<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (As permitted by Rule
14A-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
CROWN AMERICAN REALTY TRUST
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------
(5) Total fee paid:
------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------
(3) Filing Party:
--------------------------------------------------
(4) Date Filed:
----------------------------------------------------
[ X ] No fee required
<PAGE> 2
CROWN AMERICAN REALTY TRUST
PASQUERILLA PLAZA
JOHNSTOWN, PENNSYLVANIA 15901
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS--APRIL 29, 1998
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Crown American Realty Trust (the
"Company") will be held at the Holiday Inn, 250 Market Street, Johnstown,
Pennsylvania on Wednesday, April 29, 1998 at 10:00 a.m. (local time), for the
purpose of considering and acting upon the following:
(1) The election of two persons to serve as Trustees for a three-year
term expiring at the Annual Meeting of Shareholders in 2001; and
(2) Such other business as may properly come before the Annual Meeting
or any adjournment thereof.
The Board of Trustees has fixed the close of business on March 9, 1998 as
the record date for the determination of the holders of the Company's Common
Shares of Beneficial Interest entitled to receive notice of and to vote at the
meeting, or any adjournments thereof, and only shareholders of record on such
date are entitled to receive notice of and to vote at said meeting.
You will find enclosed a proxy card which must be completed and returned in
order to vote all Common Shares of Beneficial Interest which you hold. The
Company's 1997 Annual Report to Shareholders is also enclosed.
By Order of the Board of Trustees,
Ronald P. Rusinak
Vice President, General
Counsel and Secretary
Johnstown, Pennsylvania
March 30, 1998
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR SHARES
MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A
QUORUM MAY BE ASSURED AT THE ANNUAL MEETING. YOU ARE CORDIALLY INVITED TO ATTEND
THE MEETING IN PERSON. THE GIVING OF YOUR PROXY DOES NOT AFFECT YOUR RIGHT TO
VOTE IN PERSON IN THE EVENT YOU ATTEND THE MEETING.
<PAGE> 3
CROWN AMERICAN REALTY TRUST
PASQUERILLA PLAZA
JOHNSTOWN, PENNSYLVANIA 15901
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 29, 1998
GENERAL
This Proxy Statement is furnished to shareholders in connection with the
solicitation by the Board of Trustees of Crown American Realty Trust (the
"Company") of proxies in the accompanying form for use at the Annual Meeting of
Shareholders of the Company (the "Annual Meeting") to be held at 10:00 a.m.
(local time) on April 29, 1998 at the Holiday Inn, 250 Market Street, Johnstown,
Pennsylvania or at any adjournment thereof. If a proxy in the accompanying form
is duly executed and returned to the Company, the shares represented will be
voted at the Annual Meeting and, where a choice is specified, will be voted in
accordance with the specification made. Any shareholder who gives a proxy has
the power to revoke it at any time before it is exercised by notice to the
Secretary. A later-dated proxy will revoke an earlier proxy, and shareholders
who attend the Annual Meeting may, if they wish, vote in person even though they
have submitted a proxy, in which event the proxy will be deemed to have been
revoked.
As of the close of business on March 9, 1998, the Company had outstanding
26,475,314 Common Shares of Beneficial Interest ("Common Shares"). This proxy
statement and the proxy in the accompanying form are being mailed on or about
March 30, 1998 to holders of record of the Common Shares as of the close of
business on March 9, 1998. The Company has preferred shares of beneficial
interest outstanding which do not currently have voting rights.
The Annual Report to Shareholders for the fiscal year ended December 31,
1997, which includes consolidated financial statements, is enclosed with this
Proxy Statement.
VOTING
Shareholders of record as of the close of business on March 9, 1998 (the
"Record Date") have the right to receive notice of and to vote at the Annual
Meeting. The presence in person or by proxy of shareholders entitled to cast a
majority of all the votes entitled to be cast at such meeting shall constitute a
quorum. Each share may be voted for as many individuals as there are Trustees to
be elected and for whose election the share is entitled to be voted. A plurality
of all the votes cast shall be sufficient to elect a Trustee. A majority of the
votes cast shall be sufficient to approve any other matter which may come before
the meeting unless more than a majority of the votes cast is required by statute
or by the Company's Second Amended and Restated Declaration of Trust.
