<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
FORM 10-K
FORM 10-K
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended
December 31, 1995
December 31, 1995
December 31, 1995
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 or
15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________ to
____________
Commission File Number 1-1059
CROWN CENTRAL PETROLEUM CORPORATION
CROWN CENTRAL PETROLEUM CORPORATION
CROWN CENTRAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
MARYLAND
MARYLAND
MARYLAND 52-0550682
52-0550682
52-0550682
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
ONE NORTH CHARLES STREET
ONE NORTH CHARLES STREET
ONE NORTH CHARLES STREET
BALTIMORE, MARYLAND
BALTIMORE, MARYLAND
BALTIMORE, MARYLAND 21201
21201
21201
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code:
(410) 539-7400
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2
Securities registered pursuant to Section 12(b) of the
Securities registered pursuant to Section 12(b) of the
Securities registered pursuant to Section 12(b) of the
Act:
Act:
Act:
Name of Each Exchange
Name of Each Exchange
Name of Each Exchange
Title of Each Class
Title of Each Class
Title of Each Class on which Registered
on which Registered
on which Registered
Class A Common Stock - $5 Par Value American Stock Exchange
Class B Common Stock - $5 Par Value American Stock Exchange
Securities registered pursuant to Section 12(g) of the
Securities registered pursuant to Section 12(g) of the
Securities registered pursuant to Section 12(g) of the
Act: None
Act: None
Act: None
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days. YES
___
X NO ___
The aggregate market value of the voting stock held by
nonaffiliates as of December 31, 1995 was
$96,954,000.
The number of shares outstanding at January 31, 1996 of
the registrant's $5 par value Class A and Class B
Common Stock was 4,817,392 shares and 5,135,558 shares,
respectively.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the Annual Meeting
of Stockholders on April 25, 1996 are incorporated by
reference into Items 10 through 13, Part III.
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Crown Central Petroleum Corporation
Crown Central Petroleum Corporation
Crown Central Petroleum Corporation
and subsidiaries
and subsidiaries
and subsidiaries
Table of Contents
Table of Contents
Table of Contents
Page
Page
Page
PART I
PART I
PART I
Item 1 Business............................................ l
Item 2 Properties.......................................... 3
Item 3 Legal Proceedings................................... 8
Item 4 Submission of Matters to a Vote of
Security Holders.................................... 8
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3
PART II
PART II
PART II
Item 5 Market for the Registrant's Common
Equity and Related Stockholder Matters.............. 9
Item 6 Selected Financial Data............................. 10
Item 7 Management's Discussion and Analysis
of Financial Condition and Results of
Operations................................................... 11
Item 8 Financial Statements and Supplementary
Data ..................................................18
Item 9 Changes in and Disagreements with
Auditors on
Accounting and Financial Disclosure................. 35
PART III
PART III
PART III
Item 10 Directors and Executive Officers of the
Registrant................................................... 37
Item 11 Executive Compensation.............................. 37
Item 12 Security Ownership of Certain
Beneficial Owners and Management.................... 37
Item 13 Certain Relationships and Related
Transactions................................................. 37
PART IV
PART IV
PART IV
Item 14 Exhibits, Financial Statement Schedules
and Reports on Form 8-K............................. 37
<PAGE>
PART I
PART I
PART I
Item 1. BUSINESS
Item 1. BUSINESS
Item 1. BUSINESS
General
Crown Central Petroleum Corporation and
subsidiaries (the Company), which traces its
origins to 1917, is one of the largest independent
refiners and marketers of petroleum products in
the United States. The Company owns and operates
two high-conversion refineries with a combined
capacity of 152,000 barrels per day of crude oil -
a 100,000 barrel per day facility located in
Pasadena, Texas, near Houston (the Pasadena
refinery) and a 52,000 barrel per day facility
located in Tyler, Texas (the Tyler refinery, and
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4
together with the Pasadena refinery, the
refineries). The Company is also a leading
independent marketer of refined petroleum products
and merchandise through a network of 348 gasoline
stations and convenience stores located in the
Mid-Atlantic and Southeastern United States. In
support of these businesses, the Company operates
16 product terminals located on three major
product pipelines along the Gulf Coast and the
Eastern Seaboard and in the Central United States.
The refineries are strategically located and have
direct access to crude oil supplies from major and
independent producers and trading companies, thus
enabling the Company to select a crude oil mix to
optimize refining margins and minimize
transportation costs. The Pasadena refinery's
Gulf Coast location provides access to tankers,
barges and pipelines for the delivery of foreign
and domestic crude oil and other feedstocks. The
Tyler refinery benefits from its location in East
Texas due to its ability to purchase high quality
crude oil directly from nearby suppliers at a
favorable cost and its status as the only supplier
of a full range of refined petroleum products in
its local market area. The refineries are
operated to generate a product mix of over 85%
higher margin fuels, primarily transportation
fuels such as gasoline, highway diesel and jet
fuel as well as home heating oil. During the past
five years, the Company has invested over $84
million for environmental compliance, upgrading,
expansion and process improvements at its two
refineries. As a result of these expenditures,
the Pasadena refinery has one of the highest rates
of conversion to higher margin fuels, according to
a recent industry study. The Tyler refinery
enjoys essentially the same product yield
characteristics as the Pasadena refinery.
The Company is the largest independent retail
marketer in its core retail market areas within
Maryland, Virginia and North Carolina. In the
Company's primary retail marketing region of
Baltimore, Maryland, the Company is the leading
independent gasoline retailer, with a 1995 market
share of approximately 12%. In addition to its
leading market position in Baltimore, the Company
has a geographic concentration of retail locations
in high growth areas such as Charlotte and
Raleigh, North Carolina and Atlanta, Georgia.
Over the past several years, the Company has
rationalized and refocused its retail operations,
resulting in significant improvements in average
unit performance and positioning these operations
for growth from a profitable base. For the year
ended December 31, 1995, average merchandise sales
per unit increased 11.6% on a same store basis
when compared with 1994. The Company has made
substantial investments of approximately $25
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5
million at its retail locations pursuant to
environmental requirements from 1989 to 1995 and
believes that over 58% of its retail units are
currently in full or substantial compliance with
the 1998 underground storage tank environmental
standards.
Sales values of the principal classes of products
sold by the Company during the last three years
are included in Management's Discussion and
Analysis of Financial Condition and Results of
Operations on page 11 of this report.
At December 31, 1995, the Company employed 3,009
employees. The total number of employees
increased approximately 1% from year-end 1994.
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Regulation
Like other companies in the petroleum refining and
marketing industries, the Company's operations are
subject to extensive regulation and the Company
has responsibility for the investigation and
cleanup of contamination resulting from past
operations. Current compliance activities relate
to air emissions limitations, waste water and
storm water discharges and solid and hazardous
waste management activities. In connection with
certain of these compliance activities and for
other reasons, the Company is engaged in various
investigations and, where necessary, remediation
of soils and ground water relating to past spills,
discharges and other releases of petroleum,
petroleum products and wastes. The Company's
environmental activities are different with
respect to each of its principal business
activities: refining, terminal operations and
retail marketing. The Company is not currently
aware of any information that would suggest that
the costs related to the air, water or solid waste
compliance and clean-up matters discussed herein
will have a material adverse effect on the
Company. The Company anticipates that substantial
capital investments will be required in order to
comply with federal, state and local provisions.
A more detailed discussion of environmental
matters is included in Note A and Note I of Notes
to Consolidated Financial Statements on pages 23
and 31 of this report, and in Management's
Discussion and Analysis of Financial Condition and
Results of Operations on pages 11 through 16 of
this report.
Competitive Conditions
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6
Oil industry refining and marketing is highly
competitive. Many of the Company's principle
competitors are integrated multinational oil
companies that are substantially larger and better
known than the Company. Because of their
diversity, integration of operations, larger
capitalization and greater resources, these major
oil companies may be better able to withstand
volatile market conditions, compete on the basis
of price and more readily obtain crude oil in
times of shortages.
The principle competitive factors affecting the
Company's refining operations are crude oil and
other feedstock costs, refinery efficiency,
refinery product mix and product distribution and
transportation costs. Certain of the Company's
larger competitors have refineries which are
larger and more complex and, as a result, could
have lower per barrel costs or higher margins per
barrel of throughput. The Company has no crude
oil reserves and is not engaged in exploration.
The majority of the Company's total crude oil
purchases are transacted on the spot market. The
Company selectively enters into forward hedging
and option contracts to minimize price
fluctuations for a portion of its crude oil and
refined products. As such, the Company believes
that it will be able to obtain adequate crude oil
and other feedstocks at generally competitive
prices for the foreseeable future.
The principle competitive factors affecting the
Company's retail marketing operations are
locations of stores, product price and quality,
appearance and cleanliness of stores and brand
identification. Competition from large integrated
oil companies, as well as from convenience stores
which sell motor fuel, is expected to continue.
The principle competitive factors affecting the
Company's wholesale marketing business are product
price and quality, reliability and availability of
supply and location of distribution points.
The Company maintains business interruption
insurance to protect itself against losses
resulting from shutdowns to refinery operations
for periods in excess of 25 days or $5 million
resulting from fire, explosions and certain other
insured casualties.
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Item 2. PROPERTIES
Item 2. PROPERTIES
Item 2. PROPERTIES
Refining Operation
Refining Operation
Refining Operation
Overview
Overview
Overview
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7
The Company owns and operates two strategically
located, high conversion refineries with a
combined capacity of 152,000 barrels of crude oil
per day--a 100,000 barrel per day facility located
in Pasadena, Texas, near Houston, and a 52,000
barrel per day facility located in Tyler, Texas.
Both refineries are operated to generate a product
mix of over 85% higher margin fuels, primarily
transportation fuels such as gasoline, highway
diesel and jet fuel, as well as home heating oil.
When operating to maximize the production of light
products, the product mix at both of the
Refineries is approximately 55% gasoline, 33%
distillates (such as diesel, home heating oil, jet
fuel, and kerosene), 6% petrochemical feedstocks
and 6% slurry oil and petroleum coke.
The Pasadena refinery and Tyler refinery averaged
production of 105,375 barrels per day and 49,440
barrels per day, respectively, during 1995. While
both refineries primarily run sweet (low sulphur
content) crude oil, they can process up to 20%
%
% of
sour (high sulphur content) crude oil in their
mix.
The Company's access to extensive pipeline
networks provides it with the ability to acquire
crude oil directly from major integrated and
independent domestic producers, foreign producers,
or trading companies, and to transport this crude
to the refineries at a competitive cost. The
Pasadena refinery has docking facilities which
provide direct access to tankers and barges for
the delivery of crude oil and other feedstocks.
The Company also has agreements with terminal
operators for the storage and handling of the
crude oil it receives from large ocean-going
vessels and which the Company transports to the
refineries by pipeline. The Tyler refinery
benefits from its location in East Texas since the
Company can purchase high quality crude oil at
favorable prices directly from nearby producers.
In addition, the Tyler Refinery is the only
supplier of a full range of petroleum products in
its local market area. See "-- Supply,
Transportation and Wholesale Marketing."
Over the past several years, the Company has made
significant capital investments to upgrade its
refining facilities and improve operational
efficiency. The Company has also recently
completed several programs which have resulted in
increased profitability at the refinery level. The
Company began a maintenance expense reduction
program at the Pasadena Refinery in 1992. This
program is designed to reduce routine maintenance
expenditures by increasing project reliability,
reducing the use of outside contractors,
decreasing the overall amount of overtime
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8
expenditures and realigning maintenance personnel
responsibilities. The result of this program has
been to reduce average maintenance expenditures
from $1.6 million per month in 1991 to
approximately $1 million per month in 1995. The
Company has also initiated a gain sharing program
with its employees at the Tyler Refinery under
which savings realized are shared with the
employees on a quarterly basis.
Pasadena Refinery
Pasadena Refinery
Pasadena Refinery
The Pasadena refinery is located on approximately
174 acres in Pasadena, Texas and was the first
refinery built on the Houston Ship Channel. The
refinery has been substantially modernized since
1969 and today has a rated crude capacity of
100,000 barrels per day. During the past five
years, the Company has invested approximately $106
million in major upgrades and maintenance
projects.
The Company's refining strategy includes several
initiatives to enhance productivity. For example,
the Company has completed an extensive plant-wide
distributed control system at the Pasadena
refinery which is designed to improve product
yields, make more efficient use of personnel and
optimize process operations. The distributed
control system uses technology that is fast,
accurate and provides increased information to
both operators and supervisors.
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The Pasadena refinery has a crude unit with a
100,000 barrels per day atmospheric column and a
38,000 barrels per day vacuum tower. Major
downstream units consist of a 52,000 barrels per
day fluid catalytic cracking unit, a 12,000
barrels per day delayed coking unit, two
alkylation units with a combined capacity of
10,000 barrels per day of alkylate production, and
two reformers with a combined capacity of 36,000
barrels per day. Other units include two
depropanizer units that can produce 5,500 barrels
per day of refinery grade propylene, a liquefied
petroleum gas unit that removes approximately
1,000 barrels per day of liquids from the refinery
fuel system and a methyl tertiary butyl ether
("MTBE") unit which can produce approximately
1,500 barrels per day of MTBE for gasoline
blending. In 1994, the Company abandoned its plans
to construct a hydrodesulphurization unit at its
Pasadena Refinery. See "Management's Discussion
and Analysis of Financial Condition - Results of
Operations".
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9
The Clean Air Act mandates that after January 1,
1995 only reformulated gasoline ("RFG") may be
sold in certain ozone non-attainment areas,
including some metropolitan areas where the
Company sells gasoline. Using production from its
MTBE unit, the Pasadena refinery can currently
produce 12,000 barrels per day of winter grade
RFG. With additional purchases of MTBE, ethanol or
other oxygenates, all of the Pasadena refinery's
current gasoline production could meet winter
grade RFG standards. The Company is in the process
of constructing a reformate splitter at its
Pasadena refinery at a cost of $3.5 million which
will enable it to make 12,000 barrels per day of
summer grade RFG using its own MTBE, and up to
100% of its Pasadena refinery gasoline production
as summer grade RFG with the purchase of
additional oxygenates. This project is expected to
be completed in 1996 and will enable the Company
to satisfy all of its retail RFG requirements.
In 1995, the Pasadena refinery operated at
approximately 88% of rated crude unit capacity
with production yielding approximately 60%
gasoline and 28% distillates. Of the total
gasoline production, approximately 19% was premium
octane grades. In addition, the Pasadena refinery
produced and sold by-products including propylene,
propane, slurry oil, petroleum coke and sulphur.
The Company owns and operates storage facilities
located on approximately 130 acres near its
Pasadena refinery which, together with tanks on
the refinery site, provide the Company with a
storage capacity of approximately 6.2 million
barrels (2.8 million barrels for crude oil and 3.4
million barrels for refined petroleum products and
intermediate stocks).
The Pasadena refinery's refined petroleum products
are delivered to both wholesale and retail
customers. Approximately one-half of the gasoline
and distillate production is sold wholesale into
the Gulf Coast spot market and one-half is shipped
by the Company on the Colonial and Plantation
pipelines for sale in East Coast wholesale and
retail markets. The Company's retail gasoline
requirements represent approximately 52% of the
Pasadena refinery's total gasoline production
capability.
Tyler Refinery
Tyler Refinery
Tyler Refinery
The Tyler refinery is located on approximately 100
of the 529 acres owned by the Company in Tyler,
Texas and has a rated crude capacity of 52,000
barrels per day. This refinery, which was acquired
from Texas Eastern Corporation in the fourth
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10
quarter of 1989, had been substantially modernized
between 1977 and 1980. The Tyler refinery's
location provides access to nearby high quality
East Texas crude oil which accounts for
approximately 95% of its crude supply. This crude
oil is transported to the refinery on the McMurrey
and Scurlock pipeline systems. The Company owns
the McMurrey system and has a long-term contract
for use of the Scurlock system with Scurlock
Permian Pipe Line Corporation. The Company also
has the ability to ship crude oil to the Tyler
refinery by pipeline from the Gulf Coast and does
so when market conditions are favorable. Storage
capacity at the Tyler refinery exceeds 2.7
millions barrels (1.2 million barrels for crude
oil and 1.5 million barrels for refined petroleum
products and intermediate stocks), including
tankage along the Company's pipeline system.
The Tyler refinery has a crude unit with a 52,000
barrels per day atmospheric column and a 16,000
barrels per day vacuum tower. The other major
process units at the Tyler refinery include an
18,000 barrels per day fluid catalytic cracking
unit, a 6,000 barrels per day delayed coking unit,
a 20,000 barrels per day naphtha hydrotreating
unit, a 12,000 barrels per day distillate
hydrotreating unit, two reforming units with a
combined capacity of 16,000 barrels per day, a
5,000 barrels per day isomerization unit, and an
alkylation unit with a capacity of 4,700 barrels
per day. The hydrotreating units were
significantly modified in 1993 enabling this plant
to produce 12,000 barrels per day of distillate
which meets the Clean Air Act's .05% sulphur
requirements for highway diesel.
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In 1995, the Tyler refinery operated at
approximately 90% of rated crude unit capacity,
with production yielding approximately 56%
gasoline and approximately 34% distillates. Of the
total gasoline production, approximately 32% was
premium octane grades. In addition, the refinery
produced and sold by-products including propylene,
propane, slurry oil, petroleum coke and sulphur.
The Tyler refinery is the principal supplier of
refined petroleum products in the East Texas
market with approximately 60% of production sold
at the refinery's truck terminal. The remaining
production is shipped via the Texas Eastern
Products Pipeline for sale either from the
Company's terminals or from other terminals along
the pipeline. Deliveries under term exchange
agreements account for the majority of the truck
terminal sales.
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11
Retail Operations
Retail Operations
Retail Operations
Overview
The Company traces its retail marketing history to
the early 1930's when it operated a retail network
of 30 service stations in the Houston, Texas area.
It began retail operations on the East Coast in
1943. The Company has been recognized as an
innovative industry leader and, in the early
1960's, pioneered the multi-pump retailing concept
which has since become an industry standard in the
marketing of gasoline. In 1983 the Company
significantly expanded its retail presence with
the acquisition of 642 Fast Fare and Zippy Mart
convenience stores located in the Southeastern
United States. In 1986 the Company purchased an
additional 50 gasoline stations, expanding the
Company's presence in the Baltimore/Washington,
D.C. region, and in 1991, the Company acquired 48
additional units in Virginia which doubled its
presence in that state. Additionally, in 1995,
the Company acquired 13 retail units in North
Carolina and 2 retail units in Georgia.
Beginning in 1989, the Company conducted a
facility by facility review of its retail units.
As a result, the Company disposed of non-
strategic, marginal or unprofitable units as well
as certain units which would have required
significant capital improvements to comply with
environmental regulations. During this period, the
Company rebuilt and added individual units to
increase its market share in strategic core
markets. Since 1990, the Company has eliminated
440 retail units and added 62 retail units. During
the same period, the Company closed a number of
district offices and divisional headquarters. The
Company believes it has substantially completed
its retail unit rationalization program.
As of December 31, 1995, the Company had 348
retail locations. Of these 348 units (234 owned
and 114 leased), the Company directly operated 244
and the remainder were operated by independent
dealers. The Company conducts its operations in
Maryland through an independent dealer network as
a result of legislation which prohibits refiners
from operating gasoline stations in Maryland. The
Company believes that the high proportion of
Company-operated units enables it to respond
quickly and uniformly to changing market
conditions.
While most of the Company's units are located in
or around major metropolitan areas, its sites are
generally not situated on major interstate
highways or inter-city thoroughfares. These off-
highway locations primarily serve local customers
and, as a result, the Company's retail marketing
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12
unit volumes are not as highly seasonal or
dependent on seasonal vacation traffic as
locations operating on major traffic arteries. The
Company is the largest independent retail marketer
of gasoline in its core retail market areas within
Maryland, Virginia and North Carolina. In the
Company's primary retail marketing area of
Baltimore, Maryland, the Company is the leading
independent gasoline retailer, with a 1995 market
share of approximately 12%. In addition to its
leading market position in Baltimore, the Company
has a geographic concentration of retail locations
in high growth areas such as Raleigh and
Charlotte, North Carolina and Atlanta, Georgia.
The Company's three highest volume core markets
are Baltimore, the suburban areas of Maryland and
Virginia surrounding Washington, D.C., and the
greater Norfolk, Virginia area.
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Retail Unit Operations
Retail Unit Operations
Retail Unit Operations
The Company conducts its retail marketing
operations through three basic store formats:
convenience stores, mini-marts and gasoline
stations. At December 31, 1995, the Company had 81
convenience stores, 130 mini-marts and _
137
gasoline stations.
The Company's convenience stores operate primarily
under the names Fast Fare and Zippy Mart. These
units generally contain 1,500 to 2,800 square feet
of retail space and typically provide gasoline and
a variety of convenience store merchandise such as
tobacco products, beer, wine, soft drinks, snacks,
dairy products and baked goods.
The Company's mini-marts generally contain up to
800 square feet of retail space and typically sell
gasoline and much of the same merchandise as at
the Company's convenience stores. The Company has
installed lighted canopies at most of its
locations which extend over the multi-pump fuel
islands and the store itself, providing added
security and protection from the elements for
customers and employees.
The Company's gasoline stations generally contain
up to 100 square feet of retail space in an island
kiosk and typically offer gasoline and a limited
amount of merchandise such as tobacco products,
candies, snacks and soft drinks.
The Company's units are brightly decorated with
its trademark signage to create a consistent
appearance and encourage customer recognition and
patronage. The Company believes that consistency
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13
of brand image is important to the successful
operation and expansion of its retail marketing
system. In all aspects of its retail marketing
operations the Company emphasizes quality, value,
cleanliness and friendly and efficient customer
service. The Company has conducted customer
surveys which indicate strong consumer preference
for units which are well-lighted and safe. In
response to such customer preferences, the Company
has initiated a system-wide lighting upgrade and
safety enhancement program which includes the
installation of improved lighting as well as the
installation of its proprietary Coronet Security
System, an interactive audio and video monitoring
system, at over 180 of its units.
While the Company derives approximately 75% of its
retail revenue from the sale of gasoline, it also
provides a variety of merchandise and other
services designed to meet the non-fuel needs of
its customers. Sales of these additional products
are an important source of revenue, contribute to
increased profitability and serve to increase
customer traffic. The Company believes that its
existing retail sites present significant
additional profit opportunities based upon their
strategic locations in high traffic areas. The
Company also offers ancillary services such as
compressed air service, car washes, vacuums, and
automated teller machines, and management
continues to evaluate the addition of new
ancillary services such as the marketing of fast
food from major branded chains.
Dealer Operations
Dealer Operations
Dealer Operations
The Company maintains 104 dealer-operated units,
103 of which are located in Maryland. Under the
Maryland Divorcement Law, refiners are prohibited
from operating gasoline stations. The Maryland
units are operated under a Branded Service Station
Lease and Dealer Agreement (the "Dealer
Agreement"), generally with a term of three years.
Pursuant to the Dealer Agreement, a dealer leases
the facility from the Company and purchases and
resells Crown-branded motor fuel and related
products. Dealers also purchase and resell
merchandise from independent third parties. The
Dealer Agreement sets forth certain operating
standards; however, the Company does not control
the independent dealer's personnel, pricing
policies or other aspects of the independent
dealer's business. The Company believes that its
relationship with its dealers has been very
favorable as evidenced by a low rate of dealer
turnover.
The Company realizes little direct benefit from
the sale of merchandise or ancillary services at
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14
the dealer operated units, and the revenue from
these sales is not reflected in the Company's
Consolidated Financial Statements. However, to the
extent that the availability of merchandise and
ancillary services increases customer traffic and
gasoline sales at its units, the Company benefits
from higher gasoline sales volumes.
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<PAGE>
Supply, Transportation and Wholesale Marketing
Supply, Transportation and Wholesale Marketing
Supply, Transportation and Wholesale Marketing
Supply
Supply
Supply
The Company's refineries, terminals and retail
outlets are strategically located in close
proximity to a variety of supply and distribution
channels. As a result, the Company has the
flexibility to acquire available domestic and
foreign crude oil economically, and also the
ability to distribute its products cost
effectively to its own system and to other
domestic wholesale markets. Purchases of crude oil
and feedstocks are determined by quality, price
and general market conditions.
Transportation
Transportation
Transportation
Most of the domestic crude oil processed by the
Company at its Pasadena refinery is transported by
pipeline. The Company's purchases of Alaskan and
foreign crude oil are transported primarily by
tankers under spot charters which are arranged by
either the seller or the Company. The Company is
not currently obligated under any time-charter
contracts. The Company has an approximate 5%
interest in the Rancho Pipeline and generally
receives between 20,000 and 25,000 barrels per day
of crude through this system. Foreign crudes
(principally from the North Sea, West Africa and
South America) account for approximately 35% of
total crude supply and are delivered by tanker.
Most of the crude for the Tyler refinery is
gathered from local East Texas fields and
delivered by two pipeline systems, one of which is
owned by the Company. Foreign crude also can be
delivered to the Tyler refinery by pipeline from
the Gulf Coast.
Terminals
Terminals
Terminals
The Company operates 11 product terminals located
along the Colonial and Plantation pipelines from
the Pasadena refinery to Elizabeth, New Jersey
and, in addition to the terminal at the Tyler
refinery, operates four product terminals located
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15
along the Texas Eastern Products Pipeline system.
These terminals have a combined storage capacity
of 2.7 million barrels. The Company's distribution
network is augmented by agreements with other
terminal operators also located along these
pipelines. In addition to serving the Company's
retail requirements, these terminals supply
products to other refiner/marketers, jobbers and
independent distributors.
Wholesale Marketing
Wholesale Marketing
Wholesale Marketing
Approximately 16% of the gasoline produced by the
Company's Pasadena refinery is transported by
pipeline for sale at wholesale through Company and
other terminals in the Mid-Atlantic and
Southeastern United States. Heating oil is also
regularly sold at wholesale through these same
terminals. Gasoline, heating oil, diesel fuel and
other refined products are also sold at wholesale
in the Gulf Coast market.
The Company has entered into long-term product
exchange agreements for approximately one-third of
its Tyler refinery production with two major oil
companies headquartered in the United States.
These agreements provide for the delivery of
refined products at the Company's terminals in
exchange for delivery by these companies of a
similar amount of refined products to the Company.
The terms of these agreements extend through March
1998 and December 1999, respectively, and require
the exchange of 8,400 barrels per day and 9,800
barrels per day, respectively. These exchange
agreements provide the Company with the ability to
broaden its geographic distribution, supply
markets not connected to the refined products
pipeline systems and reduce transportation costs.
-7-
<PAGE>
Item 3. LEGAL PROCEEDINGS
Item 3. LEGAL PROCEEDINGS
Item 3. LEGAL PROCEEDINGS
The Company is involved in various matters of
litigation, the ultimate determination of which,
in the opinion of management, will not have a
material adverse effect on the Company. The
Company's legal proceedings are further discussed
in Note I of Notes to Consolidated Financial
Statements on page 31 of this report.
In October 1994, the Texas Natural Resource
Conservation Commission (``
TNRCC'') issued a
Notice of Violation (``
NOV'') with respect to
certain alleged violations at the reformer unit at
the Pasadena refinery, which the Company had self-
<PAGE>
16
reported earlier that year. The Company and the
TNRCC staff are currently working to resolve the
issues raised by the NOV.
The Company recently reached agreement with the
Environmental Protection Agency to settle charges
set forth in an Administrative Complaint regarding
alleged exceedances of the Pasadena refinery's
Clean Water Act permit. Under the settlement, the
Company has agreed to pay a penalty of $100,100.
The settlement covers all violations of the permit
that have occurred within a five-year period.
The Pasadena refinery and many of the Company's
other facilities are involved in a number of other
environmental enforcement actions or are subject
to agreements, orders or permits that require
remedial activities. Environmental expenditures,
including these matters, are discussed in the
Liquidity and Capital Resources section of
Management's Discussion and Analysis of Financial
Conditions and Results of Operations on pages 14
through 16 of this report, and in Note I of Notes
to Consolidated Financial Statements on page 31 of
this report. These enforcement actions and
remedial activities, in the opinion of management,
are not expected to have a material adverse effect
on the Company.
In addition, the Company has been named by the EPA
and by several state environmental agencies as a
potentially responsible party at various federal
and state Superfund sites. The Company's exposure
in these matters has either been resolved or is __
de
_______
minimis and is not expected to have a material
adverse effect on the Company.
The foregoing environmental proceedings are not of
material importance to Crown's accounts and are
described in compliance with SEC rules requiring
disclosure of such proceedings although not
material.
The Company's collective bargaining agreement with
the Oil Chemical & Atomic Workers Union (``
OCAW'')
covering employees at the Pasadena refinery
expired on February 1, 1996. Following a number
of incidents apparently intended to disrupt normal
operations at the refinery and also as a result of
the unsatisfactory status of the negotiations, on
February 5 the Company implemented a lock-out of
employees in the collective bargaining unit at the
Pasadena facility. OCAW subsequently filed unfair
labor practice charges with the National Labor
Relations Board (``
NLRB''). The Company believes
the charges are unfounded and has filed answers to
the charges with the NLRB.
<PAGE>
17
Item 4. SUBMISSION OF MATTERS TO A VOTE OF
Item 4. SUBMISSION OF MATTERS TO A VOTE OF
Item 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
SECURITY HOLDERS
SECURITY HOLDERS
No matters were submitted to a vote of security
holders during the last three months of the fiscal
year covered by this report.
-8-
<PAGE>
PART II
PART II
PART II
Item 5.MARKET FOR REGISTRANT'S COMMON EQUITY AND
Item 5.MARKET FOR REGISTRANT'S COMMON EQUITY AND
Item 5.MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
RELATED STOCKHOLDER MATTERS
RELATED STOCKHOLDER MATTERS
The Company's common stock is listed on the
American Stock Exchange under the ticker symbols
CNP A and CNP B.
<TABLE>
<CAPTION>
Common Stock Market Prices and Cash Dividends
Common Stock Market Prices and Cash Dividends
Common Stock Market Prices and Cash Dividends
___________
__________
_____________
1995 _____________
1994
Sales Price Sales Price
______
Low
__
__
______
Low
_____
High _
_____
High _
<S> <C> <C> <C>
<C>
CLASS A COMMON STOCK
CLASS A COMMON STOCK
CLASS A COMMON STOCK
First Quarter ...... $15 $11 $14
$21
1/8 7/8 3/8
7/8
Second Quarter 17 7/8
..... 13 7/8 24 1/4 17
Third Quarter 16 7/8
...... 15 1/8 19 1/2 17 1/8
Fourth Quarter ..... 16 1/4 13 5/8 18 3/8 12 3/8
Yearly 17 7/8
..... 11 7/8 24 1/4 12 3/8
CLASS B COMMON STOCK
CLASS B COMMON STOCK
CLASS B COMMON STOCK
First Quarter ...... $14 $11 $13
$20
5/8 5/8 1/8 5/8
Second Quarter ..... 17 3/4 13 3/8 23 1/8 15 3/8
Third Quarter ...... 16 3/4 14 7/8 18 16 1/8
Fourth Quarter ..... 16 11 5/8 16 5/8 11 5/8
<PAGE>
18
Yearly..... 17 3/4 11 5/8 23 1/8 11 5/8
<FN>
The payment of cash dividends is dependent upon future earnings,
capital requirements, overall financial condition and
restrictions as described in Note C of Notes to Consolidated
Financial Statements on page 26 of this report. There were no
cash dividends declared on common stock in 1995 or 1994.
The approximate number of shareholders of the Company's common
stock, based on the number of record holders on December 31, 1995
was:
Class A Common Stock ..... 689
Class B Common Stock ..... 845
Transfer Agent & Registrar
Transfer Agent & Registrar
Transfer Agent & Registrar
The First National Bank of Boston
Boston, Massachusetts
</TABLE>
-9-
<PAGE>
<TABLE>
<CAPTION>
Item 6.
Item 6.
Item 6. SELECTED FINANCIAL DATA
SELECTED FINANCIAL DATA
SELECTED FINANCIAL DATA
The selected consolidated financial data for the Company set
forth below for the five years ended December 31, 1995 should be
read in conjunction with the Consolidated Financial Statements.
<S> <C>
<C> <C> <C>
<C>
_______
1995 ___
__
__
_______
1991
_
______
1994 ______
1993 _____
1992 _
(Thousands of dollars except per share
amounts)
Sales and operating $1,864,6 $1,699, $1,747, $1,795, $1,857,
..............
revenues 39 168 411 259 711
(Loss) before
extraordinary item and
cumulative effect of
changes in
accounting (67,367) (35,406 (4,300) (13,278 )
(6,026
principles............ ) )
Extraordinary item.... (3,257)
Cumulative effect of
changes in
accounting principles 7,772
Net (loss)............ (70,624 (35,406
) (4,300) )
(5,506 )
(6,026
<PAGE>
19
)
Total assets.......... 583,214 704,076 656,178 675,337 687,816
Long-term debt........ 128,506 96,632 65,579 61,220 88,646
Per Share Data:
Per Share Data:
Per Share Data:
(Loss) before
extraordinary
item and cumulative
effect of
changes in accounting (6.95 (3.63
) )
(.44
) (1.35) )
(.61
principles............
Net (loss)............ (7.28 (3.63
) )
(.44
) )
(.56 )
(.61
Cash Dividends
Cash Dividends
Cash Dividends
Declared:
Declared:
Declared:
Class A Common........ .20 .80
Class B Common........ .20 .80
<FN>
The extraordinary loss in 1995, which was recorded in the first
quarter, resulted from the early retirement of the remaining
principle balance of the Company's 10.42% Senior Notes with the
proceeds from the sale of $125 million of Unsecured Senior Notes
due February 1, 2005.
The net loss in 1995 was unfavorably impacted by a pre-tax write-
down of certain refinery assets of $80.5 million in the fourth
quarter relating to the adoption of Statement of Financial
Accounting Standards No. 121 ``
Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of .
''
The net loss in 1994 was unfavorably impacted by a pre-tax write-
down of $16.8 million in the third quarter relating to the
abandonment of plans to construct a hydrodesulphurization unit at
the Pasadena refinery.
</TABLE>
-10-
<PAGE>
Item 7.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
FINANCIAL CONDITION AND RESULTS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OPERATIONS
OPERATIONS
General
General
General
Purchases of crude oil supply are typically made
pursuant to relatively short-term, renewable
contracts with numerous foreign and domestic major
and independent oil producers, generally
containing market-responsive pricing provisions.
The Company has instituted programs designed to
manage profit margins by minimizing the Company's
<PAGE>
20
exposure to the risks of price volatility related
to the acquisition, conversion and sale of crude
oil and refined petroleum products. These
programs include hedging activities such as the
purchase and sale of futures and options contracts
to mitigate the effect of fluctuations in the
prices of crude oil and refined products. While
the Company's net sales and operating revenues
fluctuate significantly with movements in industry
crude oil prices, such prices do not have a direct
relationship to net earnings, which are subject to
the impact of the Company's LIFO method of
accounting discussed below. The effect of changes
in crude oil prices on the Company's operating
results is determined more by the rate at which
the prices of refined products adjust to reflect
such changes.
The following table estimates the sensitivity of
the Company's income before taxes to price changes
which impact its refining and retail margins based
on a representative production rate for the
Refineries and a representative amount of total
gasoline sold at the Company's retail units:
<TABLE>
<CAPTION>
____________________
Earnings Sensitivity
____________________
Earnings Sensitivity
____________________
Earnings Sensitivity
________
Change
________
Change
________
Change
_____________
Annual Impact
_____________
Annual Impact
_____________
Annual Impact
<S> <C> <C>
Refining margin ....$0.10/bbl$ 5.7 million
Retail margin ......$0.01/gal$ 5.2 million
</TABLE>
The Company conducts environmental assessments and
remediation efforts at multiple locations,
including operating facilities and previously
owned or operated facilities. The Company accrues
environmental and clean-up related costs of a non-
capital nature when it is both probable that a
liability has been incurred and the amount can be
reasonably estimated. Accruals for losses from
environmental remediation obligations generally
are recognized no later than completion of the
remedial feasibility study. Estimated costs,
which are based upon experience and assessments,
are recorded at undiscounted amounts without
considering the impact of inflation, and are
adjusted periodically as additional or new
information is available. Expenditures for
equipment necessary for environmental issues
relating to ongoing operations are capitalized.
The Company's crude oil, refined products and
convenience store merchandise and gasoline
inventories are valued at the lower of cost (based
on the last-in, first-out or LIFO method of
accounting) or market, with the exception of crude
<PAGE>
21
oil inventory held for resale which is valued at
the lower of cost (based on the first-in first-out
or FIFO method of accounting) or market. Under
the LIFO method, the effects of price increases
and decreases in crude oil and other feedstocks
are charged directly to the cost of refined
products sold in the period that such price
changes occur. In periods of rising prices, the
LIFO method may cause reported operating income to
be lower than would otherwise result from the use
of the FIFO method. Conversely, in periods of
falling prices the LIFO method may cause reported
operating income to be higher than would otherwise
result from the use of the FIFO method. In
addition, the Company's use of the LIFO method may
understate the value of inventories on the
Company's consolidated balance sheet as compared
to the value of inventories under the FIFO method.
-11-
<PAGE>
Results of Operations
Results of Operations
Results of Operations
The Company's Sales and operating revenues
increased 9.7% in 1995 compared to a 2.8% decrease
in 1994. The Company's Sales and operating
revenues and Costs and operating expenses include
all Federal and State excise and other similar
taxes which totaled $413.3 million, $380.6 million
and $296.2 million in 1995, 1994 and 1993,
respectively. The 1994 increase in excise taxes
was due primarily to the inclusion of more
products in the taxable base that were exempt from
excise taxes in prior years. The 1995 increase in
sales and operating revenues was due to a 5.8%
increase in the average unit selling price of
petroleum products and a 4.5% increase in
petroleum product sales volumes. Additionally,
there was an 8.6% increase in excise taxes and a
$4.4 million or 5% increase in merchandise sales.
The 1994 decrease was primarily attributable to a
5.7% decrease in petroleum product sales volumes
resulting from planned reductions in operating
runs due to deteriorating refinery gross margins
in the third quarter of 1994 and a maintenance
turnaround at the Pasadena refinery in the fourth
quarter of 1994. Additionally, there was a 4.8%
decrease in the average unit selling price of
petroleum products. These decreases were
partially offset by an increase in excise taxes as
previously mentioned and a $5.8 million or 6.5%
increase in merchandise sales.
As previously mentioned, merchandise sales
increased $4.4 million or 5% for the year ended
December 31, 1995 compared to the same period in
1994, while merchandise gross profit increased
$2.3 million or 11.5% for the year ended December
<PAGE>
22
31, 1995 compared to the same period in 1994.
Merchandise gross margin (merchandise gross profit
as a percent of merchandise sales) increased from
23.3% to 24.7% for the years ended December 31,
1994 and 1995, respectively. These aggregate
increases occurred despite a slight reduction in
the number of operating units during the period,
and are attributable to the Company's merchandise
pricing program designed to increase per unit
customer traffic and overall merchandise sales and
gasoline volumes. A key element of the program
includes the reduction of prices on certain items
such as tobacco products and beverages. As a
result of the strategy, aggregate merchandise
gross profit, on a same store basis, increased
20.9% in 1995 as compared to 1994. Same store
average monthly gasoline volumes and merchandise
sales increased approximately 7% and 12%,
respectively, in 1995 as compared to 1994.
Gasoline sales accounted for 57.8% of total 1995
revenues (excluding excise taxes), while
distillates and merchandise sales represented
24.2% and 6.8%, respectively. This compares to a
dollar mix from sales of 55.2% gasoline, 28.6%
distillates and 7.2% merchandise in 1994; and
56.4% gasoline, 30.4% distillates and 6.0%
merchandise in 1993.
The following table depicts the sales values of
the principal classes of products sold by the
Company, which individually contributed more than
ten percent of consolidated sales and operating
revenues (excluding excise taxes) during the last
three years:
<TABLE>
<CAPTION>
Sales of Principal Products
Sales of Principal Products
Sales of Principal Products
millions of dollars ________
1995 _______
1994 _______
1993
<S> <C> <C> <C>
Gasoline $839.4 $728.6 $817.6
No. 2 Fuel & Diesel 335.7 296.6 369.7
</TABLE>
Costs and operating expenses increased 9.5% in
1995, after decreasing .2% in 1994. The 1995
increase was attributable to an increase in the
average cost per barrel consumed of crude oil and
feedstocks of $1.62 or 9.54%. Additionally, there
were increases in volumes sold and in excise taxes
as previously discussed. The 1994 decrease was
due primarily to a decrease in volumes sold and to
a decrease in the average cost per barrel consumed
of crude oil and feedstocks of $1.21 or 9.54%.
<PAGE>
23
These decreases were partially offset by increases
in excise taxes.
The results of operations were affected by the
Company's use of the last-in, first-out (LIFO)
method to value inventory which results in a
better matching of current revenues and costs.
The impact of LIFO was to decrease the Company's
gross margins in 1995 and 1994 by $.12 per barrel
($6.7 million) and $.35 per barrel ($19.0
million), respectively, and to increase the
Company's gross margins in 1993 by $.48 per barrel
($27.7 million). The 1995 LIFO impact is net of a
$3 million gross margin increase resulting from a
liquidation of LIFO inventory base year dollars.
-12-
<PAGE>
The Company has instituted programs designed to
manage refining profit margins by minimizing the
Company's exposure to the risks of price
volatility related to the acquisition, conversion
and sale of crude oil and refined petroleum
products. These programs include hedging
activities such as the purchase and sale of
futures and option contracts to offset the effects
of fluctuations in the prices of crude oil and
refined products. Such hedging activities are
subject to specific policies and guidelines
established by the Company and are reviewed by the
Margin Management Committee composed of senior
management and chaired by the Company's Chief
Executive Officer. The Company's policy is to
manage its crude oil acquisition, refining, and
product sales on a daily basis to achieve, at a
minimum, prevailing margins available to
comparable Gulf Coast refiners and, where
appropriate, to pursue forward hedging
opportunities which lock in attractive returns.
The number of barrels of crude oil and refined
products covered by such hedging activities varies
from time to time within certain limits
established by the Margin Management Committee.
The Company's hedging activities are intended to
reduce volatility and provide an acceptable profit
margin on a portion of production, however, the
use of such a program can limit the Company's
ability to participate in an improvement in
related product profit margins.
Total refinery production was: 154,800 barrels per
day (bpd) in 1995, yielding 90,700 bpd of gasoline
(58.6%) and 46,200 bpd of distillates (29.8%);
147,700 barrels per day (bpd) in 1994, yielding
79,800 bpd of gasoline (54.0%) and 48,200 bpd of
distillates (32.6%); and 158,400 bpd in 1993,
yielding 86,300 bpd of gasoline (54.5%) and 51,700
bpd of distillates (32.6%). Due to deteriorating
<PAGE>
24
refinery gross margins which occurred during the
third quarter of 1994, the Company reduced
operating runs at its Pasadena refinery.
Additionally, in 1994, overall refinery production
was reduced by the fourth quarter's maintenance
turnaround of the Pasadena refinery's Fluid
Catalytic Cracking Unit (FCCU) and related units.
The FCCU is the primary gasoline facility. The
turnaround was initially scheduled to be performed
in the first quarter of 1995 but was performed in
1994 due to depressed refinery gross margins.
Refinery production was slightly impacted in 1993
by a scheduled maintenance turnaround in the
second quarter at the Tyler refinery. Due to poor
refining margins late in the fourth quarter of
1993, the Company announced that it had reduced
runs at its Pasadena refinery by 20%. The
Company's finished product requirements in excess
of its refinery yields and existing inventory
levels are acquired through its exchange
agreements or outright purchases.
