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EXHIBIT 99
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE,
SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THESECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OFTHE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 1-1059
CROWN CENTRAL EMPLOYEES SAVINGS PLAN
(Title of Plan)
CROWN CENTRAL PETROLEUM CORPORATION
One North Charles Street
Baltimore, Maryland 21201
(Name and address of principal executive
offices of issuer of the securities)
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AUDITED FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
CROWN CENTRAL EMPLOYEES
SAVINGS PLAN
YEARS ENDED DECEMBER 31, 1999 AND 1998
WITH REPORT OF INDEPENDENT AUDITORS
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Crown Central Employees Savings Plan
Audited Financial Statements
and Supplemental Schedule
Years ended December 31, 1999 and 1998
CONTENTS
Report of Independent Auditors 1
Audited Financial Statements
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Supplemental Schedule
Schedule H, Line 4(i)-- Schedule of Assets Held for Investment
Purposes At End of Year 10
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Report of Independent Auditors
To the Retirement Plan Committee
Crown Central Employees Savings Plan
We have audited the accompanying statements of net assets available for
benefits of the Crown Central Employees Savings Plan as of December 31, 1999
and 1998, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a 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 financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Crown
Central Employees Savings Plan at December 31, 1999 and 1998, and the
changes in its net assets available for benefits for the years then ended,
in conformity with accounting principles generally accepted in the United
States.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes at end of year as of December 31, 1999
is presented for purposes of additional analysis and is not a required part
of the financial statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. This supplemental
schedule is the responsibility of the Plan's management. The supplemental
schedule has been subjected to the auditing procedures applied in our audits
of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
April 21, 2000
Except Note 7,
as to which the date
is May 11, 2000
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CROWN CENTRAL EMPLOYEES SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31
1999 1998
----------- -----------
ASSETS
Investments $66,384,448 $66,280,897
Receivables:
Contributions receivable 372,039 385,693
Interest receivable 12,934 13,688
Net assets available for ----------- -----------
benefits $66,769,421 $66,680,278
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[FN]
SEE ACCOMPANYING NOTES.
</FN>
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Crown Central Employees Savings Plan
Statements of Changes in Net Assets Available for Benefits
YEAR ENDED
DECEMBER 31
1999 1998
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ADDITIONS
Net investment income:
Interest $ 766,397 $ 804,064
Dividends 4,077,665 3,348,840
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Total net investment income 4,844,062 4,152,904
Contributions 4,095,040 4,224,649
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Total additions 8,939,102 8,377,553
DEDUCTIONS
Benefit payments 8,216,476 5,284,974
Net realized and unrealized depreciation in
aggregate fair value of investments 633,483 4,145,307
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Net increase (decrease) 89,143 (1,052,728)
Net assets available for benefits at
beginning of year 66,680,278 67,733,006
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Net assets available for benefits at
end of year $ 66,769,421 $ 66,680,278
============= =============
[FN]
SEE ACCOMPANYING NOTES.
</FN>
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Crown Central Employees Savings Plan
Notes to Financial Statements
1. SUMMARY OF ACCOUNTING POLICIES
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 reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
during the period. Actual results could differ from those estimates.
INVESTMENTS
Investments in Crown Central Petroleum Corporation Class A and Class B
Common Stock are reported at fair value, based on published market prices.
U.S. Savings Bonds and T. Rowe Price Funds are reported at current
redemption value. Participant loans represent the unpaid principal balances
of the loans, which approximate fair value.
The change in the difference between the fair value and the cost of
investments held during the year and the difference between the proceeds
received and the cost of investments sold is reflected as net realized and
unrealized appreciation (depreciation) in aggregate fair value of
investments in the statements of changes in net assets available for
benefits.
BENEFIT PAYMENTS
Benefits are recorded when paid.
RECLASSIFICATION
Certain amounts in the 1998 financial statements have been reclassified to
conform to the 1999 presentation.
2. PLAN DESCRIPTION
GENERAL
The Crown Central Employees Savings Plan (the "Plan") was adopted on January
1, 1955 by Crown Central Petroleum Corporation (the "Corporation"). The
participating companies ("participating companies") in the Plan are Crown
Central Petroleum Corporation, La Gloria Oil & Gas Company, McMurrey
Pipeline Company, Crown Central Pipe Line Company, and Crown-Rancho Pipe
Line Corporation.
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Crown Central Employees Savings Plan
Notes to Financial Statements (continued)
2. PLAN DESCRIPTION (CONTINUED)
The purpose of the Plan is to encourage employees to save regularly and to
provide additional funds upon retirement. An employee is eligible to
participate in the Plan upon attaining 21 years of age and having completed
one year of service with at least 1,000 hours worked.
