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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 1, 2000
CROWN CENTRAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
MARYLAND 1-1059 52-0550682
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
ONE NORTH CHARLES STREET
BALTIMORE, MARYLAND 21201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(410)539-7400
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ITEM 5. OTHER EVENTS
ADOPTION OF SHAREHOLDER RIGHTS PLAN
The following is a summary of the principal terms of the Rights Agreement
(the "Rights Agreement") dated as of February 1, 2000 between Crown Central
Petroleum Corporation (the "Company") and First Union National Bank, as Rights
Agent (the "Rights Agent"), which is qualified in its entirety by reference to
the text of the Rights Agreement. A copy of the Rights Agreement is available
free of charge from the Secretary of the Company at One North Charles Street,
Baltimore, Maryland 21201.
(a) DECLARATION OF DIVIDEND
On February 1, 2000, the Board of Directors of the Company declared a dividend
of one Series A preferred share purchase right (a "Series A Right") for each
outstanding share of Class A common stock, par value $5.00 per share, of the
Company (the "Class A Common Stock") and one Series B preferred share purchase
right (a "Series B Right" and together with the Series A Rights, collectively,
the "Rights") for each outstanding share of Class B common stock, par value
$5.00 per share, of the Company (the "Class B Common Stock" and together with
the Class A Common Stock, collectively, the "Common Stock"). The dividend is
payable on February 15, 2000 (the "Record Date") to the stockholders of record
on that date.
Under certain circumstances (set forth in Section (b) below), (i) each Series A
Right entitles the registered holder to purchase from the Company one one-
thousandth (1/1000) of a share of Series A Junior Participating Preferred Stock
of the Company, no par value (the "Series A Preferred Stock"), at a price of
$16.00 (subject to adjustment as provided in the Rights Agreement) per one one-
thousandth (1/1000) of a share of Series A Preferred Stock (the "Series A
Purchase Price") and (ii) each Series B Right entitles the registered holder to
purchase from the Company one one-thousandth (1/1000)of a share of Series B
Junior Participating Preferred Stock of the Company, no par value (the "Series
B Preferred Stock" and together with the Series A Preferred Stock,
collectively, the "Preferred Stock") at a price of $16.00 (subject to
adjustment as provided in the Rights Agreement) per one one-thousandth (1/1000)
of a share of Series B Preferred Stock (the "Series B Purchase Price" and
together with the Series A Purchase Price, collectively, the "Purchase Price").
(b) EXERCISE OF RIGHTS
The Rights may not be exercised until the earlier to occur of:
(i) 10 days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") have acquired (other
than through an Approved Transaction as discussed below), with respect to
either class of Common Stock, beneficial ownership of (1) a number of shares
that exceeds 15% of the total number of then outstanding shares of such class
of Common Stock (for any person who on the date of the Rights Agreement
beneficially owned a number of shares that is less than 14% of the total number
of then outstanding shares of a class of Common Stock), or (2) the number of
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shares as disclosed on such Person's Schedule 13D or 13G, as the case may be,
most recently filed with the Securities and Exchange Commission prior to the
date of the Rights Agreement, plus an additional number of shares of such class
of Common Stock that exceeds 1% of the total number of shares of such class of
Common Stock outstanding as of the date of the Rights Agreement (for any person
who on the date of the Rights Agreement beneficially owned a number of shares
that is equal to or exceeds 14% of the total number of outstanding shares of
either class of Common Stock) (either (1) or (2) above is hereinafter referred
to as a "Substantial Block" of Common Stock); or
(ii) 10 business days (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following the commencement of,
or announcement of an intention to make, a tender offer (other than a tender
offer which is an Approved Transaction) or exchange offer the consummation of
which may result in the beneficial ownership by a person or group of a
Substantial Block (the earlier of such dates described in clause (i) and (ii)
being referred to as the "Distribution Date").
