EXHIBIT 10.L
CROWN CENTRAL PETROLEUM CORPORATION
1994 LONG-TERM INCENTIVE PLAN
(AS RESTATED ON DECEMBER 17, 1998)
SECTION 1: ESTABLISHMENT AND PURPOSE
The purpose of the Crown Central Petroleum Corporation 1994 Long-Term Incentive
Plan (the "Plan") is to benefit the Corporation and its Subsidiaries. The Plan
is also intended to benefit the Corporation's stockholders by encouraging high
levels of performance by individuals who are key to the success of the
Corporation and its Subsidiaries and to enable the Corporation and its
Subsidiaries to attract, motivate and retain talented and experienced
individuals essential to the Corporation's success. This is to be accomplished
by providing such employees an opportunity to obtain or increase their
proprietary interest in the Corporation's performance and by providing such
employees with additional incentives to remain with the Corporation and its
Subsidiaries.
SECTION 2: DEFINITIONS
The following terms, as used herein, shall have the meaning specified:
a. "ADMINISTRATIVE COSTS" means total administrative operating
expenses exclusive of refinery, supply and transportation, and
marketing expenses plus total interest expense including
capitalized interest costs net of interest income.
b. "AWARD" means Non-qualified Stock Options and Performance Vested
Restricted Stock granted pursuant to Section 4 hereof.
c. "AWARD AGREEMENT" means an agreement described in Section 6
hereof entered into between the Corporation and a Participant,
setting forth the terms and conditions applicable to the Award
granted to the Participant.
d. "BOARD OF DIRECTORS" means the Board of Directors of the
Corporation as it may be comprised from time to time.
e. "CAUSE" means an act that constitutes cause for termination of
employment under the Corporation or Subsidiary's normal personnel
practices.
f. "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.
g. "COMMITTEE" means the Committee as defined in Section 8 hereof.
h. "CORPORATION" means Crown Central Petroleum Corporation, and any
successor corporation.
i. "COVERED EMPLOYEE" means a covered employee within the meaning of
Code Section 162(m)(3).
j. "EMPLOYEE" means officers and other key employees of the
Corporation or a Subsidiary, but excludes directors who are not
also officers or employees of the Corporation.
k. "EXCHANGE ACT" means the Securities Exchange Act of 1934, and any
successor statute, as it may be amended from time to time.
l. "FAIR MARKET VALUE" means the average of the highest and lowest
sale price of the Stock as reported on the American Stock
Exchange on the relevant date, or if no sale of the Stock is
reported for such date, the next preceding day for which there is
a reported sale.
m. "INSIDER" means any person who is subject to Section 16.
n. "MARKETING CONTRIBUTION" means Crown's marketing income minus
marketing expenses.
o. "NET MARGIN" means the Corporation's Refining Gross Margin
reduced by Total Refining Costs and Administrative Costs and
increased by the Marketing Contribution, as determined by the
Committee under the Corporation's regular accounting practices on
a consistent basis.
p. "NON-QUALIFIED STOCK OPTION" means an option to purchase Stock
that is granted pursuant to Section 4(a) hereof that does not
meet the requirements of Code Section 422, or if meeting those
requirements, is not intended to be an incentive stock option
under Code Section 422.
m. "PARTICIPANT" means any Employee who has been granted an Award
pursuant to this Plan.
n. "REFINING GROSS MARGIN" means the measure of actual gross margin
at the refinery (revenues minus costs of goods) compared to a
model for optimal refining performance.
o. "SECTION 16" means Section 16 of the Exchange Act, and any
successor statutory provision, and the rules promulgated
thereunder, as it or they may be amended from time to time.
p. "STOCK" means shares of Class B Common Stock of the Corporation,
par value $5 per share, or any security of the Corporation issued
in substitution, exchange or lieu thereof.
u. "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.
v. "TOTAL REFINING COSTS" means total refinery operating costs.
SECTION 3: ELIGIBILITY
Persons eligible for Awards shall consist of Employees who hold positions of
significant responsibility with the Corporation and/or a Subsidiary or whose
performance or potential contribution, in the judgment of the Committee, will
benefit the future success of the Corporation and/or a Subsidiary.
SECTION 4: AWARDS
The Committee may grant either of the following types of Awards, singly or in
combination, as the Committee may in its sole discretion determine:
a. NON-QUALIFIED STOCK OPTIONS. A Non-qualified Stock Option is an
option to purchase a specific number of shares of Stock during
such specified time as the Committee may determine, not to exceed
ten (10) years, at a price not less than 100% of the Fair Market
Value of the Stock on the date the option is granted.