CONTRIBUTIONS
Employees contribute to the Plan through payroll deduction, up to a maximum
of 12% of their base pay. The Corporation's contribution for all
participating companies is equal to 50% of the employees' contributions up
to a maximum of 8% of their base pay. Contributions to the Plan are
invested in the available investment options in accordance with the
participants' election. A terminating member of the Plan is paid the current
value of their contributions to the Plan reduced by any outstanding loan
balances, but unless the member is fully vested, as defined, they must
forfeit the current value of the employer's contribution to their account.
In accordance with the terms of the Plan, such forfeitures are applied to
reduce future contributions required of the employer.
INVESTMENT OPTIONS
At December 31, 1999, the available investment options offered were Crown
Class B Common Stock, T. Rowe Price U.S. Treasury Money Fund, T. Rowe Price
Equity Income Fund, T. Rowe Price Spectrum Growth Fund, T. Rowe Price
Spectrum Income Fund, T. Rowe Price International Stock Fund, T. Rowe Price
Stable Value Fund, T. Rowe Price New Horizons Fund, and T. Rowe Price Mid
Cap Growth Fund.
Investments previously made in Crown Class A Common Stock, U.S. Savings
Bonds, and the T. Rowe Price U.S. Treasury Intermediate Fund will remain in
these funds until liquidated at the participant's discretion. No further
contributions are permitted in these investment options.
PARTICIPANT LOANS
Participants have the option to borrow from the vested portion of their
account. The maximum loan permitted is the lesser of (1) $50,000 or (2) 50%
of the nonforfeitable value of the account determined on the most recent
valuation available to the Administrator prior to the date of the loan, as
adjusted for distributions or contributions.
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Crown Central Employees Savings Plan
Notes to Financial Statements (continued)
2. PLAN DESCRIPTION (CONTINUED)
PARTICIPANT LOANS (CONTINUED)
The minimum loan permitted is $1,000. The term of each loan shall be for a
minimum of one year and a maximum of five years and shall bear interest
equal to the prime rate on the last day of the prior month in which the loan
request is signed.
PLAN TERMINATION
The participating companies have the right to terminate the Plan at any
time. In the event of termination of the Plan, the individual participants,
beneficiaries or legal representatives of deceased participants are to be
paid, at their option, the balance in their accounts including non-vested
employer contributions, reduced by any outstanding loan balances, in cash or
in kind.
ADMINISTRATIVE EXPENSES
All costs and expenses incurred in connection with the administration of the
Plan are paid by the participating companies.
Information about the Plan Agreement is contained in the pamphlets SUMMARY
PLAN DESCRIPTION AND PROSPECTUS and DESCRIPTION OF AVAILABLE INVESTMENTS.
Copies of these pamphlets are available from the Corporation's Human
Resources Department.
3. INVESTMENTS
The following table presents investments that represent five percent or
more of the Plan's net assets.
DECEMBER 31
1999 1998
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T. Rowe Price Funds:
Equity Income Fund $21,487,290 $23,388,837
U.S Treasury Money Fund 13,087,897 13,393,463
Spectrum Growth Fund 9,932,371 8,870,964
Spectrum Income Fund 4,932,110 5,517,892
International Stock Fund 3,877,308 3,183,066
Mid Cap Growth Fund 3,578,744 2,371,547
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Crown Central Employees Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
During 1999 and 1998, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated in
value by $633,483 and $4,145,307, respectively, as follows:
December 31
1999 1998
------------ ------------
Mutual Funds $ 575,448 $ 1,030,025
Common Stock (1,208,931) (5,175,332)
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$ (633,483) $ (4,145,307)
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At December 31, 1999, the Plan held 176,709 shares of Crown Central
Petroleum Corporation Class A stock with a fair value of $993,990 and
482,690 shares of Crown Central Petroleum Corporation Class B stock with a
fair value of $2,534,127.
4. EMPLOYEE AND CORPORATION CONTRIBUTIONS
Employee and Corporation contributions made to the Plan for the years ended
December 31 were as follows:
1999 1998
------------ ------------
Employee $ 2,894,931 $ 2,994,575
Corporation 1,200,109 1,230,074
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$ 4,095,040 $ 4,224,649
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Crown Central Employees Savings Plan
Notes to Financial Statements (continued)
5. FEDERAL INCOME TAXES
The Plan has received a determination letter from the Internal Revenue
Service dated May 5, 1997, stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code (the "Code") and, therefore, the related
trust is exempt from taxation. Once qualified, the Plan is required to
operate in conformity with the Code to maintain its qualification. The
Retirement Plan Committee believes the Plan is being operated in compliance
with the applicable requirements of the Code and, therefore, believes that
the Plan is qualified and the related trust is tax exempt.