BENEFICIAL OWNERSHIP OF CAPITAL STOCK
Under the proxy rules of the Securities and Exchange Commission (the
"SEC"), a person who directly or indirectly has or shares voting power and/or
investment power with respect to a security is considered a beneficial owner of
the security. Voting power includes the power to vote or direct the voting of
shares, and investment power includes the power to dispose of or direct the
disposition of shares. Shares as to which voting power and/or investment power
may be acquired within 60 days are also considered as beneficially owned under
the proxy rules.
MANAGEMENT
The Company conducts all of its business activities through Crown American
Properties, L.P., a Delaware limited partnership (the "Operating Partnership"),
Crown American Financing Partnership, a
1
<PAGE> 4
Delaware general partnership (the "Financing Partnership"), Crown American WL
Associates, L.P., a Pennsylvania limited partnership and Crown American
Acquisition Associates I, L.P., a Pennsylvania limited partnership. The Company
does not have any employees other than its officers. For purposes of this Proxy
Statement, employees and officers of the Operating Partnership are treated as
employees of the Company.
The Trustees, chief executive officer, four other most highly compensated
executive officers who were serving as executive officers as of December 31,
1997, and all Trustees and executive officers of the Company as a group
beneficially owned as of the Record Date the number of Common Shares set forth
in the table below. The information on beneficial ownership in the table and
related footnotes is based upon data furnished to the Company by, or on behalf
of, the persons referred to in the table. Unless otherwise indicated in the
footnotes to the table, each Trustee and executive officer has sole voting power
and sole dispositive power with respect to the shares shown.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT
NAME OWNERSHIP OF CLASS
- ---- ----------------- ---------
<S> <C> <C>
Frank J. Pasquerilla 3,245,764(1) 12.3%
Mark E. Pasquerilla 94,589(2) *
Clifford A. Barton 20,204(3) *
Donald F. Mazziotti 7,500(3) *
Margaret T. Monaco 11,000(3) *
Zachary L. Solomon 17,500(3) *
Nicholas O. Antonazzo 35,703(4) *
John M. Kriak 41,641(5) *
Thomas Stephenson 28,752(6) *
All Trustees and executive officers as a group
(9 persons) 3,502,653(7) 13.0%
</TABLE>
- ---------
* Less than 1%
(1) Includes 667,669 Common Shares held of record by Frank J. Pasquerilla,
211,890 Common Shares held of record by Mr. Pasquerilla's wife, 1,790 Common
Shares allocated to the executive in connection with the Crown American
Properties, L.P. Key Executive Capital Incentive Plan (the "Executive
Incentive Plan") and 4,366 Common Shares allocated under the Crown American
Associates Key Executive Plan. Also includes 2,360,049 Common Shares
reported as beneficially owned by Crown Investments Trust ("Crown
Investments"), a Delaware business trust the entire beneficial interest of
which is owned by Crown Delaware Holding Corporation, a Delaware corporation
("Crown Delaware"). All the outstanding capital stock of Crown Delaware is
owned by Crown Holding Company, a Pennsylvania corporation ("Crown
Holding"). All of the voting common stock of Crown Holding is owned by Frank
J. Pasquerilla or members of his immediate family. The percent of class was
determined by dividing the number of Common Shares beneficially owned by the
number of Common Shares outstanding, treating the Common Shares which may be
acquired by Crown Investments as outstanding (see footnote 1 to the table
under the caption "Other Beneficial Owners").
(2) Includes 7,827 Common Shares held of record by Mark E. Pasquerilla
individually and 85,921 Common Shares held of record by Marenrico
Partnership, a general partnership consisting of Mark E. Pasquerilla and
Leah Pasquerilla, his sister, as to which Common Shares he shares voting and
dispositive power. Also includes 841 Common Shares allocated to the
executive in connection with the Executive Incentive Plan. Does not include
2,360,049 Common Shares reported as beneficially owned by Crown Investments.
Such shares are included in the reported holdings of Frank J. Pasquerilla,
who is the father of Mark E. Pasquerilla.
(3) Includes 7,500 shares which may be acquired upon the exercise of outstanding
share options. Options to acquire 500 Common Shares were granted on each of
August 17, 1993, December 31, 1993, December 31, 1994, December 31, 1995 and
December 31, 1996 and options to acquire 5,000 Common Shares were granted on
December 31, 1997, all of which options are currently exercisable. The
percent of class was determined by dividing the number of shares owned by
the number of shares outstanding, in each
2
<PAGE> 5
case treating the shares which may be acquired upon exercise of outstanding
share options as outstanding as required by Rule 13d-3(d)(1) under the
Securities Exchange Act of 1934, as amended.