Under the Rights Agreement, an Approved Transaction means either (i) a
tender offer to all of the holders of each class of Common Stock (A) which
provides for the acquisition by the tender offeror of all of the issued and
outstanding shares of both Class A Common and Class B Common (other than shares
of Common Stock held by an Acquiring Person or its Associates or Affiliates)
solely for cash; (B) following which tender offer the tender offer-or exercises
reasonable best efforts to consummate a statutory merger within 90 days of the
date of the tender offer pursuant to which the shares of Common Stock not
tendered pursuant to the tender offer are exchanged for cash on terms no less
favorable to the holders of such Common Stock as was offered in the tender
offer; and (C) which a majority of the Board of Directors of the Company, prior
to the date on which such tender offer was commenced, shall have approved and,
after receiving advice from one or more investment banking firms, determined to
be fair to the holders of Common Stock from a financial point of view, taking
into account all factors which such Directors deem relevant including, without
limitation, values indicated in light of long-term prospects or business plans
or aggregate prices or values which could reasonably be achieved if part or all
of the Company or its assets were sold or restructured on an orderly basis
designed to realize maximum long-term value; or (ii) a statutory merger (A) in
which all shares of Common Stock are exchanged for cash, and (B) which a
majority of the Board of Directors of the Company, prior to the date on which
the merger was agreed upon, shall have approved and, after receiving advice
from one or more investment banking firms, determined to be fair to the holders
of the Common Stock from a financial point of view, taking into account all
factors which such Directors deem relevant including, without limitation,
values indicated in light of long-term prospects or business plans or aggregate
prices or values which could reasonably be achieved if part or all of the
Company or its assets were sold or restructured on an orderly basis designed to
realize maximum long-term value. No one can become an Acquiring Person solely
as the result of acquiring securities pursuant to and in accordance with an
Approved Transaction.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
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The Rights will expire on February 14, 2001 (the "Final Expiration Date"),
unless the Company exchanges the Rights as described in Section (g) below.
(c) CERTIFICATION OF RIGHTS
Until the Distribution Date, the Rights will be evidenced, with respect to
any of the Common Stock outstanding as of the Record Date, by certificates
evidencing shares of such Common Stock having a copy of a summary of rights in
the form attached to the Rights Agreement as Exhibit B (the "Summary of
Rights") thereto. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Company's Common Stock as of the close of
business on the Distribution Date and such separate Right Certificates alone
will evidence the Rights associated with such Common Stock.
(d) TRANSFER OF RIGHTS
Until the Distribution Date (or earlier redemption or expiration of the
Rights):
(i) the Rights will be transferred with and only with the Common Stock;
(ii) upon transfer or new issuance of Common Stock, new certificates for
shares of Common Stock issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference; and
(iii) the transfer of any Common Stock outstanding as of the Record Date,
including surrender for transfer of any certificates therefor even without such
notation or a copy of the Summary of Rights being attached thereto, will also
constitute the transfer of the Rights associated with such Common Stock.
(e) ANTI-DILUTION AND OTHER INVESTOR PROTECTIONS
The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase shares of Preferred
Stock at a price, or securities convertible into Preferred Stock with a
conversion price, less than the then-current market price of the Preferred
Stock, or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in shares of
Preferred Stock) or of subscription rights or warrants (other than those
referred to above). With certain exceptions, no adjustments in the Purchase
Price will be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price.
The number of outstanding Rights and the number of one one-thousandths
(1/1000) of a share of Preferred Stock issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Stock or
a stock dividend on the Common Stock payable in shares of Common Stock or
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subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.
In the event that the Company is acquired in a merger or other business
combination transaction other than an Approved Transaction or 50% or more of
its consolidated assets or earning power are sold after a person or group has
become an Acquiring Person, proper provisions will be made so that each holder
of a Right will thereafter have the right to receive, upon the exercise thereof
at the then current exercise price of the Right, that number of shares of
Common Stock of the acquiring company which at the time of such transaction
will have a market value of two times the exercise price of the Right. In the
event that any person or group of affiliated or associated persons becomes an
Acquiring Person, proper provision shall be made so that each holder of a
Right, other than Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon exercise
that number of shares of Common Stock having a market value of two times the
exercise price of the Right.
The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one one-
thousandth (1/1000)of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-thousandth
(1/1000) of a share of Preferred Stock). Fractions of shares of Preferred
Stock in integral multiples of one one-thousandth (1/1000) of a share of
Preferred Stock may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the shares of
Preferred Stock represented by such depositary receipts.
In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-thousandth (1/1000) of a share of Preferred Stock, the
Company may, at its option, either (i) pay to any registered holder of a Rights
Certificate at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one share of
Preferred Stock, or (ii) round up any fractional share of Preferred Stock to
the next highest integral multiple of one one-thousandth (1/1000) of a share of
Preferred Stock and issue such next highest integral multiple of one one-
thousandth (1/1000) of a share of Preferred Stock.