Selling and administrative expenses decreased 2.3%
in 1995 after decreasing 7.6% in 1994. The 1995
decrease was primarily due to decreased corporate
level administrative costs as a result of certain
cost cutting programs initiated by the Company.
The 1994 decrease resulted primarily from
decreased store level and marketing administrative
costs associated with the sale or closing
throughout 1993 and in early 1994 of retail
marketing units which were either not profitable
or did not fit with the Company's strategic
direction, and cost reductions related to the
company's administrative functions. The 1993
decrease is also attributable to reduced costs
associated with the closing of retail units, and
the consolidation of certain marketing field
operations. At December 31, 1995, the Company
operated 267 retail gasoline facilities and 81
convenience stores compared to 258 retail gasoline
facilities and 99 convenience stores at December
31, 1994 and 249 retail gasoline facilities and
127 convenience stores at December 31, 1993.
Selling and administrative expenses in 1994
include $.5 million in reorganization costs, while
reorganization and office closure costs of $.7
million are included in 1993.
Operating costs and expenses in 1995, 1994 and
1993 include $3.2 million, $1.9 million and $6.3
million, respectively, related to environmental
matters and $3.7 million, $3.0 million and $2.4
million, respectively, related to retail units
that have been closed. Operating costs and
expenses in 1995, 1994 and 1993 also include $.1
million, $1.6 million and $1.8 million,
respectively, of accrued non-environmental
casualty related costs.
<PAGE>
25
Depreciation and amortization decreased 14.1% in
1995. The 1995 decreases were primarily the result
of decreases in refinery turnaround amortization
due to a $10.4 million decrease in the total
underlying value of the Pasadena Refinery FCCU
turnaround being amortized in 1995 compared to the
total underlying value of the FCCU turnaround that
was being amortized in 1994. Depreciation and
amortization in 1994 was comparable to 1993. The
implementation of Statement of Financial
Accounting Standards No. 121 ``
Accounting for the
Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of''
(SFAS 121), effective
October 1, 1995, decreased 1995 depreciation and
amortization by $1.9 million.
-13-
<PAGE>
The loss from Write-downs of property, plant and
equipment of $80.5 million in 1995 is due to the
initial adoption of SFAS 121 effective October 1,
1995. While all of the Company's long-lived
assets are subject to the provisions of SFAS 121,
circumstances indicated the carrying amount of
assets used in the operation of the Tyler refinery
would not be recoverable. As such, a write-down to
estimated fair value was recorded. The estimated
fair value of these assets was determined by an
independent appraisal. There were no indications
of possible impairment relating to the remainder
of the Company's long-lived assets. The loss of
$16.8 million from Write-downs of property, plant
and equipment in 1994 resulted from the
abandonment of a project to construct a
hydrodesulphurization unit at the Pasadena
refinery.
The loss of $2.3 million from Sales and
abandonments in 1993 relates primarily to the
write-down of the Sulphur Unit at the Pasadena
refinery.
Interest and other income in 1995 increased $3.8
million compared to 1994. The 1995 increase was
primarily the result of increases in income of
$2.3 million from the Company's wholly-owned
insurance subsidiaries. Additionally, interest
income increased $1.4 million due to an increase
in the average daily cash invested of $9.5 million
and to an increase in the average daily rate on
cash invested of 196 basis points. Interest and
other income in 1994 was comparable to 1993.
Interest expense increased $6.9 million in 1995
compared to 1994 and $.6 million in 1994 compared
to 1993. The 1995 increase was due primarily to
an increase in the average daily cash borrowed of
$59.4 million . At December 31, 1995, there were
<PAGE>
26
additional outstanding borrowings of $31.9 million
compared to December 31, 1994. The additional
outstanding borrowings are due to the sale of $125
million of Unsecured 10.875% Senior Notes in
January 1995 net of the repayment of the
outstanding balance of the unsecured 10.42% Senior
Notes and Unsecured Credit Agreement outstanding
on December 31, 1994. The 1994 increase includes
$.4 million related to the Purchase Money Lien
(Money Lien). There was no interest expense
related to the Money Lien in 1993.
As previously discussed, in January 1995, the
Company retired the remaining outstanding
principal balance of the unsecured 10.42% Senior
Notes (including a prepayment premium of $3.4
million) with the proceeds from the sale of $125
million of Unsecured 10 875% Senior Notes due
February 1, 2005 which resulted in a net
extraordinary loss in the first quarter of 1995 of
$3.3 million (after reduction for the income
benefit of $2 million).
Liquidity and Capital Resources
Liquidity and Capital Resources
Liquidity and Capital Resources
The Company's cash and cash equivalents were $12.8
million lower at year-end 1995 than at year-end
1994. The decrease was attributable to $37.4
million of net cash outflows from investment
activities which were partially offset by cash
inflows from financing activities and cash
provided by operating activities of $20.4 million
and $4.2 million, respectively.
Net cash outflows from investment activities in
1995 consisted principally of capital expenditures
of $41 million (which includes $18.4 million for
refinery operations and $20.6 million related to
the marketing area) and $3 million of refinery
deferred turnaround costs. The total outflows from
investment activities were partially offset by an
increase in cash of $6.8 million resulting from
the consolidation of the Company's wholly-owned
insurance subsidiaries. Prior to 1995, these
wholly-owned insurance subsidiaries were accounted
for under the equity method, and, as such, the
cash held by these subsidiaries was not included
in the consolidated cash balance. Proceeds from
the sale of property, plant and equipment of $6.4
million also offset total outflows from investing
activities.
Net cash provided by financing activities in 1995
relates to $20 million in net proceeds received
from debt and credit agreement borrowings due
primarily to the issuance in January 1995 of $125
million of 10.875% Unsecured Senior Notes net of
amounts used to repay outstanding balances
relating to the unsecured 10.42% Senior Notes
<PAGE>
27
(including a prepayment premium) and Unsecured
Credit Agreement borrowings.
-14-
<PAGE>
The positive $4.2 million cash generated from
operating activities in 1995 includes $3.4 million
relating to working capital, resulting primarily
from net decreases in accounts receivable and
recoverable income taxes as well as increases in
accrued liabilities. Partially offsetting these
working capital inflows were net decreases in
crude oil and refined products payables and
increases in the value of crude oil and finished
products inventories. The timing of collection of
the Company's receivables is impacted by the
specific type of sale and associated terms. Bulk
sales of finished products are typically sold in
25,000 barrel increments with three day payment
terms. Rack sales at the Company's product
terminals are sold by truckload (approximately
8,000 gallons) with seven to ten day payment
terms. While the Company's overall sales are
aligned to its refining capability, receivables
can vary between periods depending upon the
specific type of sale and associated payment terms
for sales near the end of a reporting period.
Cash provided by operating activities was also
impacted by cash outflows of $4.1 million of
capitalized loan expenses related to the issuance
of the Company's Unsecured 10.875% Senior Notes in
January 1995 and to the new Unsecured Credit
Agreement arranged in September 1995.
The ratio of current assets to current liabilities
was 1.22:1 at December 31, 1995 and 1994. If FIFO
values had been used for all inventories, assuming
an incremental effective income tax rate of 38.5%,
the ratio of current assets to current liabilities
would have been 1.35:1 at December 31, 1995 and
1.32:1 at December 31, 1994.
Like other petroleum refiners and marketers, the
Company's operations are subject to extensive and
rapidly changing federal and state environmental
regulations governing air emissions, waste water
discharges, and solid and hazardous waste
management activities. The Company's policy is to
accrue environmental and clean-up related costs of
a non-capital nature when it is both probable that
a liability has been incurred and that the amount
can be reasonably estimated. While it is often
extremely difficult to reasonably quantify future
environmental related expenditures, the Company
anticipates that a substantial capital investment
will be required over the next several years to
comply with existing regulations. The Company
believes that cash provided from its operating
activities, together with other available sources
<PAGE>
28
of liquidity, including the remaining proceeds of
the $125 million of Unsecured 10.875% Senior Notes
and borrowings under the Credit Facility, will be
sufficient to fund these costs. The Company had
recorded a liability of approximately $16.1
million as of December 31, 1995 to cover the
estimated costs of compliance with environmental
regulations which are not anticipated to be of a
capital nature. The liability of $16.1 million
includes accruals for issues extending past 1997.
Environmental liabilities are subject to
considerable uncertainties which affect the
Company's ability to estimate its ultimate cost of
remediation efforts. These uncertainties include
the exact nature and extent of the contamination
at each site, the extent of required cleanup
efforts, varying costs of alternative remediation
strategies, changes in environmental remediation
requirements, the number and financial strength of
other potentially responsible parties at multi-
party sites, and the identification of new
environmental sites. As a result, charges to
income for environmental liabilities could have a
material effect on results of operations in a
particular quarter or year as assessments and
remediation efforts proceed or as new claims
arise. However, management is not aware of any
matters which would be expected to have a material
adverse effect on the Company.
During the years 1996-1998, the Company estimates
environmental expenditures at the Pasadena and
Tyler refineries, of at least $6.9 million and
$13.5 million, respectively. Of these
expenditures, it is anticipated that $4.4 million
for Pasadena and $8.1 million for Tyler will be of
a capital nature, while $2.5 million and $5.4
million, respectively, will be related to
previously accrued non-capital remediation
efforts. At the Company's marketing facilities,
capital expenditures relating to environmental
improvements are planned totaling approximately
$25.5 million through 1998.
As discussed in Note C of Notes to Consolidated
Financial Statements on page 26 of this report,
effective September 25, 1995, the Company entered
into a new two year Revolving Credit Facility.
Management believes the new agreement will
adequately provide anticipated working capital
requirements as well as support future growth
opportunities. As a result of a strong balance
sheet and overall favorable credit relationships,
the Company has been able to maintain open lines
of credit with its major suppliers. Under the
Revolving Credit Agreement (Credit Agreement), the
Company had outstanding as of December 31, 1995,
irrevocable standby letters of credit in the
principal amount of $28.7 million for purposes in
<PAGE>
29
the ordinary course of business. At December 31,
1995, the Company was in compliance with all
covenants and provisions of the Credit Agreement.
Meeting the covenants imposed by the Credit
Agreement is dependent, among other things, upon
the level of future earnings. The Company
reasonably expects to continue to be in compliance
with the covenants imposed by the Credit Agreement
over the next twelve months.
-15-
<PAGE>
At the Company's option, up to $37.5 million of
the Unsecured 10.875% Senior Notes (Notes) may be
redeemed at 110.875% of the principal amount at
any time prior to February 1, 1998. After such
date, they may not be redeemed until February 1,
2000 when they are redeemable at 105.438% of the
principal amount, and thereafter at an annually
declining premium over par until February 1, 2003
when they are redeemable at par. The Notes were
issued under an Indenture which includes certain
restrictions and limitations customary with senior
indebtedness of this type including, but not
limited to, the payment of dividends and the
repurchase of capital stock. There are no sinking
fund requirements on the Notes.
Also as discussed in Note C of Notes to
Consolidated Financial Statements, in the fourth
quarter of 1995, the Company terminated all
outstanding interest rate swap agreements which
had effectively converted $47.5 million of its
fixed rate debt to variable interest rate debt.
At December 31, 1995, the Company has recorded a
deferred gain of $1.4 million which will be
amortized into income over the remaining terms of
the original swap agreements which range from 1996
to 1998. The Company may utilize interest rate
swaps in the future to manage the cost of funds.
The Purchase Money Lien (Money Lien) discussed in
Note C of Notes to Consolidated Financial
Statements on page 26 of this report, is secured
by certain service station and terminal equipment
and office furnishings having a cost basis of $6.5
million. The effective rate for the Money Lien is
6.65%. Ninety percent of the principal is payable
in 60 equal monthly installments which commenced
in February 1994 with a balloon payment of 10% of
the principal payable in January 1999.
As a result of Crown's strategy of obtaining a
greater balance between gasoline production and
retail marketing, 15 Conoco units were purchased
in August 1995, 13 in North Carolina and 2 in
Georgia. The high growth area of Greensboro, N.C.
represents the largest concentration of these with
<PAGE>
30
9 additional locations bringing our presence in
the state of North Carolina to 74 units.
In January 1995, the Company retired the remaining
outstanding principal balance of the unsecured
10.42% Senior Notes (including a prepayment
premium of $3.4 million) with the proceeds from
the sale of $125 million of Unsecured 10.875%
Senior Notes due February 1, 2005 which resulted
in a net extraordinary loss in the first quarter
of 1995 of $3.3 million.
The Company's management is involved in a
continual process of evaluating growth
opportunities in its core business as well as its
capital resource alternatives. Total capital
expenditures and deferred turnaround costs in 1996
are projected to approximate $66.6 million. The
capital expenditures relate primarily to planned
enhancements at the Company's refineries, retail
unit improvements and to company-wide
environmental requirements. The Company believes
that cash provided from its operating activities,
together with other available sources of
liquidity, including the remaining proceeds of the
$125 million of Unsecured 10.875% Senior Notes
(Notes) and the Unsecured Credit Agreement, will
be sufficient over the next several years to make
required payments of principal and interest on its
debt, including interest payments due on the
Notes, permit anticipated capital expenditures and
fund the Company's working capital requirements.
Any major acquisition would likely require a
combination of additional debt and equity.
The Company places its temporary cash investments
in high credit quality financial instruments which
are in accordance with the covenants of the
Company's financing agreements. These securities
mature within ninety days, and, therefore, bear
minimal risk. The Company has not experienced any
losses on its investments.
The Company faces intense competition in all of
the business areas in which it operates. Many of
the Company's competitors are substantially larger
and therefore, the Company's earnings can be
affected by the marketing and pricing policies of
its competitors, as well as changes in raw
material costs.
Merchandise sales and operating revenues from the
Company's convenience stores are seasonal in
nature, generally producing higher sales and net
income in the summer months than at other times of
the year. Gasoline sales, both at the Crown
multi-pumps and convenience stores, are also
somewhat seasonal in nature and, therefore,
related revenues may vary during the year. The
seasonality does not, however, negatively impact
<PAGE>
31
the Company's overall ability to sell its refined
products.
-16-
<PAGE>
The Company maintains business interruption
insurance to protect itself against losses
resulting from shutdowns to refinery operations
from fire, explosions and certain other insured
casualties. Business interruption coverage begins
for such losses at the greater of $5 million or
shutdowns for periods in excess of 25 days.
The Company has disclosed in Note I of Notes to
Consolidated Financial Statements on page 31 of
this report, various contingencies which involve
litigation, environmental liabilities and
examinations by the Internal Revenue Service.
Depending on the occurrence, amount and timing of
an unfavorable resolution of these contingencies,
the outcome of which cannot reasonably be
determined at this time, it is possible that the
Company's future results of operations and cash
flows could be materially affected in a particular
quarter or year. However, the Company has
concluded, after consultation with counsel, that
there is no reasonable basis to believe that the
ultimate resolution of any of these contingencies
will have a material adverse effect on the
Company. Additionally, as discussed in Item 3.
Legal Proceedings on page 8 of this report, the
Company's collective bargaining agreement at its
Pasadena refinery expired on February 1, 1996, and
on February 5, 1996, the Company invoked a lock-
out of employees in the collective bargaining
unit. The Company has been operating the Pasadena
refinery without interruption since the lock-out
with management and supervisory personnel and
intends to continue full operations until an
agreement is reached with the collective
bargaining unit.
Effects of Inflation and Changing Prices
Effects of Inflation and Changing Prices
Effects of Inflation and Changing Prices
The Company's Consolidated Financial Statements
are prepared on the historical cost method of
accounting and, as a result, do not reflect
changes in the dollar's purchasing power. In the
capital intensive industry in which the Company
operates, the replacement costs for its properties
would generally far exceed their historical costs.
As a result, depreciation would be greater if it
were based on current replacement costs. However,
since the replacement facilities would reflect
technological improvements and changes in business
strategies, such facilities would be expected to
be more productive and versatile than existing
facilities, thereby increasing profits and
<PAGE>
32
mitigating increased depreciation and operating
costs.
In recent years, crude oil and refined petroleum
product prices have been flat to falling which has
resulted in a net reduction in working capital
requirements. If the prices increase in the
future, the Company will expect a related increase
in working capital needs.
-17-
<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars)
December 31
_____
_____
________
1995 ________
1994
Assets
Assets
Assets
<S> <C> <C>
Current Assets
Current Assets
Current Assets
Cash and cash equivalents ........ $ 42,045 $ 54,868
Accounts receivable, less allowance
for
doubtful accounts (1995--$1,531; 105,799 128,984
1994--$1,908)......................
Recoverable income taxes ......... 4,137 16,075
Inventories ...................... 96,025 94,933
Other current assets ............. ____
____
_____
2,595 _____
1,264
Total Current Assets
Total Current Assets
Total Current Assets ............ 250,601 296,124
Investments and Deferred Charges
Investments and Deferred Charges
Investments and Deferred Charges... 30,633 40,125
Property, Plant and Equipment
Property, Plant and Equipment
Property, Plant and Equipment
.............................
Land 45,856 43,862
Petroleum refineries ............. 364,806 449,197
Marketing facilities ............. 189,272 183,638
Pipelines and other equipment .... ___
___
<PAGE>
33
______
24,404 ______
22,507
624,338 699,204
Less allowance for depreciation . _
_
_______
322,358 _______
331,377
Net Property, Plant and
Net Property, Plant and
Net Property, Plant and 301,980 367,827
Equipment
Equipment
Equipment..........................
________
________
______
______
________
$583,214 ________
$704,076
________
________
<FN>
See notes to consolidated financial statements
</TABLE>
-18-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars)
December 31
Liabilities and Stockholders' Equity
Liabilities and Stockholders' Equity
Liabilities and Stockholders' Equity _________
1995 _________
1994
<S> <C> <C>
Current Liabilities
Current Liabilities
Current Liabilities
Accounts payable:
Crude oil and refined products $112,036
.. $150,877
Other ........................... 24,287 29,988
Accrued liabilities ............... 66,788 51,500
Current portion of long-term debt _____
. ___
_____
1,559 ______
10,062
Total Current Liabilities
Total Current Liabilities
Total Current Liabilities ......... 204,670 242,427
Long-Term Debt
Long-Term Debt
Long-Term Debt...................... 128,506 96,632
Deferred Income Taxes
Deferred Income Taxes
Deferred Income Taxes............... 27,995 73,402
<PAGE>
34
Other Deferred Liabilities
Other Deferred Liabilities
Other Deferred Liabilities.......... 32,548 31,154
Common Stockholders' Equity
Common Stockholders' Equity
Common Stockholders' Equity
Class A Common Stock--par value $5
per share:
Authorized--7,500,000 shares;
issued and outstanding shares--
4,817,392 in 1995 and 1994 ........ 24,087 24,087
Class B Common Stock--par value $5
per share:
Authorized--7,500,000 shares;
issued and outstanding shares--
5,135,558 in 1995 and 4,985,706 in 25,678 24,929
................................
1994
Additional paid-in capital ........ 92,249 90,549
Unearned restricted stock ......... (3,733) )
(1,266
Retained Earnings ................. __________
51,214 __
_______
122,162
Total Common Stockholders' Equity
Total Common Stockholders' Equity
Total Common Stockholders' Equity 189,495
. 260,461
_________
_________
_____
_____
________
$583,214 ________
$704,076
________
________
<FN>
See notes to consolidated financial statements
</TABLE>
-19-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF OPERATIONS
Crown Central Petroleum Corporation and Subsidiaries
(thousands of dollars, except per share amounts)
Year Ended December 31
______
______
______
________
1995 ________
1994 ________
1993
_
<S> <C> <C> <C>
Revenues
Revenues
Revenues
Sales and operating revenues
<PAGE>
35
(including excise taxes
of 1995--$413,290; 1994--$380,610, $1,864,63 $1,699,16 $1,747,41
1993--$296,228)........................ 9 8 1
Operating Costs and Expenses
Operating Costs and Expenses
Operating Costs and Expenses
Costs and operating expenses ......... 1,753,886 1,602,104 1,604,696
Selling and administrative expenses .. 82,792 84,754 91,714
Depreciation and amortization ........ 36,640 42,644 41,873
Sales, abandonments and write-down of
property, plant
and equipment:
Write-down of property, plant 80,524 16,841
and equipment ........................
Sales and abandonments of ________
_______
______
property, plant and equipment ........
)
_____
(311 )
______
(840 _______
2,331
_
_
_
_________
1,953,531 _________
1,745,503 _________
1,740,614
Operating (Loss) Income
Operating (Loss) Income
Operating (Loss) Income................ )
(88,892 (46,335 6,797
)
Interest and other income ............ 5,351 1,502 1,461
Interest expense ..................... _____
______
_____
)
_______
(14,948 )
_
______
(8,003 ________
(7,451)
(Loss) Income Before Income Taxes and
(Loss) Income Before Income Taxes and
(Loss) Income Before Income Taxes and )
(98,489 (52,836 807
)
Extraordinary Item
Extraordinary Item
Extraordinary Item.....................
Income Tax (Benefit) Expense
Income Tax (Benefit) Expense
Income Tax (Benefit) Expense........... _____
____
____
)
_______
(31,122 )
_______
(17,430 _________
5,107
(Loss) Before Extraordinary Item
(Loss) Before Extraordinary Item
(Loss) Before Extraordinary Item....... )
(67,367 (35,406 (4,300
) )
Extraordinary (Loss) from Early
Extraordinary (Loss) from Early
Extraordinary (Loss) from Early
Extinguishment
Extinguishment
Extinguishment
of Debt (net of income tax benefit of
of Debt (net of income tax benefit of
of Debt (net of income tax benefit of ________
( ________
________
$2,039)
$2,039)
$2,039)................................
_____
3,257__
) ________
________
Net (Loss)
Net (Loss)
Net (Loss)............................. ____
$ ___
$ ______
$
____
___
______
_______
(70,624) )
_______
(35,406 _
______
(4,300 )
_______
_______
_______
Net (Loss) Per Share:
Net (Loss) Per Share:
Net (Loss) Per Share:
(Loss) Before Extraordinary Item
(Loss) Before Extraordinary Item
(Loss) Before Extraordinary Item....... $ $ $
)
(6.95 (3.63 ) (.44)
Extraordinary (Loss) from Early
Extraordinary (Loss) from Early
Extraordinary (Loss) from Early
<PAGE>
36
Extinguishment of Debt
Extinguishment of Debt
Extinguishment of Debt ............... ________
________
________
)
_______
(.33 ________
________
Net (Loss) Per Share
Net (Loss) Per Share
Net (Loss) Per Share................... ________
$ _______
$ ________
$
________
_______
________
_____
(7.28 )
__
)
__
_____
(3.63 __
_____
(.44 )
_______
_______
_______
<FN>
See notes to consolidated financial statements
</TABLE>
-20-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS' EQUITY
Crown Central Petroleum Corporation and Subsidiaries
(thousands of dollars, except per share amounts)
Class A Class BAdditional Unearned
_____________________
Common Stock
________________
Common Stock
____
____
Paid-In Restricted Retained
___________
Shares
______
Amount
___________
Shares
______
Amount
_
_________
Capital ___________
Stock ________
Earnings
___________
Total
<S> <C> <C> <C> <C> <C>
<C> <C> <C>
Balance at January 1, 1993
Balance at January 1, 1993
Balance at January 1, 1993 4,817,392 5,015,206
$24,087 $25,076 $91,870
$162,241 $303,274
Net (loss) for 1993 (4,300
(4,300)
)
Adjustment to record minimum
pension liability, net of
deferred income tax
benefit of $335 ________________
_____________
________________
______
_____
_____________
___________
(621 ) ___________
(621 )
Balance at December 31, 1993
Balance at December 31, 1993
Balance at December 31, 1993 4,817,39224,0875,015,206 25,076 91,870
157,320 298,353
Net (loss) for 1994 (35,406 )
(35,406 )
<PAGE>
37
Adjustment to minimum
pension liability recorded
in 1993, net of deferred
income tax benefit of $133 248
248
Purchases of Common Stock (135,000 (2,059
)
(675
) )
(2,734 )
Stock registered to
participants of stock
incentive plans 105,500 528 $(1,810
1,282 )
Market value adjustments to
Unearned Restricted Stock _________________
______________
__________
______
____________
__
_________
(544 _________
544
)
_
_______________
______________
Balance at December 31, 1994
Balance at December 31, 1994
Balance at December 31, 1994 4,817,392 4,985,706
24,087 24,929 90,549
(1,266 122,162
) 260,461
Net (loss) for 1995 )
(70,624
(70,624 )
Adjustment to minimum
pension liability recorded
in 1993, net of deferred
income tax benefit of $174 (324)
(324 )
Stock registered to
participants of stock
incentive plans 149,800 749 (2,022
1,273 )
Market value adjustments to
Unearned Restricted Stock 445 )
(445
Other ________________
_____________
______________
52
______
______
___________
(18 ____________
) _______________
_____________
(18 )
Balance at December 31, 1995
Balance at December 31, 1995
Balance at December 31, 1995 _________
4,817,392_______
$24,087_________
5,135,558 _______
$25,678 _______
$92,249
_________
_______
_________
_______
_______
_______
$(3,733 )_________
$ 51,214 ________
$189,495
_______
_________
________
See notes to consolidated financial statements
</TABLE>
-21-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS
Crown Central Petroleum Corporation and Subsidiaries
(thousands of dollars)
<PAGE>
38
Year Ended December 31
_______
1995 _______
1994 _______
1993
__
_
_
<S> <C> <C> <C>
Cash Flows From Operating
Cash Flows From Operating
Cash Flows From Operating
Activities
Activities
Activities
Net (loss)......................... $ $ $
(70,624 (35,406
) (4,300
) )
Reconciling items from net (loss)
to net
cash provided by operating
activities:
Depreciation and amortization 36,640
.... 42,644 41,873
loss on sales of property,
(Gain)
plant
and equipment ................... (311 (840
) 2,331
)
Write-down from implementation of 80,524
SFAS No. 121
Write-down of Pasadena Refinery 16,841
HDS equipment......................
Equity (earnings) loss in (2,369) (651
880 )
unconsolidated subsidiaries........
Deferred income taxes ............ (25,986 (2,303
) (4,202
) )
Other deferred items ............. 1,880 830
412
Extraordinary loss ............... 3,257
Changes in assets and liabilities
Accounts receivable .............. 23,185 (37,571 21,507
)
Inventories ...................... (1,0 (8,122
)
92 (13,357
) )
Other current assets ............. (1,331 (502
) 641
)
Crude oil and refined products (38,841 46,711
) (30,250)
............................
payable
Other accounts payable ........... (5,701 9,488
) 2,713
Accrued liabilities .............. 15,288 1,355 1,623
Income taxes payable ............ (3,264) 3,264
Recoverable and deferred income (6,245 (21,721
) ) 6,856
taxes..............................
Deferred financing costs ......... _____
_______
_______
______
(4,102 _______
) _______
Net Cash Provided by Operating
Net Cash Provided by Operating
Net Cash Provided by Operating ______
______
____
Activities
Activities
Activities.........................
_____
4,172 _____
8,602 ______
28,878
Cash Flows From Investment
Cash Flows From Investment
Cash Flows From Investment
Activities
Activities
Activities
Capital expenditures ............. (41,010) (34,359) (40,860)
Proceeds from sales of property, 6,359 4,868 5,515
plant and equipment................
Investment in subsidiaries ....... 6,778 (101) )
(4
Deferred turnaround maintenance _____
___
_____
and other..........................
<PAGE>
39
______
(9,545) _______
(13,390 ______
(4,678
) )
Net Cash (Used in) Investment
Net Cash (Used in) Investment
Net Cash (Used in) Investment ___
___
___
Activities
Activities
Activities.........................
_______
(37,418 _______
(42,982
) _______
(40,027
) )
Cash Flows From Financing
Cash Flows From Financing
Cash Flows From Financing
Activities
Activities
Activities
Proceeds from debt and credit 142,711 64,220 5,472
agreement borrowings...............
Repayments of debt and credit (122,755 (24,199 (376
) )
agreement borrowings............... )
Proceeds from interest rate swap 2,403
terminations.......................
Net (issuances) repayments of 467 167
)
(60
long-term notes receivable.........
Purchases of common stock ........ _______
_____
_______
_______
______
(2,734 _______
)
_
Net Cash Provided by Financing
Net Cash Provided by Financing
Net Cash Provided by Financing _____
____
_____
Activities
Activities
Activities .......................
______
20,423 ______
37,227 _______
7,666
Net (Decrease) Increase in Cash
Net (Decrease) Increase in Cash
Net (Decrease) Increase in Cash (12,823 2,84
) (3,483
7 )
and Cash Equivalents
and Cash Equivalents
and Cash Equivalents...............
Cash and Cash Equivalents at
Cash and Cash Equivalents at
Cash and Cash Equivalents at _____
____
____
Beginning of Year
Beginning of Year
Beginning of Year..................
______
54,868 ______
52,021 ______
55,504
Cash and Cash Equivalents at End of
Cash and Cash Equivalents at End of
Cash and Cash Equivalents at End of ____
$ ___
$ ___
$
Year
Year
Year
____
___
___
______
42,045 ______
54,868 ______
52,021
______
______
______
Supplemental Disclosures of Cash
Supplemental Disclosures of Cash
Supplemental Disclosures of Cash
Flow Information
Flow Information
Flow Information
Cash paid during the year for:
Interest (net of amount $ $ $
capitalized)....................... 19,670 6,608 4,249
Income taxes .................... 9,490 6,124 4,329
<FN>
See notes to consolidated financial statements
</TABLE>
-22-
<PAGE>
40
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Crown Central Petroleum Corporation and Subsidiaries
Note A--Description of Business and Summary of
Note A--Description of Business and Summary of
Note A--Description of Business and Summary of
Accounting Policies
Accounting Policies
Accounting Policies
_______________________
Description of Business: Crown Central Petroleum
Corporation and subsidiaries (the Company)
operates primarily in one business segment as an
independent refiner and marketer of petroleum
products, including petrochemical feedstocks. The
Company operates two refineries, one located near
Houston, Texas with a rated capacity of 100,000
barrels per day of crude oil and another in Tyler,
Texas with a rated capacity of 52,000 barrels per
day of crude oil. Its principal business is the
wholesale and retail sale of its products through
15 product terminals located on three major
product pipelines along the Gulf Coast and the
Eastern Seaboard and in the Central United States
and through a network of 348 gasoline stations,
convenience stores and mini-marts located in the
Mid-Atlantic and Southeastern United States.
Crude oil and refined products are the Company's
principle raw materials and finished goods,
respectively. The price of crude oil and refined
products are subject to worldwide market forces of
supply and demand. Prices can be volatile and
fluctuations influence the Company's financial
results.
Employment at the Company's Pasadena and Tyler
refineries represent approximately 12% and 8%,
respectively, of the Company's total employment at
December 31, 1995. Additionally, approximately
69% of the Pasadena refinery employees and
approximately 66% of the Tyler refinery employees
are subject to collective bargaining agreements.
The Company's collective bargaining agreement with
the Oil Chemical & Atomic Workers Union covering
employees at the Pasadena refinery expired on
February 1, 1996. Negotiations for a new
agreement are currently under way.
Locot Corporation, a wholly-owned subsidiary of
the Company, is the parent company of La Gloria
Oil and Gas Company (La Gloria) which operates the
Tyler refinery, a pipeline gathering system in
Texas and product terminals located along the
Texas Eastern Pipeline system.
<PAGE>
41
F Z Corporation, a wholly-owned subsidiary of the
Company, is the parent company of two convenience
store chains operating in six states, retailing
both merchandise and gasoline.
The following summarizes the significant
accounting policies and practices followed by the
Company:
___________________________
Principles of Consolidation: The consolidated
financial statements include the accounts of Crown
Central Petroleum Corporation and all significant
majority-owned subsidiaries. All significant
intercompany accounts and transactions have been
eliminated. The Company's investment in T. B. and
Company, Inc. (Formerly Tongue, Brooks and
Company, Inc.) and Tiara Insurance Company, two
wholly-owned insurance subsidiaries, which prior
to 1995 had been accounted for using the equity
method, are now fully consolidated. The impact of
consolidating these subsidiaries was not material.
________________
Use of Estimates: The preparation of financial
statements in conformity with generally accepted
accounting principles requires management to make
estimates and assumptions that affect the amounts
reported in the financial statements and
accompanying notes. Actual results could differ
from those estimates.
_________________________
Cash and Cash Equivalents: Cash in excess of
daily requirements is invested in marketable
securities with maturities of three months or
less. Such investments are deemed to be cash
equivalents for purposes of the statements of cash
flows.
___________________
Accounts Receivable: The majority of the
Company's accounts receivable relate to sales of
petroleum products to third parties operating in
the petroleum industry.
___________
Inventories: The Company's crude oil, refined
products, and convenience store merchandise and
gasoline inventories are valued at the lower of
cost (last-in, first-out) or market with the
exception of crude oil inventory held for resale
which is valued at the lower of cost (first-in,
first-out) or market. Materials and supplies
inventories are valued at cost. Incomplete
exchanges of crude oil and refined products due
the Company or owing to other companies are
reflected in the inventory accounts.
<PAGE>
42
-23-
<PAGE>
_____________________________
Property, Plant and Equipment: Property, plant
and equipment is carried at cost. Costs assigned
to property, plant and equipment of acquired
businesses are based on estimated fair value at
the date of acquisition. Depreciation and
amortization of plant and equipment are primarily
provided using the straight-line method over
estimated useful lives. Construction in progress
is recorded in property, plant and equipment.
Expenditures which materially increase values,
change capacities or extend useful lives are
capitalized in property, plant and equipment.
Routine maintenance, repairs and replacement costs
are charged against current operations. At
intervals of two or more years, the Company
conducts a complete shutdown and inspection of
significant units (turnaround) at its refineries
to perform necessary repairs and replacements.
Costs associated with these turnarounds are
deferred and amortized over the period until the
next planned turnaround, which generally ranges
from 24 to 48 months.
Upon sale or retirement, the costs and related
accumulated depreciation or amortization are
eliminated from the respective accounts and any
resulting gain or loss is included in income.
In March 1995, the Financial Accounting Standards
Board issued Statement of Financial Accounting
Standards No. 121 ``
Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of,''
(SFAS 121). SFAS 121 requires
that long-lived assets and certain identifiable
intangibles, including goodwill, to be held and
used by an entity, be reviewed for impairment
whenever events or changes in circumstances
indicate that the carrying amount of the asset(s)
may not be recoverable. The Company has chosen to
adopt SFAS 121 effective October 1, 1995. The
decline in operating margins and continuing
operating losses were indicators of potential
impairment at the Company's Tyler refinery. The
estimated undiscounted cash flows anticipated from
operating this refinery indicated that a write-
down to fair market value was required under SFAS
121. This write-down from the initial adoption of
SFAS 121 resulted in a charge to income before
income taxes of $80.5 million which is included
in the Statement of Operations as Write-downs of
property, plant and equipment. The estimated fair
<PAGE>
43
value of these assets was determined by an
independent appraisal.
___________________
Environmental Costs: The Company conducts
environmental assessments and remediation efforts
at multiple locations, including operating
facilities, and previously owned or operated
facilities. Estimated closure and post-closure
costs for active, refinery and finished product
terminal facilities are not recognized until a
decision for closure is made. Estimated closure
and post-closure costs for active and operated
retail marketing facilities and costs of
environmental matters related to ongoing refinery,
terminal and retail marketing operations are
recognized as follows. Expenditures for equipment
necessary for environmental issues relating to
ongoing operations are capitalized. The Company
accrues environmental and clean-up related costs
of a non-capital nature when it is both probable
that a liability has been incurred and that the
amount can be reasonably estimated. Accruals for
losses from environmental remediation obligations
generally are recognized no later than completion
of the remediation feasibility study. Estimated
costs, which are based upon experience and
assessments, are recorded at undiscounted amounts
without considering the impact of inflation, and
are adjusted periodically as additional or new
information is available.
____________________________
Sales and Operating Revenues: Sales and operating
revenues and Costs and operating expenses include
excise and other similar taxes. Resales of crude
oil are recorded net of the related crude oil cost
(first-in, first-out) in sales and operating
revenues.
_______________________
Interest Capitalization: Interest costs incurred
during the construction and preoperating stages of
significant construction or development projects
is capitalized and subsequently amortized by
charges to earnings over the useful lives of the
related assets.
________________________
Amortization of Goodwill: The excess purchase
price of acquisitions of businesses over the
estimated fair value of assets acquired is being
amortized on a straight-line basis over 20 years.
____________________________________________
Financial Instruments and Hedging Activities - The
Company periodically enters into interest rate
swap agreements to effectively manage the cost of
<PAGE>
44
borrowings. All interest rate swaps are only
subject to market risk as interest rates
fluctuate. For interest rate swaps designated to
the Company's long-term debt and accounted for as
a hedge, the net amounts payable or receivable
from periodic settlements under outstanding
interest rate swaps are included in interest
expense. Realized gains and losses from
terminated interest rate swaps are deferred and
amortized into interest expense over the shorter
of the term of the underlying debt or the
remaining term of the original swap agreement.
Settlement of interest rate swaps involves the
receipt or payment of cash on a periodic basis
during the duration of the contract, or upon the
Company's termination of the contract, for the
differential of the interest rates swapped over
the term of the contract.
-24-
<PAGE>
Other instruments are used to minimize the
exposure of the Company's refining margins to
crude oil and refined product price fluctuations.
Hedging strategies used to minimize this exposure
include fixing a future margin between crude oil
and certain finished products and also hedging
fixed price purchase and sales commitments of
crude oil and refined products. Futures, forwards
and exchange traded options entered into with
commodities brokers and other integrated oil and
gas companies are utilized to execute the
Company's strategies. These instruments generally
allow for settlement at the end of their term in
either cash or product.
Net realized gains and losses from these hedging
strategies are recognized in costs and operating
expenses when the associated refined products are
sold. Unrealized gains and losses represent the
difference between the market price of refined
products and the price of the derivative financial
instrument, inclusive of refining costs.
Individual transaction unrealized gains and losses
are deferred in inventory and other current assets
and liabilities to the extent that the associated
refined products have not been sold. A hedging
strategy position generating an overall net
unrealized loss is recognized in costs and
operating expenses. While the Company's hedging
activities are intended to reduce volatility while
providing an acceptable profit margin on a portion
of production, the use of such a program can limit
the Company's ability to participate in an
improvement in related refined product profit
margins.
<PAGE>
45
___________
Credit Risk - The Company is potentially subjected
to concentrations of credit risk with accounts
receivable, interest rate swaps, and futures,
forwards and exchange traded options for crude oil
and finished products. Because the Company has a
large and diverse customer base with no single
customer accounting for a significant percentage
of accounts receivable, there was no material
concentration of credit risk in these accounts at
December 31, 1995. The Company evaluates the
credit worthiness of the counterparties to
interest rate swaps, and futures, forwards and
exchange traded options and considers non-
performance credit risk to be remote. The amount
of exposure with such counterparties is generally
limited to unrealized gains on outstanding
contracts.
________________________
Stock Based Compensation - In October 1995, the
Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No.
123 ``
Accounting for Stock-Based Compensation,''
(SFAS 123). The new standard establishes a fair
value based method of accounting for stock-based
compensation plans. Although SFAS 123 encourages
entities to adopt the fair value based method in
place of the provisions of Accounting Principles
Board Opinion No. 25 (APBO 25), it does not
require adoption of the fair value method.
Entities electing to continue applying the
provisions of APBO 25 will be required to
disclose, for each year for which an income
statement is presented, the proforma net income
and proforma earnings per share as if the fair
value based accounting method prescribed by this
Statement No. 123 had been used to account for
stock-based compensation cost. The accounting
provisions of SFAS 123, if elected, are effective
for transactions entered into after December 15,
1995. The disclosure requirements of this
Statement are effective for fiscal years beginning
after December 15, 1995. The Company's current
intention is to continue to account for stock-
based compensation transactions in accordance with
the provisions of APBO 25.
Note B--Inventories
Note B--Inventories
Note B--Inventories
<TABLE>
<CAPTION>
Inventories consist of the following:
December 31
_______
1995 _______
1994
<PAGE>
46
(thousands of
dollars)
<S> <C> <C>
............................
Crude oil $ 58,047 $ 53,359
Refined products..................... __
__
______
77,342 ______
74,299
Total inventories at FIFO 135,389 127,658
(approximates current cost)..........
LIFO allowance....................... _
_
)
_______
(52,301 )
_______
(45,125
Total crude oil and refined products __
__
______
83,088 ______
82,533
Merchandise inventory at FIFO 6,453 7,150
(approximates current cost)..........
LIFO allowance....................... __
___
)
______
(1,674 )
______
(2,110
Total merchandise .................. ___
____
_____
4,779 _____
5,040
Materials and supplies inventory at ___
____
................................
FIFO .
_____
8,158 _____
7,360
Total Inven
Total Inven
Total Inven ....................
tory
tory
tory ________
$ 96,025 __
$
________
__
______
94,933
______
</TABLE>
As a result of a reduction in LIFO inventories,
which were carried at lower costs prevailing in
prior years, the net loss for 1995 decreased by
approximately $3 million ($.31 per share).
-25-
<PAGE>
<TABLE>
<CAPTION>
Note C--Long-Term Debt and Credit Arrangements
Note C--Long-Term Debt and Credit Arrangements
Note C--Long-Term Debt and Credit Arrangements
Long-term debt consists of the following:
<PAGE>
47
December 31
________
1995 ________
1994
(thousands of
dollars)
<S> <C> <C>
Unsecured 10.875% Senior Notes $
..
124,716
Unsecured 10.42% Senior Notes... $
60,000
Unsecured Credit Agreement...... 35,000
Purchase Money Lien............. 4,492 5,579
Other obligations............... ________
______
_____
856 _____
6,115
130,064 106,694
Less current portion............ _______
____
_____
1,558 ______
10,062
Long-Term Debt
Long-Term Debt
Long-Term Debt ................ __
$ ___
$
__
___
_______
128,506 ______
96,632
_______
______
</TABLE>
The aggregate maturities of long-term debt through
2000 are as follows (in thousands):
1996 - $1,297; 1997 - $1,369; 1998 - $1,455;
1999 - $763; 2000 - $72.
On January 24, 1995, the Company completed the
sale of $125 million of unsecured 10.875% Senior
Notes due February 1, 2005 priced at 99.75%
(Notes). Approximately $55 million of the net
proceeds from the sale was used to retire the
Company's outstanding 10.42% Senior Notes,
including a prepayment premium of $3.4 million,
and $8 million was used to reduce amounts
outstanding under the Company's unsecured bank
lines. The remaining portion of the outstanding
10.42% Senior Notes had been paid on January 3,
1995 as part of the regularly scheduled debt
service. The Notes were issued under an Indenture
which includes certain restrictions and
limitations customary with senior indebtedness of
this type including, but not limited to, the
payment of dividends and the repurchase of capital
<PAGE>
48
stock. The retirement of the Company's
outstanding 10.42% Senior Notes resulted in a net
extraordinary loss in the first quarter of 1995 of
$3.3 million.
Effective as of September 25, 1995, the Company
entered into a two year Unsecured Revolving Credit
Agreement (Agreement) with NationsBank of Texas,
N.A., as administrative agent and letter of credit
agent, and The First National Bank of Boston and
Texas Commerce Bank National Association, as
agents. Additionally, there are six other
participant banks. Under the Agreement, the banks
have committed a maximum of $130 million to the
Company for cash borrowings and letters of credit.