(4) Includes 2,015 Common Shares held jointly by Mr. Antonazzo and his wife,
with whom he shares voting and dispositive power. Also includes 9,688 Common
Shares allocated to the executive in connection with the Executive Incentive
Plan. Includes 24,000 shares which may be acquired upon the exercise of
outstanding share options.
(5) Includes 1,441 Common Shares allocated to the executive in connection with
the Executive Incentive Plan. Includes 24,000 shares which may be acquired
upon the exercise of outstanding share options.
(6) Includes 3,648 Common Shares held by Mr. Stephenson and his wife as trustees
for a family trust. Mr. Stephenson and his wife share voting and dispositive
power. Also includes 1,104 Common Shares allocated to the executive in
connection with the Executive Incentive Plan. Includes 24,000 shares which
may be acquired upon the exercise of outstanding share options.
(7) Includes 2,360,049 Common Shares reported as beneficially owned by Crown
Investments which are included in the reported holdings of Frank J.
Pasquerilla. Also includes 102,000 shares which may be acquired upon the
exercise of outstanding share options as described above. The percent of
class was determined by dividing the number of Common Shares beneficially
owned by the number of Common Shares outstanding, treating as outstanding
the Common Shares which may be acquired by Crown Investments (see footnote 1
to the table under the caption "Other Beneficial Owners") or by trustees
upon exercise of outstanding share options.
OTHER BENEFICIAL OWNERS
The following table sets forth information with respect to each shareholder
known to the Company to be the beneficial owner of more than 5% of the
outstanding Common Shares as of the Record Date:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------ ----------------- --------
<S> <C> <C>
Crown Investments Trust 2,360,049(1) 8.9%
Pasquerilla Plaza
Johnstown, PA 15901
The Prudential Insurance Company of America 2,466,680(2) 9.3%
Prudential Plaza
Newark, NJ 07102-3777
</TABLE>
- ---------
(1) Includes 1,450,050 Common Shares (or 5.48% of the outstanding shares)
currently held by Crown Investments and 909,999 Common Shares that Crown
Investments has the right to acquire. Crown Investments presently owns
9,438,959 common partnership units in the Operating Partnership
("Partnership Units"). Pursuant to the Operating Partnership's partnership
agreement, Crown Investments has the right to require the Operating
Partnership to redeem part or all of Crown Investments' common Partnership
Units for a price equal to the equivalent value of the Common Shares (on a
one-for-one basis). The obligation to redeem Crown Investments' common
Partnership Units may be assumed by the Company and such redemption can then
be made for, at the Company's election, either Common Shares (on a
one-for-one basis) or the cash equivalent thereof, provided that the Company
may not pay for such redemption with Common Shares to the extent that it
would result in Crown Investments beneficially or constructively owning more
than 9.8% of the outstanding Common Shares. Conversely, Crown Investments
may require the Company to assume the obligation to pay for such redemption
with Common Shares to the extent that Crown Investments owns less than 9.8%
of the outstanding Common Shares. The redemption right may be exercised by
Crown Investments from time to time (although only once during any calendar
year), in whole or in part, subject to the limitations that (i) the
redemption right may not be exercised prior to the third anniversary of the
consummation of the initial public offering of the Common Shares (except
that Crown Investments may require the Company to redeem a portion of its
partnership interest prior to such third anniversary in exchange for Common
Shares but only to the extent
3
<PAGE> 6
that Crown Investments owns beneficially or constructively less than 9.8% of
the Company's outstanding Common Shares) and (ii) in any calendar year the
redemption right may be exercised only with respect to 20% of (a) the common
Partnership Units held by Crown Investments immediately after the initial
public offering of the Common Shares plus (b) the common Partnership Units,
if any, issued to Crown Investments in connection with the acquisition of
certain properties from Crown Investments. For purposes of the 9.8%
ownership limitation, Crown Investments is deemed to own Common Shares held
by certain affiliates and related parties; as of December 31, 1997, Crown
Investments believes it would be deemed to own 1,033,307 additional Common
Shares for these purposes. Crown Investments has sole voting power and sole
investment power over all Common Shares owned by it. The percent of class
was determined by dividing the number of Common Shares beneficially owned by
the number of Common Shares outstanding, treating the Common Shares which
may be acquired by Crown Investments as outstanding.
