all of the provisions of the Charter
of the Corporation as currently in effect after giving effect to the
amendments effected hereby.
Section 1.5. Principal Office. The current address of the principal
office of the Corporation is:
Crown Central Petroleum Corporation
One North Charles Street
Baltimore, Maryland 21201
Section 1.6. Registered Agent. The name and address of the registered
agent of the Corporation, who is a citizen of Maryland and who resides in
Maryland, are:
Thomas L. Owsley, Esq.
c/o Crown Central Petroleum Corporation
One North Charles Street
Baltimore, Maryland 21201
Section 1.7. Directors. There are eight (8) directors of the
Corporation, and their names are:
Jack Africk George L. Bunting, Jr.
Michael F. Dacey Thomas M. Gibbons
Patricia A. Goldman William L. Jews
Harold E. Ridley, Jr. Henry A. Rosenberg, Jr.
- 1 -
Article II
Statements with Respect to Authorized Stock
Section 2.1. Statements with Respect to Authorized Stock.
Pursuant to Section 2-607 of the Maryland General Corporation Law, the
Corporation states that:
(a) the total number of shares of stock of all classes which
the Corporation has authority to issue is, immediately before the
amendment effected hereby, 20,000,000 shares, and as amended hereby,
35,000,000 shares;
(b) the total number of shares of common stock which the
Corporation has authority to issue is, immediately before the amendment
effected hereby, 15,000,000 shares of common stock consisting of
7,500,000 shares of Class A Common Stock and 7,500,000 Shares of Class
B Common Stock, and as amended hereby, 30,000,000 shares of common
stock, consisting of 15,000,000 shares of Class A Common Stock and
15,000,000 shares of Class B Common Stock. The total number of shares
of preferred stock which the Corporation has authority to issue is,
both immediately before the amendment effected hereby and as amended
hereby, 5,000,000 shares of Series Preferred Stock;
(c) the par value of shares of common stock which the
Corporation has authority to issue is, both immediately before the
amendment effected hereby and as amended hereby, $5 per share. The
shares of preferred stock which the Corporation has authority to issue
are, both immediately before the amendment effected hereby and as
amended hereby, without par value;
(d) the aggregate par value of all shares of stock which the
Corporation has authority to issue is, immediately before the amendment
effected hereby, $75,000,000, and as amended hereby, $150,000,000; and
(e) the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption of Class A Common Stock, Class B
Common Stock and Series Preferred Stock are not changed by the
amendments effected hereby.
IN WITNESS WHEREOF, CROWN CENTRAL PETROLEUM CORPORATION has caused
these Articles of Amendment and Restatement to be signed in its name and on
its behalf by its Chairman of the Board and President and its corporate seal
to be hereunder affixed and attested to by its Secretary on this _____ day of
April, 1996; and its Chairman of the Board and President acknowledges that
these Articles of Amendment and Restatement are the act and deed of the
Corporation, and, under the penalties of perjury, that the matters and
facts set forth herein with respect to authorization and approval are
true in all material respects to the best of his knowledge, information, and
belief.
CROWN CENTRAL PETROLEUM CORPORATION
By: _____________________________________(SEAL)
Henry A. Rosenberg, Jr.
Chairman of the Board
and President
ATTEST:
-------------------------------------
Dolores B. Rawlings
Secretary
- 2 -
State of Maryland )
) to wit:
City of Baltimore )
I HEREBY CERTIFY, that on this ____ day of April, 1996, before me, the
subscriber, a Notary Public in and for the jurisdiction aforesaid, appeared
Henry A. Rosenberg, Jr., who acknowledged himself to be the Chairman of the
Board and President of Crown Central Petroleum Corporation, a Maryland
corporation, and that he, as such Officer being authorized so to do, personally
appeared before me and acknowledged and executed the foregoing instrument for
the purposes therein contained, by signing the name of the Corporation by
himself as Chairman of the Board and President.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ______ day of April,
1996.
--------------------------
Notary Public in and for
State of Maryland
City of Baltimore
Notary's Commission Expires: Notary's Printed Name:
_______________, 199__ __________________________
State of Maryland )
) to wit:
City of Baltimore )
I HEREBY CERTIFY, that on this ____ day of April, 1996, before me, the
subscriber, a Notary Public in and for the jurisdiction aforesaid, appeared
Dolores B. Rawlings, who acknowledged herself to be the Secretary of Crown
Central Petroleum Corporation, a Maryland corporation, and that she, as such
Officer being authorized so to do, personally appeared before me and
acknowledged and executed the foregoing instrument for the purposes therein
contained, by attesting to the execution on behalf of the Corporation by herself
as Secretary.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ______ day of April,
1996.