The Agreement allows for interest on outstanding
borrowings to be computed under one of three
methods based on the Base Rate, the London
Interbank Offered Rate, or the Certificates of
Deposit Rate (all as defined). The Agreement
limits indebtedness (as defined) and cash
dividends and requires the maintenance of various
covenants including, but not limited to, minimum
consolidated tangible net worth, minimum working
capital and minimum FIFO net income or (loss) (all
as defined). The Company intends to use the
Agreement for general corporate and working
capital purposes. This Agreement replaces the
Revolving Credit Facility dated as of May 10,
1993, as amended.
As of December 31, 1995, the Company had
outstanding irrevocable standby letters of credit
in the principal amount of $28.7 million. Unused
commitments under the terms of the Credit
Agreement totaling $101.3 million were available
for future borrowings and issuance of letters of
credit at December 31, 1995. The Company pays an
annual commitment fee on the unused portion of the
credit line.
The Purchase Money Lien is secured by certain
service station equipment and office furnishings
having a cost basis of $6.5 million. The
effective rate for the Money Lien is 6.65%.
Ninety percent of the principal is repayable in 60
monthly installments with a balloon payment of 10%
of the principal payable in January 1999.
<TABLE>
<CAPTION>
The following interest costs were charged to pre-tax income:
Year Ended December 31
_______
1995 ______
1994 _______
1993
(thousands of dollars)
<S> <C> <C> <C>
Total interest costs incurred.... $ 15,234 $ 8,288 $ 7,712
<PAGE>
49
Less: Capitalized interest....... _______
_____
_____
___
286 ___
285 ___
261
Interest Expense
Interest Expense
Interest Expense ________
$ 14,948 _______
$ 8,003 _______
$ 7,451
________
_______
_______
</TABLE>
-26-
<PAGE>
Note D--Crude Oil and Refined Product Hedging
Note D--Crude Oil and Refined Product Hedging
Note D--Crude Oil and Refined Product Hedging
Activities and Other Derivative Financial
Activities and Other Derivative Financial
Activities and Other Derivative Financial
Instruments
Instruments
Instruments
The net deferred loss from crude oil and refined
product hedging strategies at December 31, 1995
was $1.6 million. Included in these hedging
strategies are contracts maturing from January
1996 to October 1996. The amount of estimated
crude requirements and estimated finished product
sales hedged at December 31, 1995 was not
material.
In the fourth quarter of 1995, the Company
terminated all outstanding interest rate swap
agreements which effectively converted $47.5
million of its fixed rate debt to variable
interest rate debt. At December 31, 1995, the
Company has recorded a deferred gain of $1.4
million which will be amortized into income over
the remaining terms of the original swap
agreements ranging from 1996 to 1998. As a result
of its interest rate swap program, the Company's
effective interest rate on the Notes for 1995 was
reduced from approximately 11.7%
%
% to approximately
10.5% per annum. The Company may utilize interest
rate swaps in the future to further manage the
cost of funds.
Note E--Income Taxes
Note E--Income Taxes
Note E--Income Taxes
<TABLE>
<CAPTION>
Significant components of the Company's deferred tax liabilities
and assets are as follows:
_______
1995 _______
1994
(thousands of
dollars)
<S> <C> <C>
Deferred tax liabilities:
Depreciation and amortization ..... $ (57,660 $
<PAGE>
50
) (56,715)
Difference between book and tax
basis of
property, plant and equipment ... 0 )
(28,880
.............................
Other __
___
_______
(22,264) )
_______
(18,748
Total deferred tax liabilities (79,924
.. ) )
(104,343
Deferred tax assets:
Postretirement and pension 5,919 5,804
obligations.........................
Environmental, litigation and other 9,552 11,542
............................
accruals
Construction and inventory cost not 8,156 4,006
currently deductible................
Benefit of future NOL utilization . 10,659 0
.............................
Other ___
_____
______
17,643 _____
9,589
Total deferred tax assets ....... ___
___
______
51,929 ______
30,941
Net deferred tax liabilities _________
$ (27,995
.... _________
$ (73,402
_________
_________
______
______
______
_
) ______
_
)
</TABLE>
No valuation allowance is considered necessary for
the above deferred tax assets. The company has tax
credit carryforwards of $390,000 which expire in
the years 2004 through 2009, along with net
operating loss carryforwards of $36.2 million
which expire in the year 2010.
Recoverable income taxes includes an income tax
receivable for the anticipated refund from the
current use of net operating losses and the
estimated benefit from net operating loss
carryforwards that will be used in 1996.
-27-
<PAGE>
<TABLE>
<CAPTION>
Significant components of the income tax (benefit) provision for
the years ended December 31 follows.
<PAGE>
51
_______
1995 _______
1994 _______
1993
(thousands of dollars)
<S> <C> <C> <C>
Current:
.....................
Federal $ $ $
)
(5,372 (14,541 5,278
)
.......................
State _______
_______
____
___
236 )
____
(586 _____
1,779
Total Current ............. (5,136 (15,127
) 7,057
)
Deferred:
.....................
Federal (25,178 (2,188
) (3,642
) )
.......................
State ______
_______
______
)
__
____
(808 )
____
(115 )
____
(560
Total Deferred ............ (25,986 (2,303
) (4,202
) )
Federal tax rate increase..... _______
_______
____
______
_______
_____
2,252
Income Tax (Benefit) Expense
Income Tax (Benefit) Expense
Income Tax (Benefit) Expense _
$ _
$ ___
$
_
_
___
_______
(31,122 _______
(17,430
) _____
5,107
)
_______
_______
_____
</TABLE>
Current state tax provision includes franchise
taxes of $750,000, $1,000,000 and $1,275,000 for
the years 1995, 1994 and 1993, respectively.
<TABLE>
<CAPTION>
The following is a reconciliation of the statutory federal income
tax rate to the actual effective income tax rate for the years
ended December 31:
______
1995 _______
1994 _______
1993
_
(thousands of dollars)
<S> <C>
<C> <C>
Income tax (benefit) expense
calculated at the
statutory federal income tax $ $ $
............................
rate (34,472 (18,492) 282
<PAGE>
52
)
Amortization of goodwill and 2,726 330 330
purchase adjustment.............
State taxes (net of federal (572 (700
) ) 798
........................
benefit)
Federal tax rate increase....... 2,252
...........................
Other _____
_____
________
1,445
_____
1,196 _____
1,432
Income Tax Expense (Benefit)
Income Tax Expense (Benefit)
Income Tax Expense (Benefit) _
$
.. _
$ _______
$ 5,107
_
_
_______
_______
(31,122 _______
(17,430)
_______
_______
)
</TABLE>
Note F--Capital Stock and Net Income Per Common
Note F--Capital Stock and Net Income Per Common
Note F--Capital Stock and Net Income Per Common
Share
Share
Share
Class A Common stockholders are entitled to one
vote per share and have the right to elect all
directors other than those to be elected by other
classes of stock. Class B Common stockholders are
entitled to one-tenth vote per share and have the
right to elect two directors. Net (loss) per
share for 1995 and 1994 is based upon the weighted
average of common shares outstanding of 9,697,611
and 9,742,598, respectively, in each year. Net
(loss) per share for 1993 is based upon the
9,832,598 common shares outstanding. The average
outstanding and equivalent shares excludes 255,300
and 105,500 shares of Performance Vested
Restricted Stock (PVRS) shares registered to
participants in the 1994 Long-Term Incentive Plan
(Plan) at December 31, 1995 and 1994,
respectively. The PVRS shares registered in
participants names are being held by the Company
subject to the attainment of certain performance
related goals and are not considered outstanding
for net income (loss) per share calculations until
the shares are released to the Plan participants.
Note G--Long-Term Incentive Plan
Note G--Long-Term Incentive Plan
Note G--Long-Term Incentive Plan
Under the terms of the 1994 Long-term Incentive
Plan (Plan), the Company may distribute to
selected employees restricted shares of the
Company's Class B Common Stock and options to
purchase Class B Common Stock. Up to 1.1 million
shares of Class B Common Stock may be distributed
under the Plan. The balance sheet caption
<PAGE>
53
"Unearned restricted stock" is charged for the
market value of restricted shares at their grant
date and changes in the market value of shares
outstanding until the vesting date, and is shown
as a reduction of stockholders' equity. The
impact is further reflected within Class B Common
Stock and Additional paid-in-capital.
-28-
<PAGE>
Performance Vested Restricted Stock (PVRS) awards
are subject to the attainment of performance goals
and certain restrictions including the receipt of
dividends and transfers of ownership. As of
December 31, 1995, 255,300 shares of PVRS have
been registered in participants names and are
being held by the Company subject to the
attainment of the related performance goals.
Under the 1994 Long-term Incentive Plan, non-
qualified stock options are granted to
participants at a price not less than 100% of the
fair market value of the stock on the date of
grant. The exercise period is ten years with the
options vesting one-third per year over three
years after a one-year waiting period. As of
December 31, 1995, grants of non-qualified stock
options have been awarded to participants to
purchase 505,000 shares of the Company's Class B
Common Stock.
Under the terms of the 1995 Management Stock
Option Plan, the Company may award to participants
non-qualified stock options to purchase shares of
the Company's Class B Common Stock at a price
equal to 100% of the fair market value of the
stock at the date of grant. Up to 500,000 shares
of Class B Common Stock may be distributed under
the Plan. The exercise period is ten years with
the options vesting one-third per year over three
years after a one-year waiting period. As of
December 31, 1995, grants of non-qualified stock
options have been awarded to participants to
purchase 461,760 shares of the Company's Class B
Common Stock.
Shares of Class B Common Stock available for
issuance under options or awards amounted to
377,940 at December 31, 1995.
<TABLE>
<CAPTION>
Detail of the Company's stock options are as follows:
Common Price
Range
<PAGE>
54
____
________
per
________
Shares _________
share
_
<S> <C> <C>
_____________________________
1994 Long-Term Incentive Plan
Granted - 1994................. 109,800 $16.25 -
$16.88
Canceled - 1994................ _____
$16.88
____
(950 )
Outstanding - December 31, 108,850 $16.25 -
.............................
1994 $16.88
Granted - 1995
................. _______
396,150 $12.81 -
$13.75
Outstanding - December 31, _______
505,000 $12.81 -
.............................
1995 $16.88
_______
Shares Exercisable at December ________
36,283 $16.25 -
.........................
31, 1995 $16.88
________
_________________________________
1995 Management Stock Option Plan
Granted - 1995................. _______
461,760 $13.75 -
$16.06
Outstanding - December 31, 461,760 $13.75 -
1995............................. $16.06
Total outstanding - December _______
966,760 $12.81 -
31, 1995......................... $16.88
_______
</TABLE>
Note H--Employee Benefit Obligations
Note H--Employee Benefit Obligations
Note H--Employee Benefit Obligations
The Company has a defined benefit pension plan
covering the majority of full-time employees. The
Company also has several defined benefit plans
covering only certain senior executives. Plan
benefits are generally based on years of service
and employees' average compensation. The
Company's policy is to fund the pension plans in
amounts which comply with contribution limits
imposed by law. Plan assets consist principally
of fixed income securities and stocks.
<TABLE>
<CAPTION>
Net periodic pension costs consisted of the following components:
<PAGE>
55
Year Ended December 31
1995 1994 1993
(thousands of dollars)
<S> <C> <C> <C>
Service cost - benefit earned $ $ $
during the year.................. 4,015 4,666 4,002
Interest cost on projected 322
7, 6,566 6,326
benefit obligations..............
Actual loss (return) on plan (22,346 1,455 (11,738
...........................
assets ) )
Total amortization and deferral __
.. __
____
______
15,086 ______
(8,733 _____
5,324
)
Net periodic pension costs .... ___
$ __
$ ___
$
___
__
___
_____
4,077 _____
3,954 _____
3,914
_____
_____
_____
</TABLE>
-29-
<PAGE>
<TABLE>
<CAPTION>
Assumptions used in the accounting for the defined benefit plans
as of December 31 were:
1995 1994 1993
<S> <C> <C> <C>
Weighted average discount rates 7.25%
.. 8.75% 7.25%
Rates of increase in compensation 4.00% 4.00% 4.00%
levels...........................
Expected long-term rate of return 9.75% 9.50% 9.50%
on assets........................
</TABLE>
<TABLE>
<CAPTION>
The following table sets forth the funded status of the plans in
which assets exceed accumulated benefits:
December 31
_______
1995 _______
1994
(thousands of
dollars)
<S> <C> <C>
<PAGE>
56
Actuarial present value of
benefit obligations:
Vested benefit obligation ...... __
$ ________
$ 65,073
______
84,992
Accumulated benefit obligation __
$
. ________
$ 67,350
______
87,889
Projected benefit obligation $107,022
... $ 80,164
Plan assets at fair value........ __
__
______
93,494 ______
76,090
Projected benefit obligation (in (13,528) (4,074)
excess of) plan assets...........
Unrecognized net loss............ 12,934 5,644
Prior service (benefit) not yet
recognized
in net periodic pension cost (1,162
... (1,141
) )
Unrecognized net (asset) at
beginning of year, net of __
__
amortization.....................
______
(1,960 ______
(2,228
) )
Net pension liability............ ________
$ (3,716 ________
$ (1,799
________
________
) )
</TABLE>
<TABLE>
<CAPTION>
The following table sets forth the funded status of the plans in
which accumulated benefits exceed assets:
December 31
_______
1995 _______
1994
(thousands of
dollars)
<S>
<C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligation ...... _______
$ 5,891 _______
$ 5,163
Accumulated benefit obligation _______
$ 5,891
. _______
$ 5,163
Projected benefit obligation ... $ 6,056 $ 5,189
Plan assets at fair value........ _______
_______
<PAGE>
57
___
0 ___
0
Projected benefit obligation (in (6,056 (5,189
) )
excess of) plan assets...........
Unrecognized net loss............ 1,307 812
Prior service (benefit) not yet
recognized
in net periodic pension cost (70
... (212
) )
Unrecognized net obligation at
beginning of year, net of 1,376 1,605
amortization.....................
Adjustment required to recognize __
__
minimum liability................
______
(2,448 ______
(2,179
) )
Net pension liability............ ________
$ (5,891 ________
$ (5,163
________
________
) )
</TABLE>
In addition to the defined benefit pension plan,
the Company provides certain health care and life
insurance benefits for eligible employees who
retire from active service. The postretirement
health care plan is contributory, with retiree
contributions consisting of copayment of premiums
and other cost sharing features such as
deductibles and coinsurance. Beginning in 1998,
the Company will "cap" the amount of premiums that
it will contribute to the medical plans. Should
costs exceed this cap, retiree premiums would
increase to cover the additional cost.
-30-
<PAGE>
<TABLE>
<CAPTION>
The following table sets forth the accrued cost of the Company's
postretirement benefit plans recognized in the Company's Balance
Sheet:
December 31
______
1995 ______
1994
(thousands of
dollars)
<S> <C> <C>
Accumulated postretirement benefit
obligation (APBO):
Retirees ......................... $ $
6,671 5,496
Fully eligible active plan 1,884 1,280
<PAGE>
58
participants........................
Other active plan participants 3,384
.... 1,752
Unrecognized net (loss)/gain (3,657
...... 363
)
Unrecognized prior service cost __
... _____
_____
1,275 ___
668
Accrued postretirement benefit cost _
$ _
$
_
_
_____
9,557 _____
9,559
_____
_____
</TABLE>
The weighted average discount rate used in
determining the APBO was 7.25% and 8.75% in 1995
and 1994, respectively.
<TABLE>
<CAPTION>
Net periodic postretirement benefit cost include the following
components:
December 31
1995 1994 1993
(thousands of dollars)
<S> <C> <C> <C>
Service cost......................... $ 184 $ 193 $ 161
Interest cost on accumulated 680
815 765
postretirement benefit obligation....
Total amortization and deferral...... ______
(72 ____
_____
) ___
(29) ____
Net periodic postretirement benefit _____
$ 927 ______
$ 844 ______
$ 926
cost.................................
_____
______
______
</TABLE>
The Company's policy is to fund postretirement
costs other than pensions on a pay-as-you-go basis
as in prior years.
An 11% increase in the cost of medical care was
assumed for 1995. This medical trend rate is
assumed to decrease 1% annually to 9% in 1997, and
decrease to 0% thereafter as a result of the
<PAGE>
59
expense cap in 1998. The medical trend rate
assumption affects the amounts reported. For
example, a 1% increase in the medical trend rate
would increase the APBO by $378,000, and the net
periodic cost by $78,000 for 1995.
Note I--Litigation and Contingencies
Note I--Litigation and Contingencies
Note I--Litigation and Contingencies
The Company has been named as a defendant in
various matters of litigation, some of which are
for substantial amounts, and involve alleged
personal injury and property damage from prolonged
exposure to petroleum, petroleum related products
and substances used at its refinery or in the
petroleum refining process. The Company is a co-
defendant with numerous other defendants in a
number of these suits. The Company is vigorously
defending these actions, however, the process of
resolving these matters could take several years.
The liability, if any, associated with these
cases was either accrued in accordance with
generally accepted accounting principles or was
not determinable at December 31, 1995. The
Company has consulted with counsel with respect to
each such proceeding or large claim which is
pending or threatened. While litigation can
contain a high degree of uncertainty and the risk
of an unfavorable outcome, in the opinion of
management, there is no reasonable basis to
believe that the eventual outcome of any such
matter or group of related matters will have a
material adverse effect on the Company.
The Company has received a Revenue Agent's Report
relative to an examination by the Internal Revenue
Service of tax returns for fiscal years 1988 and
1989. A written protest has been filed requesting
an appellate conference. The Company does not
expect the resolution of this matter to have a
material adverse effect on the Company.
-31-
<PAGE>
Like other petroleum refiners and marketers, the
Company's operations are subject to extensive and
rapidly changing federal and state environmental
regulations governing air emissions, waste water
discharges, and solid and hazardous waste
management activities. The Company's policy is to
accrue environmental and clean-up related costs of
a non-capital nature when it is both probable that
a liability has been incurred and that the amount
can be reasonably estimated. While it is often
extremely difficult to reasonably quantify future
environmental related expenditures, the Company
anticipates that a substantial capital investment
will be required over the next several years to
<PAGE>
60
comply with existing regulations. The Company had
recorded a liability of approximately $16.1
million as of December 31, 1995 relative to the
estimated costs of a non-capital nature related to
compliance with environmental regulations. This
liability is anticipated to be expended over the
next five years and is included in the balance
sheet as a noncurrent liability. No amounts have
been accrued as receivables for potential
reimbursement or recoveries to offset this
liability. Included in costs and operating
expenses in the statement of operations for the
years ended December 31, 1995, 1994 and 1993 were
costs related to environmental remediation in the
amount of $3.2 million, $1.9 million and $6.3
million, respectively.
Environmental liabilities are subject to
considerable uncertainties which affect the
Company's ability to estimate its ultimate cost of
remediation efforts. These uncertainties include
the exact nature and extent of the contamination
at each site, the extent of required cleanup
efforts, varying costs of alternative remediation
strategies, changes in environmental remediation
requirements, the number and strength of other
potentially responsible parties at multi-party
sites, and the identification of new environmental
sites. It is possible that the ultimate cost,
which cannot be determined at this time, could
exceed the Company's recorded liability. As a
result, charges to income for environmental
liabilities could have a material effect on the
results of operations in a particular quarter or
year as assessments and remediation efforts
proceed or as new claims arise. However,
management is not aware of any matters which would
be expected to have a material adverse effect on
the Company.
Note J--Noncancellable Lease Commitments
Note J--Noncancellable Lease Commitments
Note J--Noncancellable Lease Commitments
The Company has noncancellable operating lease
commitments for refinery, computer, office and
other equipment, transportation equipment, an
airplane, service station and convenience store
properties, and office space. Lease terms range
from three to ten years for refinery, computer,
office and other equipment and four to eight years
for transportation equipment. The airplane lease
commenced in 1992 and has a term of seven years.
The majority of service station properties have
lease terms of 20 years. The average lease term
for convenience stores is approximately 13 years.
The Corporate Headquarters office lease has a ten
year term beginning in 1993. Certain of these
leases have renewal provisions.
<TABLE>
<PAGE>
61
<CAPTION>
Future minimum rental payments under noncancellable operating
lease agreements as of December 31, 1995 are as follows (in
thousands):
<S> <C>
.....................
1996 $
10,425
.....................
1997 9,613
.....................
1998 9,334
.....................
1999 9,557
.....................
2000 8,270
After 2000 .............. ___
______
37,339
Total Minimum Rental __
$
Payments .................
__
______
84,538
______
</TABLE>
Rental expense for the years ended December 31,
1995, 1994 and 1993 was $12,955,000, $13,658,000
and $14,620,000, respectively.
-32-
<PAGE>
Note K--Investments and Deferred Charges
Note K--Investments and Deferred Charges
Note K--Investments and Deferred Charges
<TABLE>
<CAPTION>
Investments and deferred charges consist of the following:
December 31
_______
1995 _______
1994
(thousands of
dollars)
<S> <C> <C>
Deferred turnarounds .............. $ $ 15,874
10,603
System development costs .......... 6,908 1,081
Loan expense ...................... 3,700 572
Long-term notes receivable ........ 2,563 3,029
Goodwill .......................... 2,243 9,970
Intangible pension asset .......... 1,376 1,605
Investments in subsidiaries ....... 1,185 5,745
Deferred financing costs .......... 838 918
<PAGE>
62
Other ............................. ____
____
_____
1,217 _____
1,331
Investments and Deferred Charges
Investments and Deferred Charges
Investments and Deferred Charges ________
$ 30,633 ________
$ 40,125
________
</TABLE>
Accumulated amortization of goodwill was
$4,395,000, and $6,888,000
at December 31, 1995
and 1994, respectively.
Note L--Fair Value of Financial Instruments
Note L--Fair Value of Financial Instruments
Note L--Fair Value of Financial Instruments
The Company considers cash and cash equivalents,
accounts receivable, investments in subsidiaries,
long-term notes receivable, accounts payable,
long-term debt and interest rate swap agreements
to be its financial instruments. The carrying
amount reported in the balance sheet for cash and
cash equivalents, accounts receivable and accounts
payable, represent their fair values. The fair
value of the Company's long-term notes receivable
at December 31, 1995 was estimated using a
discounted cash flow analysis, based on the
assumed interest rates for similar types of
arrangements. The approximate fair value of the
Company's Long-term Debt at December 31, 1995 was
estimated using a discounted cash flow analysis,
based on the Company's assumed incremental
borrowing rates for similar types of borrowing
arrangements. The fair value of its investments
in subsidiaries is considered to be their carrying
amount since these investments do not have quoted
market prices.
<TABLE>
<CAPTION>
The following summarizes the carrying amounts and related
approximate fair values as of December 31, 1995 of the Company's
financial instruments whose carrying amounts do not equal its
fair value:
Carrying Approxim
___
ate
_______
Fair
_______
Amount
_______
Value
_
(thousands of
dollars)
<S> <C> <C>
<PAGE>
63
Assets
Long-Term Notes Receivable ... $ $
2,563 2,294
Liabilities
Long-Term Debt ............... 128,506 128,181
</TABLE>
-33-
<PAGE>
REPORT OF INDEPENDENT AUDITORS
REPORT OF INDEPENDENT AUDITORS
REPORT OF INDEPENDENT AUDITORS
To the Stockholders
Crown Central Petroleum Corporation
We have audited the accompanying consolidated
balance sheets of Crown Central Petroleum
Corporation and subsidiaries as of December 31,
1995 and 1994, and the related consolidated
statements of operations, changes in common
stockholders' equity, and cash flows for each of
the three years in the period ended December 31,
1995. These financial statements are the
responsibility of the Company's management. Our
responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about whether
the financial statements are free of material
ment. An audit includes examining, on a
misstate
test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit
also includes assessing the accounting principles
used and significant estimates made by management,
as well as evaluating the overall financial
statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in
all material respects, the consolidated financial
position of Crown Central Petroleum Corporation
and subsidiaries at December 31, 1995 and 1994,
and the consolidated results of their operations
and their cash flows for each of the three years
in the period ended December 31, 1995, in
<PAGE>
64
conformity with generally accepted accounting
principles.
As discussed in Note A to the consolidated
financial statements, in the fourth quarter of
1995, the Company changed its method of accounting
for impairment of long-lived assets in accordance
with the adoption of
SFAS No. 121.
/s/---Ernst & Young LLP
Baltimore, Maryland
February 29, 1996
-34-
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED
UNAUDITED
UNAUDITED
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS
Crown Central Petroleum Corporation and Subsidiaries
(thousands of dollars, except per share amounts)
First Third
Second Fourth
_
_
_
_
_________
Yearly
______
Quarte ______
Quarte
______
Quarte ______
Quarte
_
__
r __
r __
r
__
r
<S> <C> <C>
<C> <C> <C>
1995
1995
1995
Sales and operating $445,4 $474,7
$483,3 $461,1 $1,864,63
...............
revenues 24 37
12 66 9
Gross profit...........23,260 33,232
42,638 11,623 110,753
(Loss) income before
extraordinary item (6,918
... 7,030 (67,78
304 (67,367)
) 3 )
Net (loss) income .....(10,17 7,030 (67,78
304 (70,624)
)
5 3 )
(Loss) income per
share before
extraordinary item... (.71 .72 (6.99
.03 (6.95)
) )
Net (loss) income per (1.04 .72 (6.99
.03 (7.28)
share.................. ) )
1994
1994
1994
Sales and operating $393,5 $468,2
$453,4 $383,8 $1,699,16
revenues...............86 23 75 84 8
Gross profit...........50,171 19,279 11,278 16,336 97,064
<PAGE>
65
Net income (loss)......8,660 (26,60
(7,286 (10,17 (35,406)
) 8 2
) )
Net income (loss) per .88 (2.71
(.74 (1.06 (3.63)
..................
share ) ) )
</TABLE>
Gross profit is defined as sales and operating
revenues less costs and operating expenses
(including applicable property and other operating
taxes).
Per share amounts are based upon the actual number
of common shares outstanding each quarter.
The net loss in the fourth quarter of 1995 was
unfavorably impacted by a pre-tax write-down of
$80.5 million relating to the implementation of
Statement of Financial Accounting Standard No. 121
Accounting for the Impairment of Long-Lived
``
assets and for Long-Lived Assets to be Disposed
.
''
Of
The net loss in the third quarter of 1994 was
unfavorably impacted by a pre-tax write-down of
$16.8 million relating to the abandonment of plans
to construct a hydrodesulphurization unit at the
Pasadena refinery.
Item 9. CHANGES IN AND DISAGREEMENTS WITH
Item 9. CHANGES IN AND DISAGREEMENTS WITH
Item 9. CHANGES IN AND DISAGREEMENTS WITH
AUDITORS ON
AUDITORS ON
AUDITORS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
ACCOUNTING AND FINANCIAL DISCLOSURE
ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has not filed a Form 8-K within the
last twenty-four (24) months reporting a change of
independent auditors or any disagreement with the
independent auditors.
-35-
<PAGE>
PART III
PART III
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
REGISTRANT
REGISTRANT
Following is a list of Crown Central Petroleum
Corporation's executive officers, their ages and
their positions and offices as of March 1, 1996:
Henry A. Rosenberg, Jr. (66)
Henry A. Rosenberg, Jr. (66)
Henry A. Rosenberg, Jr. (66)
Director since 1955, Chairman of the Board and
Chief Executive Officer since May 1975 and also
President since March 1, 1996. Also a director of
Signet Banking Corporation and USF&G Corporation.
Phillip W. Taff (54)
Phillip W. Taff (54)
Phillip W. Taff (54)
<PAGE>
66
Senior Vice President - Finance and Chief
Financial Officer since June 1994. Director of
the Company from 1992 until his employment by the
Company. Executive Vice President, Chief
Financial Officer and Chief Administrative Officer
of Greyhound Lines, Inc. from April 1993 to May
1994. Senior Vice President and Chief Financial
Officer of American Trading and Production Company
from May 1991 to April 1993. Executive Vice
President of PHH Corporation and President of PHH
Fleet America from April 1987 to April 1991.
Edward L. Rosenberg (40)
Edward L. Rosenberg (40)
Edward L. Rosenberg (40)
Senior Vice President - Administration - Corporate
Development and Long Range Planning since June
1994; Senior Vice President - Finance and
Administration from December 1991 to June 1994;
Vice President - Supply & Transportation from
October 1990 to December 1991. Edward L.
Rosenberg is the son of Henry A. Rosenberg, Jr.,
and the brother of Frank B. Rosenberg.
John E. Wheeler, Jr. (43)
John E. Wheeler, Jr. (43)
John E. Wheeler, Jr. (43)
Senior Vice President - Treasurer and Controller
since June 1994; Vice President - Treasurer and
Controller from December 1991 to June 1994; Vice
President - Controller from March 1984 to December
1991.
George R. Sutherland, Jr. (51)
George R. Sutherland, Jr. (51)
George R. Sutherland, Jr. (51)
Senior Vice President - Supply and Transportation
since July 1995; Vice President - Supply and
Transportation from July 1992 to June 1995.
Senior Vice President - Trading of Pacific
Resources, Inc. from 1989 until employment by the
Company.
Randall M. Trembly (49)
Randall M. Trembly (49)
Randall M. Trembly (49)
Senior Vice President - Refining since July 1995;
Vice President - Refining from December 1991 to
June 1995; Vice President-Treasurer from October
1987 to December 1991.
Thomas L. Owsley (55)
Thomas L. Owsley (55)
Thomas L. Owsley (55)
Vice President - Legal since April 1983.
Paul J. Ebner (38)
Paul J. Ebner (38)
Paul J. Ebner (38)
Vice President - Marketing Support Services since
December 1991; General Manager - Marketing Support
Services from November 1988 to December 1991.
J. Michael Mims (46)
J. Michael Mims (46)
J. Michael Mims (46)
Vice President - Human Resources since June 1992.
Vice President - Internal Auditing and Consulting
Services from December 1991 to June 1992;
Director of Internal Auditing from September 1983
to December 1991.
Frank B. Rosenberg (37)
Frank B. Rosenberg (37)
Frank B. Rosenberg (37)
<PAGE>
67
Vice President - Marketing since January 1993;
Southern Marketing Division Manager from January
1992 to January 1993; Vice President - Wholesale
Marketing - La Gloria Oil and Gas Company from
October 1990 to January 1992. Frank B. Rosenberg
is the son of Henry A. Rosenberg, Jr. and the
brother of Edward L. Rosenberg.
Dennis W. Marple (47)
Dennis W. Marple (47)
Dennis W. Marple (47)
Vice President - Wholesale Sales and Terminals
since January 1996. General Manager - Wholesale
Sales from February 1, 1995 to December 31, 1995.
Vice President - Supply, Trading and
Transportation from October 1, 1989 to January 1,
1995.
Dolores B. Rawlings (58)
Dolores B. Rawlings (58)
Dolores B. Rawlings (58)
Secretary since November 1990.
-36-
<PAGE>
There have been no events under any bankruptcy
act, no criminal proceedings and no judgments or
injunctions material to the evaluation of the
ability and integrity of any Director or Executive
Officer during the past five years. The
information required in this Item 10 regarding
Directors of the Company and all persons nominated
or chosen to become directors is hereby
incorporated by reference to the definitive Proxy
Statement which will be filed with the Commission
pursuant to Regulation 14A on or about March 15,
1996.
Item 11. EXECUTIVE COMPENSATION
Item 11. EXECUTIVE COMPENSATION
Item 11. EXECUTIVE COMPENSATION
The information required in this Item 11 regarding
executive compensation is hereby incorporated by
reference to the definitive Proxy Statement which
will be filed with the Commission pursuant to
Regulation 14A on or about March 15, 1996.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
OWNERS AND MANAGEMENT
OWNERS AND MANAGEMENT
The information required in this Item 12 regarding
security ownership of certain beneficial owners
and management is hereby incorporated by reference
to the definitive Proxy Statement which will be
filed with the Commission pursuant to Regulation
14A on or about March 15, 1996.
Item 13. CERTAIN RELATIONSHIPS AND RELATED
Item 13. CERTAIN RELATIONSHIPS AND RELATED
Item 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
TRANSACTIONS
TRANSACTIONS
<PAGE>
68
The information required in this Item 13 regarding
certain relationships and related transactions is
hereby incorporated by reference to the definitive
Proxy Statement which will be filed with the
Commission pursuant to Regulation 14A on or about
March 15, 1996.
PART IV
PART IV
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS
AND REPORTS
AND REPORTS
ON FORM 8-K
ON FORM 8-K
ON FORM 8-K
(a) (1) LIST OF FINANCIAL STATEMENTS
LIST OF FINANCIAL STATEMENTS
LIST OF FINANCIAL STATEMENTS
The following Consolidated Financial Statements of
Crown Central Petroleum Corporation and
subsidiaries, are included in Item 8 on pages 18
through 33 of this report:
oConsolidated Statements of Operations --
Years ended December 31, 1995, 1994 and 1993
oConsolidated Balance Sheets -- December 31,
1995 and 1994
oConsolidated Statements of Changes in Common
Stockholders' Equity -- Years ended
December 31, 1995, 1994 and 1993
oConsolidated Statements of Cash Flows --
Years ended December 31, 1995, 1994 and 1993
oNotes to Consolidated Financial Statements --
December 31, 1995
(a) (2) LIST OF FINANCIAL STATEMENT SCHEDULES
LIST OF FINANCIAL STATEMENT SCHEDULES
LIST OF FINANCIAL STATEMENT SCHEDULES
The schedules for which provision is made in the
applicable accounting regulation of the Securities
and Exchange Commission are not required under the
related instructions or are inapplicable, and
therefore have been omitted.
-37-
<PAGE>
(a) (3) and (c) LIST OF EXHIBITS
LIST OF EXHIBITS
LIST OF EXHIBITS
EXHIBIT
EXHIBIT
EXHIBIT
NUMBER
NUMBER
NUMBER
3
3
3 Articles of Incorporation and Byla
Articles of Incorporation and Byla
Articles of Incorporation and Bylaws
ws
ws
(a) Agreement of Consolidation as amended through
August 28, 1988 (Articles of Incorporation)
was previously filed with the Registrant's
<PAGE>
69
Form 10-K for the year ended December 31,
1992, herein incorporated by reference.
(b) Bylaws of Crown Central Petroleum Corporation
as amended and restated at February 29, 1996.
4
4
4 Instruments Defining the Rights of Security
Instruments Defining the Rights of Security
Instruments Defining the Rights of Security
Holders, Including Indentures
Holders, Including Indentures
Holders, Including Indentures
(a) Credit Agreement dated as of September 25,
1995 between the Registrant and various banks
was previously filed with the Registrant's
Form 10-Q for the quarter ended September 30,
1995 as Exhibit 4(a), herein incorporated by
reference.
(b) Amendment effective as of December 31, 1995
to the Credit Agreement dated as of September
25, 1995.
(c) Form of Indenture for the Registrant's 10
7/8% Senior Notes due 2005 filed on January
17, 1995 as Exhibit 4.1 of Amendment No. 3 to
Registration Statement on Form S-3,
Registration No. 33-56429, herein
incorporated by reference.
10
10
10 Material Contracts
Material Contracts
Material Contracts
(a) Crown Central Petroleum Retirement Plan
effective as of July 1, 1993, was previously
filed with the Registrant's Form 10-K for the
year ended December 31, 1993 as Exhibit
10(a), herein incorporated by reference.
(b) Supplemental Retirement Income Plan for
Senior Executives - As amended through
October 27, 1983 and all subsequent
amendments through May 30, 1991 were
previously filed with the Registrant's Form
10-K for the year ended December 31, 1992 as
Exhibit 10 (a) (3), herein incorporated by
reference.
(c) Employee Savings Plan as amemded and
restated effective January 1, 1987.
(d) Directors' Deferred Compensation Plan adopted
on August 25, 1983 was previously filed with
the Registrant's Form 10-Q for the quarter
ended September 30, 1983 as Exhibit 19(b),
herein incorporated by reference.
(e) The Long-Term Performance Reward Plan as in
effect for the ninth performance cycle
(1993/1994/1995) was previously filed with
the Registrant's Form 10-Q for the quarter
<PAGE>
70
ended March 31, 1993, as Exhibit 19(a),
herein incorporated by reference.
(f) The 1994 Long-Term Incentive Plan was
previously filed as an exhibit to the
Registrant's Proxy Statement dated March 24,
1994, herein incorporated by reference.
-38-
<PAGE>
(g) The 1995 Annual Incentive Plan was previously
filed with the Registrant's Form 10-Q for the
quarter ended March 31, 1995, as Exhibit
19(a), herein incorporated by reference.
(h) The 1995 Management Stock Option Plan filed
on April 28, 1995 as Exhibit 4 of
Registration Statement on Form S-8,
Registration No. 33-58927, herein
incorporated by reference.
(i) Advisory and Consultancy Agreement dated
October 28, 1993 between Jack Africk,
Director and Crown Central Petroleum
Corporation was previously filed with the
Registrant's Form 10-Q for the quarter ended
September 30, 1994 as Exhibit 99, herein
incorporated by reference.
(j) The Employment Agreement between Charles L.
Dunlap, President and Crown Central Petroleum
Corporation, dated October 29, 1991 was
previously filed with the Registrant's Form
10-Q for the quarter ended September 30, 1991
as Exhibit 19(a), herein incorporated by
reference.
(k) Employees Supplementary Savings Plan filed on
February 27, 1995 as Exhibit 4 of
Registration Statement on Form S-8,
Registration No. 33-57847, herein
incorporated by reference.
11
11
11 Statement re: Computation of Earnings Per
Statement re: Computation of Earnings Per
Statement re: Computation of Earnings Per
Share
Share
Share
Exhibit 11 is included on page 40 of this
report.
13
13
13 Annual Report to Security Holders, Form 10-Q
Annual Report to Security Holders, Form 10-Q
Annual Report to Security Holders, Form 10-Q
or Quarterly Report to Security Holders
or Quarterly Report to Security Holders
or Quarterly Report to Security Holders
Annual Report Exhibits:
(a) Shareholders' Letter dated February 29,
1996.
(b) Financial Summary, Operating Summary and
Key Financial Statistics.
(c) Directors and Officers of the Company
<PAGE>
71
Corporate Information
(d)
Supplement to the Annual - Operating
(e)
Results and Operating Statistics
Subsidiaries of the Registrant
Subsidiaries of the Registrant
Subsidiaries of the Registrant
21
21
21
Exhibit 21 is included on page 41 of this
report.
Consent of Independent Auditors
Consent of Independent Auditors
Consent of Independent Auditors
23
23
23
Exhibit 23 is included on page 42 of this
report.
Power of Attorney
Power of Attorney
Power of Attorney
24
24
24
Exhibit 24 is included on page 43 of this
report.
Financial Data Schedule
Financial Data Schedule
Financial Data Schedule
27
27
27
Form 11-K will be filed under cover of Form
Form 11-K will be filed under cover of Form
Form 11-K will be filed under cover of Form
99
99
99
10-KA by June 28, 1996.
10-KA by June 28, 1996.
10-KA by June 28, 1996.
REPORTS ON FORM 8-K
REPORTS ON FORM 8-K
REPORTS ON FORM 8-K
(b)
(b)
(b)
There were no reports filed on Form 8-K for
the three months ended December 31, 1995.
Certain exhibits listed on pages 38 and
:
NOTE
NOTE
NOTE
39 of this report and filed with the
Securities and Exchange Commission, have been
omitted. Copies of such exhibits may be
obtained from the Company upon written
request, for a prepaid fee of 25 cents per
page.
-39-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
EXHIBIT 11
EXHIBIT 11
CROWN CENTRAL PETROLEUM CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
COMPUTATION OF EARNINGS PER SHARE
COMPUTATION OF EARNINGS PER SHARE
(thousands of dollars except per share amounts)
_____________________________
Year Ended December 31
_______
1995 ______
1994 ______
1993
<S> <C> <C> <C>
<PAGE>
72
Primary and Fully Diluted
Primary and Fully Diluted
Primary and Fully Diluted
Earnings Per Share
Earnings Per Share
Earnings Per Share
Net (loss) applicable to __
$ ___
$ _____
$
common shares
__
___
_____
)
_______
(70,624 _______
(35,406) ______
(4,300 _
)
_
_______
_______
________
Shares outstanding as reported
at December 31,
1994, 1993 and 1992, 9,803,098 9,832,598 9,832,598
respectively
Restricted shares held by the
Company at
December 31 (105,500)
Weighted average effect of 52
shares of common
stock issued in October 1995 13
Weighted average effect of
135,000 shares
of common stock purchased in ________
____
May 1994
________
_______
(90,000)
Weighted average number of
common shares
outstanding, as adjusted at _
_
December 31
_
_
_________
9,697,611 _________
9,742,598 _________
9,832,598
_________
_________
_________
Net (loss) per common share ________
$ ________
$ ________
$
________
________
________
_____
(7.28 ) __
_____
(3.63 ) _____
(.44 )
_____
_______
_____
</TABLE>
-40-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 21
EXHIBIT 21
EXHIBIT 21
<PAGE>
73
SUBSIDIARIES
SUBSIDIARIES
SUBSIDIARIES
1. Subsidiaries as of December 31, 1995, which are consolidated
Subsidiaries as of December 31, 1995, which are consolidated
Subsidiaries as of December 31, 1995, which are consolidated
in the financial statements of the Registrant; each
in the financial statements of the Registrant; each
in the financial statements of the Registrant; each
subsidiary is 100% owned and doing business under its own
subsidiary is 100% owned and doing business under its own
subsidiary is 100% owned and doing business under its own
name.
name.
name.
Nation or State
Nation or State
Nation or State
Subsidiary
Subsidiary
Subsidiary of Incorporation
of Incorporation
of Incorporation
<S> <C>
Continental American Corporation Delaware
Coronet Security Systems, Inc. Delaware
Coronet Software, Inc. Delaware
Crown Central Holding Corporation Maryland
Crown Central International (U.K.), United Kingdom
Limited
Crown Central Pipe Line Company Texas
Crown Gold, Inc. Maryland
The Crown Oil and Gas Company Maryland
Crown-Rancho Pipe Line Corporation Texas
Crown Stations, Inc. Maryland
Crowncen International N.V. Netherlands
Antilles
Fast Fare, Inc. Delaware
F Z Corporation Maryland
Health Plan Administrators, Inc. Maryland
La Gloria Oil and Gas Company Delaware
Locot, Inc. Maryland
McMurrey Pipe Line Company Texas
Tiara Insurance Company Vermont
Tiara Properties, Inc. Maryland
T. B. & Company, Inc. Maryland
</TABLE>
-41-
<PAGE>
EXHIBIT 23
EXHIBIT 23
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
CONSENT OF INDEPENDENT AUDITORS
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference
in the Registration Statement (Form S-8 No. 33-
<PAGE>
74
53457) pertaining to the 1994 Long Term Incentive
Plan and Employees Savings Plan and the
Registration Statement (Form S-8 No. 33-57847)
pertaining to the Employees Supplemental Savings
Plan of Crown Central Petroleum Corporation and
Subsidiaries of our report dated February 29,
1996, with respect to the consolidated financial
statements of Crown Central Petroleum Corporation
and Subsidiaries included in the Annual Report
(Form 10-K) for the year ended December 31, 1995.
ERNST & YOUNG LLP
Baltimore, Maryland
March 15, 1996
-42-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 24
EXHIBIT 24
EXHIBIT 24
POWER OF ATTORNEY
POWER OF ATTORNEY
POWER OF ATTORNEY
We, the undersigned officers and directors of Crown Central
Petroleum Corporation hereby severally constitute Henry A.