(2) According to Schedule 13G dated February 10, 1998, The Prudential Insurance
Company of America ("Prudential") holds such Common Shares for the benefit
of its clients by its separate accounts, externally managed accounts,
registered investment companies, subsidiaries and/or other affiliates. As
such, Prudential may have direct or indirect voting and/or investment
discretion over the shares.
ELECTION OF TRUSTEES
NOMINEES
Two trustees will be elected at the Annual Meeting to serve until the
annual meeting of shareholders in 2001 and until their successors are duly
elected and qualified. The Board of Trustees has approved the nominations of
Donald F. Mazziotti and John M. Kriak and recommends a vote for their election.
Each of the nominees has consented to be named as a nominee and to serve if
elected.
Unless authority to so vote is withheld, it is intended that the proxies
solicited by the Board of Trustees will be voted FOR the election of the two
nominees. In the event that at the date of the Annual Meeting either of the
nominees should for any reason not be available for election, the proxies
solicited by the Board will be voted for the election of the other nominee and
such substitute nominee as shall be designated by the Board.
The Board of Trustees established a Nominating Committee in September 1993
consisting of Frank J. Pasquerilla, Mark E. Pasquerilla and Donald F. Mazziotti.
Such committee, however, did not meet in 1997; instead, the entire Board of
Trustees voted to approve the nominations of Messrs. Mazziotti and Kriak.
The Company's Bylaws provide that nominations for the election of Trustees
at a meeting of shareholders may be made only by the Board or a shareholder of
record entitled to vote in the election of the Trustees to be elected; provided,
however, that a nomination may only be made by a shareholder of record at a
meeting of shareholders if written notice that the nomination is to be made is
received by the Secretary of the Company prior to the meeting. Generally, in the
case of an annual meeting, the written notice must be received not less than 60
days nor more than 90 days prior to the anniversary date of the immediately
preceding annual meeting and must contain certain information with respect to
the nominee as set forth in the Bylaws. Information with respect to the
nominating procedure may be obtained by a shareholder from the Secretary of the
Company. No written notice that a nomination would be made by a shareholder at
the Annual Meeting was received by the Company.
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<PAGE> 7
Information about the nominees, each of whom is presently a member of the
Board of Trustees, and about the other Trustees whose terms of office will
continue after the Annual Meeting is set forth in the table below.
<TABLE>
<CAPTION>
TRUSTEE PRINCIPAL OCCUPATION OR
NAME SINCE EMPLOYMENT, DIRECTORSHIPS, AGE
---- ----- ------------------------------
<S> <C> <C>
Nominees for a term expiring in 2001:
John M. Kriak 1995 Executive Vice President and Chief Financial Officer
of the Company since May 1995 and Executive Vice
President of Crown Holding Company and various of its
subsidiaries and affiliates since May 1993; Chief
Operating Officer of Crown American Associates from
May 1993 to May 1995; Vice President, Secretary,
Treasurer and Chief Financial Officer of The Penn
Traffic Company (supermarkets, general merchandise
and food processing) from prior to 1992 to May 1993;
Advisory Board Member of USBANCORP, Inc.; Age 50
Donald F. Mazziotti 1993 Chief Information Officer, State of Oregon since
January 1998; Chairman of Delta Development Group,
Inc. (government relations, economic planning and
management consulting) from 1995 to 1997; President
of Delta Development Group, Inc. from 1988 to 1994;
Director of Delta Development Group, Inc. since 1988;
Age 52
Continuing Trustees with a term expiring in 2000:
Frank J. Pasquerilla 1993 Chairman and Chief Executive Officer of the Company
and its various subsidiaries and affiliates since
1993; Chairman and Chief Executive Officer of Crown
Holding Company and various of its subsidiaries and
affiliates (Crown Holding Company is a holding
company for various Pasquerilla family interests
including the entity formerly known as Crown American
Corporation) since 1993; Chairman and Chief Executive
Officer of Crown American Corporation and its
subsidiaries since prior to 1993; Age 71
Zachary L. Solomon 1993 President and Chief Executive Officer of Adrienne
Vittadini (clothing design company) since February