--------------------------
Notary Public in and for
State of Maryland
City of Baltimore
Notary's Commission Expires: Notary's Printed Name:
_______________, 199__ __________________________
- 3 -
EXHIBIT A
CROWN CENTRAL PETROLEUM CORPORATION
AMENDED AND RESTATED CHARTER
Article I
Name
The name of the corporation (hereinafter called the "Corporation") is:
Crown Central Petroleum Corporation.
Article II
Purpose and Powers
The purposes for which the Corporation is formed are (i) to engage in
petroleum refining and marketing and (ii) to engage in any lawful business for
which corporations may be organized under the laws of the State of Maryland. The
Corporation shall have all of the general powers conferred by law upon Maryland
corporations and all other powers not inconsistent with law which are
appropriate to promote and attain its purpose.
Article III
Principal Office and Resident Agent
The address of the principal office of the Corporation is:
Crown Central Petroleum Corporation
One North Charles Street
Baltimore, Maryland 21201.
The name and address of the resident agent of the Corporation are:
Thomas L. Owsley, Esq.
c/o Crown Central Petroleum Corporation
One North Charles Street
Baltimore, Maryland 21201,
Said resident agent is a citizen of the State of Maryland and actually
resides therein.
Article IV
Directors
The Corporation shall have eight (8) Directors. The number of
Directors may be changed in such lawful manner as the Bylaws may from time to
time provide.
Article V
Capital Stock
Section 5.1. Authorized Capital Stock. The total number of shares of
stock of all classes which the Corporation has authority to issue is
35,000,000 shares, divided into 5,000,000 shares of Series Preferred Stock
without par value, 15,000,000 shares of Class A Common Stock of the par
value of $5 per share and 15,000,000 shares of Class B Common Stock of the par
value of $5 per share. The aggregate par value of all shares of all classes
having par value is $150,000,000. A description of each class with the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends and qualifications of each class is as follows.
Section 5.2. Series Preferred Stock. The Series Preferred Stock
may be issued in one or more series, with such voting powers, full or
limited, or without voting powers, and with such designations, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be stated or
expressed in the resolution or resolutions
- 4 -
providing for the authorization of such stock adopted by the Board of Directors.
Authority is hereby expressly granted to and vested in the Board of Directors at
any time, or from time to time, to authorize the issue of shares of Series
Preferred Stock of one or more series and in connection with the authorization
of any such series, to fix by resolution or resolutions the terms thereof,
including without limitation, the following:
(a) The number of authorized shares to constitute such series
and the distinctive designation thereof;
(b) The rates, preferences, conditions and times applicable to
the payment of dividends for such series and whether the dividends
shall be cumulative or non-cumulative;
(c) The terms and conditions on which, and the price or prices
at which, stock of such series may be made subject to redemption;
(d) The rights of the holders of stock of such series upon the
voluntary or involuntary dissolution of, or upon any other distribution
of the assets of, the Corporation; and
(e) Whether or not stock of such series shall be made
convertible into, or exchangeable for, shares of any other class or
classes or of any other series of the same or any other class or
classes of stock of the Corporation, and if made so convertible or
exchangeable, the conversion price or prices, or the rates of exchange,
and the adjustments, if any, at which, and the other terms and
conditions upon which, any such conversion or exchange may be made.
Any shares of Series Preferred Stock of any series which are acquired by the
Corporation, including any shares redeemed by the Corporation pursuant to any
provisions for the redemption thereof established for shares of such series, and
any shares converted into shares of another class pursuant to any provisions for
the conversion thereof established for shares of such series, shall be canceled
and shall have the status of authorized but unissued shares of Series Preferred
Stock without serial designation.
Section 5.3. Common Stock.
(a) In all proceedings in which action of the Stockholders
shall be taken, each share of Class A Common Stock shall entitle the
holder of record thereof to one (1) vote, and each share of Class B
Common Stock shall entitle the holder of record thereof to one-tenth
(1/10) vote.
(b) The holders of record of the Class A Common Stock shall be
entitled, voting separately as a class, to elect and to remove all
directors other than directors to be elected by any other class or
classes or series of stock. The holders of record of the Class B Common
Stock and the holders of record of each other class or series of stock
convertible into Class B Common Stock to which such voting rights have
been granted shall be entitled as a group to elect two (2) directors
(who may not be employees of the Corporation or of any subsidiary of
the Corporation) and to remove directors so elected.
(c) Except as provided above with respect to voting rights,
the Class A Common Stock and the Class B Common Stock shall have the
same rights and privileges without differentiation as to class;
provided, however, that in the case of any stock distribution payable
in Common Stock to the holders of record of Common Stock, the Board of
Directors shall have authority to declare such distribution to be
payable either (1) in Class A Common Stock to holders of Class A Common
Stock and in Class B Common Stock to holders of Class B Common Stock,
or (2) in either Class A Common Stock or Class B Common Stock to
holders of both Class A Common Stock and Class B Common Stock.