Rosenberg, Jr., Phillip W. Taff, John E. Wheeler, Jr. and Thomas
L. Owsley, and each of them singly, our true and lawful attorneys
with full power to them and each of them to sign for us in our
names and in the capacities indicated below this Report on Form
10-K for the fiscal year ended December 31, 1995 pursuant to the
requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934 and all amendments thereto.
_________
Signature
_________
Signature
_________
Signature _____
Title
_____
Title
_____
Title ____
Date
____
Date
____
Date
<S> <C> <C>
/s/---Henry A. Rosenberg, Jr.
Chairman of the Board, President 3/11/96
Henry A. Rosenberg, Jr. and
Chief Executive Officer
(Principal Executive Officer)
/s/---Jack Africk
Director
3/11/96
Jack Africk
<PAGE>
75
/s/---George L. Bunting, Jr.
Director 3/11/96
George L. Bunting, Jr.
/s/---Michael F. DaceyDirector 3/11/96
Michael F. Dacey
/s/---Robert M. Freeman
Director 3/11/96
Robert M. Freeman
/s/---Thomas M. Gibbons
Director 3/11/96
Thomas M. Gibbons
/s/---Patricia A. Goldman
Director 3/11/96
Patricia A. Goldman
/s/---Peter J. Holzer
Director 3/11/96
Peter J. Holzer
/s/---William L. Jews
Director 3/11/96
William L. Jews
/s/---Rev. Harold E. Ridley, Jr., S.J.
Director 3/11/96
Reverend Harold E. Ridley, Jr., S.J.
/s/---Phillip W. Taff Senior Vice President - Finance and3/11/96
Phillip W. Taff Chief Financial Officer
(Principal Financial Officer)
/s/---John E Wheeler, Jr. Senior
Vice President - Treasurer and Controller 3/11/96
John E. Wheeler, Jr. (Principal Accounting Officer)
</TABLE>
-43-
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES
SIGNATURES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
<S> <C>
CROWN CENTRAL PETROLEUM
CROWN CENTRAL PETROLEUM
CROWN CENTRAL PETROLEUM
CORPORATION
CORPORATION
CORPORATION
<PAGE>
76
By ____________________________
*
__________________________________
Henry A. Rosenberg, Jr.
Chairman of the Boa rd,
President
and Chief Executive Officer
By ____________________________
*
____________________________________
Phillip W. Taff
Senior Vice President -
Finance and
Chief Financial Officer
By ___________________________
/s/---John E. Wheeler, Jr.
____________________________
John E. Wheeler, Jr.
Senior Vice President -
Treasurer and Controller
Date: March 15, 1996
</TABLE>
<TABLE>
<CAPTION>
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below on
March 15, 1996 by the following persons on behalf of the
registrant and in the capacities indicated:
<S> <C>
_________________________________________________________________
*
___
______________________________
*
_________________________________
Jack Africk, Director Patricia A. Goldman, Director
_________________________________________________________________
*
___
______________________________
*
_________________________________
George L. Bunting, Jr., Director Peter J. Holzer, Director
_________________________________________________________________
*
___
______________________________
*
_________________________________
Michael F. Dacey, Director William L. Jews, Director
<PAGE>
77
_________________________________________________________________
*
___
______________________________
*
_________________________________
Robert M. Freeman, Director Rev. Harold E. Ridley, Jr.,
S.J., Director
_________________________________________________________________
*
___
______________________________
*
_________________________________
Thomas M. Gibbons, Director Henry A. Rosenberg, Jr.,
Director
Chairman of the Board,
President
and Chief Executive
Officer
*By Power of Attorney (John E.
Wheeler, Jr.)
-44-
</TABLE>
<PAGE>
Crown Central Petroleum Corporation
Crown Central Petroleum Corporation
Crown Central Petroleum Corporation
Bylaws
Bylaws
Bylaws
Adopted February 29, 1996
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
Article I
____________
Stockholders
<S> <C> <C>
<PAGE>
78
Section 1.1 Meetings of Stockholders 1
Section 1.2 Annual Meeting 1
Section 1.3 Special Meeting Called by Corporation 2
Section 1.4 Special Meeting Called by Stockholders 2
Section 1.5 Record Date 3
Section 1.6 Quorum 3
Section 1.7 Proxies 4
Section 1.8 Ballot Vote 4
Section 1.9 Inspection of Books 4
Article II
___________________
Stock and Dividends
Section 2.1 Certificates of Stock 4
Section 2.2 Transfers of Stock 4
Section 2.3 Registered Stockholders 4
Section 2.4 Lost Certificates 4
Section 2.5 Dividends 5
Article III
_________
Directors
Section 3.1 Board of Directors 5
Section 3.2 Number of Directors 5
Section 3.3 Eligibility; Nomination Procedures 5
Section 3.4 Vacancies 6
Section 3.5 Place and Time of Meeting 6
Section 3.6 Annual Meeting 6
Section 3.7 Calling of Meeting 6
Section 3.8 Notice of Meeting. 6
Section 3.9 Quorum 7
Section 3.10 Compensation of Directors 7
Article IV
______________________________
Executive and Other Committees
Section 4.1 Executive Committee 7
Section 4.2 Other Committees 7
Section 4.3 Procedures Applicable to Committees 7
</TABLE>
Page (i)
<PAGE>
<TABLE>
<CAPTION>
Article V
________
Officers
<S> <C> <C>
Section 5.1 Appointment and Removal of Officers 8
Section 5.2 Chairman of the Board 8
Section 5.3 Vice Chairman of the Board 8
Section 5.4 President 9
Section 5.5 Vice Presidents 9
<PAGE>
79
Section 5.6 Secretary 9
Section 5.7 Treasurer 9
Section 5.8 Controller 10
Section 5.9 Assistant Officers 10
Section 5.10 Vacancies 10
Section 5.11 Duties of Officers May Be Delegated 10
Article VI
___________________________________
Indemnity of Directors and Officers
Section 6.1 Indemnity 10
Section 6.2 Advancement of Expenses 11
Section 6.3 Services in Other Capacities 11
Section 6.4 Rights not Exclusive 11
Article VII
______________________________
Certain Administrative Matters
Section 7.1 Checks 12
Section 7.2 Fiscal Year 12
Section 7.3 Annual Statements 12
Section 7.4 Amendment to Bylaws 12
Section 7.5 Offices 12
Section 7.6 Seal 12
</TABLE>
Page (ii)
<PAGE>
Crown Central Petroleum Corporation
Crown Central Petroleum Corporation
Crown Central Petroleum Corporation
Bylaws
Bylaws
Bylaws
Article I
Article I
Article I
____________
Stockholders
____________
Stockholders
____________
Stockholders
Section 1.1
Section 1.1
Section 1.1 ________
Meetings
________
Meetings
________
Meetings
________________
of Stockholders.
________________
of Stockholders.
________________
of Stockholders. All meetings
of the stockholders shall be
at the office of the
Corporation in Baltimore,
Maryland, or at such other
place within the United States
as the Board of Directors may
designate.
Section 1.2
Section 1.2
Section 1.2____
____
____
______
Annual
______
Annual
______
Annual
________
Meeting.
________
Meeting.
________
Meeting.
(a) The annual
meeting of stockholders shall
be held at two o'clock p.m. on
a business day during the
<PAGE>
80
thirty (30) day period
commencing on the fourth
Thursday of April. At each
annual meeting of
stockholders, only such
business shall be conducted as
is proper to consider and has
been brought before the
meeting (i) pursuant to the
Corporation's notice of the
meeting, (ii) by or at the
direction of the Board of
Directors, or (iii) by a
stockholder who is a
stockholder of record of a
class of shares entitled to
vote on the business such
stockholder is proposing both
at the time of the giving of
the stockholder's notice
hereinafter described in this
Section 1.2 and on the record
date for such annual meeting,
and who complies with the
notice procedures set forth in
this Section 1.2. Written
notice of each annual meeting
shall be given to each
stockholder by leaving the
same with the stockholder, or
at the stockholder's residence
or usual place of business, or
by mailing it postage prepaid
and addressed to the
stockholder at his or her
address as it appears upon the
books of the Corporation, at
least ten days prior to the
meeting.
(b) In order to
bring before an annual meeting
of stockholders any business
which may properly be
considered, a stockholder who
meets the requirements set
forth in the preceding
paragraph must give the
Corporation timely written
notice which complies with
Section 1.2(c) of these
bylaws. To be timely, a
stockholder's notice must be
given, by certified United
States mail, with postage
thereon prepaid and with
return receipt requested,
addressed to the Secretary at
the principal office of the
Corporation. Any such notice
<PAGE>
81
must be received at the
Corporation's principal office
not less than 120 calendar
days in advance of the
anniversary of the date on
which the Corporation's proxy
statement was released to its
stockholders in connection
with the previous year's
annual meeting of
stockholders, unless the date
of the meeting to which such
notice relates has been
changed by more than 30 days
from the date contemplated at
the time of the previous
year's proxy statement, in
which case any such notice
must be received not less than
60 days before the date
established for the meeting.
-1-
<PAGE>
(c) Each such
stockholder's notice shall set
forth as to each matter the
stockholder proposes to bring
before the annual meeting: (i)
the name and address, as they
appear on the Corporation's
stock transfer books, of the
stockholder proposing
business; (ii) the class and
number of shares of stock of
the Corporation beneficially
owned by such stockholder;
(iii) a representation that
such stockholder is a
stockholder of record at the
time of the giving of the
notice and intends to appear
in person or by proxy at the
meeting to present the
business specified in the
notice; (iv) 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; and (v)
any interest which the
stockholder may have in such
business.
(d) The Secretary or
Assistant Secretary shall
<PAGE>
82
deliver each stockholder's
notice that has been timely
received to the Chairman and
to the President for review.
(e) Notwithstanding
the foregoing provisions of
this Section 1.2, a
stockholder seeking to have a
proposal included in the
Corporation's proxy statement
for an annual meeting of
stockholders shall comply with
the requirements of Regulation
14A under the Securities
Exchange Act of 1934, as
amended from time to time, or
with any successor regulation.
Section 1.3
Section 1.3
Section 1.3____
____
____
_______
Special
_______
Special
_______
Special
______________________________
Meeting Called by Corporation.
______________________________
Meeting Called by Corporation.
______________________________
Meeting Called by Corporation.
At any time in the interval
between regular meetings,
special meetings of the
stockholders may be called by
the Chairman of the Board, the
Vice Chairman of the Board,
the President, or by a
majority of the Board of
Directors, stating the place,
day, and hour of such special
meeting, and the business
proposed to be transacted
thereat. Such notice shall be
given to each stockholder
entitled to vote thereat by
leaving the same with the
stockholder, or at the
stockholder's residence or
usual place of business, or by
mailing it postage prepaid and
addressed to the stockholder
at his or her address as it
appears upon the books of the
Corporation. No business
shall be transacted at such
meetings except for the
business set forth in the
notice.
Section 1.4
Section 1.4
Section 1.4____
____
____
_______
Special
_______
Special
_______
Special
_________________
Meeting Called by
_________________
Meeting Called by
_________________
Meeting Called by
_____________
Stockholders.
_____________
Stockholders.
_____________
Stockholders.
<PAGE>
83
(a) A special
meeting may also be called by
stockholders entitled to cast
twenty-five percent (25%) of
all votes entitled to be cast
at the meeting, upon the
request in writing signed by
such stockholders and
delivered to the Chairman of
the Board, the Vice Chairman
of the Board, the President,
or the Secretary. Such
request shall set forth: (i)
the names and addresses, as
they appear on the
Corporation's stock transfer
books, of the stockholders
making the request; (ii) the
class and number of shares of
stock of the Corporation
beneficially owned by such
stockholders; (iii) a
representation that such
stockholders are stockholders
of record at the record date
for determining whether the
requisite number of
stockholders have signed and
delivered the written request
demanding a special meeting of
stockholders and a
representation as to the date
on which the first such
stockholder signed such
request; (iv) a representation
that each such stockholder
intends to appear in person or
by proxy at the meeting to
present the business specified
in the notice; (v) as to each
matter or business the
requesting stockholders
propose to bring before the
special meeting, a brief
description of the matter or
business including the
complete text of any
resolutions to be presented
and the reasons for wanting to
conduct such business; and
(iv) any interest which any of
the requesting stockholders
may have in such business.
(b) The record date
for determining whether the
requisite number of
stockholders have signed and
delivered the written request
demanding a special meeting of
<PAGE>
84
stockholders is the date the
first such stockholder signs
such request.
-2-
<PAGE>
(c) A special
meeting may not be called to
consider any matter which is
substantially the same as a
matter voted on at any special
meeting of the stockholders
held during the preceding
twelve (12) months, unless the
meeting is requested by
stockholders entitled to cast
a majority of all of the votes
entitled to be cast at the
meeting. The twelve month
period shall be determined
from the date of the previous
special meeting to the date of
the stockholder request.
<PAGE>
(d) The Secretary or
Assistant Secretary shall
inform the stockholders who
make the request of the
reasonably estimated cost of
preparing and mailing a notice
of the meeting, and only upon
payment of these costs to the
Corporation, notify each
stockholder entitled to notice
of the meeting. If the
officer of the Corporation to
whom such request in writing
shall have been delivered
pursuant to Section 1.4(a)
shall fail to issue a call for
such meeting within ten (10)
business days after payment to
the Corporation of the
reasonably estimated cost of
preparing and mailing a notice
of the meeting, then the
stockholders who made the
request may do so by giving
fifteen (15) business days'
notice of the time, place and
object of the meeting by
advertisement inserted in a
daily newspaper of general
circulation in the City of
Baltimore, Maryland.
(e) Only business
within the purpose or purposes
<PAGE>
85
described in the notice for a
special meeting of
stockholders may be conducted
at the meeting.
Section 1.5
Section 1.5
Section 1.5____
____
____
______
Record
______
Record
______
Record
_____
Date.
_____
Date.
_____
Date.
(a) The Board of
Directors shall fix, in
advance, a record date to make
a determination of
stockholders for an annual
meeting, or for any special
meeting, such date to be not
more than ninety (90) nor less
than ten (10) days before the
meeting or action requiring a
determination of stockholders.
If no such record date is set
the record date shall be the
close of business on the day
before the date on which the
first notice is given.
(b) When a
determination of stockholders
entitled to notice of or to
vote at any meeting of
stockholders has been made,
such determination shall be
effective for any adjournment
of the meeting unless the
Board of Directors fixes a new
record date, which it shall do
if the meeting is adjourned to
a date more than ninety (90)
days after the date fixed for
the original meeting.
Section 1.6
Section 1.6
Section 1.6____
____
____
_______
Quorum.
_______
Quorum.
_______
Quorum.
The presence in person or by
proxy of stockholders entitled
to cast a majority of all
votes entitled to be cast at
the meeting shall be requisite
and shall constitute a quorum
for the transaction of
business at all meetings of
the stockholders except as
otherwise provided by law or
by the charter. If at any
annual or special meeting of
stockholders a quorum shall
fail to attend, a majority in
interest attending in person
or by proxy shall have power
<PAGE>
86
to adjourn the meeting from
time to time without notice
other than announcement at the
meeting until the requisite
amount of voting stock shall
be present. At any such
adjourned meeting, at which
the requisite amount of voting
stock shall be present in
person or by proxy, any
business may be transacted
which might have been
transacted at the meeting
originally called, had the
same been held at the time so
called.
-3-
<PAGE>
Section 1.7
Section 1.7
Section 1.7 ___
___
___
________
Proxies.
________
Proxies.
________
Proxies.
At any meeting stockholders
may vote either in person or
by proxy. Such proxy shall be
in writing and dated, but no
proxy which is dated more than
three (3) months before the
meeting at which it is offered
shall be accepted unless such
proxy shall, on its face, name
a longer period for which it
is to remain in force.
Section 1.8
Section 1.8
Section 1.8____
____
____
_______
Vote by
_______
Vote by
_______
Vote by
_______
Ballot.
_______
Ballot.
_______
Ballot. The vote for
Directors, and, upon demand of
any stockholder, the vote upon
any question before the
meeting, shall be by ballot.
Section 1.9
Section 1.9
Section 1.9 ___
___
___
__________
Inspection
__________
Inspection
__________
Inspection
_________
of Books.
_________
of Books.
_________
of Books. Except as otherwise
provided by statute the Board
of Directors shall determine
from time to time whether, and
if allowed, when and under
what conditions and
regulations the accounts and
books of the Corporation or
any of them shall be open to
inspection of the
stockholders, and the
stockholders' rights in this
respect are and shall be
<PAGE>
87
restricted and limited
accordingly.
Article II
Article II
Article II
___________________
Stock and Dividends
___________________
Stock and Dividends
___________________
Stock and Dividends
Section 2.1
Section 2.1
Section 2.1
_____
_____
_____
______________________
Certificates of Stock.
______________________
Certificates of Stock.
______________________
Certificates of Stock.
Each stockholder shall be
entitled to a certificate of
stock of the Corporation which
shall be signed by the
Chairman of the Board,
President or a Vice President
and by the Secretary or an
Assistant Secretary, or the
Treasurer or an Assistant
Treasurer of the Corporation,
and sealed with its seal;
which shall exhibit the
holder's name and certify the
number of shares owned by the
stockholder. A certificate
shall be deemed to be so
signed and sealed whether the
signatures be manual or
facsimile signatures and
whether the seal be a
facsimile seal or any other
form of seal. Each
certificate shall be counter-
signed by the transfer agent
and registered by the
Registrar duly appointed by
the Board of Directors of the
Corporation, the Board of
Directors being hereby given
the power and authority to
appoint one or more Transfer
Agents and one or more
Registrars.
<PAGE>
Section 2.2
Section 2.2
Section 2.2 ___
___
___
_________
Transfers
_________
Transfers
_________
Transfers
_________
of Stock.
_________
of Stock.
_________
of Stock. Transfers of stock
shall be made on the books of
the Corporation only by the
person named in the
certificate, or by his or her
attorney, lawfully constituted
in writing, upon surrender and
cancellation of certificates
for a like number of share.
<PAGE>
88
Section 2.3
Section 2.3
Section 2.3____
____
____
__________
Registered
__________
Registered
__________
Registered
_____________
Stockholders.
_____________
Stockholders.
_____________
Stockholders. The Corporation
shall be entitled to recognize
the exclusive right of a
person registered on its books
as the owner of shares to
receive dividends and to vote
as such owner, and for any
other purpose, and shall not
be bound to recognize any
equitable or other claim to or
interest in such shares on the
part of any other person,
whether or not it shall have
express or other notice
thereof, save as expressly
provided for by the laws of
Maryland.
Section 2.4
Section 2.4
Section 2.4 ___
___
___
____
Lost
____
Lost
____
Lost
_____________
Certificates.
_____________
Certificates.
_____________
Certificates. Any person
claiming a certificate of
stock to be lost, stolen,
destroyed, or mutilated shall
make an affidavit or
affirmation to that fact and
advertise the same in such
manner as the Board of
Directors may require, and
shall, if the Directors so
require, give the Corporation
a bond of indemnity in form
and with one or more sureties
satisfactory to the Board in
at least double the value of
the stock represented by said
certificate, whereupon a new
certificate may be issued of
the same tenor and for the
same number of shares as the
one alleged to be lost,
stolen, destroyed or
mutilated.
-4-
<PAGE>
Section 2.5
Section 2.5
Section 2.5____
____
____
__________
Dividends.
__________
Dividends.
__________
Dividends.
Dividends upon the capital
stock of the Corporation when
earned may be declared by the
Board of Directors at any
regular or special meeting.
The Board of Directors shall
<PAGE>
89
have power from time to time
to fix and determine and to
vary the amount of working
capital of the Corporation,
and to direct and determine
the use and disposition of any
surplus or net profits; and
the amount of the surplus and
the net profits of the
Corporation to be reserved
before the payment of any
dividend shall rest wholly in
the discretion of the Board of
Directors.
Article III
Article III
Article III
_________
Directors
_________
Directors
_________
Directors
Section 3.1
Section 3.1
Section 3.1 ___
___
___
________
Board of
________
Board of
________
Board of
__________
Directors.
__________
Directors.
__________
Directors. The business and
affairs of this Corporation
shall be managed under the
direction of the Board of
Directors, and all of the
powers of the Corporation,
except such as are by law, or
by the charter, or by these
bylaws conferred upon or
reserved to the stockholders
may be exercised by the Board
of Directors.
Section 3.2
Section 3.2
Section 3.2____
____
____
_________
Number of
_________
Number of
_________
Number of
__________
Directors.
__________
Directors.
__________
Directors. The Board of
Directors shall consist of ten
(10) persons which number from
time to time may be increased
to not greater than twenty or
decreased to not less than
three by vote of a majority of
the entire Board of Directors.
Each Director shall hold
office until his or her death,
resignation, or removal or
until his or her successor is
elected and qualified.
Section 3.3
Section 3.3
Section 3.3
_____
_____
_____
_______________________
Eligibility; Nomination
_______________________
Eligibility; Nomination
_______________________
Eligibility; Nomination
___________
Procedures.
___________
Procedures.
___________
Procedures.
(a) No person shall
be eligible for election as a
<PAGE>
90
Director at a meeting of
stockholders unless nominated
(i) by the Board of Directors
or (ii) by a stockholder who
is a stockholder of record of
a class of shares entitled to
vote for the election of
Directors, both at the time of
the giving of the
stockholder's notice described
in this Section 3.3 and on the
record date for the meeting at
which Directors will be
elected, and who complies with
the notice procedures set
forth in this Section 3.3.
(b) In order to
nominate any persons, a
stockholder who meets the
requirements set forth in the
preceding paragraph must give
the Corporation timely written
notice. To be timely, a
stockholder's notice must be
given either by personal
delivery to the Secretary at
the principal office of the
Corporation or by first class
United States mail, with
postage thereon prepaid,
addressed to the Secretary at
the principal office of the
Corporation. Any such notice
must be received, in the case
of an annual meeting of
stockholders, on or after
January 1st and before
February 1st of the year in
which the meeting will be held
if the meeting is to be an
annual meeting held within the
period specified for the
annual meeting by Section 1.2,
unless the annual meeting has
not been held within such
period, in which case any such
notice must be received not
less than sixty (60) days
before the date established
for the annual meeting. In
the case of a special meeting
of stockholders, any such
notice must be received not
later than the close of
business on the tenth (10th)
day following the day on which
notice of the special meeting
of stockholders called for the
purpose of electing Directors
<PAGE>
91
is first given to
stockholders.
-5-
<PAGE>
<PAGE>
92
(c) Each such
stockholder's notice shall set
forth the following: (i) as
to the stockholder giving the
notice, (1) the name and
address of such stockholder as
they appear on the
Corporation's stock transfer
books, (2) the class and
number of shares of stock of
the Corporation beneficially
owned by such stockholder, (3)
a representation that such
stockholder is a stockholder
of record at the time of
giving the notice and intends
to appear in person or by
proxy at the meeting to
nominate the person or persons
specified in the notice, and
(4) a description of all
arrangements or
understandings, if any,
between such stockholder and
each nominee and any other
person or persons (naming such
person or persons) pursuant to
which the nomination or
nominations are to be made;
and (ii) as to each person
whom the stockholder wishes to
nominate for election as a
Director, (1) the name, age,
business address and residence
address of such person, (2)
the principal occupation or
employment of such person, (3)
the class and number of shares
of stock of the Corporation
which are beneficially owned
by such person, and (4) all
other information that is
required to be disclosed about
nominees for election as
Directors in solicitations of
proxies for the election of
Directors under the rules and
regulations of the Securities
and Exchange Commission. In
addition, each such notice
shall be accompanied by the
written consent of each
proposed nominee to serve as a
Director if elected and such
consent shall contain a
statement from the proposed
nominee to the effect that the
information about the nominee
contained in the notice is
correct.
<PAGE>
93
Section 3.4
Section 3.4
Section 3.4 ___
___
___
__________
Vacancies.
__________
Vacancies.
__________
Vacancies.
Whenever there is a vacancy
on the Board of Directors
(other than a vacancy
resulting from the removal of
a Director by vote of the
stockholders which vacancy is
immediately thereafter filled
by the stockholders), then the
vacancy shall be filled by a
majority of the remaining
Directors elected by the
stockholders of the class or
series entitled to fill such
vacancy or by the sole
remaining Director elected by
that class or series if there
is only one such Director.
Section 3.5
Section 3.5
Section 3.5____
____
____
_________
Place and
_________
Place and
_________
Place and
_______________
Time of Meeting
_______________
Time of Meeting
_______________
Time of Meeting Meetings of
the Board of Directors may be
held within, or without the
State of Maryland, as the
Board may from time to time
determine. The time and place
of meetings may be fixed by
the party or parties making
the call.
Section 3.6
Section 3.6
Section 3.6____
____
____
______
Annual
______
Annual
______
Annual
________
Meeting.
________
Meeting.
________
Meeting. The Board of
Directors shall meet for the
purpose of organization and
the transaction of other
business immediately following
the annual meeting of
stockholders at which the
Board was elected. Such
meeting shall be held at the
principal office of the
Corporation in the State of
Maryland, or at such other
place within the United States
as the Board of Directors may
have designated for the
immediately preceding annual
meeting of stockholders, or as
may be designated by the
consent in writing of all of
the Directors. No notice of
such meeting shall be
necessary.
<PAGE>
94
Section 3.7
Section 3.7
Section 3.7____
____
____
__________
Calling of
__________
Calling of
__________
Calling of
_______
Meeting
_______
Meeting
_______
Meeting Meetings of the Board
of Directors may be called by
the Chairman of the Board, the
Vice Chairman of the Board,
the President, or a majority
of the Board. At least
twenty-four (24) hours' notice
shall be given of all meetings
of the Board; with the consent
of the majority of the
Directors, a shorter notice
may be given.
Section 3.8
Section 3.8
Section 3.8____
____
____
_________
Notice of
_________
Notice of
_________
Notice of
________
Meeting.
________
Meeting.
________
Meeting. Notices of all
meetings of Directors may be
left at their usual places of
business, or may be sent by
mail or electronic means, and
such notices by mail or
electronic means shall be
deemed to have been given when
sent or mailed at Baltimore.
-6-
<PAGE>
Section 3.9
Section 3.9
Section 3.9____
____
____
_______
Quorum.
_______
Quorum.
_______
Quorum.
At all meetings of the Board,
a majority of the entire Board
of Directors shall be
necessary and sufficient to
constitute a quorum for the
transaction of business,
except that a lesser number
may adjourn any meeting from
time to time.
<PAGE>
Section 3.10
Section 3.10
Section 3.10
_____
_____
_____
_______________
Compensation of
_______________
Compensation of
_______________
Compensation of
__________
Directors.
__________
Directors.
__________
Directors.
(a) By resolution of
the Board all Directors, other
than salaried officers of the
Corporation or a subsidiary of
the Corporation, may be
allowed a fixed sum and
expenses of attendance, if
any, for attendance at each
meeting of the Board and in
<PAGE>
95
addition may be allowed for
their services as Directors
such annual or other
compensation as may be fixed
by resolution of the Board
from time to time. The
preceding provisions shall not
be construed to preclude any
Directors, including salaried
officers, from serving the
Corporation in any other
capacity, including service as
a member of a standing or
special committee, and
receiving compensation
therefor or to preclude
reimbursement of salaried
officers who are Directors for
expenses of attendance at
meetings of the Board.
(b) For their
services as members of special
and standing committees,
Directors may be allowed such
annual or other compensation
as may be fixed by resolution
of the Board of Directors from
time to time.
Article IV
Article IV
Article IV
______________________________
Executive and Other Committees
______________________________
Executive and Other Committees
______________________________
Executive and Other Committees
Section 4.1
Section 4.1
Section 4.1____
____
____
_________
Executive
_________
Executive
_________
Executive
__________
Committee.
__________
Committee.
__________
Committee. There may be an
executive committee of three
or more Directors designated
by resolution passed by a
majority of the whole Board.
Said committee may meet at
stated times, or on notice to
all by any of their own
number. During the intervals
between meetings of the Board,
such committee shall advise
with and aid the officers of
the Corporation in all matters
concerning its interests and
the management of its
business, and generally
perform such duties and
exercise such powers as may be
directed or delegated by the
Board of Directors from time
to time. To such Committee
may be delegated any or all of
the powers of the Board of
<PAGE>
96
Directors in the management of
the business and affairs of
the Corporation while the
Board is not in session,
excepting such powers as the
Board of Directors by statute
may not delegate.
Section 4.2
Section 4.2
Section 4.2 ___
___
___
_____
Other
_____
Other
_____
Other
___________
Committees.
___________
Committees.
___________
Committees. There may be such
other standing and special
committees as may be
established from time to time
by resolution passed by a
majority of the whole Board of
Directors. Such committees
shall be composed of such
Directors as may be designated
by the Board of Directors and
shall perform such duties and
exercise such powers as may be
directed by the Board of
Directors.
Section 4.3
Section 4.3
Section 4.3____
____
____
__________
Procedures
__________
Procedures
__________
Procedures
_________________________
Applicable to Committees.
_________________________
Applicable to Committees.
_________________________
Applicable to Committees. The
provisions of these bylaws
which govern meetings, notice
and waiver of notice, and
quorum and voting requirements
of the Board shall apply to
committees of Directors and
their members as well.
Vacancies in the membership of
any committee shall be filled
by the Board of Directors at
any meeting thereof. In the
absence of a member or members
of a committee, the members
thereof present at any meeting
(whether or not they
constitute a quorum) may
appoint a member or members of
the Board of Directors to act
in the place or places of such
absent member or members.
Committees shall keep regular
minutes of their proceedings,
and report the same to the
Board when required.
-7-
<PAGE>
Article V
Article V
Article V
<PAGE>
97
________
Officers
________
Officers
________
Officers
Section 5.1
Section 5.1
Section 5.1
_____
_____
_____
_______________________
Appointment and Removal
_______________________
Appointment and Removal
_______________________
Appointment and Removal
____________
of Officers.
____________
of Officers.
____________
of Officers.
(a) The officers of
the Corporation shall be
chosen by the Board of
Directors at its first meeting
after each annual meeting of
stockholders; and shall
consist of a Chairman of the
Board of Directors, a
President, one or more Vice
Presidents, a Secretary, a
Treasurer, a Controller, an
Assistant Secretary, an
Assistant Treasurer, and
whenever deemed advisable by
the Board of Directors, a Vice
Chairman of the Board and one
or more additional Vice
Presidents (including, without
limitation, one or more
Executive, Group, and Senior
Vice Presidents), Assistant
Vice Presidents, Assistant
Secretaries, or Assistant
Treasurers. Any two of the
offices hereinbefore mentioned
except those of President and
Vice President, may be held by
the same person.
(b) The Board may
appoint such other officers
and agents as it shall deem
necessary, who shall hold
their offices for such terms,
and shall exercise such powers
and perform such duties as
shall be determined from time
to time by the Board. The
salaries of all officers of
the Corporation shall be fixed
by the Board of Directors or
by any committee or superior
officer upon whom such power
may be conferred from time to
time by the Board of
Directors.
(c) The officers of
the Corporation shall hold
office until their successors
are chosen and qualified.
<PAGE>
98
(d) Any officer or
employee of the Corporation
may be removed at any time
with or without cause, by the
affirmative vote of a majority
of the whole Board of
Directors, or by any committee
or superior officer upon whom
such power of removal may be
conferred by the Board of
Directors, and such action
shall be conclusive on the
officer or employee so
removed.
Section 5.2
Section 5.2
Section 5.2____
____
____
________
Chairman
________
Chairman
________
Chairman
_____________
of the Board.
_____________
of the Board.
_____________
of the Board. The Chairman of
the Board shall be the chief
executive officer of the
Corporation. The Chairman of
the Board shall preside at all
meetings of the stockholders
and Directors and shall
exercise, subject to control
of the Board of Directors,
such general supervision over
the affairs of the Corporation
and its employees as may be
appropriate to carry out the
policies of the Corporation.
The Chairman of the Board
shall have such other
functions as may be determined
by the Board of Directors.
<PAGE>
99
Section 5.3
Section 5.3
Section 5.3____
____
____
____
Vice
____
Vice
____
Vice
______________________
Chairman of the Board.
______________________
Chairman of the Board.
______________________
Chairman of the Board. The
Vice Chairman of the Board, if
elected, shall be the chief
administrative officer of the
Corporation, and, subject to
control of the Board of
Directors and the general
supervision of the Chairman of
the Board, shall, in
cooperation with the
President, be responsible for
the administration of the
Corporation's activities. The
Vice Chairman of the Board
shall preside at all meetings
of the stockholders and
Directors at which the
Chairman of the Board is not
present. The Vice Chairman of
the Board shall have such
other functions as may be
determined by the Board of
Directors.
-8-
<PAGE>
Section 5.4
Section 5.4
Section 5.4____
____
____
__________
President.
__________
President.
__________
President.
The President shall be the
chief operating officer of the
Corporation and, subject to
control of the Board of
Directors and the general
supervision of the Chairman of
the Board, shall have general
and active management of the
Corporation's operations. The
President shall have all of
the powers and perform all of
the duties of the Chairman of
the Board in case of his or
her absence or inability to
act, or if a Chairman of the
Board has not been elected,
other than presiding at
meetings of the stockholders
and Directors at which the
Vice Chairman of the Board, if
elected, shall preside. The
President shall also have all
of the powers and perform all
of the duties of the Vice
Chairman of the Board in case
of his or her absence or
inability to act, or if a Vice
<PAGE>
100
Chairman of the Board is not
elected, other than such
powers and duties as the
Chairman of the Board shall
either elect to exercise and
perform or to delegate to
another officer. The
President shall perform such
other duties as may be
determined by the Board of
Directors.
Section 5.5
Section 5.5
Section 5.5____
____
____
____
Vice
____
Vice
____
Vice
___________
Presidents.
___________
Presidents.
___________
Presidents. The Vice
Presidents shall perform such
duties as the Chairman of the
Board, Vice Chairman of the
Board, President, or Board of
Directors shall from time to
time prescribe. In the order
of seniority prescribed, the
most senior Vice President
shall, in the absence or
inability of the President to
act, perform the duties and
exercise the powers of the
President. The order of
seniority of Vice Presidents
shall be prescribed from time
to time by the Board of
Directors or, in the absence
of prescription by the Board
of Directors, by the Chairman
of the Board.
Section 5.6
Section 5.6
Section 5.6____
____
____
__________
Secretary.
__________
Secretary.
__________
Secretary.
The Secretary shall attend
all sessions of the Board and
all meetings of the
stockholders and record all
votes and the minutes of all
proceedings in a book to be
kept for that purpose; and
shall perform like duties for
the standing committees when
required. The Secretary shall
give, or cause to be given,
notice of all meetings of the
stockholders and of the Board
of Directors; shall have
custody of the seal of the
Corporation and whenever
authorized by the Board shall
affix the seal to any
instrument requiring the same;
and shall perform such other
duties and have custody of
<PAGE>
101
such other books and papers as
may from time to time be
prescribed by the Board of
Directors, the Chairman of the
Board, the Vice Chairman of
the Board, or the President.
Section 5.7
Section 5.7
Section 5.7____
____
____
__________
Treasurer.
__________
Treasurer.
__________
Treasurer.
The Treasurer shall be the
chief financial officer of the
Corporation, unless the Board
of Directors shall designate a
Vice President as such
officer, and have the custody
of the corporate funds and
securities and shall deposit
all moneys and other valuable
effects in the name and to the
credit of the Corporation in
such depositories as may be
authorized by the Board of
Directors. The Treasurer
shall disburse the funds of
the Corporation as may be
ordered by the Board, taking
proper vouchers for such
disbursements, and shall
render to the Chairman of the
Board, the Vice Chairman of
the Board, the President and
the Board of Directors,
whenever they may respectively
require it, an account of all
his or her transactions as
Treasurer and of the financial
condition of the Corporation.
The Treasurer shall give the
Corporation a bond if required
by the Board of Directors in
the sum, and with one or more
sureties satisfactory to the
Board, for the faithful
performance of the duties of
his or her office, and for the
restoration to the Corporation
in case of his or her death,
resignation, retirement, or
removal from office, of all
books, papers, vouchers,
moneys, and other property of
whatever kind in his or her
possession or under his or her
control belonging to the
Corporation. If a Controller
has not been elected, the
Treasurer shall also have all
of the powers and perform all
of the duties of that office.
The Treasurer shall perform
<PAGE>
102
such other duties as the
Chairman of the Board, Vice
Chairman of the Board,
President, or Board of
Directors may from time to
time prescribe.
-9-
<PAGE>
Section 5.8
Section 5.8
Section 5.8
_____
_____
_____
___________
Controller.
___________
Controller.
___________
Controller. The
Controller shall be the chief
accounting officer of the
Corporation. The Controller
shall see that adequate and
correct records of all assets,
liabilities and transactions
of the Corporation and its
subsidiaries are maintained;
that efficient procedures and
systems are installed and
followed; that adequate audits
are currently and regularly
made; and, in conjunction with
other officers, that measures
and procedures are initiated
and followed whereby the
business of the Corporation
and its subsidiaries shall be
conducted with maximum effi-
ciency and economy. The
Controller shall perform such
other duties as may be
assigned to him or her from
time to time by the Chairman
of the Board, Vice Chairman of
the Board, President, or Board
of Directors.
Section 5.9
Section 5.9
Section 5.9____
____
____
_________
Assistant
_________
Assistant
_________
Assistant
_________
Officers.
_________
Officers.
_________
Officers. Each Assistant Vice
President, each Assistant
Secretary, and each Assistant
Treasurer shall have the usual
powers and duties pertaining
to his or her office, together
with such other powers and
duties as may be assigned to
him or her by the Chairman of
the Board, Vice Chairman of
the Board, President, or the
Board of Directors.
<PAGE>
103
Section 5.10
Section 5.10
Section 5.10___
___
___
__________
Vacancies.
__________
Vacancies.
__________
Vacancies.
If the office of any officer
or agent becomes vacant by
reason of death, resignation,
retirement, disqualification,
removal from office, or
otherwise, the Directors then
in office, although less than
a quorum, by a majority vote,
may choose a successor or
successors, who shall hold
office for the unexpired term
in respect of which said
vacancy occurred.
Section 5.11
Section 5.11
Section 5.11___
___
___
_________
Duties of
_________
Duties of
_________
Duties of
__________________________
Officers May Be Delegated.
__________________________
Officers May Be Delegated.
__________________________
Officers May Be Delegated. In
case of the absence of any
Officer of the Corporation, or
for any other reason that the
Board of Directors may deem
sufficient, the Board may
delegate, for the time being,
the powers or duties, or any
of them of such officer to any
other officer, or to any
Director, providing a majority
of the entire Board concur
therein.
Article VI
Article VI
Article VI
<PAGE>
104
__________________________
Indemnity of Directors and
__________________________
Indemnity of Directors and
__________________________
Indemnity of Directors and
________
Officers
________
Officers
________
Officers
<PAGE>
105
Section 6.1`
Section 6.1`
Section 6.1`___
___
___
__________
Indemnity.
__________
Indemnity.
__________
Indemnity.
Each person who is now, or
who shall hereafter become, a
Director, officer, employee or
agent of the Corporation,
whether or not serving in one
or more of such capacities at
the time indemnification is
sought or paid, and who is
made a party defendant to any
proceeding by reason of
service in any one or more of
such capacities shall be
indemnified in the manner and
to the maximum extent
authorized by law against
judgments, penalties, fines,
settlements (approved by the
Corporation) and reasonable
expenses actually incurred in
connection with such
proceeding unless it is proved
that the act or omission of
such person was material to
the cause of action
adjudicated in the proceeding
or, in the case of a
settlement, to be adjudicated
in the proceeding, and that
(a) such act or omission (i)
was committed in bad faith or
(ii) was the result of active
and deliberate dishonesty or
(b) such person actually
received an improper personal
benefit in money, property or
services or (c) in the case of
any criminal proceeding, such
person had reasonable cause to
believe the act or omission
was unlawful. Such
indemnification shall not be
made unless authorized for a
specific proceeding after a
determination in accordance
with Maryland law that the
Director, officer, employee or
agent has met the standard of
conduct set forth in this
paragraph. Additionally, any
such person who was not a
Director or officer of the
Corporation at the time of the
commission of the act or the
omission to act which is a
subject of such proceeding may
be indemnified to such further
extent, if any, consistent
with law, as may be provided
<PAGE>
106
in any contract between the
Corporation and such person
and may be indemnified, but
shall not be entitled to be
indemnified, to such further
extent, if any, consistent
with law, as may be
authorized, prospectively or
retroactively, by the Board of
Directors, the Chairman of the
Board, the President or any
other officer to whom such
authority is delegated by the
Board of Directors, the
Chairman of the Board or the
President.
-10-
<PAGE>
Section 6.2
Section 6.2
Section 6.2
_____
_____
_____
________________________
Advancement of Expenses.
________________________
Advancement of Expenses.
________________________
Advancement of Expenses.
Payment or reimbursement in
advance of the final
disposition of any proceeding
described in Section 6.1 of
reasonable expenses incurred
by any such person in
defending such proceeding may
be authorized by the Board of
Directors or in the case of
any such person who is not a
Director, by the Chairman of
the Board, the President or
any other officer to whom such
authority is delegated by the
Board of Directors, the
Chairman of the Board or the
President; provided, however,
that the Corporation shall
have received:
(a) a written
affirmation by such person of
such person's good faith
belief that the standard of
conduct necessary for
indemnification by the
Corporation as authorized by
law has been met; and
(b) a written
undertaking by or on behalf of
such person to repay all
amounts so paid or reimbursed
if it shall ultimately be
determined that such standard
of conduct has not been met.
<PAGE>
107
Nothing contained in this
Section 6.2 shall be construed
to require the Corporation to
pay or reimburse any expenses
incurred by any such person
prior to the ultimate disposi-
tion of such proceeding or to
require the Corporation to pay
or reimburse subsequent to the
ultimate disposition of such
proceeding any expenses
incurred by any such person,
except as provided in Section
6.1.
Section 6.3
Section 6.3
Section 6.3____
____
____
________
Services
________
Services
________
Services
____________________
in Other Capacities.
____________________
in Other Capacities.
____________________
in Other Capacities. Service
in the capacity of a Director,
officer, employee or agent of
the Corporation shall include
service at the request of the
Corporation as a director,
officer, partner, trustee,
fiduciary, employee or agent
of any other corporation or of
any partnership, joint
venture, trust, other enter-
prise, or employee benefit
plan. Any approval of any
settlement may be made by the
Board of Directors or, in the
case of a settlement by any
such person who is not a
Director, by the Chairman of
the Board, the President or
any other officer to whom such
authority is delegated by the
Board of Directors, the
Chairman of the Board or the
President. Except where
reimbursement of expenses is
ordered by a court, all
determinations as to the
reasonableness of any expenses
shall be made by the persons
authorizing reimbursement or
payment thereof.
Section 6.4
Section 6.4
Section 6.4 ___
___
___
__________
Rights not
__________
Rights not
__________
Rights not
__________
Exclusive.
__________
Exclusive.
__________
Exclusive. The preceding
rights to indemnification
shall not be exclusive of and
shall be in addition to any
other rights to which such
person would be entitled as a
<PAGE>
108
matter of law in the absence
of the preceding provisions.
-11-
<PAGE>
Article VII
Article VII
Article VII
______________________________
Certain Administrative Matters
______________________________
Certain Administrative Matters
______________________________
Certain Administrative Matters
Section 7.1
Section 7.1
Section 7.1____
____
____
_______
Checks.
_______
Checks.
_______
Checks.
All checks or demands for
money or notes of the
Corporation shall be signed by
such officer or officers as
the Board of Directors may
from time to time designate.