1) The purchase price of the Stock subject to the option may
be paid in cash. At the discretion of the Committee at the
time of exercise or as provided in the Award Agreement,
the purchase price may also be paid by the tender of Stock
(the value of such Stock shall be its Fair Market Value on
the date of exercise), or through a combination of Stock
and cash, or through such other means as the Committee
determines are consistent with the Plan's purpose and
applicable law. No fractional shares of Stock will be
issued or accepted.
2) Without limiting the foregoing, to the extent permitted by
law (including relevant state law), (A) the Committee may
agree to accept as full or partial payment of the purchase
price of Stock issued upon exercise of options, a
promissory note of the Participant evidencing the
Participant's obligation to make future cash payments to
the Corporation, which promissory notes shall be payable
as determined by the Committee (but in no event later than
five (5) years after the date thereof), shall be secured
by a pledge of the shares of Stock purchased, and shall
bear interest at a rate established by the Committee which
shall be at least equal to the minimum interest rate
required at the time to avoid imputed interest under the
Code, and (B) the Committee may also permit Participants,
at the time of exercise or as provided in the Award
Agreement, simultaneously to exercise options and sell the
shares of Stock thereby acquired, pursuant to a brokerage
or similar arrangement approved in advance by the
Committee, and use the proceeds from such sale as payment
of the purchase price of such Stock.
b. PERFORMANCE VESTED RESTRICTED STOCK. Performance Vested
Restricted Stock is Stock that is issued to a Participant and is
subject to the attainment of performance goals, restrictions on
transfer or such other restrictions on incidents of ownership, if
any, as the Committee may determine.
1) The performance goals shall be based on such measure or
measures of performance, which may include, but need not
be limited to, the performance of the Corporation, one or
more Subsidiaries or one or more of their divisions or
units, or any combination of the foregoing, as the
Committee shall determine, and may be applied on an
absolute basis or be relative to industry or other
indices, or any combination thereof. Unless otherwise
provided in an Award, such performance goals may be
adjusted in any manner by the Committee in its discretion
at any time and from time to time if it determines that
such performance goals are not appropriate under the
circumstances. The performance goals for Covered Employees
shall be based on the Corporation's Net Margin unless
prior to the grant of an Award the Committee determines
that another performance measurement or measurements
should be substituted.
2) Subject to such restrictions, the Participant as owner of
such shares of Performance Vested Restricted Stock shall
have the rights of the holder thereof, except that the
Committee may provide at the time of the Award that any
dividends or other distributions paid on such Stock while
subject to such restrictions shall be accumulated or
reinvested in Stock and held subject to the same
restrictions as the Performance Vested Restricted Stock
and such other terms and conditions as the Committee shall
determine.
3) A certificate for the shares of Performance Vested
Restricted Stock, which certificate shall be registered in
the name of the Participant, shall bear an appropriate
restrictive legend and shall be subject to appropriate
stop-transfer orders or the certificates representing
shares of Performance Vested Restricted Stock shall be
held in custody by the Corporation until the restrictions
relating thereto otherwise lapse and the Participant shall
deliver to the Corporation a stock power endorsed in blank
relating to the Performance Vested Restricted Stock.
SECTION 5: SHARES OF STOCK AVAILABLE UNDER PLAN
a. Subject to the adjustment provisions of Section 9 hereof, the
number of shares of Stock with respect to which Awards may be
granted under the Plan shall not exceed 1,100,000 shares of
Stock; provided that no more than 550,000 of the shares of Stock
available for Awards shall be available for Awards in the form of
Performance Vested Restricted Stock; and provided further that no
single Participant shall receive, in any one calendar year,
Awards (i) in the form of Non-qualified Stock Options with
respect to more than 150,000 shares of Stock and (ii) for more
than 50,000 Performance Vested Restricted Shares, as determined
for purposes of Code Section 162(m). The number of shares shall,
if permissible under Rule 16b-3 of the Exchange Act, include the
number of shares surrendered by a Participant or retained by the
Corporation in payment of applicable withholding taxes under
Section 6(a)(4) hereof.
b. Any unexercised or undistributed portion of any terminated or
forfeited Award shall be available for further Awards in addition
to those available under Section 5(a) hereof to the extent
permitted under Section 16.
c. The Stock which may be issued pursuant to an Award under the Plan
may be authorized but unissued Stock, or Stock that is acquired,
subsequently or in anticipation of the transaction, in the open
market to satisfy the requirements of the Plan.