Article VI
Provisions Defining, Limiting and Regulating
the Powers of the Corporation
The following provisions are hereby adopted for the purpose of
defining, limiting, and regulating the powers of the Corporation and of the
Directors and Stockholders:
Section 6.1. Authority to Issue Stock. The Board of Directors is
hereby empowered to authorize the issuance from time to time of shares of stock
of the Corporation, with or without par value, of any class, which has been
authorized but remains unissued, and securities convertible into shares of its
stock, with or without par value, of any class, which has been authorized
but remains unissued, for such consideration as the Board of Directors may
deem advisable, subject to such limitations and restrictions, if any, as may be
set forth in the Bylaws.
- 5 -
Section 6.2. Reclassification of Unissued Stock. The Board of
Directors shall have power to classify and reclassify from time to time any
unissued stock of whatever class, whether now or hereafter authorized, by
setting or changing the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications or terms or
conditions of redemption of such stock.
Section 6.3. No Preemptive Rights. No holders of stock of the
Corporation, of whatever class, shall have any preemptive right of subscription
to any shares of any class or to any securities convertible into shares of
stock of the Corporation, nor any right of subscription to any thereof
other than such, if any, as the Board of Directors in its discretion may
determine and at such price as the Board of Directors in its discretion may fix;
and any shares or convertible securities which the Board of Directors may
determine to offer for subscription to holders of stock may, as the Board of
Directors shall determine, be offered to holders of any class or classes of
stock at the time existing to the exclusion of holders of any or all other
classes at the time existing.
Section 6.4. Charter Amendments. The Corporation reserves the right
to make from time to time any amendments to its Charter which may now or
hereafter be authorized by law including, but not restricted to, any amendments
altering the contract rights as expressly set forth in the Charter of any
outstanding stock.
Section 6.5. Votes Required for Stockholder Action. Subject to
any provisions requiring approval of a specific action by a class or series of
stock voting separately, or with one or more classes or series of stock, as a
class:
(a) within each class of stock entitled to vote in the
election of Directors, a plurality of all votes of such class cast at a
meeting at which a quorum is present shall be sufficient for such class
to elect a Director;
(b) any action of Stockholders required by law to be approved
or authorized by a majority or greater proportion of the votes entitled
to be cast may only be taken or authorized by the affirmative vote of
at least two-thirds of all votes entitled to be cast by all classes and
series of stock entitled to vote, without the right of any class or
series to vote separately as a class; and
(c) any other action of Stockholders may only be taken or
authorized by the affirmative vote of at least two-thirds of all votes
cast at a duly constituted meeting by all classes and series of stock
entitled to vote, without the right of any class or series to vote
separately as a class.
Section 6.6. Rights, Powers, Authorities and Responsibilities of
Directors. All Directors shall be general Directors and, except for the
statutory provisions governing vacancies on the Board of Directors, shall
have the same rights, powers, authorities and responsibilities,
notwithstanding that particular Directors may be separately elected and be
separately subject to removal by the holders of record of less than all
classes of the stock of the Corporation entitled to elect and remove Directors.
Section 6.7. Limitation on Liability of Directors and Officers. No
person who is or formerly was a Director or Officer of the Corporation shall
have any liability to the Corporation or to any Stockholder for money
damages in connection with any action, or failure to act, subsequent to
February 18, 1988, in his or her capacity as a Director or Officer; provided,
however, that nothing contained herein shall restrict or limit the liability of
any person:
(a) to the extent that it is proved that such person actually
received an improper benefit or profit in money, property or services,
for the amount of the benefit or profit in money, property or services
actually received; or
(b) to the extent that a judgment or other final adjudication
adverse to such person is entered in a proceeding based on a finding in
the proceeding that such person's action, or failure to act, was the
result of active and deliberate dishonesty and was material to the
cause of action adjudicated in the proceeding.
Neither the amendment nor repeal of this Section 6.8, nor the adoption of any
provision of the Charter inconsistent with this Section 6.8, shall affect the
liability of any Director or Officer, or former Director or Officer, with
respect to any act or failure to act which occurred prior to such amendment,
repeal or adoption.
Section 6.8. Full Indemnification of Directors and Officers. The
Corporation shall indemnify its Directors and Officers to the full extent
permitted by the General Laws of the State of Maryland now or hereafter in
force, including the advance of related expenses, upon a determination by
the Board of Directors or independent legal counsel (who may be regular counsel
for the Corporation) made in accordance with applicable statutory standards;
and, upon authorization by the Board of Directors, may indemnify other
employees or agents up to the same extent.