Section 7.2
Section 7.2
Section 7.2____
____
____
______
Fiscal
______
Fiscal
______
Fiscal
_____
Year.
_____
Year.
_____
Year. The fiscal year shall
begin the first day of January
of each year.
Section 7.3
Section 7.3
Section 7.3 ___
___
___
______
Annual
______
Annual
______
Annual
___________
Statements.
___________
Statements.
___________
Statements. The Chairman of
the Board or such other
officer or officers of the
Corporation as he or she may
direct, shall annually prepare
a full and true statement of
the affairs of the
Corporation, which shall be
submitted at the annual
meeting of the stockholders
and filed within 20 days
thereafter at the principal
office of the Corporation in
Baltimore, State of Maryland.
Section 7.4
Section 7.4
Section 7.4 ___
___
___
_________
Amendment
_________
Amendment
_________
Amendment
__________
to Bylaws.
__________
to Bylaws.
__________
to Bylaws. Any and all
provisions of these bylaws may
be altered, amended, or
repealed and new bylaws be
adopted only by the
stockholders at a duly
constituted meeting or by the
vote of a majority of the
entire Board of Directors at
any meeting of the Board of
Directors.
<PAGE>
109
Section 7.5
Section 7.5
Section 7.5____
____
____
________
Offices.
________
Offices.
________
Offices.
The Principal office of the
Corporation shall be in the
City of Baltimore, State
of Maryland. The Corporation
may also have a place of
business in such other places
as the Board of Directors may
from time to time appoint or
the business of the
Corporation may require.
Section 7.6
Section 7.6
Section 7.6 ___
___
___
_____
Seal.
_____
Seal.
_____
Seal. The
corporate seal shall have
inscribed thereon the name of
the Corporation, the year of
its organization, and the
words, ``
Corporate Seal,
Maryland.''
-12-
<PAGE>
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT
AGREEMENT (herein called this
"Amendment") is made by and among
Crown Central Petroleum
Corporation, a Maryland corporation
(the "Company"), The First National
Bank of Boston and Texas Commerce
Bank National Association, as
agents for the Banks ("Agents"),
NationsBank of Texas, N.A., as
administrative agent and as letter
of credit agent for the Banks (in
such respective capacities,
"Administrative Agent" and "Letter
of Credit Agent"), and each of the
banks that is a signatory to the
Original Agreement (the
"Banks")(the Administrative Agent,
the Letter of Credit Agent, the
Agents, and the Banks are
collectively referred to herein as
the "Bank Parties").
<PAGE>
110
RECITALS
1. The Company and the Bank
Parties have entered into that
certain Credit Agreement dated as
of September 25, 1995 (the
"Original Agreement") for the
purpose and consideration therein
expressed.
2. The Company and the Bank
Parties desire to amend the
Original Agreement as expressly set
forth herein.
NOW, THEREFORE, in
consideration of the premises and
the mutual covenants and agreements
contained herein and in the
Original Agreement and in
consideration of the credit which
may hereafter be extended by the
Banks to the Company, and for other
good and valuable consideration,
the receipt and sufficiency of
which are hereby acknowledged, the
parties hereto agree as follows:
<PAGE>
ARTICLE I.
__________________________
Definitions and References
Section 1.1. ________________
Terms Defined in
______________________
the Original Agreement. Unless the
context otherwise requires or
unless otherwise expressly defined
herein, the terms defined in the
Original Agreement shall have the
same meanings whenever used in this
Amendment.
Section 1.2. _____________
Other Defined
_____
Terms. Unless the context
otherwise requires, the following
terms when used in this Amendment
shall have the meanings assigned to
them in this Section 1.2.
"Amendment" shall mean
this First Amendment to Credit
Agreement.
-1-
<PAGE>
111
<PAGE>
"Credit Agreement" shall
mean the Original Agreement as
amended hereby.
ARTICLE II.
________________________________
Amendments to Original Agreement
Section 2.1. ______________
New Definition.
The following definition of "FAS
121 Writedown" is hereby added to
Section 1.1 of the Original
Agreement:
"_________________
FAS 121 Writedown" shall
mean the recognition by the
Company of Consolidated Non-
Cash Charges in the amount of
$55,000,000 as reflected in
the Company's 1995 year-end
financial statements for an
impairment loss in accordance
with Statement of Financial
Accounting Standards No. 121
- "Accounting for the
Impairment of Long-Lived
Assets and for Long-Lived
Assets to Be Disposed Of".
Section 2.2. _____________
Amendments to
_____________
Defined Terms. The definition of
"Adjusted Net Income (Loss)" in
Section 1.1 of the Original
Agreement is hereby amended to
include the following subsection
(a1) which is to be added
immediately after subsection (a)
and before subsection (b):
(a1) Consolidated Non-
Cash Charges of
$55,000,000
recognized pursuant
to the FAS 121
Writedown,
Subsections (g) and (h) of the
definition of "Cumulative Adjusted
Liquidity Capacity" in Section 1.1
of the Original Agreement are
hereby amended in their entirety to
read as follows:
<PAGE>
112
(g) increases
(decreases) during
such Determination
Period in Deferred
Liabilities,
excluding decreases
of $13,800,000, plus
(minus)
(h) increases
(decreases) in
Consolidated Funded
Debt during such
Determination
Period, but only up
to the level at
which the
CFD/Capital Ratio
equals 40%
(provided, however,
that in no event
will increases in
Consolidated Funded
Debt be added in
determining
Cumulative Adjusted
Liquidity Capacity
unless FIFO Tangible
Net Worth exceeds
$243,000,000 at such
Determination Date),
minus
Section 2.3. ________________
Covenants of the
_______
Company. Section 8.14(c)(iii) of
the Original Agreement is hereby
amended in its entirety to read as
follows:
(iii) FIFO Net Worth
must exceed $231,000,000
immediately after such sale,
without giving effect to any
gain recognized upon such
sale; and
-2-
<PAGE>
Section 8.19 of the Original
Agreement is hereby amended in its
entirety to read as follows:
8.19 _________________
FIFO Tangible Net
_____
Worth. The Company shall
<PAGE>
113
cause FIFO Tangible Net Worth
to be at least $185,000,000 at
the end of each calendar
month.
Section 8.20 of the Original
Agreement is hereby amended in its
entirety to read as follows:
8.20 _________________
CFD/Capital Ratio.
The Company shall cause the
CFD/Capital Ratio to be less
than .475 to 1.0 at the end of
each calendar month.
Section 8.23 of the Original
Agreement is hereby amended in its
entirety to read as follows:
8.23 ___________________
Short-Term FIFO Net
_____________
Income (Loss). The Company
shall cause FIFO Net Income
(Loss) to be greater than:
(i) ($20,000,000) (i.e.,
either to be positive or, if a
loss, not to be a loss of more
than $20,000,000) for the
first three short-term
measurement periods commencing
on July 1, 1995 (of one month,
two months and three months,
respectively);
(ii) ($20,000,000) less
($400,000) for each month in
such short-term measurement
period for each of the next
successive twelve short-term
measurement periods; and
(iii) ($15,200,000) for each
short-term measurement period
thereafter. As used in this
Section 8.23, "short-term
measurement period" means any
period of twelve consecutive
calendar months, provided that
until June 30, 1996, a short-
term measurement period shall
be any period (from one to
eleven months in length)
beginning on July 1, 1995 and
ending on the last day of a
calendar month prior to June
30, 1996.
Section 8.24 of the Original
Agreement is hereby amended in its
entirety to read as follows:
<PAGE>
114
8.24 _________________
Mid-Term FIFO Net
_____________
Income (Loss). The Company
shall cause FIFO Net Income
(Loss) to be greater than:
(i) ($30,000,000) (i.e.,
either to be positive or, if a
loss, not to be a loss of more
than $30,000,000) for the
first three mid-term
measurement periods commencing
on July 1, 1995 (of one month,
two months and three months,
respectively);
(ii) ($30,000,000) less
($200,000) for each month in
such mid-term measurement
period for each of the next
successive twenty four mid-
term measurement periods; and
(iii) ($25,200,000) for each
mid-term measurement period
thereafter. As used in this
Section 8.24, "mid-term
measurement period" means any
period of twenty-four
consecutive calendar months,
provided that until June 30,
1997, a mid-term measurement
period shall be any period
(from one to twenty-three
months in length) beginning on
July 1, 1995 and ending on the
last day of a calendar month
prior to June 30, 1997.
-3-
<PAGE>
ARTICLE III.
___________________________
Conditions of Effectiveness
Section 3.1. ______________
Effective Date.
This Amendment shall become
effective when, and only when, (i)
Administrative Agent shall have
received, at Administrative Agent's
office, a counterpart of this
Amendment executed and delivered by
the Company, the Administrative
Agent, the Letter of Credit Agent
and the Majority Banks and (ii)
Administrative Agent shall have
additionally received such
<PAGE>
115
supporting documents as
Administrative Agent may reasonably
request. Upon satisfaction of such
conditions, this Amendment shall be
deemed to take effect as of October
1, 1995.
ARTICLE IV.
______________________________
Representations and Warranties
Section 4.1. _______________
Representations
_____________________________
and Warranties of the Company. In
order to induce each Bank to enter
into this Amendment, the Company
represents and warrants to each
Bank that:
(a) The representations
and warranties contained in
Section 7 of the Original
Agreement (excluding Section
7.16) are true and correct
(except as disclosed in the
letter dated February 14, 1996
from the Company to the Banks)
and no Default or Event of
Default exists at and as of
February 1, 1996, in each case
after giving effect to the
amendments herein made.
(b) The Company is duly
authorized to execute and
deliver this Amendment and is
and will continue to be duly
authorized to borrow monies
and to perform its obligations
under the Credit Agreement.
The Company has duly taken all
corporate action necessary to
authorize the execution and
delivery of this Amendment and
to authorize the performance
of the obligations of the
Company hereunder.
(c) The execution and
delivery by the Company of
this Amendment, the
performance by the Company of
its obligations hereunder and
the consummation of the
transactions contemplated
hereby do not and will not
conflict with any provision of
law, statute, rule or
regulation or of the articles
<PAGE>
116
or certificate of
incorporation and bylaws of
the Company, or of any
material agreement, judgment,
license, order or permit
applicable to or binding upon
the Company, or result in the
creation of any lien, charge
or encumbrance upon any assets
or properties of the Company.
Except for those which have
been obtained, no consent,
approval, authorization or
order of any court or
governmental authority or
third party is required in
connection with the execution
and delivery by the Company of
this Amendment or to
consummate the transactions
contemplated hereby.
-4-
<PAGE>
(d) When duly executed
and delivered, each of this
Amendment and the Credit
Agreement will be a legal and
binding obligation of the
Company, enforceable in
accordance with its terms,
except as limited by
bankruptcy, insolvency or
similar laws of general
application relating to the
enforcement of creditors'
rights and by equitable
principles of general
application.
<PAGE>
117
ARTICLE V.
_____________
Miscellaneous
Section 5.1. _______________
Ratification of
__________
Agreements. The Original Agreement
as hereby amended is hereby
ratified and confirmed in all
respects. Any reference to the
Credit Agreement in any Loan
Document shall be deemed to be a
reference to the Original Agreement
as hereby amended. The execution,
delivery and effectiveness of this
Amendment shall not, except as
expressly provided herein, operate
as a waiver of any right, power or
remedy of the Banks under the
Credit Agreement, the Notes, or any
other Loan Document nor constitute
a waiver of any provision of the
Credit Agreement, the Notes or any
other Loan Document.
Section 5.2. ___________
Survival of
__________
Agreements. All representations,
warranties, covenants and
agreements of the Company herein
shall survive the execution and
delivery of this Amendment and the
performance hereof, including
without limitation the making or
granting of the Loans, and shall
further survive until all of the
Obligations are paid in full. All
statements and agreements contained
in any certificate or instrument
delivered by the Company hereunder
or under the Credit Agreement to
any Bank shall be deemed to
constitute representations and
warranties by, and/or agreements
and covenants of, the Company under
this Amendment and under the Credit
Agreement.
Section 5.3. ______________
Loan Documents.
This Amendment is a Loan Document,
and all provisions in the Credit
Agreement pertaining to Loan
Documents apply hereto.
<PAGE>
118
Section 5.4. _____________
Governing Law.
This Amendment shall be governed by
and construed in accordance the
laws of the State of New York and
any applicable laws of the United
States of America in all respects,
including construction, validity
and performance.
Section 5.5. ____________
Counterparts.
This Amendment may be separately
executed in counterparts and by the
different parties hereto in
separate counterparts, each of
which when so executed shall be
deemed to constitute one and the
same Amendment.
-5-
<PAGE>
IN WITNESS WHEREOF, this
Amendment is executed by the
parties hereto. This Amendment
shall be dated as of February 1,
1996 for purposes of reference but
shall, as provided in Section 3.1
above, take effect as of October 1,
1995.
CROWN CENTRAL PETROLEUM CORPORATION
By: /s/---Phillip W. Taff
Name: Phillip W. Taff
Title: Senior Vice President
and Chief Financial
Officer
NATIONSBANK OF TEXAS, N.A., as
Administrative Agent, Letter of
Credit Agent and a Bank
By: /s/---William D. Clift
William D. Clift
Senior Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as an Agent and a Bank
<PAGE>
119
By: /s/---Michael Kane
Name: Michael Kane
Title: Managing Director
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as an Agent and a Bank
By: /s/---D. G. Mills
Name: D. G. Mills
Title: Vice President
FIRST NATIONAL BANK OF MARYLAND, as
a Bank
By: /s/---Kellie M. Mathews
Name: Kellie M. Mathews
Title: Vice President
-6-
<PAGE>
SIGNET BANK/MARYLAND, as a Bank
By: /s/---Janice E. Godwin
Name: Janice E. Godwin
Title: Vice President
THE BANK OF NOVA SCOTIA,
as a Bank
By: /s/---John W. Campbell
Name: John W. Campbell
Title: Unit Head
DEN NORSKE BANK AS, as a Bank
By: /s/---Byron L. Cooley
Name: Byron L. Cooley
Title: First Vice President
By: /s/---William V. Moyer
Name: William V. Moyer
Title: Vice President
SOCIETE GENERALE,as a Bank
<PAGE>
120
By: /s/---Gordon Saint-Denis
Name: Gordon Saint-Denis
Title: Vice President
THE YASUDA TRUST AND BANKING
COMPANY, LIMITED, New York Branch,
as a Bank
By: /s/--- Yutaka Fujiwara
Name: Yutaka Fujiwara
Title: Joint General Manager
-7-
<PAGE>
EXHIBIT 10.c
CROWN CENTRAL PETROLEUM
CORPORATION
______________________
EMPLOYEES SAVINGS PLAN
_________________
TABLE OF CONTENTS
Article I - Definitions
Article II - Eligibility of
Employees to Participate
Article III- Contributions
Article IV - Limitation on
Annual Additions
Article V - Investments
Article VI-Vesting of Interest of
Participants in Employer
Contributions
Article VII- In-Service
Distributions
<PAGE>
121
Article VIII - Loans to
Participants
Article IX - Distributions upon
Death
Article X - Distributions
upon Separation from Service
Article XI - Distributions upon
Retirement or Disability
Article XII- Distributions
Commencing on Required
Beginning Date
Article XIII - Distributions
under Qualified Domestic
Relations Order
Article XIV - Top Heavy
Rules
Article XV - Administration
Article XVI- Indemnification
Article XVII - Concerning the
Trustee
Article XVIII - Concerning the
Participating Companies
Article XIX- Exclusive Benefit,
Amendment, Termination
Article XX - Appendices
Article XXI- Eligible Rollover
Distributions
Article XXII - Miscellaneous
Appendices
<PAGE>
CROWN CENTRAL PETROLEUM
CORPORATION
EMPLOYEES SAVINGS PLAN
AMENDED AND RESTATED
AS OF JANUARY 1, 1987
THIS AMENDMENT AND RESTATEMENT
of the CROWN CENTRAL PETROLEUM
CORPORATION EMPLOYEES SAVINGS PLAN
(the "Plan"), by CROWN CENTRAL
PETROLEUM CORPORATION, a Maryland
<PAGE>
122
corporation, hereinafter called
the "Company".
W I T N E S S E T H:
WHEREAS, the Company and the
Participating Companies have
heretofore established the Crown
Central Petroleum Corporation
Employees Savings Plan; and
WHEREAS, the Company reserved the
right to modify the Plan at any
time and from time to time; and
WHEREAS, the Company now wishes to
amend and restate the Plan in
order to bring it into compliance
with the Tax Reform Act of 1986
and subsequent legislation through
the date of execution hereof;
NOW, THEREFORE, the said Plan is
amended and restated in its
entirety, effective January 1,
1987, except for provisions
stating later effective dates, to
provide as follows:
<PAGE>
_________
ARTICLE I
___________
DEFINITIONS
The following definitions will
apply to this Plan, unless a
different meaning is required by
the context.
1.1 _______
ACCOUNT means the separate
accounts maintained on the books
and records of the Plan to reflect
each Participant's interest under
the Plan. Accounts shall be
maintained for each Participant,
as appropriate, of one or more of
the following types:
(a) _________________
Employer Matching
_____________________
Contributions Account - That
portion of a Participant's
interest in the Plan which is
attributable to Employer Matching
<PAGE>
123
Contributions made on his behalf
in accordance with Section 3.2.
(b) _______________
Participant Pre____
-Tax
_____________________
Contributions Account - That
portion of a Participant's
interest in the Plan which is
attributable to Participant
Pre-Tax Contributions made by him
in accordance with Section 3.1.
(c) _________________
Participant After____
-Tax
_____________________
Contributions Account - That
portion of a Participant's
interest in the Plan which is
attributable to Participant
After-Tax Contributions made by
him pursuant to Section 3.1.
1.2 _____________________
ANNUITY STARTING DATE shall
mean the first day of the month
following the date an Insurer
receives from the Administrator
written notice of a distribution
as shall be required by the
Insurer, or if later, the first
day of the month specified by the
Participant or Beneficiary for the
commencement of benefit payments.
"_______
Insurer" means a legal reserve
life insurance company organized
or operated under the laws of any
one of the United States of
America and duly licensed in the
State of Maryland which has
entered into a group annuity
contract for the purpose of
funding this Plan in whole or in
part.
<PAGE>
1.3 ___________
BENEFICIARY means (i) the
surviving spouse, if any, of the
Participant, or (ii) if there is
no surviving spouse, or if the
Participant and surviving spouse
have executed a qualified election
(as defined below), the person or
persons designated in writing by
the Participant, or (iii) if there
is no surviving spouse and no
person living on the date of the
Participant's death who is
designated in writing by the
<PAGE>
124
Participant, the Participant's
descendants per stirpes, or (iv)
if there are no persons described
above living on the date of the
Participant's death, the
Participant's estate.
A "qualified election" is a
written designation by a
Participant of a beneficiary(ies)
other than the Participant's
spouse which includes the written
consent of the spouse to the
payment of the Participant's
Accounts to the beneficiary(ies)
designated in the election (which
may not be changed without spousal
consent) or which includes the
written consent of the spouse
which expressly permits
beneficiary designations by the
Participant without any
requirement of further consent by
the spouse. The spouse's consent
must acknowledge the effect of the
written designation and consent,
and the spouse's signature must
be notarized or witnessed by a
Plan representative. If the
consent of the spouse permits
beneficiary designations without
further consent by the spouse, the
consent must acknowledge and
expressly relinquish the right to
limit the consent to the
designation of a specific
beneficiary. A spouse may not
revoke his or her written consent.
A qualified election is not
required if it is established to
the satisfaction of the Plan
Administrator that there is no
spouse or that the spouse cannot
be located. If the spouse is
legally incompetent to give
consent, the spouse's legal
guardian, even if the guardian is
the Participant, may give consent.
Also, if the Participant is
legally separated or the
Participant has been abandoned
(within the meaning of local law)
and the Participant has a court
order to such effect, or if such
other circumstances exist as are
specified under applicable
Internal Revenue Service
regulations, a qualified election
is not required unless a qualified
domestic relations order (as
<PAGE>
125
defined in Code Section 414(p))
provides otherwise.
1.4 ________________
BREAK IN SERVICE means a
calendar year during which an
Employee (i) terminates or
continues an earlier termination
of employment and (ii) does not
complete at least five hundred and
one (501) Hours of Service.
1.5 ____
CODE means the Internal
Revenue Code of 1986, as amended.
<PAGE>
1.6 _______
COMPANY means Crown Central
Petroleum Corporation, a Maryland
corporation.
1.7 ____________
COMPENSATION means the base
salary or base wages regularly
paid to a Participant by a
Participating Company or Companies
on a periodic basis; provided,
however, that if the Participant
has made an election(s) to reduce
his base salary or base wages in
accordance with Sections 125
and/or 401(k) of the Code,
"Compensation" shall mean the base
salary or base wages that would
have been regularly paid to the
Participant by a Participating
Company on a periodic basis but
for such election(s). "Base
salary" means the regular salary,
excluding overtime, bonuses,
premium pay and other allowances,
paid to a salaried Participant.
"Base wages" means the amount
determined by multiplying the
"base rate of pay" of an
hourly-paid Participant by his
paid hours per week (to a maximum
of 40) for a Participating
Company. "Base rate of pay" means
the hourly wage rate paid to the
Participant by a Participating
Company for non-overtime work,
exclusive of bonuses, premium pay,
living and other allowances, or,
if the Participant has been
assigned to two or more job
classifications at different wage
rates, the arithmetical average of
<PAGE>
126
the hourly wage rates of all job
classifications to which the
Participant has been assigned. In
the case of either salaried or
hourly-paid Participants who are
employed by two or more
Participating Companies, base
salary or base wages means the sum
of the base salaries or base wages
paid to him by such Participating
Companies.
<PAGE>
Any reference in this Plan to
Compensation is a reference to the
definition in this Section 1.7
unless the Plan reference
specifies a modification to this
definition. The Plan
Administrator will take into
account only Compensation actually
paid for the relevant period.
(A) Limitations on Compensation.
(1) Compensation Dollar
Limitation. For any Plan Year
beginning after December 31, 1988,
and before January 1, 1994, the
Plan Administrator must take into
account only the first $200,000
(or beginning January 1, 1990,
such larger amount as the
Commissioner of Internal Revenue
may prescribe) of any
Participant's Compensation. For
any Plan Year beginning prior to
January 1, 1989, this $200,000
limitation (but not the family
aggregation requirement set forth
hereinbelow) applies only if the
Plan is top heavy for such Plan
Year. For any Plan Year beginning
on or after January 1, 1994, the
Plan Administrator must take into
account only the first $150,000
(as adjusted by the Commissioner
of Internal Revenue for increases
in the cost of living in
accordance with Code Section
401(a)(17)(B) of any Participant's
Compensation.
<PAGE>
(2) Application of Limitation to
Certain Family Members. The
Compensation dollar limitation
applies to the combined
Compensation of the Employee and
of any family member aggregated
<PAGE>
127
with the Employee under Section
3.3(c)(iii) who is either (i) the
Employee's spouse; or (ii) the
Employee's lineal descendant under
the age of 19 as the close of the
year. If, for a Plan Year, the
combined Compensation of the
Employee and such family members
who are Participants entitled to
an allocation for that Plan Year
exceeds the applicable limitation,
"Compensation" for each such
Participant, for purposes of the
contribution and allocation
provisions of Article III, means
his Adjusted Compensation.
Adjusted Compensation is the
amount which bears the same ratio
to the applicable limitation as
the affected Participant's
Compensation (without regard to
the applicable limitation) bears
to the combined Compensation of
all the affected Participants in
the family unit.
(B) Nondiscrimination. For
purposes of determining whether
the Plan discriminates in favor of
Highly Compensated Employees,
Compensation means Compensation as
defined in this Section.
1.8 _____________
CONTRIBUTIONS means amounts
paid into the Trust Fund by the
Participating Companies or
Participants.
1.9 _________________
ELIGIBLE EMPLOYEE means an
Employee who has satisfied the
eligibility requirements of
Article II whether or not such
Employee elects to participate in
the Savings Plan.
1.10 ________
EMPLOYEE means any
employee of the Employer.
1.11 ________
EMPLOYER for purposes of
determining who may contribute to
the Plan and whose Employees may
be Participants means the Company
and any other Participating
Company which adopts this Plan for
the benefit of some or all of its
Employees.
<PAGE>
128
The term "Employer" refers to
all Employers collectively, as if
they were one, unless the context
clearly indicates that any
Employer is referred to
separately.
1.12 _________________
EMPLOYER MATCHING
_____________
CONTRIBUTIONS means the Employer
contributions provided pursuant to
Section 3.2.
<PAGE>
1.13 __________
ENTRY DATE means the
first of each month following the
date on which an Employee first
satisfies the eligibility
requirements of the Plan.
1.14 _____
ERISA means the Employee
Retirement Income Security Act of
1974 and the regulations
thereunder, as amended from time
to time.
1.15 _______________
HOUR OF SERVICE means:
(a) Each Hour of Service
for which the Employer, either
directly or indirectly, pays an
Employee, or for which the
Employee is entitled to payment,
for the performance of duties.
The Administrator credits Hours of
Service under this paragraph (a)
to the Employee for the
computation period in which the
Employee performs the duties,
irrespective of when paid;
(b) Each Hour of Service
for back pay, irrespective of
mitigation of damages, to which
the Employer has agreed or for
which the Employee has received an
award. The Administrator credits
Hours of Service under this
paragraph (b) to the Employee for
the computation period(s) to which
the award or the agreement
pertains rather than for the
computation period in which the
award, agreement or payment is
made; and
<PAGE>
129
(c) Each Hour of Service
for which the Employer, either
directly or indirectly, pays an
Employee, or for which the
Employee is entitled to payment
(irrespective of whether the
employment relationship is
terminated), for reasons other
than for the performance of duties
during a computation period, such
as leave of absence, vacation,
holiday, sick leave, illness,
incapacity (including disability),
layoff, jury duty or military
duty. The Administrator will
credit no more than 501 Hours of
Service under this paragraph (c)
to an Employee on account of any
single continuous period during
which the Employee does not
<PAGE>
perform any duties (whether or not
such period occurs during a
single computation period). The
Administrator credits Hours of
Service under this paragraph (c)
in accordance with the rules of
paragraphs (b) and (c) of Labor
Reg. Section 2530.200b-2, which
the Plan, by this reference,
specifically incorporates in full
within this paragraph (c).
The Administrator will not
credit an Hour of Service under
more than one of the above
paragraphs. A computation period
for purposes of this Section 1.15
is the calendar year, Year of
Service period, Break in Service
period or other period, as
determined under the Plan
provision for which the
Administrator is measuring an
Employee's Hours of Service. The
Administrator will resolve any
ambiguity with respect to the
crediting of an Hour of Service in
favor of the Employee.
(A) Method of Crediting Hours of
Service. The Administrator will
credit every Employee with Hours
of Service on the basis of weeks
of employment. In this regard,
the Administrator will credit an
Employee with 45 Hours of Service
for each week for which the
Administrator would credit the
Employee with at least one Hour of
<PAGE>
130
Service under the preceding
provisions of this Section 1.15.
(B) Maternity/Paternity Leave.
Solely for purposes of determining
whether an Employee incurs a Break
in Service under any provision of
this Plan, the Administrator must
credit Hours of Service during an
Employee's unpaid absence period
due to maternity or paternity
leave. The Administrator
considers an Employee on maternity
or paternity leave if the
Employee's absence is due to the
Employee's pregnancy, the birth of
the Employee's child, the
placement with the Employee of an
adopted child, or the care of the
Employee's child immediately
following the child's birth or
placement. The Administrator
credits Hours of Service under
this paragraph on the basis of the
number of
<PAGE>
Hours of Service the Employee
would receive if he were paid
during the absence period or, if
the Administrator cannot determine
the number of Hours of Service the
Employee would receive, on the
basis of 8 hours per day during
the absence period. The
Administrator will credit only the
number (not exceeding 501) of
Hours of Service necessary to
prevent an Employee's incurring a
Break in Service. The
Administrator credits all Hours of
Service described in this
paragraph to the computation
period in which the absence period
begins or, if the Employee does
not need these Hours of Service to
prevent a Break in Service in the
computation period in which his
absence period begins, the
Administrator credits these Hours
of Service to the immediately
following computation period.
1.16 _______________
LEASED EMPLOYEE. The
Plan treats a Leased Employee as
an Employee of the Employer. A
Leased Employee is an individual
(who otherwise is not an Employee
of the Employer) who, pursuant to
<PAGE>
131
a leasing agreement between the
Employer and any other person, has
performed services for the
Employer (or for the Employer and
any persons related to the
Employer within the meaning of
Code Section 414(a)(3)) on a
substantially full time basis for
at least one year and who performs
services historically performed by
employees in the Employer's
business field. If a Leased
Employee is treated as an Employee
by reason of this Section 1.16,
"Compensation" includes
Compensation from the leasing
organization which is attributable
to services performed for the
Employer.
(A) Safe Harbor Plan Exception.
The Plan does not treat a Leased
Employee as an Employee if the
leasing organization covers the
employee in a safe harbor plan
and, prior to application of this
safe harbor plan exception, 20% or
less of the Employer's Employees
(other than Highly Compensated
Employees) are Leased
Employees. A safe harbor plan is
a money purchase pension plan
<PAGE>
providing immediate participation,
full and immediate vesting, and a
nonintegrated contribution formula
equal to at least 10% of the
employee's compensation without
regard to employment by the
leasing organization on a
specified date. The safe harbor
plan must determine the 10%
contribution on the basis of
compensation as defined in Code
Section 415(c)(3) plus elective
contributions (as defined in
Section 4.1(b)).
(B) Other Requirements. The
Administrator must apply this
Section 1.16 in a manner
consistent with Code Section
414(n) and 414(o) and the
regulations issued under those
Code sections. The Administrator
will reduce a Leased Employee's
allocation of Employer
contributions under this Plan by
the Leased Employee's allocation
under the leasing organization's
<PAGE>
132
plan, but only to the extent that
allocation is attributable to the
Leased Employee's service provided
to the Employer.
1.17 _____________________
NORMAL RETIREMENT AGE
means age sixty-five (65).
1.18 ___________
PARTICIPANT means any
Employee who shall have acquired
either a forfeitable or
nonforfeitable interest in the
Trust Fund pursuant to the
provisions of this Plan.
1.19 _________________
PARTICIPANT AFTER____
-TAX
_____________
CONTRIBUTIONS mean contributions
made by a Participant to the Plan
which do not reduce the
Participant's Compensation for
Federal Income Tax purposes.
1.20 _______________
PARTICIPANT PRE____
-TAX
_____________
CONTRIBUTIONS means contributions
made by the Employer on behalf of
a Participant to this Plan,
resulting from an election by such
Participant to reduce his
Compensation for Federal Income
Tax purposes by a designated
percentage.
1.21 _____________________
PARTICIPATING COMPANY
means the Company and any
corporation of which 50% or more
of the outstanding stock entitled
to vote is owned by the Company or
by any corporation of which 50% or
more of the outstanding stock
entitled to vote is owned by a
corporation first mentioned above,
which elects to participate in
this Plan pursuant to Article
XVIII.
1.22 ____________
PENSION PLAN means the
Crown Central Petroleum
Corporation Pension Trust
Agreement and/or the Crown Central
Petroleum Corporation Retirement
Income Plan.
<PAGE>
133
1.23 ____
PLAN means this Crown
Central Petroleum Corporation
Employees Savings Plan and any
amendments thereto.
<PAGE>
1.24 _____________________
PLAN ADMINISTRATOR OR
_____________
ADMINISTRATOR means Crown Central
Petroleum Corporation, and any
successor by merger, purchase or
otherwise.
1.25 _________
PLAN YEAR through January
31, 1988 means the calendar year,
thereafter means the period
beginning January 1, 1989 and
ending December 30, 1989, the
12-month periods beginning
December 31, 1989 and ending
December 30, 1990, and beginning
December 31, 1990 and ending
December 30, 1991, the short year
consisting of December 31, 1991,
and thereafter means the 12-month
period beginning January 1 and
ending December 31.
1.26 _____________
RELATED GROUP. A related
group is a controlled group of
corporations (as defined in Code
Section 414(b)), trades or
businesses (whether or not
incorporated) which are under
common control (as defined in Code
Section 414(c)) or an affiliated
service group (as defined in Code
Section 414(m) or in Code Section
414(o)). If the Employer is a
member of a related group, the
term "Employer" includes the
related group members for purposes
of crediting Hours of Service,
determining Years of Service and
Breaks in Service under Articles
II and VI, applying the
limitations on allocations in
Sections 4.1 and 4.2, applying the
top heavy rules and the minimum
allocation requirements of Article
XIV, the definitions of Employee,
Highly Compensated Employee,
Compensation and Leased Employee,
and for any other purpose required
by the applicable Code section or
<PAGE>
134
by a Plan provision. However,
only a Participating Company may
contribute to this Plan and only
an Employee employed by a
Participating Company is eligible
to participate in this Plan. For
Plan allocation purposes,
"Compensation" does not include
Compensation received from a
related employer which is not
participating in this Plan.
1.27 __________
RETIREMENT means a
separation from service upon or
after (i) Early, Normal or
Deferred Retirement under the
Pension Plan or (ii) attainment of
Normal Retirement Age under this
Plan.
1.28 ________________
TOTAL DISABILITY means
inability, due to sickness or
accidental bodily injury, to
engage in any occupation or
perform any work for compensation
or profit for which the person is
reasonably fitted by training,
education or experience.
1.29 _____
TRUST means the Trust
Fund established pursuant to this
Plan out of which the benefits
payable under this Plan shall be
paid.
1.30 _______
TRUSTEE means Signet
Bank/Maryland through December 31,
1991, and from and after January
1, 1992, means T. Rowe Price Trust
Company, a Maryland limited trust
company, or any successor in
office who in writing accepts the
position of Trustee.
<PAGE>
1.31 _______________
YEAR OF SERVICE has the
following meanings:
(a) _______________
For Eligibility
________
Purposes. A Year of Service means
a twelve (12) consecutive month
period, measured from the
Employee's employment commencement
<PAGE>
135
date, in which the Employee is
credited with one thousand (1,000)
Hours of Service; provided,
however, that for an Employee who
is credited with less than one
thousand (1,000) Hours of Service
during such period, a Year of
Service means a Plan Year in which
such Employee is credited with one
thousand (1,000) Hours of Service,
starting with the Plan Year which
begins during the Employee's first
twelve (12) months of employment.
(b) ____________________
For Vesting Purposes.
A Year of Service means a Plan
Year during which an Employee is
credited with at least one
thousand (1,000) Hours of Service.
<PAGE>
__________
ARTICLE II
___________________________
ELIGIBILITY OF EMPLOYEES TO
___________
PARTICIPATE
2.1 __________________
ELIGIBLE EMPLOYEES.
Effective with respect to any
Employee who has at least one (1)
Hour of Service on or after
January 1, 1989, (except effective
on or after February 1, 1988 as to
those certified collective
bargaining unit Participants
covered by the amendment to this
Plan dated March 31, 1988), every
Employee of a Participating
Company who has attained age 21
and has completed a Year of
Service as defined in Section
1.31(a), shall be eligible to
participate in this Plan provided
that if the Employee is a member
of a certified collective
<PAGE>
bargaining unit, he shall be
eligible to participate in this
Plan only if the collective
bargaining agency for such unit
has either accepted the terms and
conditions of this Plan or has
consented to the solicitation of
applications for participation
from members of such collective
bargaining unit.
<PAGE>
136
2.2 ____________________
ELIGIBILITY UPON RE-
__________
EMPLOYMENT. If an Employee should
terminate employment and
subsequently be re-employed by the
Employer, the following rules
shall determine when he shall
again become eligible to
participate in the Plan:
(a) If he had not yet met
the service requirement of Section
2.1 prior to such termination, his
re-employment date shall be
treated as his employment
commencement date, and the
provisions of Section 2.1 shall
apply.
(b) If he had met the
service requirement of Section
2.1, then:
(i) If his prior service is
disregarded under the Break in
Service rule specified in Section
6.2(b), such prior service shall
be disregarded for purposes of
determining his eligibility to
again participate, his re-
employment date shall be treated
as his employment commencement
date and the provisions of Section
2.1 shall apply;
(ii) If his prior service is
not disregarded under the Break in
Service rule specified in Section
6.2(b), he shall be deemed to have
met the service requirement of
Section 2.1 as of the first day of
the month next following his re-
employment.
<PAGE>
___________
ARTICLE III
_____________
CONTRIBUTIONS
3.1 _______________________
PARTICIPANT PRE-TAX AND
_____________________
PARTICIPANT AFTER-TAX
_____________
CONTRIBUTIONS.
(a) Subject to the
limitations prescribed by this
Article and Article IV, each
<PAGE>
137
Participant may elect through
payroll deduction to make either
or both Participant Pre-Tax and/or
Participant After-Tax
Contributions to the Plan. The
Participant's election must be
made on a form prescribed by the
Plan Administrator. The election,
as to the aggregate of Pre-Tax and
After-Tax Contributions, may be
for any whole percentage not
greater than 12% of the
Participant's Compensation and
shall indicate what portion, if
any, shall be allocated as a
Participant Pre-Tax Contribution
and what portion, if any, shall be
allocated as a Participant After-
Tax Contribution.
(b) The Employer shall
remit Participant Contributions to
the Trustee as soon as practicable
but not later than thirty (30)
days after they are withheld from
payroll. That portion indicated
by the Participant as being a
Participant Pre-Tax Contribution
will be credited to his
Participant Pre-Tax Contribution
Account, and that portion
indicated as being a Participant
After-Tax Contribution will be
credited to his Participant After-
Tax Contribution Account.
Effective January 1,
<PAGE>
1992, a Participant may change the
total (including suspending
allotments by reducing such total
to 0%) and/or the Pre-Tax/After
Tax make-up of his election no
more than two times per Plan Year,
effective as of the next January 1
or July 1; to the end and intent
that any such change (including
suspension) shall remain in effect
for at least six months. A change
may only be made on a form
prescribed by and delivered to the
Plan Administrator at least thirty
(30) days before the election is
to
become effective.
3.2 _________________
EMPLOYER MATCHING
_____________
CONTRIBUTIONS.
<PAGE>
138
Promptly following the payment
of the last payroll paid by it in
any month, each Participating
Company shall contribute to the
Trust Fund an amount equal to
fifty percent (50%) of the
Matchable Portion of the
Participant Pre-Tax Contributions
and Participant After-Tax
Contributions made by the
Participants in its employ during
that month, or, in the case of
Participants employed by more than
one Participating Company, the
amount of the Matchable Portion of
said Contributions which is
apportioned to each Participating
Company, less any applicable
credits. Such contribution is
hereinafter referred to as the
"Employer Matching Contribution".
Matchable Portion means (i) in the
case of vested Participants, up to
eight percent (8%) of Compensation
allocated to Participant Pre-Tax
and Participant After-Tax
Contributions pursuant to Section
3.1 and (ii) in the case of non-
vested Participants, up to seven
percent (7%) of such Compensation.
<PAGE>
3.3 _________________
SPECIAL RULES FOR
_________________________________
PARTICIPANT PRE-TAX CONTRIBUTIONS.
(a) _______________
Annual Elective
___________________
Deferral Limitation. A
Participant's Elective Deferrals
(Pre-Tax Contributions to this
Plan or any other plan covering
the Participant) for a calendar
year beginning after December 31,
1986 may not exceed the Code
Section 402(g) limitation. The
Code Section 402(g) limitation is
the greater of $7,000 or the
adjusted amount determined by the
Secretary of the Treasury. If the
Employer determines a
Participant's elective deferrals
under this Plan for a calendar
year would exceed the Code
Section 402(g) limitation for the
calendar year, the Employer shall
not permit any additional
Participant Pre-Tax Contributions
<PAGE>
139
with respect to that Participant
for the remainder of that calendar
year, paying in cash to the
Participant any amounts which
would cause the Participant Pre-
Tax Contributions to exceed the
Code Section 402(g) limitation.
If the Administrator determines a
Participant's elective deferrals
have exceeded the Code Section
402(g) limitation, the
Administrator shall direct the
Trustee to distribute to the
Participant in cash the amount in
excess of the limitation (the
"Excess Deferral") as adjusted for
income or loss allocable thereto.
The determination of such
allocable income or loss shall be
made in a manner similar to the
allocable income or loss
determination described in Section
3.4 for Excess Contributions,
except the numerator of the
allocation fraction will be the
amount of the Participant's Excess
Deferral, and the denominator will
be the Participant's accrued
benefit attributable to his
Elective Deferrals. If the
Administrator
<PAGE>
distributes the Excess Deferral by
April 15, it may make the
distribution irrespective of any
other provision under this Plan or
under the Code.
If a Participant participates
in another plan under which he
makes elective deferrals pursuant
to a Code Section 401(k)
arrangement, elective deferrals
under a simplified employee
pension, or salary reduction
contributions to a tax-sheltered
annuity, irrespective of whether
the Employer maintains the other
plan, the Participant may provide
the Administrator a written claim
for excess deferrals made for a
calendar year. The Participant
must submit the claim no later
than the March 1 following the
close of the particular calendar
year and the claim shall certify
under oath the amount of the
Participant's Pre-Tax
Contributions under this Plan
<PAGE>
140
which are excess deferrals. If
the Administrator receives a
timely claim, he shall distribute
to the Employee the excess
deferral, as adjusted for
allocable income or loss, which
the Employee has assigned to this
Plan in accordance with the
distribution procedure described
in the immediately preceding
paragraph.
(b) ________________
Average Deferral
_______________
Percentage Test. For each Plan
Year, the Participant Pre-Tax
Contributions shall satisfy one of
the following average deferral
percentage ("ADP") tests:
(i) The ADP for the Highly
Compensated Group shall not exceed
1.25 times the ADP for the
Nonhighly Compensated Group; or
<PAGE>
(ii) The ADP for the Highly
Compensated Group shall not exceed
the ADP for the Nonhighly
Compensated Group by more than two
(2) percentage points (or the
lesser percentage permitted by the
multiple use limitation in Section
3.7) and the ADP for the Highly
Compensated Group shall be not
more than twice the ADP for the
Nonhighly Compensated Group.
For purposes of applying the
ADP test in Plan Years beginning
on or after January 1, 1992,
during which this Plan covers both
employees who are included in a
unit of employees covered by a
collective bargaining agreement
and employees who are not, this
Plan shall be treated as
consisting of two separate cash or
deferred arrangements (one for
each such group of employees).
(c) ___________
Definitions. For
purposes of applying the ADP test,
the following definitions apply:
(i) "Highly Compensated Group"
shall mean the Eligible Employees
who are Highly Compensated
Employees for the Plan Year.
(ii) "Eligible Employee" shall
mean a Participant who elects to
make Employee Pre-Tax
<PAGE>
141
Contributions or who is eligible
to make the same, irrespective of
whether he actually does so.
<PAGE>
(iii) "Highly Compensated
Employee" shall mean an Eligible
Employee who, during the Plan Year
or during the preceding 12-month
period:
(1) is a more than five
percent (5%) owner of his Employer
(applying the constructive
ownership rules of Code Section
318, and applying the principles
of Code Section 318 for an
unincorporated entity);
(2) has Compensation in
excess of $75,000 (or a greater
amount, as determined by the
Commissioner of Internal Revenue);
(3) has Compensation in
excess of $50,000 (or a greater
amount, as determined by the
Commissioner of Internal Revenue)
and is part of the top-paid 20%
group of employees (based on
Compensation for the relevant Plan
Year);
(4) has Compensation in
excess of 50% of the dollar amount
prescribed in Code Section
415(b)(1)(A) (relating to defined
benefit plans) and is an officer
of the Employer.