SECTION 6: AWARD AGREEMENTS
Each Award under the Plan shall be evidenced by an Award Agreement setting forth
the number of shares of Stock subject to the Award and such other terms and
conditions applicable to the Award, as determined by the Committee, not
inconsistent with the terms of the Plan.
a. Award Agreements shall include the following terms:
1) NON-ASSIGNABILITY. A provision that no Award shall be
assignable or transferable except by will or by laws of
descent and distribution and that, during the lifetime of
a Participant, the Award shall be exercised only by such
Participant or by his or her guardian or legal
representative.
2) TERMINATION OF EMPLOYMENT.
A. A provision describing the treatment of an Award
in the event of the retirement, disability, death
or other termination of a Participant's employment
with the Corporation or a Subsidiary, including but
not limited to terms relating to the vesting, time
for exercise, forfeiture or cancellation of an
Award in such circumstances. Participants who
terminate employment due to retirement, permanent
disability, or death prior to the satisfaction of
applicable conditions and restrictions associated
with their Award(s) may be entitled to a prorated
Awards(s) as and to the extent determined by the
Committee.
B. A provision that for purposes of the Plan, (i) a
transfer of an Employee from the Corporation to a
Subsidiary or affiliate of the Corporation, whether
or not incorporated, or vice versa, or from one
Subsidiary or affiliate of the Corporation to
another, and (ii) a leave of absence, duly
authorized in writing by the Corporation, shall not
be deemed a termination of employment.
C. A provision describing the effect of an event of
Cause on an Award.
3) RIGHTS AS A STOCKHOLDER. A provision stating that a
Participant shall have no rights as a stockholder with
respect to any Stock covered by an Award of a
Non-qualified Stock Option until the date the Participant
becomes the holder of record. Except as provided in
Section 9 hereof, no adjustment shall be made for
dividends or other rights, unless the Award Agreement
specifically requires such adjustment.
4) WITHHOLDING. A provision requiring the withholding of
applicable taxes required by law from all amounts paid in
satisfaction of an Award. A Participant may satisfy the
withholding obligation by (A) paying the amount of any
taxes in cash, (B) with the approval of the Committee at
the time applicable taxes are due or as provided in the
Award Agreement, shares of Stock may be deducted from the
payment to satisfy the obligation in full or in part, or
(C) with the approval of the Committee at the time
applicable withholding taxes are due or as provided in the
Award Agreement, deliver already owned Stock to satisfy
the obligation in full or in part. The amount of the
withholding and the number of shares to be deducted shall
be determined by the Committee with reference to the Fair
Market Value of the Stock when the withholding is required
to be made. Any use of Stock by an Insider for payment of
applicable withholding taxes shall be subject to the
provisions of Rule 16b-3 as to the manner and timing of
the election.
5) EXECUTION. A provision stating that no Award is
enforceable until the Award Agreement or a receipt has
been signed by the Participant and the Corporation or a
Subsidiary. By executing the Award Agreement or receipt, a
Participant shall be deemed to have accepted and consented
to any action taken under the Plan by the Committee, the
Board of Directors or their delegates.
6) HOLDING PERIOD. In the case of an Award to an Insider: (A)
of an equity security, a provision stating (or the effect
of which is to require) that such security must be held
for at least six (6) months (or such longer period as the
Committee in its discretion specifies) from the date of
acquisition; or (B) of a derivative security with a fixed
exercise price within the meaning of Section 16, a
provision stating (or the effect of which is to require)
that at least six (6) months (or such longer period as the
Committee in its discretion specifies) must elapse from
the date of acquisition of the derivative security to the
date of disposition of the derivative security (other than
upon exercise or conversion) or its underlying equity
security.
b. Award Agreements may include the following terms:
1) REPLACEMENT AND SUBSTITUTION. Any provisions (A)
permitting the surrender of outstanding Awards or
securities held by the Participant in order to exercise or
realize rights under other Awards, or in exchange for the
grant of new Awards under similar or different terms or
(B) requiring holders of Awards to surrender outstanding
Awards as a condition precedent to the grant of new Awards
under the Plan.
2) OTHER TERMS. Such other terms as the Committee may
determine are necessary and appropriate to effect an Award
to the Participant, including, but not limited to, the
term of the Award, vesting provisions, any requirements
for continued employment with the Corporation or a
Subsidiary, any other restrictions or conditions
(including performance goals) on the Award and the method
by which restrictions or conditions lapse, the effect on
the Award of a change in control of the Corporation, the
price, amount or value of Awards, and the terms, if any,
pursuant to which a Participant may elect to defer the
receipt of cash or Stock under an Award.