(f) RIGHTS AND PREFERENCES OF THE UNDERLYING PREFERRED STOCK
Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable. Each share of Preferred Stock will have a minimum preferential
quarterly dividend in an amount per share equal to the greater of (i) $1.00, or
(ii) subject to certain adjustments, 1000 times the aggregate per share amount
of all cash dividends, and 1000 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions other than a dividend
payable in corresponding Common Stock or a subdivision of the outstanding
Common Stock (by reclassification or otherwise), declared on the corresponding
Common Stock, since the date of the immediately preceding quarterly dividend
payment or, with respect to the date of the first quarterly dividend payment,
since the first issuance of any share or fraction of a share of Preferred
Stock. In the event of liquidation, the holders of shares of Preferred Stock
will receive a preferential liquidation payment equal to the greater of $1.00
per share, plus accrued and unpaid dividends and distributions thereon, or 1000
times the payment made per share of corresponding Common Stock.
Each share of Series A Preferred Stock will have 1000 votes and each share
of Series B Preferred Stock will have 100 votes, voting together with the
Common Stock on all matters on which the shares of Class A Common and the
shares of Class B Common vote together and, to the extent entitled to vote for
the election or removal of Directors, separately by class for the election or
removal of Directors. If, on any record date for determining stockholders
entitled to vote for the election or removal of Directors, a certain threshold
number of shares of Series A Preferred Stock is then issued and outstanding (as
such threshold is determined pursuant to the Articles Supplementary attached as
Exhibit 3(i) hereto), the holders of Series A Preferred Stock will then have
the ability to elect and remove one more Director than the number of Directors
the Class A Common Stock is then entitled to elect and remove. If, on any
record date for determining stockholders entitled to vote for the election or
removal of Directors, a certain threshold number of shares of Series B
Preferred Stock is then issued and outstanding (as such threshold is determined
pursuant to the Articles Supplementary attached as Exhibit 3(i) hereto), the
holders of Series B Preferred Stock will then be entitled to elect two
Directors.
In the event of any merger, consolidation or other transaction in which
shares of Common Stock are exchanged, each share of Preferred Stock will be
entitled to receive 1000 times the amount received per share of corresponding
Common Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting rights of
the Preferred Stock, the value of one one-thousandth (1/1000) interest in a
share of Series A Preferred Stock purchasable upon exercise of each Series A
Right should approximate the value of one share of Class A Common Stock and the
value of one one-thousandth (1/1000) interest in a share of Series B Preferred
Stock purchasable upon exercise of each Series B Right should approximate the
value of one share of Class B Common Stock.
(g) BOARD'S ABILITY TO EXCHANGE THE RIGHTS
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio of one share of
Common Stock, or one one-thousandth (1/1000) of a share of Preferred Stock (or
of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right, subject to
adjustment.
(h) BOARD'S ABILITY TO REDEEM THE RIGHTS
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At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of a Substantial Block of either
class of Common Stock, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right or, at the
option of the Board of Directors, for one one-thousandth (1/1000) of a share of
Class A Common Stock per Series A Right and one one-thousandth (1/1000) of a
share of Class B Common Stock per Series B Right (either, the "Redemption
Price"). The redemption of the Rights may be made effective at such time on
such basis with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders
of the Rights will be to receive the Redemption Price.
(i) AMENDMENT
The terms of the Rights may be amended in certain respects by the Board of
Directors of the Company without the consent of the holders of the Rights,
except that from and after such time as any person or group of affiliated or
associated persons becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
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ITEM 7(c) EXHIBITS
EXHIBIT NO. DESCRIPTION
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3(i) Articles Supplementary setting forth the
designation, preferences and rights of the Series
A Junior Participating Preferred Stock and the
Series B Junior Participating Preferred Stock of
Crown Central Petroleum Corporation dated
February 1, 2000, attached as Exhibit 1 to the
Form 8-A filed by the Company on February 3, 2000
registering the Series A Rights and the Series B
Rights under the Exchange Act and incorporated
herein by reference.
4 Rights Agreement dated as of February 1, 2000
between the Company and First Union National
Bank, as Rights Agent, attached as Exhibit 1 to
the Form 8-A filed by the Company on February 3,
2000 registering the Series A Rights and the
Series B Rights under the Exchange Act and
incorporated herein by reference.
99 Press Release
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CROWN CENTRAL PETROLEUM CORPORATION
(Registrant)
By: /s/ John E. Wheeler, Jr.