If the Employee satisfies the
definition in clause (2), (3) or
(4) in the Plan Year but not
during the preceding 12-month
period and does not satisfy clause
(1) in either period, the Employee
is a Highly Compensated Employee
only if he is one of the 100 most
highly compensated Employees for
the Plan Year. The number of
officers taken into account under
clause (4) will not exceed the
greater of 3 or 10% of the total
number (after application of the
Code Section 414(q) exclusions) of
Employees, but no more than 50
officers. If no Employee
satisfies the Compensation
<PAGE>
requirement in clause (4) for the
relevant year, the Administrator
will treat the highest paid
<PAGE>
142
officer as satisfying clause (4)
for that year.
For purposes of this Section
3.3(c)(iii), "Compensation" means
Compensation as defined in Section
4.1(b), except no exclusions from
Compensation apply other than the
exclusions described in paragraphs
(i), (ii), (iii) and (iv) of
Section 4.1(b), and Compensation
must include: (i) elective
deferrals under a Code Section
401(k) arrangement or under a
Simplified Employee Pension
maintained by the Employer; and
(ii) amounts paid by the Employer
which are not currently includible
in the Employee's gross income
because of Code Section 125
(cafeteria plans) or 403(b) (tax-
sheltered annuities). The Plan
Administrator must make the
determination of who is a Highly
Compensated Employee, including
the determinations of the number
and identity of the top paid 20%
group, the top 100 paid Employees,
the number of officers includible
in clause (4) and the relevant
Compensation, consistent with Code
Section 414(q) and regulations
issued under that Code section.
For purposes of applying any
nondiscrimination test required
under the Plan or under the Code,
in a manner consistent with
applicable Treasury regulations,
the Plan Administrator will treat
a Highly Compensated Employee and
all his family members (a spouse,
a lineal ascendant or descendant,
or a spouse of a lineal ascendant
or descendant) as a single Highly
Compensated
Employee, but only if the Highly
Compensated Employee is a
<PAGE>
more than 5% owner or is one of
the 10 Highly Compensated
Employees with the greatest
Compensation for the Plan Year.
This aggregation rule applies to a
family member even if that family
member is a Highly Compensated
Employee without family
aggregation.
The term "Highly Compensated
Employee" also includes any former
<PAGE>
143
Employee who separated from
Service (or has a deemed
Separation from Service, as
determined under Treasury
regulations) prior to the Plan
Year, performs no Service for the
Employer during the Plan Year, and
was a Highly Compensated Employee
either for the separation year or
any Plan Year ending on or after
his 55th birthday. If the former
Employee's Separation from Service
occurred prior to January 1, 1987,
he is a Highly Compensated
Employee only if he satisfied
clause (1) of this Section
3.3(c)(iii) or received
Compensation in excess of $50,000
during (1) the year of his
separation from Service (or the
prior year); or (2) any year
ending after his 54th birthday.
(iv) "Nonhighly Compensated
Group" shall mean the Eligible
Employees who are Nonhighly
Compensated Employees for the Plan
Year. The Nonhighly Compensated
Employees are the Eligible
Employees who are not Highly
Compensated Employees and are not
family members treated as Highly
Compensated Employees under
paragraph (iii).
<PAGE>
(v) The "ADP" for a group is the
average of the separate Actual
Deferral Ratios ("ADR") calculated
for each Eligible Employee who is
a member of that group. An
Eligible Employee's ADR for a Plan
Year is the ratio of the
Participant Pre-Tax Contributions
allocated to his account for the
Plan Year to his Compensation for
that portion of the Plan Year
during which he was an Eligible
Employee. For aggregated family
members treated as a single Highly
Compensated Employee under
paragraph (c), the ADR of the
family unit is the ADR determined
by combining the Employee Pre-Tax
Contributions and Compensation of
all aggregated family members. A
Nonhighly Compensated Employee's
ADR shall not include Employee
Pre-Tax Contributions made to this
Plan or to any other Plan
<PAGE>
144
maintained by the Employer, to the
extent such Employee Pre-Tax
Contributions exceed the Code
Section 402(g) limitation. A
Highly Compensated Employee's ADR
shall include elective deferrals
under any other Code Section
401(k) arrangement maintained by
the Employer (unless elective
deferrals are to an ESOP), but a
Nonhighly Compensated Employee's
ADP shall not include elective
deferrals under another Code
Section 401(k) arrangement
maintained by the Employer unless
the Employer treats the Code
Section 401(k) arrangement under
this Plan and the other Code
Section 401(k) arrangement as a
unit for coverage or
discrimination purposes.
<PAGE>
3.4 ___________________
ADP TEST CORRECTION.
(a) If the Administrator
determines the Plan fails to
satisfy the ADP test for a Plan
Year, it may recharacterize
pursuant to Section 3.4(b) or
direct the Trustee to distribute
the Excess Contributions (defined
hereinbelow), as adjusted for
allocable income or loss, no later
than the last day of the
succeeding Plan Year. However,
the Employer will incur an excise
tax equal to ten percent (10%) of
the amount of excess contributions
for a Plan Year not
recharacterized or distributed to
the appropriate Highly Compensated
Employees by 2-1/2 months
following the close of that Plan
Year. The Excess Contributions
are the amount of Employee Pre-Tax
Contributions made by the Highly
Compensated Employees which causes
the Plan to fail to satisfy the
ADP test. The Administrator shall
direct the Trustee to distribute
to each Highly Compensated
Employee his respective share of
the Excess Contributions. The
Administrator shall determine the
respective shares of Excess
Contributions by starting with the
Highly Compensated Employee(s) at
the next highest ADR level
<PAGE>
145
(including the ADR of the Highly
Compensated Employees who has the
greatest ADR(s), reducing his ADR
to the next highest ADR, then, if
necessary, reducing the ADR of the
Highly Compensated Employee(s)
whose ADR(s) the Administrator
already has reduced), and
continuing in this manner until
the ADP for the Highly Compensated
Group satisfies the ADP test. If
the Highly Compensated Employee is
part of an aggregated family
group, the Administrator, in
accordance with the applicable
Treasury Regulations, will
determine each family member's
allocable share of the Excess
Contributions assigned to the
family unit.
<PAGE>
Excess Contributions shall be
adjusted for any income or loss
allocable thereto up to the date
of distribution. The income or
loss allocable to Excess
Contributions up to the date of
distribution is the sum of: (i)
the income or loss allocable to
the Highly Compensated Employee's
Pre-Tax Account for the Plan Year
multiplied by a fraction, the
numerator of which is such
Employee's Excess Contributions
for the year and the denominator
of which is the Employee's account
balance attributable to
Participant Pre-Tax Contributions
as of the last day of the Plan
Year without regard to any income
or loss occurring during such Plan
Year; plus (ii) ten percent of the
amount determined under (i)
multiplied by the number of whole
calendar months between the end of
the Plan Year and the date of
distribution, counting the
month of distribution as a
whole calendar month if, but
only if, distribution occurs
after the 15th day of such month.
<PAGE>
(b) Recharacterization.
The Employer may treat Excess
Contributions as an amount
distributed to the Participant and
<PAGE>
146
then recontributed by the
Participant to the Plan as a
Participant After-Tax
Contribution. An amount may not
be recharacterized with respect to
a Highly Compensated Employee to
the extent that such amount, in
combination with other Participant
After-Tax Contributions made by
that Employee, would exceed any
stated limit under the Plan.
Recharacterization must
occur no later than two and one-
half months after the last day of
the Plan Year in which such Excess
Contributions arose and is deemed
to occur on the date on which the
last of those Highly Compensated
Employees with Excess
Contributions to be
recharacterized is informed in
writing of the amount
recharacterized and the
consequences thereof.
Recharacterized amounts are
includible in the Participant's
gross income on the earliest dates
any elective contributions made on
behalf of the Participant during
the Plan Year would have been
received by the Participant had he
originally elected to receive the
amounts in cash.
3.5 __________________________
SPECIAL RULES FOR EMPLOYEE
___________________________
AFTER-TAX CONTRIBUTIONS AND
_______________________________
EMPLOYER MATCHING CONTRIBUTIONS.
(a) ____________________
Average Contribution
_______________
Percentage Test. The Plan shall
satisfy one of the following
average contribution percentage
("ACP") tests, with respect to
Employee After-Tax Contributions
and Employer Matching
Contributions:
(i) The ACP for the Highly
Compensated Group shall not exceed
1.25 times the ACP for the
Nonhighly Compensated Group; or
<PAGE>
(ii) The ACP for the Highly
Compensated Group shall not exceed
the ACP for the Nonhighly
<PAGE>
147
Compensated Group by more than two
(2) percentage points (or the
lesser percentage permitted by the
multiple use limitation in Section
3.7), and the ACP for the Highly
Compensated Group shall not be
more than twice the ACP for the
Nonhighly Compensated Group.
For purposes of applying the
ACP test in Plan Years beginning
on or after January 1, 1992,
during which this Plan covers both
employees who are included in a
unit of employees covered by a
collective bargaining agreement
and employees who are not, this
Plan shall be treated as
consisting of two separate cash or
deferred arrangements (one for
each such group of employees).
(b) ___________
Definitions. For
purposes of applying the ACP test,
the following definitions apply:
(i) "Highly Compensated Group"
shall mean the Eligible Employees
who are Highly Compensated
Employees (as defined in Section
3.3(c)(iii)) for the Plan Year.
(ii) "Eligible Employee" shall
mean a Participant who is eligible
to receive an allocation of
Company Matching Contributions (or
would be eligible if he made the
type of contributions necessary to
receive such an allocation), and a
Participant who is eligible to
make Participant After-Tax
Contributions, irrespective of
whether he actually makes such
Contributions for the Plan Year.
(iii) "Nonhighly Compensated
Group" shall have the same meaning
as in Section 3.3(c)(iv).
<PAGE>
(iv) The "ACP" for a group is
the average of the Actual
Contribution Ratios (ACR)
calculated for each Eligible
Employee who is a member of that
group. An Eligible Employee's ACR
for a Plan Year is the ratio of
the sum of the Participant After-
Tax Contributions and Employer
Matching Contributions (such sum
being hereinafter referred to as
"Aggregate Contributions")
allocated to his account for the
<PAGE>
148
Plan Year to his Compensation for
that portion of the Plan Year
during which he was an Eligible
Employee. For aggregated family
members treated as a single Highly
Compensated Employee under Section
3.3(c)(iii), the ACR of the family
unit is the ACR determined by
combining the Aggregate
Contributions and Compensation of
all aggregated family members. A
Highly Compensated Employee's ACR
shall include any Aggregate
Contributions made on his behalf
to any other plan maintained by
the Employer (unless the other
plan is an ESOP). A Nonhighly
Compensated Employee's ACR shall
not include Aggregate
Contributions made on his behalf
to another plan unless the
Employer treats this Plan and the
other plan as a unit for coverage
or discrimination purposes under
the Code. The Administrator may
(in a manner consistent with
Treasury regulations) determine
the ACRs of the Eligible Employees
by taking into account Employee
Pre-Tax
<PAGE>
Contributions made to this Plan,
but only to the extent
they are not used in calculating
the ADP test under Section 3.3.
The Administrator may not include
Employee Pre-Tax Contributions in
the ACP test, unless the Code
Section 401(k) arrangement under
this Plan satisfies the ADP test
both with and without such
contributions. For Plan Years
beginning after December 31, 1988,
the Administrator may not include
in the ACP test any Aggregate
Contributions or elective
deferrals under another plan
unless that plan has the same Plan
Year as this Plan.
(v) "Aggregate Contributions"
are Participant After-Tax
Contributions and Employer
Matching Contributions. "Excess
Aggregate Contributions" are the
amount of the Aggregate
Contributions allocated on behalf
of the Highly Compensated
<PAGE>
149
Employees which causes the Plan to
fail to satisfy the ACP test.
3.6 ___________________
ACP TEST CORRECTION. The
Administrator first shall
determine whether the Highly
Compensated Employees have made
Participant Pre-Tax Contributions
which are Excess Deferrals under
Section 3.3 or Excess
Contributions under Section 3.4
before it determines Excess
Aggregate Contributions for the
Plan Year. If the Administrator
determines the Plan fails to
satisfy the ACP test for a Plan
Year, it shall direct the Trustee
to distribute the Excess Aggregate
Contributions, as adjusted for
<PAGE>
allocable income or loss, no later
than the last day of the
succeeding Plan Year. However, the
Employer will incur an excise tax
equal to ten percent (10%) of the
amount of Excess Aggregate
Contributions for a Plan Year not
distributed to the appropriate
Highly Compensated Employees by 2-
1/2 months following the close of
that Plan Year.
The Administrator shall direct the
Trustee to distribute to each
Highly Compensated Employee his
respective amount of the Excess
Aggregate Contributions. The
Administrator shall determine the
respective amounts of Excess
Aggregate Contributions by
starting with the Highly
Compensated Employee(s) who has
the greatest ACR, reducing his ACR
to the next highest ACR then, if
necessary, reducing the ACR of the
Highly Compensated Employee(s) at
the next highest ACR level
(including the ACR of the Highly
Compensated Employee(s) whose ACR
the Administrator already has
reduced), and continuing in this
manner until the ACP for the
Highly Compensated Group satisfies
the ACP test. If the Highly
Compensated Employee is part of an
aggregated family group, the
Administrator, in accordance with
the applicable Treasury
<PAGE>
150
regulations, will determine each
aggregated family member's
allocable share of the Excess
Aggregate Contributions assigned
to the family member unit. The
Administrator shall treat a Highly
Compensated Employee's Excess
Aggregate Contributions in the
following priority: (1) first as
attributable to his unmatched
Employee After-Tax Contributions,
if any; (2) then on a prorata
basis to matched Employee After-
Tax Contributions, and to the
<PAGE>
Matching Contributions allocated
on the basis of those Employee
After-Tax Contributions. To the
extent the Highly Compensated
Employee's Excess Aggregate
Contributions are attributable to
Company Matching Contributions,
and he is not one hundred percent
(100%) vested in his accrued
benefit attributable to Employer
Matching Contributions, the
Administrator shall distribute
only the vested portion of his
Excess Aggregate Contributions, as
adjusted for allocable income or
loss, and forfeit the nonvested
portion. The vested portion of
the Highly Compensated Employee's
Excess Aggregate Contributions
attributable to Company Matching
Contributions is the total amount
of such Excess Aggregate
Contributions (as adjusted for
allocable income or loss)
multiplied by his vested
percentage (determined as of the
last day of the Plan Year for
which the Participating Company
made the matching contribution).
The Administrator shall allocate
any forfeited Excess Aggregate
Contributions to reduce
Employer Matching Contributions
for the Plan Year following the
Plan Year during which the excess
occurred.
The Administrator shall
determine the amount of income or
loss allocable to the Highly
Compensated Employee's Excess
Aggregate Contributions in a
manner similar to the allocable
income or loss determination
<PAGE>
151
described in Section 3.4(a) for
Excess Contributions, except the
Administrator shall make the
determination with reference to
the income or loss allocable to
the Highly Compensated Employee's
Excess Aggregate
<PAGE>
Contributions.
3.7 _______________________
MULTIPLE USE LIMITATION.
For Plan Years beginning after
December 31, 1988, if at least one
Highly Compensated Employee is
included in the ADP test under
Section 3.3 and the ACP test under
Section 3.5, the sum of the Highly
Compensated Group's ADP and ACP
may not exceed the multiple use
limitation.
The multiple use limitation is
the sum of (i) and (ii):
(i) 125% of the greater of:
(a) the ADP of the Nonhighly
Compensated Group; or (b) the
ACP of the Nonhighly
Compensated Group.
(ii) 2% plus the lesser of
(i)(a) or (i)(b), but no more
than twice the lesser of
(i)(a) or (i)(b).
The Administrator, in lieu
of determining the multiple
use limitation as the sum of
(i) and (ii), may elect to
determine such limitation as
the sum of (iii) and (iv):
(iii) 125% of the lesser of
(a) the ADP of the Nonhighly
Compensated Group or (b) the
ACP of the Nonhighly
Compensated Group.
(iv) 2% plus the greater of
(iii)(a) or (iii)(b), but no
more than twice the greater
of (iii)(a) or (iii)(b).
The Administrator shall
determine whether the Plan
satisfies the multiple use
limitation after applying the ADP
test under Section 3.3 and the ACP
test under Section 3.5 and making
any corrective distributions
required by those Sections. If
the Administrator determines the
Plan has failed to satisfy the
multiple use limitation, the
<PAGE>
152
Administrator shall correct the
failure by treating the excess
amount as Excess Aggregate
<PAGE>
Contributions. This Section 3.7
does not apply unless, prior to
the application of the multiple
use limitation, the ADR and the
ACR of the Highly Compensated
Group each exceeds 125% of the
respective percentages for the
Nonhighly Compensated Group.
<PAGE>
__________
ARTICLE IV
______________________________
LIMITATION ON ANNUAL ADDITIONS
4.1 ___________
DEFINITIONS. For purposes
of Article IV, the following terms
mean:
(a) "Annual Addition" - The
sum of the following amounts
allocated on behalf of a
Participant for a Limitation Year;
(i) all Employer Matching
Contributions; and (ii) all
Participant Pre-Tax and After-Tax
Contributions. Except to the
extent provided in Treasury
regulations, Annual Additions
include excess contributions
described in Code Section 401(k),
excess aggregate contributions
described in Code Section 401(m)
and excess deferrals described in
Code Section 401(g), irrespective
of whether the Plan distributes or
forfeits such excess amounts.
Annual Additions also include
Excess Amounts reapplied to reduce
Employer contributions under
Section 4.2. Amounts allocated
after March 31, 1984, to an
individual medical account (as
defined in Code Section 415(l)(2))
included as part of a defined
benefit plan maintained by the
Employer are Annual Additions.
Furthermore, Annual Additions
include contributions paid or
accrued after December 31, 1985,
for taxable years ending after
December 31, 1985, attributable to
<PAGE>
153
post-retirement medical benefits
allocated to the separate account
of a key employee (as defined in
Code
<PAGE>
Section 419A(d)(3)) under a
welfare benefit fund (as defined
in Code Section 419(e)) maintained
by the Employer, but only for
purposes of the dollar limitation
applicable to the Maximum
Permissible Amount.
(b) "Compensation" means
(subject to the limitation
specified in Section 1.7(A)) the
Participant's wages, salaries,
fees for professional service and
other amounts received for
personal services actually
rendered in the course of
employment with the Employer
maintaining the Plan (including,
but not limited to, commissions
paid salesmen, compensation for
services on the basis of a
percentage of profits, commissions
on insurance premiums, tips and
bonuses). Compensation does not
include elective contributions
made by the Employer on the
Employee's behalf. "Elective
contributions" are amounts
excludable from the Employee's
gross income under Code Section
125, 402(a)(8), 402(h) or 403(b),
and contributed by the Employer,
at the Employee's election, to a
Code Section 401(k) arrangement, a
Simplified Employee Pension,
cafeteria plan or tax-sheltered
annuity. A Compensation payment
includes Compensation paid by the
Employer to an Employee through
another person under the common
paymaster provisions of Code
Section 3121(s) and 3306(p). The
term "Compensation" also does not
include:
<PAGE>
(i) Employer
contributions (other
than "elective
contributions") to a
Plan of deferred
compensation to the
extent the contributions
<PAGE>
154
are not included in the
gross income of Employee
for the taxable year in
which contributed, on
behalf of an Employee to
a Simplified Employee
Pension Plan to the
extent such
contributions are
excludable from the
Employee's gross income,
and any distributions
from a plan of deferred
compensation, regardless
of whether such amounts
are includible in the
gross income of the
Employee when
distributed.
(ii) Amounts
realized from the
exercise of a non-
qualified stock option,
or when restricted stock
(or property) held by an
Employee either becomes
freely transferable or
is no longer subject to
a substantial risk of
forfeiture.
(iii) Amounts realized
from the sale, exchange
or other disposition of
stock acquired under a
stock option described
in Part II, Subchapter
D, Chapter 1 of the
Code.
(iv) Other amounts
which receive special
tax benefits, such as
premiums for group term
life insurance (but only
to the extent that the
premiums are not
includible in the gross
income of the Employee),
or contributions made by
an Employer (whether or
not under a salary
reduction agreement)
towards the purchase of
an annuity contract
described in Code
Section 403(b) (whether
or not the contributions
are excludable from the
gross income of the
Employee), other than
<PAGE>
155
"elective
contributions".
<PAGE>
(c) "Maximum Permissible
Amount" - The lesser of (i)
$30,000 (or, if greater, one-
fourth of the defined benefit
dollar limitation under Code
Section 415(b)(1)(A)), or (ii) 25%
of the Participant's Compensation
for the Limitation Year. If there
is a short Limitation Year because
of a change in Limitation Year,
the Plan Administrator will
multiply the $30,000 (or adjusted)
limitation by the following
fraction:
_____________________________
Number of months in the short
_______________
Limitation Year
12
(d) "Employer" - The
Employer that adopts this Plan and
any Related Employers described in
Section 1.26. Solely for purposes
of applying the limitations of
Section 4.2 and this Section, the
Plan Administrator will determine
Related Employers described in
Section 1.26 by modifying Code
Section 414(b) and (c) in
accordance with Code Section
415(h).
(e) "Excess Amount" - The
Excess of the Participant's Annual
Additions for the Limitation Year
over the Maximum Permissible
Amount.
(f) "Limitation Year" - The
Plan Year. If the Employer amends
the Limitation Year to a different
12 consecutive month period, the
new Limitation Year must begin on
a date within the Limitation Year
for which the Employer makes the
amendment, creating a short
Limitation Year.
(g) "Defined contribution
plan" - A retirement plan which
provides for an individual account
for each participant and for
benefits based solely on the
amount contributed to the
participant's account, and any
income, expenses, gains and
<PAGE>
156
<PAGE>
losses, and any forfeitures of
accounts of other participants
which the plan may allocate to
such participant's account. The
Plan Administrator must treat all
defined contribution plans
maintained by the Employer
(whether or not terminated) as a
single plan. Solely for purposes
of the limitations of this
Article, the Plan Administrator
will treat employee contributions
made to a defined benefit plan
maintained by the Employer as a
separate defined contribution
plan. The Plan Administrator also
will treat as a defined
contribution plan an individual
medical account (as defined in
Code Section 415(l)(2)) included
as part of a defined benefit plan
maintained by the Employer and,
for taxable years ending after
December 31, 1985, a welfare
benefit fund under Code Section
419(e) maintained by the Employer
to the extent there are post-
retirement medical benefits
allocated to the separate account
of a key employee (as defined in
Code Section 419A(d)(3)).
(h) "Defined benefit plan"
- A retirement plan which does not
provide for individual accounts
for Employer contributions. The
Plan Administrator must treat all
defined benefit plans maintained
by the Employer (whether or not
terminated) as a single plan.
(i) "Defined benefit plan
fraction" - shall mean, for each
Limitation Year, the following:
Projected annual benefit of the
Participant under all qualified
________________________________
defined benefit plans maintained
_______________
by the Employer
The lesser of (i) 125% (subject to
the "100% limitation" in
paragraph (k)) of the dollar
limitation in effect under
Code Section 415(b)(1) (A) for the
Limitation Year, or (ii)
140% of the Participant's average
Compensation for
his high 3 consecutive Years of
Service
<PAGE>
157
<PAGE>
To determine the denominator
of this fraction, the Plan
Administrator will make any
adjustment required under Code
Section 415(b) and will determine
a Year of Service as a Plan Year
in which the Employee completed at
least 1,000 Hours of Service. The
"projected
annual benefit" is the annual
retirement benefit (adjusted to an
actuarially equivalent straight
life annuity if the plan expresses
such benefit in a form other than
a straight life annuity or
qualified joint and survivor
annuity) of the Participant under
the terms of the defined benefit
plan on the assumptions he
continues employment until his
normal retirement age (or current
age, if later) as stated in the
defined benefit plan, his
compensation continues at the same
rate as in effect in the
Limitation Year under
consideration until the date of
his normal retirement age and all
other relevant factors used to
determine benefits under the
defined benefit plan remain
constant as of the current
Limitation Year for all future
Limitation Years.
_______________________
Current Accrued Benefit. If
the Participant accrued benefits
in one or more defined benefit
plans maintained by the Employer
which were in existence on May 5,
1986, the dollar limitation used
in the denominator of this
fraction will not be less than the
Participant's Current Accrued
Benefit. A Participant's Current
Accrued Benefit is the sum of the
annual benefits under such defined
benefit plans which the
Participant had accrued as of the
end of the 1986 Limitation Year
(the last Limitation Year
beginning before January 1, 1987),
determined
<PAGE>
<PAGE>
158
without regard to any change in
the terms or conditions of the
Plan made after May 5, 1986, and
without regard to any cost of
living adjustment occurring after
May 5, 1986. This Current Accrued
Benefit rule applies only if the
defined benefit plans individually
and in the aggregate satisfied
the requirements of Code Section
415 as in effect at the end of the
1986 Limitation Year.
(j) "Defined contribution
plan fraction" - shall mean, for
each Limitation Year, the
following:
The sum, as of the close of the
Limitation Year, of the Annual
Additions to the Participant's
Account under all defined
________________________________
contribution plans maintained by
____________
the Employer
The sum of the lesser of the
following amounts determined
for the Limitation Year and for
each prior Year of Service
with the Employer: (i) 125%
(subject to the "100%
limitation" in paragraph (k)) of
the dollar
limitation in effect under Code
Section 415(c)(1)(A)
for the Limitation Year
(determined without
regard to the special dollar
limitations
for employee stock ownership
plans), or
(ii) 35% of the Participant's
Compensation for the
Limitation Year
For purposes of determining
the defined contribution plan
fraction, the Plan Administrator
will not recompute Annual
Additions in Limitation Years
beginning prior to January 1,
1987, to treat all Employee
contributions as Annual Additions.
If the Plan satisfied Code
Section 415 for Limitation Years
beginning prior to January 1,
1987, the Plan Administrator will
redetermine the defined
contribution plan fraction and the
defined benefit plan fraction as
of the end of the 1986 Limitation
<PAGE>
159
Year, in accordance with this
Section 4.1. If the sum of the
redetermined fractions
<PAGE>
exceeds 1.0, the Plan
Administrator will subtract
permanently from the numerator of
the defined contribution plan
fraction an amount equal to the
product of (1) the excess of the
sum of the fractions over 1.0,
times (2) the denominator of the
defined contribution plan
fraction. In making the
adjustment, the Plan Administrator
must disregard any accrued benefit
under the defined benefit plan
which is in excess of the Current
Accrued Benefit. This Plan
continues any transitional rules
applicable to the determination of
the defined contribution plan
fraction under the Employer's Plan
as of the end of the 1986
Limitation Year.
(k) "100% limitation". If
the 100% limitation applies, the
Plan Administrator must determine
the denominator of the defined
benefit plan fraction and the
denominator of the defined
contribution plan fraction by
substituting 100% for 125%. The
100% limitation applies only if:
(i) the Plan's top heavy ratio
exceeds 90%; or (ii) the Plan's
top heavy ratio is greater than
60%, and the Employer does not
provide extra minimum benefits
which satisfy Code Section
416(h)(2).
4.2 __________________________
LIMITATIONS ON ALLOCATIONS
_________________________
TO PARTICIPANTS' ACCOUNTS.
The amount of Annual Addition
which the Plan Administrator may
allocate under this Plan on a
Participant's behalf for a
Limitation Year may not exceed the
Maximum Permissible Amount.
(A) Estimation of Compensation.
Prior to the determination of the
Participant's actual Compensation
for a Limitation Year, the Plan
Administrator may determine the
Maximum Permissible
<PAGE>
160
<PAGE>
Amount on the basis of the
Participant's estimated annual
Compensation for such Limitation
Year. The Plan Administrator must
make this determination on a
reasonable and uniform basis for
all Participants similarly
situated. The Plan Administrator
must reduce any Employer
contributions based on estimated
annual Compensation by any Excess
Amount carried over from prior
years. As soon as is
administratively feasible after
the end of the Limitation Year,
the Plan Administrator will
determine the Maximum Permissible
Amount for such Limitation Year on
the basis of the Participant's
actual Compensation for such
Limitation Year.
(B) Disposition of Excess
Amount. If, due to a reasonable
error in estimating a
Participant's Annual Compensation,
a reasonable error in determining
the amount of Participant Pre-Tax
Contributions that may be made
with respect to any individual
under the limits of Code Section
415, or under other limited facts
and circumstances that the
Commissioner of Internal Revenue
finds justify the availability of
the rules set forth in this
Paragraph (B), there is an Excess
Amount with respect to a
Participant for a Limitation Year,
the Plan Administrator will
dispose of such Excess Amount as
follows:
(1) The Plan
Administrator will return
to the Participant his
After-Tax Contributions to
the extent the return would
reduce the Excess Amount but
would not reduce the
Matchable Portion as defined
in Section 3.2.
<PAGE>
(2) If, after the
application of subparagraph
(1), an Excess Amount still
<PAGE>
161
exists, and the Plan covers
the
Participant at the end of the
Limitation Year, then the
Plan Administrator will use
the Excess Amount to reduce
future Employer contributions
under the Plan for the next
Limitation Year and for each
succeeding Limitation Year,
as is necessary, for the
Participant. The Participant
may elect to limit his
Compensation for allocation
purposes to the extent
necessary to reduce his
allocation for the Limitation
Year to the Maximum
Permissible Amount and
eliminate the Excess Amount.
(3) If, after the
application of subparagraph
(1), an Excess Amount still
exists, and the Plan does not
cover the Participant at the
end of the Limitation Year,
then the Plan Administrator
will hold the Excess Amount
unallocated in a suspense
account. The Plan
Administrator will apply the
suspense account to reduce
Employer Contributions for
all remaining Participants in
the next Limitation Year, and
in each succeeding Limitation
Year if necessary. Neither
the Employer nor any Employee
may contribute to the Plan
for any Limitation Year in
which the Plan is unable to
allocate fully a suspense
account maintained pursuant
to this paragraph (3).
<PAGE>
(4) Notwithstanding
subparagraphs (1), (2) and
(3) of this Paragraph (B),
the Plan Administrator may
return Participant Pre-Tax
Contributions or Participant
After-Tax Contributions to
the extent the return would
reduce an Excess Amount.
(C) Defined Benefit Plan
Limitation. If the Participant
presently participates, or has
ever participated under a defined
<PAGE>
162
benefit plan maintained by the
Employer, then the sum of the
defined benefit plan fraction and
the defined contribution plan
fraction for the Participant for
that Limitation Year must not
exceed 1.0. To the extent
necessary to satisfy this
limitation, the Employer will
reduce the Participant's projected
annual benefit
under the defined benefit plan
under which the Participant
participates.
<PAGE>
_________
ARTICLE V
___________
INVESTMENTS
5.1 _________________
INVESTMENT OF NEW
_____________
CONTRIBUTIONS.
(a) Upon enrollment in the
Plan and thereafter from time to
time pursuant to this Article, a
Participant on and after January
1, 1992 may select one or more of
the following options for
investment by the Trustee of his
ensuing Participant After-Tax
Contributions, Participant Pre-
Tax Contributions and Employer
Matching Contributions made with
respect thereto:
<PAGE>
(i) Class A Common
Stock of the Company
(Class B Common Stock
after June 30, 1994)
which shall be purchased
in the open market.
(ii) One or more
Money Market Investment
Funds, one or more Bond
Investment Funds and one
or more Equity
Investment Funds which
shall be maintained
under this Plan through
one or more "regulated
investment companies" as
defined in Section 851
of the Code and/or
through bank common
<PAGE>
163
trust funds and/or
through one or more
group annuity contracts
with one or more
Insurers.
(1) The Money
Market Investment
Fund(s) shall be
invested in shares
of one or more
regulated
investment
companies which
invest in debt
instruments with an
average maturity of
one year or less
and seek to
maintain a constant
share price but do
not guarantee the
same or a minimum
or fixed rate of
return on deposits
made thereto.
(2) The Bond
Investment Fund(s)
shall be invested
in shares of one or
more regulated
investment
companies which
invest principally
in longer term
debt-type
securities and
which do not
guarantee the
preservation of
principal or a
minimum or fixed
rate of return on
deposits made
thereto.
<PAGE>
(3) The
Equity Investment
Fund(s) shall be
invested in shares
of one or more
regulated
investment
companies which
invest principally
in equity-type
securities and
which do not
guarantee the
<PAGE>
164
preservation of
principal or a
minimum or fixed
rate of return on
deposits made
thereto.
(b) Each such selection of
an investment option shall specify
a percentage, which shall be
determined by the Plan
Administrator, to be applied to
such investment option and shall
be considered a continuing
direction until changed by
direction of the Participant.
(c)U.S. Savings Bonds are
a frozen investment option
under the Plan into which no
new investments are allowed.
At its maturity, each U.S.
Savings Bond in a
Participant's Account will be
liquidated. The proceeds of
liquidation shall be invested
in the other investment
options available under the
Plan as if the proceeds were
a Participant Contribution.
If the Participant has not
made a selection of
investment options for
Participant Contributions,
the proceeds shall be
invested in the Money Market
Investment Fund.
<PAGE>
(d) Pursuant to procedures
adopted by the Plan Administrator
and uniformly applied,
Participants may effect their
selection of investment options by
instructions to a plan fiduciary
who will be identified at all
times and in like manner may
change their selection with
respect to subsequent
contributions at least once in
each calendar quarter.
5.2 _____________________
CHANGE OF INVESTMENTS.
(a) Pursuant to procedures
adopted by the Plan Administrator
and uniformly applied, but subject
to the further conditions in this
Section 5.2 prescribed,
Participants may direct through a
plan fiduciary who shall be
<PAGE>
165
identified at all times, the sale
or redemption of investments in
their accounts and the
reinvestment of the proceeds of
such sale or redemption at least
once in each calendar quarter,
except as otherwise required in
order to make a permitted
withdrawal in cash; provided,
however, that any election made by
a Participant who is an officer or
director of the Company to sell
Class A or Class B Common Stock of
the Company as well as any
election made by such a
Participant to purchase Class A or
Class B Common Stock of the
Company with the proceeds of a
sale or redemption of other
investments in such Participant's
Accounts (i) may not be made
within less than six months before
or after any other election by
such Participant to sell or
purchase Class A or Class B Common
Stock of the Company and (ii) may
only be made during the period in
each calendar quarter which begins
on the third business day
following the release of quarterly
or annual statements of sales and
earnings of the Company and ends
on the twelfth business day
following such date.
<PAGE>
(b) The following
provisions apply to the
disposition of certain investments
which, in the case of shares of
Class B Common Stock of the
Company, were acquired in
Participant After-Tax
Contributions Accounts by reason
of a dividend paid in such shares
on January 9, 1980, to the holders
Class A Common Stock of the
Company and were acquired in
Participant Pre-Tax Contributions
Accounts by reason of an elected
transfer in kind from the accounts
of such Participants in the Crown
Central Petroleum Corporation Tax
Credit Employees Stock Ownership
Plan following its termination as
of December 31, 1987, and, in the
case of United States Savings
Bonds and investments in the
Guaranteed Fixed Income Investment
<PAGE>
166
Fund through group annuity
contracts with Insurers, were
acquired through investment
options which from and after
November 1, 1991 are not available
investment options for ongoing
contributions:
(i) Prior to July 1,
1994, a direction to
sell Class B Common
Stock of the Company in
a Participant's Accounts
must cover all, and not
less than all, of such
stock, except that less
than all of such stock
may be sold to comply
with a withdrawal
request.
(ii) A direction to
redeem United States
Savings Bonds in a
Participant's Accounts
shall be subject to any
applicable holding
period restrictions on
such redemption imposed
by Federal regulatory
authorities.
<PAGE>
(iii) A redemption
of an investment of a
Participant's Accounts
in the Guaranteed Fixed
Income Investment Fund
through a group annuity
contract with an Insurer
shall be made by
deducting the
appropriate amount from
the Investment Year
Accounts for such
Participant on a last-
in/first-out basis. If
the Insurer shall so
require, cash resulting
from any such redemption
prior to the Maturity
Date of the group
annuity contract
redeemed may not be
invested in a Money
Market Investment Fund
until a period of at
least six (6) months
shall have elapsed from
the date of such
redemption.
<PAGE>
167
(c) From and after November
1, 1991, unless otherwise directed
by the Participant, ongoing
contributions theretofore
designated for investment in
United States Savings Bonds or in
the Guaranteed Fixed Income Fund
through group annuity contracts
with Insurers will be invested in
a Money Market Investment Fund
selected by the Plan Administrator
which invests primarily in U.S.
Treasury securities.
5.3 ____________________
INVESTMENT OF INCOME
________
RECEIVED. Income received in an
Account shall be reinvested in the
same investment medium which
produced such income except as
follows:
(a) Unless otherwise
directed by the Participant, the
entire amount received by the
Trustee (i) in exchange for any
United States Government Bonds
surrendered at maturity or (ii)
from expiration of a group annuity
contract with an Insurer, shall be
invested in a Money Market
Investment Fund selected by the
Plan Administrator which invests
primarily in U.S. Treasury
securities.
<PAGE>
(b) Prior to July 1, 1994,
income received from investments
in Class B Common Stock of the
Company shall be invested in full
and fractional shares of Class A
Common Stock of the Company.
After June 30, 1994, income
received from investments in Class
A Common Stock of the Company
shall be invested in full and
fractional shares of Class B
Common Stock of the Company.
5.4 _____________________
INVESTMENT OF CASH IN
______________________
DEFAULT OF PARTICIPANT
____________
INSTRUCTIONS. All cash received
from any source by the Trustee,
and credited to the Account(s) of
any Participant without direction
<PAGE>
168
by the Participant for investment
thereof, shall be invested in a
Money Market Investment Fund.
5.5 _______________________
VOTING OF COMPANY STOCK.
(a) Each Participant may
direct the Trustee, or a third
party selected by the
Administrator, as to the manner in
which whole shares of common stock
of the Company in his Accounts are
to be voted on any issue as to
which such shares are entitled to
be voted. Fractional shares are
not entitled to vote.
(b) Any shares of common
stock of the Company in the
Accounts of a Participant for
which clear and timely
instructions of the Participant
are not received shall be voted in
the same proportion as such shares
for which such instructions are
received.
5.6 _________
VALUATION. United States
Savings Bonds held in Accounts
will be valued current at cost.
All other investments will be
valued at market value as of the
close of each business day.
<PAGE>
__________
ARTICLE VI
______________________
VESTING OF INTEREST OF
________________________
PARTICIPANTS IN EMPLOYER
_____________
CONTRIBUTIONS
6.1 _______
VESTING.
(a) A Participant is fully
vested at all times in his
Participant Pre-Tax Contributions
Account and his Participant After-
Tax Contributions Account.
(b) Effective with respect
to any Participant who has at
least one (1) Hour of Service on
or after January 1, 1989, a
Participant will have a vested
interest in his Employer Matching
<PAGE>
169
Contributions Account in
accordance with the following
schedule:
________________________
YEARS OF SERVICE VESTING
__________
PERCENTAGE
Less than 5 0%
5 or more 100%
Although the Company
reserves the right to amend the
vesting schedule at any time, the
Company shall not amend the
vesting schedule (and no such
amendment shall be effective) if
the amendment would reduce the
nonforfeitable percentage of any
Participant's accrued benefit
derived from Employer
contributions (determined as of
the later of the date the Company
adopts the amendment, or the date
the amendment becomes effective)
to a percentage less than the
nonforfeitable percentage computed
under the Plan without regard to
such amendment.
<PAGE>
Effective with respect to
any Participant who has at least
one (1) Hour of Service on or
after January 1, 1989, if the
Company shall amend the vesting
schedule, each Participant having
at least three (3) Years of
Service (as defined in Section
1.31(b) and without reference to
Section 6.2) with a Participating
Company may elect to have the
percentage of his nonforfeitable
accrued benefit computed under the
Plan without regard to the
amendment. The Administrator, as
soon as practicable, shall forward
a true copy of any amendment to
the vesting schedule to each
Participant, together with an
explanation of the effect of the
amendment, the appropriate form
upon which a Participant so
entitled under the provisions of
this Paragraph may make an
election to remain under the
vesting schedule provided under
the Plan prior to the amendment
<PAGE>
170
and notice of the time within
which such Participant must make
an election to remain under the
prior vesting schedule. The
Participant must file his election
in writing with the Administrator
within sixty (60) days after his
receipt of a copy of the amendment
changing the vesting schedule.
Notwithstanding the provisions of
this Paragraph, no election need
be provided for any Participant
whose nonforfeitable percentage
under the Plan, as amended, at any
time cannot be less than such
percentage determined without
regard to such amendment.
<PAGE>
(c) A Participant who is
involuntarily laid off by the
Employer for a period in excess of
365 days, due to lack of work, and
meets the Notice Requirements of
this paragraph, will become 100%
vested in his Employer Matching
Contributions Account. Notice
Requirements shall mean filing a
notice with the Plan
Administrator, in a form
prescribed by the Plan
Administrator, within 30 days
after the first day of the lay
off, which states the
Participant's agreement to defer
receipt of Plan benefits until
after the 365-day period has
elapsed without his being called
back to work with the Employer.
(d) A Participant will have
a fully vested interest in his
Employer Matching Contributions
Account in the event of his
termination of employment as a
result of Death, Total Disability,
or upon and after attainment of
his Normal Retirement Age (if
employed by the Employer on or
after that date). The interests
of affected Participants in their
Employer Matching Contributions
Accounts shall become fully vested
upon the complete or partial
termination of the Plan. Upon a
complete discontinuance of
contributions to the Plan by a
Participating Company, such
interests shall become fully
vested in the proportion that the
<PAGE>
171
contributions of such
Participating Company credited to
such Accounts bear to the
contributions of all Participating
Companies credited to such
Accounts.
6.2 __________________________
SERVICE CREDIT: BREAKS IN
_______
SERVICE.
For purposes of determining
Years of Service under Section
6.1, the Plan takes into account
all Years of Service an Employee
completes with the Employer,
except:
(a) In the case of a
Participant who has incurred a
Forfeiture Break in Service, Years
of Service completed by such
Participant following such Break
shall be disregarded for purposes
of determining his vested interest
in the portion of his Employer
Matching Contributions Account
that accrued before such Break. A
Participant incurs a Forfeiture
Break in Service when he incurs
five (5) Consecutive Breaks in
Service.
<PAGE>
(b) In the case of a
Participant who has a 0% vested
interest in his Employer Matching
Contributions Account at the
commencement of a Break in
Service, his Years of Service
completed prior to such Break in
Service shall not be taken into
account for the purpose of
determining his vested interest in
the portion of his Employer
Matching Contributions Account
that may accrue upon his
reemployment and participation in
this Plan following such Break in
Service if the number of his
consecutive one-year Breaks in
Service shall have equalled or
exceeded the greater of (i) five
(5) or (ii) his number of Years of
Service preceding such Break in
Service. Furthermore, the
aggregate number of Years of
Service before a Break in Service
does not include any Years of
Service not required to be taken
<PAGE>
172
into account under this exception
by reason of any prior Break in
Service.
<PAGE>
___________
ARTICLE VII
________________________
IN-SERVICE DISTRIBUTIONS
7.1 ________________
WITHDRAWALS FROM
_____________________
PARTICIPANT AFTER-TAX
______________________
CONTRIBUTIONS ACCOUNTS.