SECTION 7: AMENDMENT AND TERMINATION
The Board of Directors may at any time amend, suspend or discontinue the Plan,
in whole or in part. The Committee may at any time alter or amend any or all
Award Agreements under the Plan to the extent permitted by law, but no such
alteration or amendment shall impair the rights of any holder of an Award
without the holder's consent, except to preserve the Plan's qualification as a
safe harbor plan under Section 16. However, no such action may, without approval
of the stockholders of the Corporation, be effective with respect to (A) any
Insider if such approval is required by Section 16, or (B) any Covered Employee
if such approval is required by Code Section 162(m)(4)(C).
SECTION 8: ADMINISTRATION
a. The Plan and all Awards granted pursuant thereto shall be
administered by a Committee of the Board of Directors, which
Committee shall consist of not less than three (3) members of
such Board of Directors and shall be constituted so as to permit
the Plan to comply with the administration requirements of Rule
16b-3(c)(2)(i) and (ii) of the Exchange Act and Code Section
162(m)(4)(C). The members of the Committee shall be designated by
the Board of Directors. 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. The Committee shall have the power to interpret and administer
the Plan. All questions of interpretation with respect to the
Plan, the number of shares of Stock or other security or rights
granted and the terms of any Award Agreements, including the
timing, pricing, and amounts of Awards, shall be determined by
the Committee, and its determination shall be final and
conclusive upon all parties in interest. The Committee's
determinations under the Plan need not be uniform and may be made
by it selectively among Employees who receive, or are eligible to
receive, Awards under the Plan, whether or not such persons are
similarly situated.
c. In the event of any conflict between an Award Agreement and this
Plan, the terms of this Plan shall govern.
d. It is the intent of the Corporation that this Plan and Awards
hereunder satisfy, and be interpreted in a manner that satisfies,
(i) in the case of Participants who are or may be Insiders, the
applicable requirements of Rule 16b-3 of the Exchange Act, so
that such persons will be entitled to the benefits of Rule 16b-3,
or other exemptive rules under Section 16, and will not be
subjected to avoidable liability thereunder; (ii) with respect to
Non-qualified Stock Options in the case of Participants who are
or may be Covered Employees, the applicable requirements of Code
Section 162(m) so that the tax deduction for the Corporation or a
Subsidiary for remuneration in respect of this Plan for services
performed by such Covered Employees with respect to such
Non-qualified Stock Options, is not disallowed in whole or in
part by the operation of such Code Section, and (iii) with
respect to Performance Vested Restricted Stock in the case of
Participants who are or may be Covered Employees, the applicable
requirements of Code Section 162(m) to the extent designated by
the Committee at the time of an Award. If any provision of this
Plan or of any Award would otherwise frustrate or conflict with
the intent expressed in this Section 8(d), that provision to the
extent possible shall be interpreted and deemed amended so as to
avoid such conflict. To the extent of any remaining
irreconcilable conflict with such intent, such provision shall be
deemed void as applicable to Insiders and/or Covered Employees,
as applicable.
e. The Committee may delegate to the officers or employees of the
Corporation and its Subsidiaries 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, except that the
Committee may not delegate any discretionary authority with
respect to substantive decisions or functions regarding the Plan
or Awards thereunder as these relate to Insiders or Covered
Employees, including, but not limited to, decisions regarding the
timing, eligibility, pricing, amount or other material terms of
such Awards.
SECTION 9: ADJUSTMENT PROVISIONS
a. In the event of any change in the outstanding shares of Stock by
reason of a stock dividend or split, recapitalization, merger or
consolidation (whether or not the Corporation is a surviving
corporation), reorganization, combination or exchange of shares
or other similar corporate changes or an extraordinary dividend
payback in cash or property, the number of shares of Stock (or
other securities) then remaining subject to this Plan, and the
maximum number of shares that may be issued to any single
participant pursuant to this Plan, including those that are then
covered by outstanding Awards, shall (i) in the event of an
increase in the number of outstanding shares, be proportionately
increased and the price for each share then covered by an
outstanding Award shall be proportionately reduced, and (ii) in
the event of a reduction in the number of outstanding shares, be
proportionately reduced and the price for each share then covered
by an outstanding Award shall be proportionately increased.
b. The Committee shall make any further adjustments as it deems
necessary to ensure equitable treatment of any holder of an Award
as the result of any transaction affecting the securities subject
to the Plan not described in (a), or as is required or authorized
under the terms of any applicable Award Agreement.
c. The existence of the Plan and the Awards granted hereunder shall
not affect or restrict in any way the right or power of the Board
of Directors or the shareholders of the Corporation to make or
authorize any adjustment, recapitalization, reorganization or
other capital structure of its business, any merger or
consolidation of the Corporation, any issue of bonds, debentures,
preferred or prior preference stock ahead of or affecting the
Stock or the rights thereof, the dissolution or liquidation of
the Corporation or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
SECTION 10: CHANGE OF CONTROL
a. In the event of a change in control of the Corporation, in
addition to any action required or authorized by the terms of an
Award Agreement, the Committee may, in its sole discretion unless
otherwise provided in an Award Agreement, take any of the
following actions as a result, or in anticipation, of any such
event:
1) accelerate time periods for purposes of vesting in, or
realizing gain from, any outstanding Award made pursuant
to this Plan;
2) offer to purchase any outstanding Award made pursuant to
this Plan from the holder for its equivalent cash value,
as determined by the Committee, as of the date of the
change of control; or
3) 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. For purposes of this Section, a change of control shall mean the
following:
1) 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.