------------------------
Name: John E. Wheeler, Jr.
Title: Executive Vice President --
Chief Financial Officer
Dated: February 1, 2000
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
3(i) Articles Supplementary setting forth the
designation, preferences and rights of the Series
A Junior Participating Preferred Stock and the
Series B Junior Participating Preferred Stock of
Crown Central Petroleum Corporation dated
February 1, 2000, attached as Exhibit 1 to the
Form 8-A filed by the Company on February 3, 2000
registering the Series A Rights and the Series B
Rights under the Exchange Act and incorporated
herein by reference.
4 Rights Agreement dated as of February 1, 2000
between the Company and First Union National
Bank, as Rights Agent, attached as Exhibit 1 to
the Form 8-A filed by the Company on February 3,
2000 registering the Series A Rights and the
Series B Rights under the Exchange Act and
incorporated herein by reference.
99 Press Release
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EXHIBIT 99
JOHN E. WHEELER, JR.
Executive Vice
President and
Chief Financial
Officer
(410) 659-4803
FOR IMMEDIATE RELEASE
Baltimore, Maryland - February 3, 2000
Crown Adopts Plan to Protect Shareholders' Rights
On February 25, 1999, Crown Central Petroleum Corporation (CNPA and CNPB
on the American Stock Exchange) announced that it had engaged Credit Suisse
First Boston as financial advisor to provide the Company with financial advice
and assistance in evaluating strategic alternatives to enhance shareholder
value. In connection with that process, Crown has today adopted a one-year
Shareholder Rights Plan in which rights to purchase its preferred stock will be
distributed to holders of its common stock on February 15, 2000 to ensure that
any strategic transaction undertaken by Crown will be one in which all
stockholders can receive fair and equal treatment, and to guard against partial
tender offers, open market accumulations and other abusive tactics that might
result in unequal treatment of stockholders.
Under the Plan, Crown's board of directors has created two new classes of
preferred stock, known as Series A and Series B Junior Participating Preferred
stock. Crown has declared a dividend distribution of one preferred stock
purchase right on each outstanding share of its common stock. Each right
entitles stockholders to buy one one-thousandth of a share of preferred stock
at an exercise price of $16.00, with Crown's Class A common stock receiving
purchase rights for the Series A preferred stock and Crown's Class B common
stock receiving purchase rights for the Series B preferred stock.
Generally, the rights become exercisable only if a person or group
acquires a substantial block (i.e., 15% or more) of either class of common
stock or announces a tender offer which may result in any person becoming the
owner of a substantial block of either class. For persons currently owning in
excess of 14% of any class, however, the rights plan "grandfathers" their
current level of ownership (as indicated on such person's federal securities
law filings) plus an additional 1% of that class.
Under the plan, Crown's board of directors can pre-approve a tender offer
or other transaction which would otherwise trigger the plan. If a person
acquires a substantial block of either class of Crown's common stock other than
pursuant to an offer or transaction which has been pre-approved by Crown's
board of directors, each right then will entitle its holder to purchase a
number of Crown's common shares having a market value at that time of twice the
right's exercise price, except for the rights held by the person who acquired
the substantial block of stock, which will become void and will not be
exercisable to purchase shares at the bargain purchase price.
If, after a person has acquired a substantial block of Crown common stock
other than pursuant to an offer or transaction which has been pre-approved by
Crown's board of directors, Crown is acquired in a merger or other business
combination transaction, each right (other than the rights held by the owner of
the substantial block) will entitle its holder to purchase a number of the
acquiring company's common shares having a market value at the time of twice
the right's exercise price.
The rights plan permits Crown to redeem each purchase right at the option
of the board of directors for $.001 per right or for one one-thousandth of a
share of common stock, at any time before a person acquires a substantial block
of either class of common stock. Until the rights become exercisable, no
separate rights certificate will be issued to shareholders. Instead, the
rights will be evidenced by the certificates for Crown's common stock. At the
time the rights become exercisable, rights certificates will be distributed to
holders of Crown's common stock. The plan will expire at the close of business
on February 14, 2001.
Headquartered in Baltimore, Maryland since 1930, Crown operates two Texas
refineries with a total capacity of 152,000 barrels per day, 331 Crown gasoline
stations and convenience stores in the Mid-Atlantic and Southeastern U.S., and
13 product terminals along the Colonial, Plantation and Texas Eastern Products
pipelines.