(a) ______________
Withdrawals by
______________________
Nonvested Participants. While
employed by the Employer, a
Participant who is 0% vested in
his Employer Matching
Contributions Account may withdraw
all (but not less than all) of the
value of his After-Tax
Contributions Account reduced by
the aggregate value of United
States Savings bonds credited
thereto but increased by the
excess of (i) the aggregate value
of United States Savings Bonds
credited both to his After-Tax
Contributions Account and his
Employer Matching Contributions
Account over (ii) the amount of
Employer Matching Contributions
applied to the acquisition of such
Bonds.
<PAGE>
Thereupon, the entire then value
of his Employer Matching
Contributions Account shall be
forfeited. Such withdrawal may be
made in cash and/or in kind,
subject to the provisions of
Section 7.5. Any accrued benefit
forfeited under this provision
shall be restored upon repayment
by the Participant of the full
amount of such withdrawal provided
such repayment is made within 5
years after the date of the
withdrawal.
<PAGE>
173
(b) _____________________
Withdrawals by Vested
____________
Participants. While employed by
the Employer, a Participant who is
fully vested in his Employer
Matching Contributions Account may
withdraw a portion or all of his
After-Tax Contributions Account,
in cash and/or in kind subject to
the provisions of Section 7.5;
provided that no more than one
such withdrawal may be made in
each calendar year and such
withdrawal must be for a minimum
amount or value of at least One
Thousand Dollars ($1,000.00).
7.2 ______________________
WITHDRAWALS FROM FULLY
________________________
VESTED EMPLOYER MATCHING
______________________
CONTRIBUTIONS ACCOUNTS. While
employed by the Employer, a
Participant who is fully vested in
his Employer Matching
Contributions Account and who at
the same time is withdrawing the
full value of his After-Tax
Contributions Account, may
withdraw a portion of his Employer
Matching Contributions Account up
to all of such Account save and
except for Employer Matching
Contributions which have been
allotted thereto during the 24
months preceding such withdrawal.
Such withdrawal may be in cash
and/or in kind, subject to the
provisions of Section 7.5.
7.3 ____________________
HARDSHIP WITHDRAWALS.
(a) While employed by the
Employer, a Participant who has
not attained age 59-1/2 may apply
for a hardship distribution in
cash from that portion of his
vested Employer Matching
Contributions Account which
otherwise may not be withdrawn
under Section 7.2, and thereafter
from his Pre-Tax Contributions
Account, by filing a written
application for the same with the
Administrator stating the amount
requested, the reason(s) for the
<PAGE>
174
<PAGE>
request and furnishing such
written representation and
evidence in support thereof as the
further provisions of this Plan
and the Administrator may require.
Such application may be approved
by the Administrator only if (i)
by reason of a prior or concurrent
withdrawal the Participant has
fully utilized his withdrawal
rights under Sections 7.1 and 7.2,
(ii) the amount requested does not
include any portion of his Pre-Tax
Contributions Account derived from
earnings credited to such Account
after December 31, 1988, and (iii)
the reason for the request is a
"deemed hardship" as hereinafter
defined. Furthermore, such
application will be so approved
only to the extent necessary, as
hereinafter defined, to alleviate
such hardship.
(b) Except to the extent
the Internal Revenue Service shall
expand such list by means of a
published ruling or notice of
general applicability, a "deemed
hardship" shall consist only of an
immediate and heavy financial need
to pay for one or more of the
following:
(i) Unreimbursed medical
expenses of the Participant, the
Participant's spouse or any of his
dependents.
(ii) Purchase of a principal
residence for the Participant.
(iii) Payment of tuition and
related educational fees for the
next 12 months of post-secondary
education for the Participant, his
spouse, children and dependents.
<PAGE>
(iv) Payments needed to
prevent eviction of the
Participant from his principal
residence or foreclosure on a
mortgage on his principal
residence.
(c) In determining the
amount of distribution which is
necessary to alleviate a deemed
hardship, the Administrator,
provided it acts reasonably under
the circumstances, may rely upon
<PAGE>
175
the Participant's representation
that the need cannot be relieved:
(i) Through reimbursement or
compensation by insurance or
otherwise, or
(ii) By reasonable liquidation
of the Participant's assets (which
shall be deemed to include those
assets of the Participant's spouse
and minor children that are
reasonably available to the
Participant) to the extent such
liquidation would not itself cause
an immediate and heavy financial
need, or
(iii) By cessation of
Participant pre-tax and after-tax
contributions under this Plan, or
(iv) By other distributions or
nontaxable (at the time of the
loan) loans from this Plan or from
any plan maintained for the
Participant's benefit by any
employer, or
(v) By borrowing from commercial
sources on reasonable commercial
terms.
<PAGE>
7.4 ____________________________
WITHDRAWALS FROM PARTICIPANT
_____________________________
PRE-TAX CONTRIBUTION ACCOUNTS
________________
AFTER AGE 59-1/2. While employed
by the Employer, a Participant who
shall have fully utilized his
withdrawal rights under Sections
7.1 and 7.2 may, from and after
the attainment of age 59-1/2,
withdraw a portion or all of his
Participant Pre-Tax Contributions
Account, in cash and/or in kind
subject to the provisions of
Section 7.5; provided that no more
than one such withdrawal may be
made in each calendar year and
such withdrawal must be for a
minimum amount or value of at
least One Thousand Dollars
($1,000.00).
7.5 ______________
CONDITIONS AND
________________________________
RESTRICTIONS UPON WITHDRAWALS IN
____
KIND.
<PAGE>
176
(a) ______________________
Officers and Directors.
Participants who are
officers or directors of the
Company and who withdraw Class A
or Class B Common Stock of the
Company under this Article, must
either (i) cease further purchases
in the Plan of Class A Common
Stock of the Company (or of any
other equity security of the
Company which may be offered for
acquisition under this Plan) for
six (6) months or (ii) enter into
a written agreement with the
Company to hold such withdrawn
stock for at least six (6) months
prior to disposition thereof.
(b) ________________
All Participants.
(i) An investment of a
Participant's Accounts in the
Guaranteed Fixed Income Investment
Fund through a group annuity
contract with an Insurer (to which
Contributions are permitted under
this Plan until October 31, 1991)
may be redeemed in cash but not in
kind.
(ii) If and to the extent
Funds described in Section
5.1(a)(ii) are maintained through
bank common trust funds and/or
through one or more group annuity
contracts with one or more
Insurers, investments therein may
be redeemed in cash but not in
kind.
<PAGE>
____________
ARTICLE VIII
_____________________
LOANS TO PARTICIPANTS
8.1 _______________
PERMITTED LOANS - A "party
in interest" as defined in Section
3(14) of ERISA may borrow from his
Pre-Tax, After-Tax and Employer
Matching Contribution Accounts (to
the extent vested) upon the
conditions and limitations
hereinafter prescribed. Each loan
shall be for such term, between a
minimum of one (1) year, and a
maximum of five (5) years, as the
borrower shall elect. No loan
shall be permitted while any prior
<PAGE>
177
loan balance is outstanding, or
until at least thirty (30) days
after the full repayment thereof,
nor shall any loan be permitted
within twelve (12) months after a
default, as hereinafter defined,
shall have occurred with respect
to a prior loan. The maximum
principal amount of loan permitted
for any participant shall be the
lesser of:
(i) Fifty Thousand Dollars
($50,000.00) reduced by any prior
loan principal repayments made by
the borrower to this Plan within
the 1-year period ending on the
day before the loan is made; or
(ii) 50% of the sum of the
values of the nonforfeitable
portions of the Participant's
Accounts.
The minimum initial principal
amount of any loan shall be One
Thousand Dollars ($1,000.00).
<PAGE>
8.2 ___________
LOAN POLICY. The
Administrator shall set forth, in
a separate written document which
this Section 8.2 incorporates as
part of this Plan, a loan policy
consistent with the provisions of
this Article under which:
(a) Loans shall be made
available to all parties in
interest on a reasonably
equivalent basis.
(b) Loans shall not be made
available to Highly Compensated
Employees (as defined in Code
Section 414(q)) in an amount
greater than the amount made
available to other Employees.
(c) Loans shall be
adequately secured and bear a
reasonable interest rate.
(d) Each loan shall be
evidenced by a promissory note of
the borrower which shall require
that repayment (principal and
interest) be amortized in level
payments coincident with the dates
upon which the borrower's
Compensation is or most recently
was being paid at the time the
loan was made and shall provide
for acceleration of maturity on
the earliest date upon which the
<PAGE>
178
borrower shall cease to be a
"party in interest" as defined in
Section 3(14) of ERISA.
Prepayment in whole, but not in
part, shall be permitted on any
installment payment date on or
after One (1) year from the date
of the loan.
Except to the extent
specified in this Article, the
separate written document setting
forth the loan policy must include
the following:
<PAGE>
(1) the identity of the person
or persons authorized to
administer the loan program;
(2) the procedure for applying
for a loan;
(3) the basis upon which loans
will be approved or denied;
(4) limitations (if any) on the
types and amounts of loans
offered;
(5) the procedure under the
program for determining a
reasonable rate of interest;
(6) the types of collateral
which may secure a loan; and
(7) the events constituting
default and the steps that will be
taken to preserve plan assets in
the event of such default.
8.3 _______
DEFAULT. In the event an
installment is not paid within
thirty (30) days after it is due,
or in the event the entire
outstanding balance is not paid
within thirty (30) days after the
earliest date upon which the
borrower shall cease to be a
"party in interest" as defined in
Section 3(14) of ERISA, the loan
shall be deemed in default and the
entire unpaid balance of principal
shall thereupon become due and
payable. The Administrator shall
have the right to reduce the
borrower's vested account balances
to repay the same; provided,
however, that the borrower's
Participant Pre-Tax Contributions
Account may not be so reduced
until a distribution from such
Account is otherwise permitted
<PAGE>
179
under the terms of this Plan and
under the Code.
<PAGE>
8.4 ______________
OFFSET AGAINST
_____________
DISTRIBUTIONS. To the extent a
borrower's nonforfeitable accrued
benefit becomes payable under the
terms of the Plan to him or his
Beneficiary while a loan is
outstanding, the
loan shall thereupon become due
and payable and the Trustee is and
shall be authorized to deduct the
unpaid balance of the loan from
and up to the amount of such
benefit payable to or in respect
of the borrower.
<PAGE>
__________
ARTICLE IX
________________________
DISTRIBUTIONS UPON DEATH
9.1 _______
GENERAL. In the event of
the death of a Participant prior
to his severance from service, a
distribution of the entire value
of the deceased Participant's
After-Tax Contributions Account,
Pre-Tax Contributions Account and
Employer Matching Contributions
Account shall be made to such
Participant's Beneficiary as
hereinafter provided. In the
event of a Participant's death
subsequent to his severance from
service, a distribution of the
entire value of the deceased
Participant's After-Tax
Contributions Account, Pre-Tax
Contributions Account and Employer
Matching Contributions Account
shall be made to such
Participant's Beneficiary except
to the extent such value has
<PAGE>
been used to purchase an annuity
and the Participant's death occurs
subsequent to his Annuity Starting
Date, in which case any death
benefit payable under such annuity
<PAGE>
180
shall be paid in accordance with
the terms thereof.
9.2 _________________
METHOD OF PAYMENT. Payment
of any death benefits not payable
in accordance with the terms of an
annuity purchased by the
Participant shall be made in a
lump sum, as an immediate or
deferred annuity purchased under a
group annuity contract with an
Insurer, as a combination of such
methods of payment or by payment
in monthly, quarterly or annual
installments over a fixed period
of time. The method of payment
shall be chosen by the
Beneficiary.
9.3 ____________________
MINIMUM DISTRIBUTION
______________________________
REQUIREMENTS FOR BENEFICIARIES.
The method of distribution to the
Participant's Beneficiary must
satisfy Code Section 401(a)(9) and
the applicable Treasury
regulations. If the Participant's
death occurs after his Required
Beginning Date or, if earlier, the
date the Participant commences an
irrevocable annuity pursuant to
Section 11.2, the method of
payment to the Beneficiary must
provide for completion of payment
over a period which does not
exceed the payment period which
had commenced for the Participant.
If the Participant's death occurs
prior to his Required Beginning
Date, and the Participant had not
commenced an irrevocable annuity,
the method of payment to the
Beneficiary must provide for
completion of payment to the
Beneficiary over a period not
exceeding: (i) 5 years after the
date of the Participant's death;
or (ii) if the Beneficiary is a
designated Beneficiary, the
designated Beneficiary's life
expectancy. The Plan
Administrator may not direct
payment of the Participant's
nonforfeitable accrued benefit
over a period described in clause
(ii) unless the Trustee will
commence payment to the designated
Beneficiary no later than the
<PAGE>
181
December 31 following the close of
the calendar year in which the
Participant's death occurred or,
if later, and the designated
Beneficiary is the Participant's
surviving spouse, December 31 of
the calendar year in which the
Participant would have attained
age 70-1/2. If the Trustee will
make distribution in accordance
with clause (ii), the minimum
distribution for a calendar year
equals the Participant's
nonforfeitable accrued benefit as
of the latest valuation date
preceding the beginning of the
calendar year divided by the
designated Beneficiary's life
expectancy.
<PAGE>
The Plan Administrator must use
the unisex life expectancy
multiples under Treas. Reg.
Section 1.72-9 for purposes of
applying this paragraph. The Plan
Administrator, only upon the
written request of the Participant
or of the Participant's surviving
spouse, will recalculate the life
expectancy of the Participant's
surviving spouse not more
frequently than annually, but may
not recalculate the life
expectancy of a nonspouse
designated Beneficiary after the
Trustee commences payment to the
designated Beneficiary. The Plan
Administrator will apply this
paragraph by treating any amount
paid to the Participant's child,
which becomes payable to the
Participant's surviving spouse
upon the child's attaining the age
of majority, as paid to the
Participant's surviving spouse.
Upon the Beneficiary's written
request, the Plan Administrator
must direct the Trustee to
accelerate payment of all, or any
portion, of the Participant's
unpaid Accrued Benefit, as soon as
administratively practicable
following the effective date of
that request unless the
Participant shall have precluded
such Beneficiary's discretion in
his Beneficiary designation.
<PAGE>
182
9.4 ____________________
ADMINISTRATIVE FORMS. All
Beneficiary designations,
elections and spousal consents
made in accordance with this
Article must be made in writing on
forms prescribed by the Plan
Administrator and shall become
effective when submitted to the
Plan Administrator.
<PAGE>
_________
ARTICLE X
__________________________________
DISTRIBUTIONS UPON SEPARATION FROM
_______
SERVICE
10.1 Following a
Participant's separation from the
service of his Employer, other
than by reason of Total
Disability, death or Retirement,
his vested interest in his
Employer Matching Contributions
Account shall be determined in
accordance with Article VI hereof
and shall be distributed along
with the balances in his
Participant Pre-Tax Contributions
Account and Participant After-Tax
Contributions Account as provided
in this Article X. At the time
such distribution is made, the
Participant's unvested interest in
his Employer Matching
Contributions Account shall be
forfeited, subject to
reinstatement as provided in
Section 10.4.
10.2 The distribution
prescribed by Section 10.1 shall
be a lump sum distribution (a
"cash out distribution") of the
entire value of the distributee's
Participant After-Tax
Contributions Account, his
Participant Pre-Tax Contributions
Account and his vested interest in
his Employer Matching
Contributions Account. If the
value of the vested portion of all
of the Participant's
<PAGE>
<PAGE>
183
Accounts exceeds $3,500, a cashout
distribution may not be made prior
to his Normal Retirement Age
unless no earlier than 90 days,
but not later than 30 days (unless
the 30 day minimum is waived as
hereinafter provided) before the
distribution is made he shall have
received a benefit notice
explaining his right to receive
distribution in cash and/or in
kind and his right to defer
distribution until he attains
Normal Retirement Age, and after
receipt of such notice he shall
have consented thereto in writing.
If such value does not exceed
$3,500 (at the time of
distribution), the Participant's
consent is not required, and the
Plan Administrator (following
expiration of the 60-day period
hereinafter specified) will direct
the Trustee to distribute such
value in a lump sum, in cash
and/or in kind except that a
distribution in kind shall be
subject to the provisions of
Section 7.5 and shall be made only
if written application for the
same is filed with the Plan
Administrator within sixty (60)
days after the Participant's
separation from service.
If a distribution is one to
which Sections 401(a)(11) and 417
of the Internal Revenue Code do
not apply, such distribution may
commence less than 30 days after
the notice required under Section
1.411(a)-11(c) of the Income Tax
Regulations is given, provided
that:
(1) The Plan Administrator
clearly informs the Participant
that the Participant has a right
to a period of at least 30 days
after receiving the notice to
consider the decision of whether
or not to elect a distribution
(and, if applicable, a particular
distribution option), and
(2) The Participant, after
receiving the notice affirmatively
elects a distribution.
10.3 If a Participant's
written consent is required
pursuant to Section 10.2 and the
<PAGE>
184
Participant fails to provide such
consent, the Plan Administrator
shall direct the Insurer or
Trustee to defer the distribution
prescribed by Section 10.1 until
the earlier of receipt of written
consent from the Participant or
his Normal Retirement Age, at
which time distribution may be
made partly or wholly in kind
(subject to Section 7.5) if the
Participant shall so direct with
such written consent, and
otherwise shall be made wholly in
cash and not later than the 60th
day after the Participant's Normal
Retirement Age.
<PAGE>
10.4 A Participant who is re-
employed by a Participating
Company after receiving a cash-out
distribution of his Accounts under
the Plan shall have the right to
reinstate his interest in his
Accounts to the same dollar amount
as the dollar amount thereof on
the valuation date immediately
preceding the date of the cash-out
distribution by repaying to the
Trustee in cash within five (5)
years after his reemployment
commencement date the entire value
of such cash-out distribution
unless:
(a) the Participant's
Employer Contributions Account was
one hundred percent (100%)
vested at the time of the cash-out
distribution; or
(b) the Participant incurred a
Forfeiture Break In Service. This
condition shall apply even if the
Participant makes repayment within
the Plan Year in which he incurs
the Forfeiture Break in Service.
To the extent Participant
forfeitures are insufficient to
provide for a reinstatement
required hereunder, the Employer
shall contribute to the Trust
Fund, without regard to any
requirement or condition of
Article III, the additional amount
necessary to enable the Plan
Administrator to make the required
reinstatement.
<PAGE>
185
10.5 Amounts forfeited by
Participants in accordance with
any provision of the Plan shall be
used to reinstate Participant
forfeitures pursuant to Section
10.4, offset subsequent Employer
Contributions under the Plan or
shall be distributed in accordance
with the provisions hereinafter
made concerning termination of
this Plan.
<PAGE>
10.6 If a Participant or
Beneficiary who is entitled to a
distribution cannot be located,
then the Participant's or
Beneficiary's vested interest in
his Accounts shall be forfeited
after the Plan Administrator has
made reasonable efforts to locate
the Participant. The Plan
Administrator will be deemed to
have made reasonable efforts to
locate the Participant (or, in the
case of a deceased Participant,
his Beneficiary) after having made
two successive certified or
similar mailings to the last
address on file with the Plan
Administrator. The Participant's
vested Account shall be forfeited
as of the last day of the Plan
Year in which occurs the close of
the 12 consecutive calendar month
period following the last of the
two successive mailings.
If the Participant or his
Beneficiary makes a written claim
for the vested interest after it
has been forfeited, the Employer
shall cause the vested interest to
be reinstated in the Participant's
Account. The Account shall be
reinstated from forfeitures and,
if forfeitures are insufficient,
from a special contribution by the
Employer. The value of the
Account that is reinstated shall
be the value as of the date of
forfeiture and shall not be
adjusted for any income or loss
after the date of forfeiture.
<PAGE>
__________
ARTICLE XI
<PAGE>
186
________________________________
DISTRIBUTIONS UPON RETIREMENT OR
__________
DISABILITY
11.1 A Participant shall be
entitled to a distribution of the
entire value of his Participant
After-Tax Contributions Account,
his Participant Pre-Tax
Contributions Account, and his
Employer Matching Contributions
Account on or after the date of
his Total Disability or
Retirement. No earlier than 90
days, but not later than 30 days
(unless the 30 day minimum is
waived as hereinafter provided),
before distribution is made or
commenced, the Plan Administrator
must provide to the Participant a
benefit notice explaining the
optional forms of benefit under
the Plan and the Participant's
right to defer distribution until
his Required Beginning Date as
defined in Article XII. Such
distribution will be made or
commenced not later than the 60th
day after the close of the Plan
Year in which the later of the
following occurs:
(a) the Participant attains
Normal Retirement Age; or
(b) the Participant has a
separation from service with his
Employer;
unless the Participant elects a
further deferral until no later
than his Required Beginning Date
as defined in Article XII. During
the period of any such further
deferral, the Participant may make
a total withdrawal, or partial
withdrawals; provided that no more
than one partial withdrawal may be
made in each calendar year and
such withdrawal must be for a
minimum amount or value of at
least One Thousand Dollars
($1,000.00).
If a distribution is one to
which Sections 401(a)(11) and 417
of the Internal Revenue Code do
not apply, such distribution may
commence less than 30 days after
the notice required under Section
1.411(a)-11(c) of the Income Tax
Regulations is given,
<PAGE>
187
<PAGE>
provided that:
(1) The Plan Administrator
clearly informs the Participant
that the Participant has a right
to a period of at least 30 days
after receiving the notice to
consider the decision of whether
or not to elect a distribution
(and, if applicable, a particular
distribution option), and
(2) The Participant, after
receiving the notice,
affirmatively elects a
distribution.
11.2 At the election of the
Participant, distribution shall be
made in a lump sum in cash and/or
in kind (subject to Section 7.5),
by cash payment in annual
installments over a fixed
reasonable period of time not
exceeding the life expectancy of
the Participant, or the joint life
and last survivor expectancy of
the Participant and his
Beneficiary, as an immediate or
deferred annuity purchased under
any group annuity contract then in
effect under this Plan with an
Insurer, or as a combination of
such methods of payment, provided
that any method of payment
selected must meet the minimum
distribution requirements
specified in Article XII. If a
group annuity contract with an
Insurer is then in effect for the
purpose of funding this Plan in
whole or in part, the 30 days
minimum period for notice under
Section 11.1 may not be waived and
not earlier than 90 days nor later
than 30 days before the
Participant's Annuity Starting
Date, the Plan Administrator shall
furnish to each Participant
entitled to a distribution
pursuant to Section 11.1, written
<PAGE>
descriptions of the annuities
available under such contract
(which shall include a Qualified
Joint and Survivor Annuity). If a
Participant is married and elects
<PAGE>
188
to have such distribution made in
whole or in part through the
purchase of an annuity, the
annuity must be paid as a
Qualified Joint and Survivor
Annuity, unless the Participant
executes a waiver election.
Except as hereinafter provided in
the case of a blanket spousal
consent, a married Participant's
waiver election is not valid
unless (a) the Participant's
spouse (to whom the survivor
annuity would be payable under a
Qualified Joint and Survivor
Annuity), after the Participant
has received the written
explanation described in this
Section 11.2, has consented in
writing to the waiver election,
the spouse's consent acknowledges
the effect of the election, and a
notary public or the Plan
Administrator (or his
representative) witnesses the
spouse's consent, (b) the spouse
consents to the alternate form of
payment designated by the
Participant or to any change in
that designated form of payment,
and (c) unless the spouse is the
Participant's sole primary
Beneficiary, the spouse consents
to the Participant's Beneficiary
designation or to any change in
the Participant's Beneficiary
designation. The spouse's consent
to a waiver of the Qualified Joint
and Survivor Annuity is
irrevocable, unless the
Participant revokes the waiver
election. Notwithstanding the
aforegoing, a spouse may execute a
blanket consent to any form of
payment
<PAGE>
designation or to any Beneficiary
designation made by the
Participant, if the spouse
acknowledges the right to limit
that consent to a specific
designation but, in writing,
waives that right. The consent
requirements of this Section 11.2
apply to a former spouse of the
Participant, to the extent
required under a qualified
domestic relations order.
<PAGE>
189
The Plan Administrator will
accept as valid a waiver election
which does not satisfy the spousal
consent requirements if the Plan
Administrator establishes the
Participant does not have a
spouse, the Plan Administrator is
not able to locate the
Participant's spouse, the
Participant is legally separated
or has been abandoned (within the
meaning of State law) and the
Participant has a court order to
that effect, or other
circumstances exist under which
the Secretary of the Treasury will
excuse the consent requirement.
If the Participant's spouse is
legally incompetent to give
consent, the spouse's legal
guardian (even if the guardian is
the Participant) may give consent.
If a Participant is not married
and elects to have distribution
made in whole or in part through
the purchase of an annuity, he
will receive an annuity which will
terminate upon his death, unless
his election to have distribution
made through the purchase of an
annuity contains a contrary
direction. Any such contrary
direction must comply with the
requirements of Code Section
401(a)(9) and the applicable
Treasury regulations.
Any revocation of an annuity
election made by a married
Participant shall require his
spouse's consent.
<PAGE>
11.3 All elections and
revocations of elections and
consents to revocations and
elections made in accordance with
this Article must be made in
writing on forms prescribed by and
submitted to the Plan
Administrator.
<PAGE>
___________
ARTICLE XII
___________________________
DISTRIBUTIONS COMMENCING ON
_______________________
REQUIRED BEGINNING DATE
<PAGE>
190
12.1 _______________________
REQUIRED BEGINNING DATE.
If any distribution commencement
date described under Articles X or
XI, either by Plan provision or by
Participant election (or non-
election) is later than the
Participant's Required Beginning
Date, the Plan Administrator shall
direct that minimum distributions,
determined pursuant to Section
12.2, be made to the Participant
commencing on his Required
Beginning Date. A Participant's
Required Beginning Date is the
April 1 following the close of the
calendar year in which the
Participant attains age seventy
and one-half (70-1/2). However, if
the Participant, prior to
incurring a separation from
service with his Employer,
attained 70-1/2 by January 1,
1988, and, for the five Plan Year
period ending on the calendar year
in which he attained age 70-1/2
and for all subsequent years, the
Participant was not a more than 5%
owner of the Employer, the
Required Beginning Date is the
April 1 following the close of the
calendar year in which the
Participant becomes a more than 5%
owner of the Employer.
Furthermore, if a
<PAGE>
Participant who was not a more
than 5% owner of the Employer,
attained age 70-1/2 during 1988
and did not incur a separation
from service prior to January 1,
1989, his Required Beginning Date
is April 1, 1990. On the last
business day of December in each
calendar year commencing with the
December of the same year in which
occurs the Participant's Required
Beginning Date, the Plan
Administrator shall direct that a
minimum
distribution determined pursuant
to Section 12.2 be made to the
Participant to the extent the
Participant shall not have
withdrawn such amount during such
calendar year. If the Participant
receives distribution in the form
<PAGE>
191
of a nontransferable annuity
contract, the distribution
satisfies Section 12.2 if the
contract complies with the
requirements of Code Section
401(a)(9) and the applicable
Treasury regulations thereunder.
12.2 ____________________
MINIMUM DISTRIBUTION
_____________________________
REQUIREMENTS FOR PARTICIPANTS. The
minimum distribution required by
Section 12.1 for a calendar year
equals the sum of the
Participant's vested interests in
all of his Accounts (i.e. his
Nonforfeitable Accrued Benefit) as
of the latest valuation date
preceding the beginning of the
calendar year, divided by the
Participant's life expectancy or,
if applicable, the joint and last
survivor expectancy of the
Participant and his designated
Beneficiary (as determined under
Article IX, subject to the
requirements of the Code Section
401(a)(9) regulations). The Plan
Administrator will increase the
<PAGE>
Participant's Nonforfeitable
Accrued Benefit, as determined on
the relevant valuation date, for
contributions allocated after the
valuation date and by December 31
of the valuation calendar year,
and will decrease the valuation by
distributions made after the
valuation date and by December 31
of the valuation calendar year.
For purposes of this valuation,
the Plan Administrator will treat
any portion of the minimum
distribution for the first
distribution calendar year made
after the close of that year as a
distribution occurring in that
first distribution calendar year.
In computing a minimum
distribution, the Plan
Administrator shall use the unisex
life expectancy multiples under
Treas. Reg. Section 1.72-9. Only
upon the written request of the
Participant on or before the
Participant's Required Beginning
<PAGE>
192
Date shall the Plan Administrator
determine the minimum distribution
for subsequent calendar years by
redetermining the applicable life
expectancy. Even upon such
request, the Plan Administrator
may not redetermine the joint life
and last survivor expectancy of
the Participant and a nonspouse
designated Beneficiary in a manner
which takes into account any
adjustment to a life expectancy
other than that of the
Participant.
If the Participant's spouse is
not his designated Beneficiary,
the Plan Administrator shall not
direct distribution under this
Article, nor shall the Participant
elect distribution,
<PAGE>
under a method of payment which
provides more than incidental
benefits to the Beneficiary. For
Plan Years beginning after
December 31, 1988, the Plan must
satisfy the minimum distribution
incidental benefit ("MDIB")
requirement in the Treasury
regulations issued under Code
Section 401(a)(9) for
distributions made on or after the
Participant's Required Beginning
Date and before the Participant's
death. To satisfy the MDIB
requirement, the Plan
Administrator will compute the
minimum distribution required by
this Section 12.2 by substituting
the applicable MDIB divisor for
the applicable life expectancy
factor, if the MDIB divisor is a
lesser number. Following the
Participant's death, the Plan
Administrator will compute the
minimum distribution required by
this Section 12.2 solely on the
basis of the applicable life
expectancy factor and will
disregard the MDIB factor. For
Plan Years beginning prior to
January 1, 1989, the Plan
satisfies the incidental benefits
requirement if the distributions
to the Participant satisfied the
MDIB requirement or if the present
value of the retirement benefits
payable solely to the Participant
<PAGE>
193
is greater than 50% of the present
value of the total benefits
payable to the Participant and his
Beneficiaries. The Plan
Administrator shall determine
whether benefits to the
Beneficiary are incidental as of
the date of commencement of
payment of the retirement
benefits to the Participant, or
<PAGE>
as of any date the Plan
Administrator redetermines the
payment period to the Participant.
12.3 ________________________
SOURCE OF DISTRIBUTIONS.
Distributions under this
Article XII shall be applied pro
rata against the Participant's
Accounts.
<PAGE>
____________
ARTICLE XIII
_____________________________
DISTRIBUTIONS UNDER QUALIFIED
_________________________
DOMESTIC RELATIONS ORDERS
13.1 ______________________
TRUSTEE RESPONSIBILITY.
Nothing contained in this Plan
shall prevent the Trustee, in
accordance with the direction of
the Administrator, from complying
with the provisions of a qualified
domestic relations order (as
defined in Code Section 414(p)).
13.2 __________
PROCEDURES. The
Administrator shall establish
reasonable procedures to determine
the qualified status of a domestic
relations order. Upon receiving
a domestic relations order, the
Administrator promptly shall
notify the Participant and any
alternate payee named in the
order, in writing, of the receipt
of the order and the Plan's
procedures for determining the
qualified status of the order.
Within a reasonable period of time
after receiving the domestic
relations order, the Administrator
<PAGE>
194
shall determine the qualified
status of the order and shall
notify the Participant and each
alternate payee, in writing, of
its determination. The
Administrator shall provide notice
under this paragraph by mailing to
the individual's
<PAGE>
address specified in the domestic
relations order, or in a manner
consistent with Department of
Labor regulations. The
Administrator may treat as
qualified any domestic relations
order entered prior to January 1,
1985, irrespective of whether it
satisfies all the requirements
described in Code Section 414(p).
13.3 ___________________
SEGREGATED ACCOUNTS.
If any portion of the
Participant's Accounts is payable
during the period the
Administrator is making its
determination of the qualified
status of the domestic relations
order, the Administrator shall
direct the Trustee to segregate
the amounts payable in a separate
account and to invest the
segregated account solely in fixed
income investments. If the
Administrator determines the order
is a qualified domestic relations
order within eighteen (18) months
of receiving the order, the
Administrator shall direct the
Trustee to distribute the
segregated account in accordance
with the order. If the
Administrator does not make its
determination of the qualified
status of the order within
eighteen (18) months after
receiving the order, the
Administrator shall direct the
Trustee to distribute the
segregated account in a manner the
Administrator deems the Plan would
distribute if the order did not
exist. The order shall apply
prospectively if the Administrator
later determines the order is a
qualified domestic relations
order.
<PAGE>
195
<PAGE>
13.4 ________________________
SEPARATE DISTRIBUTION TO
_________________
ALTERNATE PAYEES. The
Administrator shall direct the
Trustee to make any payments or
distributions required under this
Article by separate benefit checks
or other separate distribution to
the alternate payee(s).
13.5 ________________________
DISTRIBUTION NOT TREATED
_____________
AS WITHDRAWAL. A distribution to
an alternate payee pursuant to a
qualified domestic relations order
shall not be treated for purposes
of this Plan as a withdrawal by
the Participant from whose
Account(s) such distribution is
made. Moreover, this Plan
specifically permits distribution
to an alternate payee under a
Qualified Domestic Relations Order
at any time to the extent of a
Participant's nonforfeitable
accrued benefit.
<PAGE>
___________
ARTICLE XIV
_______________
TOP HEAVY RULES
14.1 If this Plan is top heavy
in any Plan Year beginning after
December 31, 1983, each
Participant who is a Non-Key
Employee and is employed by the
Employer on the Determination Date
of the Plan Year without regard to
Hours of Service completed during
the Plan Year, shall, if he or she
is a Participant in the Employer's
Pension Plan, have an accrued
benefit under the Employer's
Pension Plan at the end of the top
<PAGE>
heavy Plan Year, derived from
Employer Contributions, which,
when expressed as a straight life
annuity (with no ancillary
benefits) commencing on the first
day of the month following the
<PAGE>
196
Participant's Normal Retirement
Date, is not less than two percent
(2%) of his or her average
Compensation for years in the
testing period provided by Code
Section 416(c)(1) multiplied by
the number of Years of Service
determined under paragraphs (4),
(5) and (6) of Code Section 411(a)
(not to exceed ten (10)) earned as
a Non-Key Employee Participant in
top heavy Plan Years. Any such
Participant who is not a
Participant in the Employer's
Pension Plan shall for such Plan
Year receive under this Plan a
guaranteed minimum contribution
prescribed hereinbelow for Non-Key
Employees.
If the contribution rate for
the Key Employee with the highest
contribution rate is less than
three percent (3%) of such
Participant's Compensation, the
guaranteed minimum contribution
for Non-Key Employees shall equal
the highest contribution rate
received by a Key Employee. To
determine the contribution rate,
the Plan Administrator shall
consider all qualified top heavy
defined contribution plans
maintained by the Employer as a
single plan. Notwithstanding the
preceding provisions of this
Section 14.1, if a defined benefit
plan maintained by the Employer
which benefits one or more Key
Employees depends on this Plan to
satisfy the anti-discrimination
rules of Code Section 401(a)(4) or
the coverage rules of Code Section
410 (or
<PAGE>
another plan benefiting one or
more Key Employees so depends on
such defined benefit plan), the
guaranteed minimum contribution
for a Non-Key Employee is three
percent (3%) of his Compensation
regardless of the contribution
rate for the Key Employees.
For purposes of this Section
14.1, the term "Participant"
includes any Employee otherwise
eligible to participate in this
Plan but who is not a Participant
because of his failure to make
<PAGE>
197
elective deferrals under a Code
Section 401(k) arrangement or
because of his failure to make
mandatory employee contributions.
For purposes of this Section
14.1, "Compensation" means
Compensation as defined in Section
4.1(b).
For purposes of this Section
14.1, a Participant's contribution
rate is the sum of Employer
Matching Contributions plus
Participant Pre-Tax Contributions
allocated to the Participant's
Account for the Plan Year divided
by his Compensation for the entire
Plan Year. However, for purposes
of satisfying a Participant's top
heavy minimum allocation in Plan
Years beginning after December 31,
1988, a Participant's contribution
rate does not include any elective
contributions necessary to satisfy
the nondiscrimination requirements
of Code Section 401(k) or of Code
Section 401(m). To determine a
Participant's contribution rate,
the Plan Administrator must treat
all qualified top heavy defined
contribution plans maintained by
the Employer (or any related
Employer described in Section
1.26) as a single plan.
<PAGE>
14.2 If the contribution rate
for the Plan Year with respect to
a Non-Key Employee who is required
by Section 14.1 to receive a
guaranteed minimum contribution
under the Plan is less than the
minimum contribution, the Employer
will increase its contribution for
such Employee to the extent
necessary for his contribution
rate for the Plan Year to equal
the guaranteed minimum
contribution. The Plan
Administrator shall allocate the
additional contribution to the
Employer Matching Contributions
Account of the Non-Key Employee
for whom the Employer makes the
contribution.
14.3 If this Plan is the only
qualified plan maintained by the
Employer, the Plan is top heavy
for a Plan Year if the top heavy
<PAGE>
198
ratio as of the Determination Date
exceeds sixty percent (60%). The
top heavy ratio is a fraction, the
numerator of which is the sum of
the amounts standing in the
Accounts of all Key Employees as
of the Determination Date and the
denominator of which is the
similar sum determined for all
Employees. The Plan Administrator
must include in the top heavy
ratio, as part of the numerator,
any contribution not made as of
the Determination Date but
includible under Code Section 416
and the applicable Treasury
regulations, and distributions
made within the Determination
Period. The Plan Administrator
shall calculate the top heavy
ratio by disregarding the Accounts
and distributions, if any, of the
Accounts of any Non-Key Employee
who was formerly a Key Employee,
and by disregarding the Accounts
(including
<PAGE>
distributions, if any, of the
Accounts) of an individual who has
not received credit for at least
one Hour of Service with the
Employer during the Determination
Period. The Plan Administrator
shall calculate the top heavy
ratio, including the extent to
which it must take into account
distributions, rollovers and
transfers, in accordance with Code
Section 416 and the regulations
under that section.
If the Employer maintains other
qualified plans, or maintained
another such plan which now is
terminated, this Plan is top heavy
only if it is part of the Required
Aggregation Group, and the top
heavy ratio for both the Required
Aggregation Group and the
Permissive Aggregation Group, if
any, exceeds sixty percent (60%).
The Plan Administrator will
calculate the top heavy ratio in
the same manner as required by the
first paragraph of this Section
14.3, taking into account all
plans within the Aggregation
Group. To the extent the Plan
Administrator must take into
<PAGE>
199
account distributions to a
Participant, the Plan
Administrator shall include
distributions from a terminated
plan which would have been part of
the Required Aggregation Group if
it were in existence on the
Determination Date. The Plan
Administrator shall calculate the
present value of accrued benefits
and other amounts the Plan
Administrator must take into
account under defined benefit
plans included within the group,
in
<PAGE>
accordance with the terms of those
plans, Code Section 416 and the
regulations under that section. If
an aggregated plan does not have a
valuation date coinciding with the
Determination Date, the Plan
Administrator shall value the
accrued benefits in the aggregated
plan as of the most recent
valuation date falling within the
twelve-month period ending on the
Determination Date except as Code
Section 416 and applicable
Treasury regulations require for
the first and second year of a
defined benefit plan. The Plan
Administrator shall calculate the
top heavy ratio with reference to
the Determination Dates that fall
within the same calendar year.
14.4 If, during any Limitation
Year, this Plan is top heavy, the
Plan Administrator shall apply the
limitations of Article IV to a
Participant by substituting 1.0
for 1.25 each place it appears in
Section 4.1. This Section 14.4
shall not apply if:
(a) The contribution rate for a
Non-Key Employee who participates
only in the defined contribution
plan(s) would satisfy Section 14.1
if the Plan Administrator
substituted four percent (4%) for
three percent (3%);
(b) A Non-Key Employee who
participates in the top heavy
defined benefit plan(s) receives
an extra minimum contribution or
benefit which satisfies Code
Section 416(h)(2); and
<PAGE>
200
(c) The top heavy ratio does not
exceed ninety percent (90%).
<PAGE>
14.5 Effective for the first
Plan Year for which the Plan is
top heavy and then in all
subsequent Plan Years, a
Participant's vested interest in
his Employer Matching
Contributions Account shall be
determined in accordance with the
following schedule:
________________________
YEARS OF SERVICE VESTING
__________
PERCENTAGE
Less then 20%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
The above top heavy vesting
schedule will apply to
Participants who earn at least one
(1) Hour of Service after such
schedule becomes effective.
Nonetheless, such shift to the
above top heavy vesting schedule
is a vesting schedule amendment
within the meaning of Section
6.1(b).
14.6 For purposes of applying
the provisions of this Article
XIV:
(a) "Key Employee" shall
mean, as of any Determination
Date, any Employee or former
Employee (or Beneficiary of such
Employee) who, for any Plan Year
in the Determination Period: (i)
has Compensation in excess of 50%
of the dollar amount prescribed in
Code Section 415(b) (1) (A)
(relating to defined benefit
plans) and is an officer of the
Employer; (ii) has Compensation in
excess of the dollar amount
prescribed in Code Section 415(c)
(1) (A) (relating to defined
contribution plans) and is one of
the Employees owning
<PAGE>
<PAGE>
201
the ten largest interests in the
Employer; (iii) is a more than 5%
owner of the Employer; or (iv) is
a more than 1% owner of the
Employer and has Compensation of
more than $150,000. The
constructive ownership rules of
Code Section 318 (or the
principles of that section, in the
case of an unincorporated
Employer) will apply to determine
ownership in the Employer. The
number of officers taken into
account under clause (i) will not
exceed the greater of 3 or 10% of
the total number (after
application of the Code Section
414(q) exclusions) of Employees,
but no more than 50 officers. The
Plan Administrator will make the
determination of who is a Key
Employee in accordance with Code
Section 416(i) and the regulations
under that Code section.
(b) "Non-Key Employee" is
an Employee who does not meet the
definition of Key Employee.
(c) "Compensation" means
Compensation as determined under
Section 3.3(c)(iii) for purposes
of identifying Highly Compensated
Employees.
(d) "Required Aggregation
Group" means:
(1) Each qualified plan of the
Employer in which at least one (1)
Key Employee participates during
the Determination Period; and
(2) Any other qualified plan of
the Employer which enables a plan
described in (1) to meet the
requirements of Code Section
401(a)(4) or 410.
<PAGE>
(e) "Permissive Aggregation
Group" is the Required Aggregation
Group plus any other qualified
plans maintained by the Employer,
but only if such group would
satisfy in the aggregate the
requirements of Code Section
401(a)(4) and 410. The Plan
Administrator shall determine the
Permissive Aggregation Group.
(f) "Employer" shall mean
all the members of a controlled
group of corporations [as defined
<PAGE>
202
in Code Section 414(b)], of a
commonly controlled group of
trades or businesses (whether or
not incorporated) [as defined in
Code Section 414(c)], or of an
affiliated service group [as
defined in Code Section 414(m)],
of which the Employer is a part.
However, the Plan Administrator
shall not aggregate ownership
interests in more than one member
of a related group to determine
whether an individual is a Key
Employee because of his ownership
interest in the Employer.
(g) "Determination Date"
for any Plan Year is the last day
of the preceding Plan Year. The
"Determination Period" is the 5-
year period ending on the
Determination Date.
<PAGE>
__________
ARTICLE XV
______________
ADMINISTRATION
15.1 __________________
PLAN ADMINISTRATOR.
(a) The Plan Administrator
shall have the responsibility for
administering the Plan and
carrying out its provisions. The
Plan Administrator may delegate
any or all of
its duties, powers, and
responsibilities with respect to
the
<PAGE>
Plan, to an administrative
committee (designated the Plan
Administrative Committee), which
shall consist of not fewer than
three persons and which shall be
appointed by the Plan
Administrator. Any member of the
Plan Administrative Committee may
be removed and new members may be
appointed by the Plan
Administrator at any time.