2) The Corporation is merged or consolidated with another
corporation and, as a result of such merger or
consolidation, less than seventy-five percent (75%) of the
combined voting power of the surviving or resulting
corporation shall then be owned in the aggregate by the
former stock holders of the Corporation.
3) The Corporation transfers substantially all of its assets
to another corporation or entity that is not a wholly
owned subsidiary of the Corporation.
4) Any person (as such term is used in Sections 3(a)(9) and
13(d)(3) of the Exchange Act) other than a person included
within the definition of Rosenberg Shareholder in Section
II.6, Stock Not Subject to the Control Share Act, of the
Corporation's Bylaws (or any group controlled by or
consisting of persons included within the definition of
Rosenberg Shareholder) 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.
5) 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 of the Corporation immediately before
the transaction, cease to constitute at least a majority
thereof.
6) As the result of any sale, exchange, business combination,
joint venture or other transaction with a third party or
any combination of such transactions: (A) the
Corporation's refining capacity is reduced to less than
80,000 barrels per day, (B) for a period in excess of two
years, the refining capacity over which the Corporation
will have operational control and market risk is less than
80,000 barrels per day, or (C) the Corporation has less
than 175 company operated and dealer retail units.
SECTION 11: UNFUNDED PLAN
The Plan shall be unfunded. No provision of the Plan or any Award Agreement will
require the Corporation or its Subsidiaries, for the purpose of satisfying any
obligations under the Plan, to purchase assets or place any assets in a trust or
other entity to which contributions are made or otherwise to segregate any
assets, nor will the Corporation or its Subsidiaries maintain separate bank
accounts, books, records or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes. Participants will
have no rights under the Plan other than as unsecured general creditors of the
Corporation and its Subsidiaries, except that insofar as they may have become
entitled to payment of additional compensation by performance of services, they
will have the same rights as other employees under generally applicable law.
SECTION 12: LIMITS OF LIABILITY
a. Any liability of the Corporation or a Subsidiary to any
Participant with respect to an Award shall be based solely upon
contractual obligations created by the Plan and the Award
Agreement.
b. 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.
SECTION 13: RIGHTS OF EMPLOYEES
a. 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.
b. Nothing contained in this Plan or in any Award Agreement (or in
any other documents related to this Plan or to any Award or Award
Agreement) shall confer upon any Employee or Participant any
right to continue in the employ or other service of the
Corporation or a Subsidiary or constitute any contract or limit
in any way the right of the Corporation or a Subsidiary to change
such person's compensation or other benefits or to terminate the
employment or other service of such person with or without cause.
SECTION 14: TERM
The Plan shall be adopted by the Board of Directors effective as of January 1,
1994, subject to approval by the Corporation's stockholders. The Committee may
grant Awards prior to stockholder approval, provided, however, that Awards
granted prior to such stockholder approval are automatically canceled if
stockholder approval is not obtained at or prior to the period ending twelve
months after the date the Plan is adopted. Notwithstanding anything to the
contrary herein, no Award may be exercisable prior to the date stockholder
approval is obtained. The Plan shall remain in effect until all Awards under the
Plan have been exercised or terminated under the terms of the Plan and
applicable Award Agreements, provided that Awards under the Plan may only be
granted within ten years from the effective date of the Plan.
SECTION 15: REQUIREMENTS OF AND GOVERNING LAW
a. The Plan, the Award Agreements and all actions taken hereunder or
thereunder shall be governed by, and construed in accordance
with, the laws of the state of Maryland without regard to the
conflict of law principles thereof.
b. Notwithstanding anything contained herein or in any Award
Agreement to the contrary, the Corporation shall not be required
to sell or issue shares of Stock hereunder if the issuance
thereof would constitute a violation by the Participant or the
Corporation of any provisions of any law or regulation of any
governmental authority or any national
securities exchange; and as a condition of any sale or issuance
the Corporation may require such agreements or undertakings, if
any, as the Corporation may deem necessary or advisable to assure
compliance with any such law or regulation.