6. RECONCILIATION TO FORM 5500
Total investment income, as reported on lines 32 b (1) through (10) of Form
5500, is reported as net investment income and net realized and unrealized
depreciation in aggregate fair value of investments on the financial
statements.
7. SUBSEQUENT EVENT - DATED AS OF MAY 11, 2000
The Corporation has received an offer from Rosemore, Inc. (Rosemore) to
acquire all of the outstanding Class A and Class B common stock of the
Corporation held by shareholders other than Rosemore for $9.50 per share.
Rosemore owns approximately 49% of the Corporation's outstanding Class A
common stock and 11% of the outstanding Class B common stock. At its
April 7, 2000 meeting, the Board of Directors of the Corporation (excluding
Mr. Henry A. Rosenberg, Jr., who recused himself) unanimously approved
Rosemore's cash offer of $9.50 per share and the Corporation entered into a
binding merger agreement with Rosemore. A shareholder meeting to vote on
this proposed merger is in the process of being scheduled.
The Corporation received an amended proposal dated May 1, 2000 from Apex,
Inc. to acquire all of the issued and outstanding Class A and Class B
common stock held by the Corporation's stockholders other than Apex by
merger for a price of $10.00 per share. The amended Apex proposal is
subject to Apex's receipt of an irrevocable commitment from a lender
reasonably satisfactory to Apex to provide financing to the Corporation (on
terms reasonably satisfactory to Apex). The proposal is also conditioned on
receiving all necessary governmental approvals and approval from the
Corporation's board of directors and stockholders.
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Crown Central Employees Savings Plan
Notes to Financial Statements (continued)
7. SUBSEQUENT EVENT - DATED AS OF MAY 11, 2000 (CONTINUED)
Apex has also set forth an alternative proposal dated March 29, 2000 to
purchase between 3.5 and 4.5 million shares of the Corporation's Class A
common stock from the Corporation in a private placement at a price of
$10.00 per share. Apex is also continuing to advance a stock-for-stock
proposal that it made in November 1999, which it asserts would value the
existing Corporation shares at $10.00 per share. Both of these alternative
proposals are stated to include a shortfall distribution if the stock of
the merged company or Corporation fails to reach certain trading ranges,
and both are conditioned on the finalization of replacement financing for
the Corporation's 10 7/8% senior notes. Apex has stated that it is willing
to post a letter of credit in the amount of $30 million to secure the
shortfall distribution. A two-thirds vote for the merger by the
stockholders of the Corporation is required to approve a merger.
The Corporation's Independent Committee of the Board of Directors is
currently evaluating the Apex proposals.
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SUPPLEMENTAL SCHEDULE
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Crown Central Employees Savings Plan
EIN: 52-0550682
Plan # 002
Schedule H, Line 4(i) --Schedule of Assets Held for Investment Purposes
At End of Year
December 31, 1999
Description of Investment
Including Maturity Date
Identify of Issuem Borrower, Rate of Interest, Par or Current
Lessor or Similar Party Maturity Value Value
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Crown Central Petroleum Corp.
Class A Common Stock* 176,709 shares $ 993,990
Crown Central Petroleum Corp.
Class B Common Stock* 482,690 shares 2,534,127
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3,528,117
United States Savings Bonds--
Series E and EE VARIOUS MATURITIES 847,813
T. Rowe Price Funds*:
Equity Income Fund 866,074 shares 21,487,290
U.S. Treasury Money Fund 13,087,897 shares 13,087,897
Spectrum Growth Fund 560,834 shares 9,932,371
Spectrum Income Fund 460,515 shares 4,932,110
International Stock Fund 203,747 shares 3,877,308
Mid Cap Growth Fund 89,179 shares 3,578,744
U.S. Treasury Intermediate Fund 239,608 shares 1,188,455
New Horizons Fund 41,949 shares 1,154,846
Stable Value Fund 944,832 shares 944,832
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60,183,853
Participant Loans* Interest rates from
6.0% to 9.0%;
maturities to
12/11/04 1,824,665
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Total investments $66,384,448
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* PARTY IN INTEREST AS DEFINED BY ERISA.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan's Administrator has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
CROWN CENTRAL EMPLOYEES SAVINGS PLAN
/s/---Jan L. Ries
Jan L. Ries
Crown Central Petroleum Corporation's
Controller, Chief Accounting Officer
and Duly Authorized Officer
Date: June 28, 2000