- 6 -
Section 6.9. Removal of Officers and Employees. Any Officer or
employee of the Corporation may be removed at any time with or without cause by
the Board of Directors or by any committee or superior Officer upon whom
such power of removal may be conferred by the Bylaws or by authority of
the Board of Directors, and such action shall be conclusive on the Officer
or employee so removed.
Section 6.10. Distributions to Stockholders. The Board of Directors
shall have the power from time to time to distribute and pay
distributions or dividends in stock, cash, other securities, or property, out
of surplus or any other funds or amounts legally available therefore, at
such times and to the Stockholders of record on such dates as it may, from time
to time, determine.
Section 6.11. Enumeration of Powers Not Limiting. The
enumeration and definition of particular powers of the Board of Directors
included in the foregoing shall in no way be limited or restricted by
reference to or inference from the terms of any other clause of this or any
other Article of the Charter, or construed as or deemed by inference or
otherwise in any manner to exclude or limit any powers conferred upon the Board
of Directors under the General Laws of the State of Maryland now or hereafter in
force.
Article VII
Perpetual Duration
The duration of the Corporation shall be perpetual.
- 7 -
CROWN(R)
PROXY
CROWN CENTRAL PETROLEUM CORPORATION
P.O. BOX 1168
BALTIMORE, MARYLAND 21203
PROXY FOR CLASS A COMMON STOCK AND CLASS B COMMON STOCK
Solicited on behalf of the Board of Directors
for the Annual Meeting of Stockholders -- April 25, 1996
Reserving the right of revocation, the undersigned hereby appoints as
his or her proxy or proxies, with full power of substitution, Thomas L. Owsley,
Dolores B. Rawlings, and Henry A. Rosenberg, Jr., or any one or more of them, to
vote all Class A Common Stock and Class B Common Stock of the undersigned at the
Annual Meeting of Stockholders of Crown Central Petroleum Corporation, a
Maryland corporation, to be held at the offices of the Corporation, One North
Charles Street, Baltimore, Maryland on Thursday, April 25, 1996 or at any
adjournment of said meeting, on the following matters.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[SEE REVERSE SIDE]
his proxy card is provided for completion by both holders of Class A Stock and
holders of Class B Stock. If a stockholder owns shares of Class A Stock, the
stockholder should vote on the election of the directors to be elected by the
holders of Class A Stock and the other matters listed below: If a stockholder
owns shares of Class B Stock, the stockholder should vote on the election of the
directors to be elected by the holders of Class B Stock and the other matters
listed below. If a stockholder owns shares of both Class A Stock and Class B
Stock, the stockholder should vote on the election of all directors and other
matters listed below. YOUR VOTE IS EXPECIALLY IMPORTANT BECAUSE THE PROPOSED
AMENDMENT AND RESTATEMENT OF THE COMPANY'S CHARTER REQUIRES THE APPROVAL OF TWO
THIRDS OF ALL OF THE CLASS A COMMON STOCK AND THE CLASS B COMMON STOCK, VOTING
TOGETH AS A SINGLE CLASS
[X] Please mark
votes as in
this example
The Board of Directors recommends a vote FOR the nominees listed and FOR
the Amendment and Restatment of the Charter.
1. Election of six (6) Directors Election of two (2) Directors
Class A Common Stock Nominees: Class B Common Stock Nominees:
Jack Africk, George L. Bunting, Jr., Thomas M. Gibbons and Rev. Harold
Michael F. Dacey, Patricia A. Goldman, E. Ridley, Jr., S.J.
William L. Jews and Henry A.
Rosenberg, Jr.
FOR AGAINST
FOR WITHHELD FOR WITHHELD 2. To Approve the Amendment [ ] [ ]
ALL [ ] FROM ALL [ ] BOTH [ ] FROM BOTH [ ] and Restatement of the ABSTAIN
NOMINEES NOMINEES NOMINEES NOMINEES Charter. [ ]
3. In their discretion on any other matter or
[ ] [ ] matters which may properly come before
For, except vote withheld from the For, except vote withheld from the said meeting or any adjornment thereof.
nominees listed above. nominees listed above.
Yes No
[ ] [ ]
MARK HERE
FOR ADDRESS
CHANGE AND [ ]
NOTE AT LEFT
This proxy when property exeucted will be voted in the manner
directed by the undersigned stockholder. If no direction is
made this proxy will be voted for the election of the
nominees named and for the Amendment and Restatment of the
Charter.
This proxy should be signed by the stockholder in person. If
a joint account, all joint owners should sign.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED
ENVELOPE.
Signature ________________________ Date ____________
Signature_____________________ Date ____________