(b) Any person appointed to
be a member of the Plan
Administrative Committee shall
give his acceptance in writing to
the Plan Administrator. Any
<PAGE>
203
member of the Plan Administrative
Committee may resign by delivering
his written resignation to the
Plan Administrator, and such
resignation shall become effective
upon such delivery or upon any
date specified therein.
(c) The Plan Administrative
Committee may delegate any or all
of its duties, powers, and
responsibilities to one or more
individuals or subcommittees,
whose members may or may not be
members of the Plan Administrative
Committee.
15.2 ________________
Responsibilities. The
Plan Administrator shall have the
responsibility to construe and
interpret the provisions of the
Plan and all parts thereof, to
construe any ambiguity or supply
any omission or reconcile any
inconsistencies in such manner and
to such extent as it deems proper,
and to determine all questions
with respect to the individual
rights of Participants and their
beneficiaries and legal
representatives under the Plan,
including, but not by way of
limitation, all issues with
respect to eligibility,
compensation, base rate of pay,
base pay, contributions, vesting
and credited service. The
interpretation or construction
placed upon any term or provision
of the Savings Plan and any action
taken by the Administrator, the
Trustee, a Participating Company
or a Participant in good faith
pursuant thereto shall be final
and conclusive upon all parties
hereto, the Participating
Companies, the Trustee at the
time, the Participants and all
other persons concerned.
<PAGE>
15.3 _____________________
RULES AND REGULATIONS.
The Administrator shall from time
to time enact such rules and
regulations and prescribe such
forms as it may deem proper and
necessary to facilitate the
carrying out of the Plan.
<PAGE>
204
Whenever the Administrator shall
have prescribed a form for any
action to be taken by a
Participant, or his beneficiaries
or legal representatives, such as,
but not limited to, apply for
participation, selecting, changing
or terminating investment options,
directions for sale, increasing or
decreasing his Pre-Tax or After-
Tax Contributions, terminating
participation, requesting
withdrawal, and nominating,
changing or revoking
beneficiaries, such action shall
not be effective unless taken by
executing and filing with the
Administrator the proper form in
the number of copies required by
the Administrator.
15.4 ______________________
RIGHTS OF PARTICIPANTS
_________________
AND BENEFICIARIES. Any
Participant or any beneficiary
receiving benefits under the Plan
may examine copies of the Plan
description, latest annual report
and this Plan and the Trust
Agreement. The Administrator will
maintain all of such items in its
office for examination during
reasonable business hours and in
such additional place or places as
the Administrator may designate
from time to time in order to
comply with applicable law. Upon
the written request of a
Participant or a beneficiary
receiving benefits under the
Savings Plan, the Administrator
shall furnish him a copy of any
item listed in this paragraph, for
which the Administrator may impose
a reasonable charge.
15.5 ________________
CLAIMS PROCEDURE.
(a) If any person makes a
claim regarding the amount of any
distribution or its method of
payment, such person shall present
the reason for the claim in
writing to the Plan Administrator.
The Plan Administrator, in its
discretion, may request a meeting
to clarify any matters that it
deems pertinent. A claimant who
is denied a claim will, within 90
<PAGE>
205
days of the Plan Administrator's
receipt of the claim, be given
notice by the Plan Administrator
that describes:
(i)The specific reason or
reasons for the denial;
(ii)The specific reference to
the Plan provisions on which the
denial is based;
<PAGE>
(iii)A list of additional
material or information (if any)
that is necessary for the claimant
to perfect the claim, with an
explanation of why the additional
information is needed;
(iv) in explanation of the
Plan's claim review procedure; and
(v) An explanation that the
claimant may request a review of
his claim denial by the Plan
Administrator by filing a written
request with the Plan
Administrator not more than 60
days after receiving written
notice of the denial and that the
claimant, or his representative,
before such review, may review
pertinent documents and submit
issues and comments in writing.
The 90-day period may be
extended to 180 days if special
circumstances require such an
extension and the claimant is
notified of the extension within
90 days of the Plan
Administrator's receipt of the
claim.
(b) If a review of the
initial denial is requested and
the claim is again denied, the
Plan Administrator shall again
give written notice within 60 days
of its decision to deny the claim
to the claimant setting forth
items (i) and (ii) above.
However, the 60-day period may be
extended to 120 days if special
circumstances require such an
extension and the claimant is
notified of the extension within
60 days of the Plan
Administrator's receipt of the
request for review. All final
interpretations, determinations
and decisions of the Plan
<PAGE>
<PAGE>
206
Administrator with respect to any
matter hereunder shall be
conclusive and binding upon the
Employer, Participants, Employees,
and all other persons claiming
interest under the Plan, except as
otherwise provided by ERISA.
<PAGE>
___________
ARTICLE XVI
_______________
INDEMNIFICATION
16.1 The Company agrees to
indemnify and save harmless all
persons acting from time to time
as the Administrator from and
against any and all loss resulting
from liability to which the
Administrator may be subjected by
reason of any act or conduct
(except willful misconduct or
gross negligence) in its official
capacities in the administration
of this Plan including all
expenses reasonably incurred in
its defense, in case the Company
fails to provide such defense.
The indemnification provisions of
this Section 16.1 shall not
relieve the Administrator from any
liability which it may have to
anyone other than the Company for
breach of a fiduciary duty.
Nothing herein stated shall
preclude the following:
(a) This Savings Plan from
purchasing insurance for its
fiduciaries or for itself to
cover liabilities or losses
occurring by reason of the
act or omission of a
fiduciary if such insurance
permits recourse by the
insurer against the fiduciary
in the case of a breach of a
fiduciary obligation by such
fiduciary;
<PAGE>
(b) A fiduciary from
purchasing insurance to cover
liability from and for his
own account; and
(c) The Company from purchasing
insurance to cover potential
<PAGE>
207
liability of one or more persons
who serve in a fiduciary capacity
with regard to this Savings Plan.
<PAGE>
____________
ARTICLE XVII
______________________
CONCERNING THE TRUSTEE
17.1 _________________
PURPOSES OF TRUST. The
Company has entered into a
separate Trust Agreement for the
purposes of enabling the Trustee
to receive contributions from
Participating Companies and
Participants, invest those
contributions pursuant to this
Plan and make distributions in
accordance with this Plan or in
accordance with instructions of
the Plan Administrator pursuant to
this Plan.
<PAGE>
_____________
ARTICLE XVIII
____________________________
CONCERNING THE PARTICIPATING
_________
COMPANIES
18.1 Any corporation, fifty
percent (50%) or more of the stock
of which outstanding and entitled
to vote is owned by one or more
Participating Companies, may elect
to participate in the Plan by
filing an instrument in writing
with the Company and the Trustee
electing to participate in and to
accept the terms and provisions of
this Plan and the Trust Agreement.
Whenever there
<PAGE>
shall be a Participating Company
other than the Company, the
Company shall be the agent of all
Participating Companies for all
purposes of this Plan except
withdrawal from or termination of
participation, other than a
termination of this Plan in its
entirety. Any Participating
Company may withdraw from or
<PAGE>
208
terminate participation by filing
a written notice of withdrawal or
termination with the Trustee and
the Company.
18.2 None of the Participating
Companies shall be obliged to pay
any contribution payable by
another Participating Company, but
the Participating Companies shall
have the right, if they so agree
from time to time, to pay any such
contribution of a Participating
Company.
<PAGE>
___________
ARTICLE XIX
_____________________________
EXCLUSIVE BENEFIT, AMENDMENT,
___________
TERMINATION
19.1 _________________
EXCLUSIVE BENEFIT.
Except as provided under Article
X, no Employer has any beneficial
interest in any asset of the Trust
and no part of any asset in the
Trust may ever revert to or be
repaid to an Employer, either
directly or indirectly; nor, prior
to the satisfaction of all
liabilities with respect to the
Participants and their
Beneficiaries under the Plan, may
any part of the corpus or income
of the Trust, or any asset of the
Trust, be (at any time) used for,
or diverted to, purposes other
than
<PAGE>
the exclusive benefit of the
Participants or their
Beneficiaries.
19.2 ____________________
AMENDMENT BY COMPANY. In
order to facilitate
administration, the Company shall
be the agent for all other
Employers for purposes of amending
this Plan from time to time
(subject to the right of each
Employer party to a Schedule
hereto to modify, amend or change
any provision of this Plan insofar
<PAGE>
209
as applicable to Employees
included in such Schedule) and for
all other purposes except
withdrawing from or otherwise
terminating participation under
this Plan as an Employer. The
Company, by action of its Board of
Directors, shall have the right at
any time to amend, in whole or in
part, any of the provisions of
this Plan, including the right to
make such amendments effective
retroactively, if necessary, to
bring the Plan into compliance
with the requirements of the Code,
ERISA and the regulations
promulgated
under each. No amendment shall
make it possible for Plan assets
to be used for, or diverted to,
purposes other than the exclusive
benefit of Participants and
former Participants and their
Beneficiaries.
_______________________
Code Section 411(d) (6)
__________________
Protected Benefits. An amendment
(including the adoption of this
Plan as a restatement of an
existing plan) may not decrease a
Participant's accrued benefit,
except to the extent permitted
under Code Section 412(c)(8), and
may not reduce or eliminate Code
Section 411(d)(6) protected
benefits determined immediately
prior to the adoption date (or, if
later, the effective date) of the
amendment. An amendment reduces
or eliminates Code Section
411(d)(6) protected benefits if
the amendment
<PAGE>
has the effect of either (i)
eliminating or reducing an early
retirement benefit or a
retirement-type subsidy (as
defined in Treasury regulations),
or (ii) except as provided by
Treasury regulations, eliminating
an optional form of benefit. The
Plan Administrator must disregard
an amendment to the extent
application of the amendment would
fail to satisfy this paragraph.
If the Plan Administrator must
disregard an amendment because the
<PAGE>
210
amendment would violate clause (i)
or clause (ii), the Plan
Administrator must maintain a
schedule of the early retirement
option or other optional forms of
benefit the Plan must continue for
the affected
Participants.
19.3 ______________
DISCONTINUANCE. Each
Employer has the right, at any
time, to suspend or discontinue
its contributions under the Plan,
and as to its participation to
terminate, at any time, this Plan
and the Trust. The Plan will
terminate as to such Employer upon
the first to occur of the
following:
(a) The date terminated by
action of the Employer;
(b) The dissolution or
merger of the Employer,
unless the successor makes
provision to continue the
Plan, in which event the
successor must substitute
itself as the Employer under
this Plan. Any termination
of the Plan resulting from
this paragraph (b) is not
effective until compliance
with any applicable notice
requirements under ERISA.
<PAGE>
19.4 ________________________
MERGER, CONSOLIDATION OR
________
TRANSFER. The Trustee may not
consent to or be a party to, any
merger or consolidation with
another plan, or to a transfer of
assets or liabilities to another
plan, unless immediately after
the merger, consolidation or
transfer, the surviving Plan
provides each Participant a
benefit equal to or greater than
the benefit each Participant would
have received had the Plan
terminated immediately before the
merger or consolidation or
transfer.
19.5 ___________
TERMINATION. If the Plan
is terminated or partially
<PAGE>
211
terminated by an Employer, any
forfeitures which shall have
occurred in accordance with
Article X hereof prior to the
termination or partial termination
of the Plan, which shall not have
been used to offset Employer
Contributions or to reinstate
Participant forfeitures in
accordance with Section 10.5,
shall be distributed pro-rata to
the affected Participants in the
same proportion that the sum of
the Participant After-Tax
Contributions
Account, Participant Pre-Tax
Contributions Account and Employer
Matching Contributions Account
balances of each such Participant
bears to the sum of such account
balances of all Participants.
If the Plan is terminated or
partially terminated by an
Employer, the entire value of each
affected Participant's After-Tax
Contributions Account, Participant
Pre-Tax Contributions Account and
Employer Matching Contributions
Account as of the Valuation Date
coincident with or immediately
following the effective date of
the termination or partial
termination, plus
<PAGE>
any distribution to which such
Participant is entitled pursuant
to this Section 19.5, shall, at
the election of the Participant,
be distributed to the Participant
in a lump sum, as an immediate or
deferred annuity purchased under a
group annuity contract with an
Insurer, or as a combination of
such methods of payment, as soon
as practicable after such
Valuation Date.
_______________________________
Distribution Restrictions Under
___________________
Code Section 401(k). The portion
of the Participant's
Nonforfeitable Accrued Benefit
attributable to elective
contributions under a Code Section
401(k) arrangement (or to amounts
treated under the Code Section
401(k) arrangement as elective
contributions) is not
<PAGE>
212
distributable on account of Plan
termination, as described in this
Section 19.5, unless: (a) the
Participant otherwise is entitled
under the Plan to a distribution
of that portion of his
Nonforfeitable Accrued Benefit; or
(b) the Plan termination occurs
without the establishment of a
successor plan. A distribution
made after March 31, 1988,
pursuant to clause (b),
must be part of a lump sum
distribution to the Participant of
his nonforfeitable accrued
benefit.
<PAGE>
__________
ARTICLE XX
__________
APPENDICES
20.1 One or more appendices
may be executed and attached
hereto by a Participating Company
and shall include each employee of
such Participating Company (i) who
is a member of a particular
<PAGE>
certified collective bargaining
unit, the collective bargaining
agency for which has either
accepted the terms and conditions
of this Plan, or has consented to
the solicitation of applications
for participation from members of
such collective bargaining unit,
and (ii) who is eligible for
participation in this Plan. Each
such appendix shall include a
statement of which of the
Participating Companies is a party
thereto and a description of the
employee group includible within
such appendix and may, in
addition, contain provisions
adding to, modifying, amending or
changing any provision of this
Agreement, insofar as applicable
to employees included in such
appendix, but nothing contained in
any appendix shall be of effect
except with respect to so much of
the employment of such employees
as may come within such appendix.
<PAGE>
213
<PAGE>
___________
ARTICLE XXI
_______________________________
ELIGIBLE ROLLOVER DISTRIBUTIONS
21.1 ____________
APPLICATIONS. This
Article applies to distributions
made on or after January 1, 1993.
Notwithstanding any provision of
the Plan to the contrary that
would otherwise limit a
distributee's election under this
Article, a distributee may elect,
at the time and in the manner
prescribed by the Plan
Administrator, to have any portion
of an eligible rollover
distribution paid directly to an
eligible retirement plan specified
by the distributee in a direct
rollover.
<PAGE>
21.2 ___________
DEFINITIONS.
(a) "Eligible rollover
distribution." An eligible
rollover distribution is any
distribution of all or any portion
of the balance to the credit of
the distributee, except that an
eligible rollover distribution
does not include: any distribution
that is one of a series of
substantially equal periodic
payments (not less frequently than
annually) made for the life (or
life expectancy) of the
distributee or the joint lives (or
joint life expectancies) of the
distributee and the distributee's
designated beneficiary, or for a
specified period of ten years or
more; any distribution to the
extent such distribution is
required under Code Section
401(a)(9); and the portion of any
distribution that is not
includible in gross income
(determined without regard to the
exclusion of net unrealized
appreciation with respect to
employer securities).
(b) "Eligible retirement
plan." An eligible retirement
<PAGE>
214
plan is an individual retirement
account described in Code Section
408(a), an individual retirement
annuity described in Code Section
408(b), an annuity plan described
in Code Section 403(a), or a
qualified trust described in Code
Section 401(a), that accepts the
distributee's eligible rollover
distribution. However, in the
case of an eligible rollover
distribution to the surviving
spouse, an eligible retirement
plan is an individual retirement
account or individual retirement
annuity.
<PAGE>
(c) "Distributee." A
distributee includes an Employee
or former Employee. In addition,
the Employee's or former
Employee's surviving spouse and
the employee's or former
Employee's spouse or former spouse
who is the alternate payee under a
qualified domestic relations
order, as defined in Code Section
414(p), are distributees with
regard to the interest of the
spouse or former spouse.
(d) "Direct rollover." A
direct rollover is a payment by
the Plan to the eligible
retirement plan specified by the
distributee.
<PAGE>
____________
ARTICLE XXII
_____________
MISCELLANEOUS
22.1 ____________________
RIGHT OF EMPLOYER TO
_________________
DISMISS EMPLOYEES. Neither the
action of the Company in
establishing this Plan and the
Trust nor of any other
Participating Company in electing
to participate therein nor any
action taken by any Participating
Company under the provisions
hereof, nor any provision of this
Plan or of the Trust shall be
<PAGE>
215
construed as giving to any
employee of any Participating
Company the right to be retained
in its employ or any right to any
payment whatsoever except to the
extent of the benefits provided
for by this Plan to be paid from
the Trust.
22.2 _____________
GOVERNING LAW. This
Agreement shall be administered
and construed according to the
laws of the State of Maryland.
22.3 _______________
TEXT TO CONTROL. The
headings of Articles and Sections
are included solely for
convenience of reference, and, if
there be any conflict between such
headings and the text of this
Plan, the text shall control.
22.4 ______
GENDER. Masculine
pronouns shall refer to both males
and females.
<PAGE>
IN WITNESS WHEREOF, Crown
Central Petroleum Corporation has
caused this Amended and Restated
Plan to be executed on its behalf
and pursuant to the authority
conferred upon it by the Plan, on
behalf of all Participating
Companies, by its duly authorized
officers and its corporate seal to
be hereunto affixed this ______
day of ______________________ ,
1991.
ATTEST:CROWN CENTRAL PETROLEUM
CORPORATION On Behalf of Itself,
and on Behalf of all Participating
Companies
_____________________
By:___________________________
<PAGE>
CROWN CENTRAL PETROLEUM
CORPORATION
EMPLOYEES SAVINGS PLAN
<PAGE>
216
APPENDIX I
Article I - Statement of
Participating Companies
Parties to this
Appendix
1.1 Crown Central Petroleum
Corporation, hereinafter referred
to as "the Employer" is the only
party to this Appendix.
Article II - Definition of
Employee Group
2.1 Each employee of the
Employer who is a member of the
Oil, Chemical and Atomic Workers
International Union, certified
collective bargaining unit Local
No. 4-227, and who is eligible for
membership in the Savings Plan, is
included within this Appendix.
<PAGE>
Article III - Additional
Provisions
3.1 The only provisions adding
to, modifying, amending or
changing any provision of the
Savings Plan are the following
special provisions:
FIRST: A Participant on
unpaid leave of absence
from the Employer
to work for the
international union
("Union Leave of
Absence"), in excess of
thirty (30) days may
elect to make
contributions to his
Participant After-Tax
Contributions Account
(and receive Employer
Matching Contributions
with respect thereto)
during such leave of
absence by filing
written notice with the
Administrator within
thirty (30) days after
his leave of absence
begins and paying to the
Company, on or before
the tenth (10th) day of
<PAGE>
217
each month commencing
with the month following
the month in which such
notice is given, an
amount equal to the
Participant's
Contribution (based on
the classification which
he occupied at the time
his leave of absence
began) which he would
have made, whether Pre--
Tax or After-Tax, during
the preceding month (or,
in the case of the first
such payment with
respect to such leave of
absence, since the start
of such leave of
absence) if he had not
been on leave of
absence.
<PAGE>
SECOND: Section 14.1 of the
Plan shall apply to a
Participant
included within this
Appendix who is on Union
Leave of Absence in
excess of thirty (30)
days and who has elected
to make contributions to
his Participant After-
Tax Contributions
Account, irrespective of
whether such Participant
is employed by the
Employer on the
Determination Date of
the Plan Year.
3.2 In the event of any
conflict between the provisions of
the Savings Plan and the
provisions of this Appendix, the
provisions of this Appendix shall
be controlling only with respect
to Participants properly included
in this Appendix and only with
respect to so much of the
employment of any such Participant
as comes within this Appendix.
IN WITNESS WHEREOF, the
Employer has caused this Appendix
to be executed by its duly
authorized officer and its
corporate seal to be hereunto
<PAGE>
218
affixed this ____ day of
_______________, 1992.
ATTEST: CROWN CENTRAL
PETROLEUM
CORPORATION
_____________________
By_____________________________
___________
<PAGE>
CROWN CENTRAL PETROLEUM
CORPORATION
EMPLOYEES SAVINGS PLAN
APPENDIX II
Article I - Statement of
Participating Companies
Parties to this
Appendix
<PAGE>
1.1 LaGloria Oil and Gas
Company, hereinafter referred to
as "the Employer" is the only
party to this Appendix.
Article II - Definition of
Employee Group
2.1 Each employee of the
Employer who is a member of the
collective bargaining unit of OCAW
Local 4-202, consisting of
production and maintenance
employees employed at Tyler Texas,
and who is eligible for membership
in the Savings Plan, is included
within this Appendix.
Article III - Additional
Provisions
3.1 The only provisions adding
to, modifying, amending or
changing any provision of the
Savings Plan are the following
special provisions:
<PAGE>
FIRST: The definitions of
"base wages" and "base rate
of pay" in Section 1.7 are
modified as follows:
<PAGE>
219
Participants included
within this Appendix are
hourly paid and are
scheduled to work 36
hours every other week
and 48 hours per week
during the intervening
weeks. Effective
commencing with the pay
period beginning March
5, 1990, "base wages",
in the case of such
Participants, shall
mean the amount
determined by
multiplying the
Participant's scheduled
hours during a
<PAGE>
scheduled 36 hour work
week by his Straight
Time Factored Rate of
Pay and by multiplying
the first 40 of his
scheduled hours during a
scheduled 48 hour work
week by his Straight
Time Factored Rate of
Pay and the next 8 hours
by his Overtime Factored
Rate of Pay. "Straight
Time Factored Rate of
Pay" means base wages
multiplied by a factor
of .97727, and "Overtime
Factored Rate of Pay"
means 1-1/2 times
Straight Time Factored
Rate of Pay.
Notwithstanding the
foregoing, base wages
with respect to paid
vacation time and paid
sick leave shall be
calculated at the
straight time base rate
of pay.
3.2 In the event of any
conflict between the provisions of
the Savings Plan and the
provisions of this Appendix, the
provisions of this Appendix shall
be controlling only with respect
to Participants properly included
in this Appendix and only with
respect to so much of the
employment of any such Participant
as comes within this Appendix.
<PAGE>
220
IN WITNESS WHEREOF, the
Employer has caused this Appendix
to be executed by its duly
authorized officer and its
corporate seal to be hereunto
affixed this ____ day of
_______________, 1992.
ATTEST: LaGLORIA
OIL AND GAS COMPANY
__________________________
By________________________________
<PAGE>
EXHIBIT 13.a
CROWN CENTRAL PETROLEUM CORPORATION
L
L
LETTER TO THE
ETTER TO THE
ETTER TO THE S
S
SHAREHOLDERS
HAREHOLDERS
HAREHOLDERS
To the Shareholders:
To the Shareholders:
To the Shareholders:
Crown's results for 1995 reflect improved
operating income despite continued industry
weaknesses in Gulf Coast refining margins.
Earnings before interest, taxes, depreciation,
amortization, abandonments (including the impact
of the initial adoption of SFAS No. 121 in 1995),
and before LIFO accounting provisions
(collectively referred to as EBITDAAL) amounted to
$34.7 million in 1995 compared to $31.3 million in
1994, an increase of 11%.
Several positive factors contributed to this
improved operating performance. Crown's
aggressive cost-reduction program throughout the
Company resulted in nearly $15 million of savings.
In addition, our retail performance was strong
throughout the year, with volumes up in all
categories of stores. While total average
gasoline margins, on a cents per gallon basis,
were slightly less than 1994, both merchandise
revenue and gross margins were up substantially.
Although net income was not positive in 1995,
strong performance in key finance, administrative,
and operating areas helped minimize negative
results. The capital expenditures made during
<PAGE>
221
1995 were prudent investments in the Company's
future that promote efficiencies and
competitiveness. Projects such as the new
automated Distributed Control System (DCS) for the
Pasadena refinery and the purchase of additional
retail outlets contributed to improved operating
results in 1995 and will continue to benefit the
Company for many years to come.
Including one-time, non-cash write-downs, the
Company reported a net loss before extraordinary
items of $67.4 million ($6.87 per share) in 1995
compared to a net loss of $35.4 million ($3.63 per
share) in 1994. Crown's 1994 earnings reflect a
write-down of certain refinery projects related to
a $16.8 million pre-tax charge to earnings for
hydro-desulphurization equipment which had been
purchased for the Pasadena refinery. The 1995
results include a one-time non-cash write-down of
certain Company refinery assets in accordance with
SFAS No.121, which relates to the accounting for
the impairment of long-lived assets. The write-
down, amounting to $80.5 million dollars on a pre-
tax basis, will improve future earnings results
and related returns on both equity and capital
employed, while permitting improved comparisons
with other independent refiners and marketers.
Additionally, the Company took an extraordinary
$3.3 million after-tax charge in January of 1995
related to early retirement of senior long-term
notes when the Company completed the $125 million
public debt offering. The resulting net loss for
1995 was $70.6 million ($7.20 per share) compared
to a net loss in 1994 of $35.4 million ($3.63 per
share).
While the SFAS No.121 impact was taken entirely in
the fourth quarter, the quarter's operating
results showed a slight improvement over 1994.
The EBITDAAL loss amounted to $4.6 million in the
fourth quarter of 1995 before the one-time non-
cash write-down of $80.5 million related to SFAS
No.121 as described above. This compares to an
EBITDAAL loss of $4.9 million in the fourth
quarter of 1994 which benefited from exceptionally
strong retail margins. Fourth quarter retail
margins averaged 18 cents per gallon in 1994
compared to a more typical 12 cents per gallon in
1995.
(Photograph of Henry A. Rosenberg, Jr. Chairman of
the Board, President and Chief Executive Officer)
(Photograph's Caption: Henry A. Rosenberg, Jr.
Chairman of the Board and President)
Overall results for the fourth quarter of 1995,
including charges relating to the one-time non-
cash SFAS No.121 write-down, amounted to a net
<PAGE>
222
loss of $67.8 million compared to a net loss of
$10.2 million for the fourth quarter of 1994.
Both the annual and fourth quarter results for
1995 include substantial increases in net interest
expense due to the issuance of additional debt.
This increase amounted to $12.1 million in 1995
compared to $6.6 million in 1994 with the fourth
quarter net interest expense amounted to $3.2
million in 1995 compared to $1.8 million in 1994.
Crown's cash position at year-end remained strong
at $43 million. Further improvements in inventory
management resulted in a reduction in inventory
quantities, which in turn reduced the 1995 net
loss by $3.0 million ($.30 per share).
________
Refining
________
Refining
________
Refining
Crown's refineries performed well from an
operations perspective in 1995. Depressed margins
on the Gulf Coast due in large part to the
unseasonably warm winter of 1994/1995, were
responsible for disappointing financial results.
Results would have been even more disappointing
had not the cash operating costs per barrel at
Pasadena been reduced to $1.66 during the year, a
13% decline from 1994's $1.92. This significant
improvement is the result of cost cutting
programs, process improvements and higher
throughput.
The past several years have been difficult, but
there is reason to be confident about the future
of the petroleum industry. (1) Demand growth will
remain relatively strong due to continued modest
economic expansion and due to a less fuel
efficient fleet of vehicles as new car sales of
luxury and recreational-oriented vehicles outpace
overall new car sales. (2) Annual capacity
expansion for upgraded fuels will be lower as new
capital for refineries has dropped sharply on a
per barrel basis since 1990 following the
completion of a number of refining projects that
were required to meet the Clean Air Act. (3) The
1998 California Air Resources Board standards will
create additional strong demands for alkylates,
some of which will have to be supplied by Gulf
Coast refineries. (4) The ``
greening'' of Europe
will positively impact domestic gasoline producers
by reducing cost advantages European producers
have realized in recent years. As a result, it
can be expected that future refining margins have
the possibility of again reaching levels that more
adequately compensate refiners for their employed
capital.
Keeping our refineries efficient and up-to-date
with current technology are strategies that will
be key to future successes. As an example, a new
<PAGE>
223
refinery-wide distributed control system, DCS,
which is now fully commissioned at our Pasadena
facility, has provided new and valuable
technology for optimizing process unit operations
by maximizing throughputs and improving yields of
desirable more profitable products.
<PAGE>
Process improvements were made during the
turnaround in the fourth quarter of 1994 to the
fluid catalytic cracking (FCC) unit at Pasadena.
As a result, there was an 18% increase of the more
profitable products such as propane/propylene mix
and less production of lower valued products such
as slurry. Gasoline yields also showed favorable
gains at the FCC unit. The continuous catalyst
regeneration reformer at Pasadena was modified
during a turnaround in 1995, and the capacity was
increased by 18% to 26,000 barrels per day.
Favorable industry trends, as cited above,
combined with Crown's continuing investments in
productivity, should result in improved financial
results over the next several years.
_________
Marketing
_________
Marketing
_________
Marketing
Crown marketing continued to produce excellent
results for the year. Merchandise sales at
comparable stores were 12.3% higher and gasoline
sales showed gains of 6.6% over 1994 despite
national demand for gasoline growing at only a
1.5% to 2% rate. Gross merchandise margins, as a
percent of revenues, were up 9% from 22.7% to
24.7%. Gasoline margins per gallon were slightly
lower in 1995, compared to 1994, principally due
to the exceptionally strong gasoline margins
experienced during the last quarter of 1994.
Gasoline margins per gallon experienced during the
fourth quarter of 1995 were more in line with
historical seasonal trends.
During the year, eighteen units were added to our
system. Fifteen of these were acquired as
existing units which were located in current Crown
high growth market areas and were easily
assimilated into our infrastructure. These units
are projected to produce a 4% yearly volume
increase or 20.5 million gallons and this is
expected to provide additional economies of scale.
The remaining three units were new sites
constructed in Maryland. These new stores are
nearly doubling the gallonage sold compared to the
existing Maryland stations' average. This gives
us confidence that Crown's ``
new build program''
is based upon a sound foundation and that it will
assist us in our pursuit of our strategic goal of
improving the balance between our refining
<PAGE>
224
capacity for gasoline production and our retail
volume.
In keeping with recent market trends to provide
the consumer with more convenience, Crown
installed four Taco Bells in existing stores.
These are franchises owned by Crown and operated
in company-managed stores. A Subway restaurant
was constructed in one of our Maryland stations
and the Crown dealer is operating as the Subway
franchisee.
On a net basis, Crown ended 1995 with 8 fewer
stores due to the closing of low performing units.
Aside from expected attrition, normal for any
retail operation, the Company's downsizing program
which began four years ago is essentially
complete.
---
---
---
---
---
---
---
---
---
---
---
---
---
Two major financial agreements were concluded
during the year, one of which was mentioned
earlier. In January, the Company closed an
oversubscribed public offering of $125 million
senior notes, the proceeds of which were used to
retire existing debt with non-amortizing ten-year
notes. A second, in September, was a $130 million
revolving credit to provide working capital and
letter of credit capacity. In part, as a result
of these financial activities, there has been
increased interest in Crown from the investment
research community and industry publications.
Gasoline Marketing, an industry trade journal,
featured Crown's Tyler refinery in their very
positive cover story in the October/November 1995
issue.
As of this announcement, Crown management is in a
lockout situation at the Pasadena refinery with
the Oil, Chemical, & Atomic Workers Union. Talks
to resolve the issues are underway and the Company
is hopeful of an early settlement. Refining
operations continue uninterrupted with supervisors
and salaried employees, some drawn from other
areas of the Company.
Charles L. Dunlap, President and C.O.O., resigned
his position to pursue other investment and
business opportunities effective February 29,
1996. Crown is grateful for his leadership and
the many contributions made during his service.
We are pleased to announce that the Reverend
Harold E. Ridley, Jr., S.J., President of Loyola
College in Maryland, joined our Board of Directors
in December 1995. Mr. Malcolm McNair retired from
the Board after many years of dedicated service.
His wise counsel and seasoned judgment will be
<PAGE>
225
greatly missed. Also, during the year, Randall M.
Trembly and George R. Sutherland, Jr., were
promoted to the position of Senior Vice President.
Management has reviewed the industry and carefully
analyzed each segment of our businesses in
relation to the level of return that shareholders
expect to be receiving on their capital. Models
and strategies for the future have been developed
for managing improvement throughout all of Crown's
operations. Crown looks forward to continued
progress in the year ahead.
The support and confidence of all Crown
shareholders and employees during this difficult
period for our industry is greatly appreciated.
Sincerely,
Henry A. Rosenberg, Jr.
Henry A. Rosenberg, Jr.
Chairman of the Board and President
March 1, 1996
<PAGE>
EXHIBIT 13.b CROWN CENTRAL PETROLEUM CORPORATION
AND SUBSIDIARIES
Year in Review
<TABLE>
<CAPTION>
Thousand of dollars, except per share amounts1995 1994 1993
----------------------------------------
-----
Financial Summary
-------------------------
<S> <C> <C> <C>
Sales and operating revenues $1,864,639 $1,699,168
$1,747,411
(Loss) income before income taxes and
extraordinary (loss) (98,489) (52,836) 807
Net (loss) (70,624) (35,406) (4,300)
Net (loss) per share (7.20) (3.63) (.44)
EBITDAAL (1) 34,702 31,331 23,377
Cash flow from operating activities4,172 8,602 28,878
Total capital expenditures 41,010 34,359 40,860
Common stockholders' Equity 189,495 260,461 298,353
<PAGE>
226
</TABLE>
<TABLE>
<CAPTION>
In thousands 1995 1994 1993
------------- ------------- ------
-------
Operating Summary
-------------------------
<S> <C> <C> <C>
Barrels per day processed 154 148 158
Gasoline barrels produced per day 91 80 86
Distillate barrels produced per day 46 48 52
Gasoline barrels sold per day 92 84 91
</TABLE>
<TABLE>
<CAPTION>
1995 1994 1993
----------- ------------- ------
--------
Key Financial Statistics
-------------------------
<S> <C> <C> <C>
Working capital (in millions) $45.9 $ 53.7 $ 51.8
Working capital ratio 1.22:1 1.22 : 1 1.29 : 1
Liquid assets as a percentage of current
liabilities (2) 72.2% 75.8% 80.1%
Long term debt as a percentage of total
capitalization (3) 40.7% 29.1% 18.3%
Equity ratio (4) 32.5% 37.0% 45.5%
Return on average shareholders' equity(31.4% )(12.7% )(1.4% )
Gross profit margin 5.9% 5.7% 8.2%
<FN>
(1) EBITDAAL is defined as operating inncome (loss) before
interest and taxxes (EBIT), excluding depreciation and
amortization (DA), excluding gain (loss) on sales and
abandonments of property, plant and equipment (A), and excluding
the impact on operating income (loss) of accounting for inventory
under the LIFO method compared with the FIFO method (L).
(2) Liquid assets defined as cash, cash equivalents and trade
accounts receivable.
(3) Total capitalization defined as long-term debt and common
stockholders' equity.
(4) Common stockholders' equity divided by total assets.
</TABLE>
<PAGE>
EXHIBIT 13.c
Crown Central Petroleum Corporation
Directors and Officers
Board of Directors
Jack Africk #
Retired Vice Chairman
UST Inc.
George L. Bunting, Jr. #
President and CEO
Bunting Management Group
Michael F. Dacey #
President
The Evolution Consulting Group, Inc.
Robert M. Freeman #
Chairman of the Board and
Chief Executive Officer
Signet Banking corporation
Thomas M. Gibbons +
Retired Chairman of the Board
The Chesapeake and Potomac
Telephone Companies (part of Bell
Atlantic Corporation)
Patricia A. Goldman +
Retirement Senior Vice President
Corporate Communications USAir
Peter J. Holzer +
Executive Vice President
The Chase Manhattan Bank N.A.
William L. Jews +
President and Chief Executive Officer
Blue Cross and Blue Shield
of Maryland
Rev. Harold E. Ridley, Jr., S.J.
President
Loyola College in Maryland
Henry A. Rosenberg, Jr.
Chairman of the Board, President and
Chief Executive Officer of the
Corporation
+ Members of Executive
Compensation and Bonus
Committee
<PAGE>
228
# Members of Audit Committee
Executive Committee
Jack Africk
Thomas M. Gibbons
Henry A. Rosenberg, Jr.
Officers
Henry A. Rosenberg, Jr.
Chairman of the Board, President and
Chief Executive Officer
Phillip W. Taff
Senior Vice President - Finance and
Chief Financial Officer
Edward L. Rosenberg
Senior Vice President - Administration,
Corporate Development and
Long Range Planning
John E. Wheeler, Jr.
Senior Vice President - Treasurer and
Controller
Randall M. Trembly
Senior Vice President - Refining
George R. Sutherland, Jr.
Senior Vice President - Supply and
Transportation
Thomas L. Owsley
Vice President - Legal
Frank B. Rosenberg
Vice President - Marketing
J. Michael Mims
Vice President - Human Resources
Paul J. Ebner
Vice President - Marketing Support
Services
Dennis W. Marple
Vice President - Wholesale Sales
and Terminals
Delores B. Rawlings
Secretary
William A. Wolters
Assistant Secretary
Peter G. Wolfhagan
Assistant Secretary
<PAGE>
229
Phillip F. Hodges
Assistant Secretary
Andrew Lapayowker
Assistant Secretary
Stephen A. Noll
Assistant Treasurer
David J. Shade
Assistant Treasurer
Kim M. Melton
Assistant Treasurer
Coronet Security Systems, Inc.
Edward L. Rosenberg
Chairman of the Board
Fast Fare, Inc.
Frank B. Rosenberg
President
LaGloria Oil & Gas Company
Henry A. Rosenberg, Jr.
President
Transfer Agent and Registrar
The First National Bank of Boston
c/o Equiserve, L. P.
P. O. Box 644
Boston, Massachussetts 02102
800-736-3001
<PAGE>
CORPORATE INFORMATION EXHIBIT 13.d
Crown Central Petroleum Corporation is one of the
largest independent refiners and marketers of
petroleum products in the United States. The
Company operates two high-conversion refineries
in Texas with a combined capacity of 152,000
barrels per day. Crown markets its refined
products at 348 retail gasoline stations and
convenience stores in seven Mid-Atlantic and
Southeastern states. Crown's wholesale operations
extend from its Texas refineries into the
Southeastern, Mid-Atlantic and Midwestern regions
of the United States.
<PAGE>
230
By concentrating on its core business and
maintaining a strong financial position, Crown is
able to offer quality products to its customers
and long-term value to its shareholders.
<PAGE>
<TABLE>
<CAPTION>
Crown Central Petroleum Corporation and Subsidiaries
Operating Results
Twelve Months Ended
December 31
Dollars in thousands, exxcept per share data
1995 1994
------------ -------------
<S>
<C> <C>
Sales and operating revenues $1,864,639
$1,699,168
SFAS 121 Implementation (1) (80,524)
(Loss) before income taxes (2)
(98,489) (52,836)
(Loss) before extraordinary item (67,367)
(35,406)
(Loss) from extraordinary item (3) (3,257)
----
Net (loss)
(70,624) (35,406)
(Loss) per share before extraordinary item (6.95)
(3.63)
(Loss) per share from extraordinary item (.33)
----
Net (loss) per share
(7.28) (3.63)
Weighted average shares used in the
computation of (loss) per share 9,697,611
9,742,598
------------------------------------------------------------------------
---------------------
<FN>
(1) During the fourth quarter of 1995, the Company implemented
Statement of Financial Accounting Standard No. 121 ``
Accounting for the
Impairment of Long-Lived Assets and Long-Lived assets to be Disposed Of''
which resulted in a write-down of $80.5 million related to certain refinery
assets.
(2) Includdes the impact of implementation of SFAS 121.
<PAGE>
231
(3) During the first quarter of 1995, the Company incurred an
extraordinary loss as a result of the early
retirement of its outstanding 10.42% Senior Notes (Notes). The
outstanding Notes were retired
on January 24, 1995 from the proceeds received from the sale of $125
million of Unsecured 10.875%
Senior Notes due February 1, 2005.
</TABLE>
<TABLE>
<CAPTION>
Crown Central Petroleum Corporation and Subsidiaries
Operating Statistics
Twelve Months Ended
December 31
1995 1994
------------ ----------
<S>
<C> <C>
________
REFINING
Production (BPD - M)
155 148
Production (MMbbl)
56.5 53.9
Gross Margin ($/bbl)
2.12 2.37
Gross Profit ($MM)
119.7 127.8
Operating Cost ($/bbl)
2.26 2.52
Operating Cost ($MM) 127.7
136.1
Net Refining Profit ($MM)
(8.0) (8.3)
______
RETAIL
Number Stores
348 357
Volume (pmps - Mgal)
123 113
Volume (MMgal)
516 486
Gasoline Gross Margin ($/gal) 0.13
0.13
Gasoline Gross Profit ($MM) 65.0
63.7
<PAGE>
232
Merchandise Sales (pmps - $M) 22.0
20.4
Merchandise Sales ($MM) 91.8
87.5
Merchandise Gross Margin (%) 28.8
27.4
Merchandise Gross Margin ($MM) 26.5
24.0
Retail Gross Profit ($MM)
91.5 87.7
Retail Operating Costs (pmps - $M) 17.2
17.1
Retail Net Profit ($MM)
19.5 14.2
Wholesale / Other ($MM)
(13.1) (23.1)
HDS Write-down ($MM)
(16.8)
SFAS No. 121 Implementation ($MM) (80.5)
Corporate Overhead ($MM) (16.3)
(18.8)
Income Tax (Expense) Benefit ($MM) 31.1
17.4
(Loss) from Extraordinary Item ($MM) (3.3)
Total Net (Loss) ($MM)
(70.6) (35.4)
Depreciation and Amortization ($MM) 36.6
42.6
Net Interest Expense ($MM) 12.1
6.6
Other Income ($MM)
2.5 0.1
LIFO Provision ($MM)
6.7 19.0
Loss (Gain) on Sales and Abandonments
of P,P & E ($MM)
80.2 16.0
EBITDAAL ($MM) 34.7
31.3
Capital Expenditures ($MM) 41.0
34.4
------------------------------------------------------------------------
------------
<FN>
BPD = Barrels per day
bbl = barrel or barrels as applicable
gal = gallon or gallons as applicable
pmps = per month per store
M = in thousands
MM = in millions
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<PERIOD-TYPE> 12-MOS
<CAPTION>
FINANCIAL DATA SCHEDULE
Crown Central Petroleum Corporation and Subsidiaries
(Thousands of dollars, except per share amounts)
December 31
1995
-----------------
(Unaudited)
<S> <C>
<CASH> 5,163
<SECURITIES> 36,882
<RECEIVABLES> 107,330
<ALLOWANCES> 1,531
<INVENTORY> 96,025
<CURRENT-ASSETS> 250,601
<PP&E> 624,338
<DEPRECIATION> 322,358
<TOTAL-ASSETS> 583,214
<CURRENT-LIABILITIES> 204,670
<BONDS> 128,506
0
0
<COMMON> 49,765
<OTHER-SE> 139,730
<TOTAL-LIABILITY-AND-EQUITY> 583,214
<SALES> 1,864,639
<TOTAL-REVENUES> 1,864,639
<CGS> 1,753,886
<TOTAL-COSTS> 1,753,886
<OTHER-EXPENSES> 199,249
<LOSS-PROVISION> 396
<INTEREST-EXPENSE> 14,948
<INCOME-PRETAX> (98,489)
<INCOME-TAX> (31,122)
<INCOME-CONTINUING> (67,367)
<DISCONTINUED> 0
<EXTRAORDINARY> (3,257)
<CHANGES> 0
<NET-INCOME> (70,624)
<EPS-PRIMARY> (7.28)
<EPS-DILUTED> (7.28)
</TABLE>