1998; President and Chief Executive Officer of
Associated Merchandising Corporation (private label
developer and sourcer) since prior to 1992 until
1997; Vice-Chairman of Brooklyn College Foundation
from 1987 to 1997; Chairman of Brooklyn College
Foundation since July 1997; Trustee of Baruch
Graduate School of Business since April 1997; Age 63
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
TRUSTEE PRINCIPAL OCCUPATION OR
NAME SINCE EMPLOYMENT, DIRECTORSHIPS, AGE
---- ----- ------------------------------
<S> <C> <C>
Continuing Trustees with a term expiring in 1999:
Mark E. Pasquerilla 1993 President of the Company and its various subsidiaries
and affiliates since 1993; President or Vice-Chairman
of Crown Holding Company and its various subsidiaries
and affiliates since 1993. President of Crown
American Corporation and its various subsidiaries
since prior to 1993; Director of USBANCORP, Inc.; Age
38
Clifford A. Barton 1993 Retired since January 1994; Chairman, President and
Chief Executive Officer of USBANCORP, Inc. (bank
holding company) from prior to 1992 to January 1994;
Director of USBANCORP, Inc., U.S. National Bank of
Johnstown, Three Rivers Bank & Trust Co., Community
BANCORP, Inc., Community Savings Bank, USBANCORP
Trust Co., Urban Associates, Inc., Urban Mortgage
Company, USNB Financial Services and Standard
Mortgage Corporation of Georgia; Age 69
Margaret T. Monaco 1993 President of Probus Advisors (management and
financial consulting) since July 1993; Vice President
and Treasurer of The Limited, Inc. (specialty
clothing retailer) from prior to 1992 to June 1993;
Director of Pipeliner Systems, Inc., Cooker
Restaurant Corp. and Barnes & Noble, Inc.; Age 50
</TABLE>
VOTE REQUIRED
Only affirmative votes are counted in the election of Trustees. The two
nominees for election as Trustees at the Annual Meeting who receive the highest
number of votes cast for the election of Trustees by the holders of the
Company's Common Shares present in person or voting by proxy, a quorum being
present, will be elected as Trustees.
COMMITTEES OF BOARD OF TRUSTEES
The principal committees of the Board of Trustees are the Executive
Committee, the Audit Committee and the Compensation Committee.
The members of the Executive Committee are Frank J. Pasquerilla, Mark E.
Pasquerilla and John M. Kriak. The Executive Committee is authorized to exercise
all the powers of the Board of Trustees in the conduct of the business of the
Company during the time when the Board of Trustees is not in session, except
that the Executive Committee cannot declare dividends or other distributions,
elect Trustees, issue shares of the Company, recommend action to the
shareholders, amend the Bylaws or approve any merger or share exchange which
does not require shareholder approval. The Executive Committee did not meet in
1997 because such committee and management of the Company favor participation by
all Trustees whenever possible.
The Audit Committee consists of Mr. Barton, Mr. Solomon and Ms. Monaco. The
responsibilities of the Audit Committee include, but are not limited to, making
recommendations concerning the engagement of independent public accountants,
reviewing with the independent public accountants the plans and results of the
audit engagement, approving professional services provided by the independent
public accountants, reviewing the independence of the independent public
accountants, considering the range of audit and non-audit fees and reviewing the
adequacy of the Company's internal accounting controls. The Audit Committee held
two meetings in 1997.
The Compensation Committee currently consists of Ms. Monaco and Messrs.
Barton and Solomon. The Compensation Committee consists only of independent
Trustees and its responsibilities include determining compensation of the
Company's executive officers and administering the Company's option plans, the
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<PAGE> 9
Executive Incentive Plan, the Retirement Savings Plan and the Savings
Restoration Plan. The Compensation Committee held four meetings in 1997.
The Board of Trustees held five regular meetings and four special meetings
in 1997. All of the Trustees attended at least 75% of the aggregate of all
meetings of the Board of Trustees and the committees on which they served during
1997.
COMPENSATION OF TRUSTEES
Trustees who are employees of the Company do not receive a retainer or fees
for attending meetings of the Board of Trustees or meetings of Committees of the
Board. Trustees who are not employees of the Company receive an annual fee of
$18,000, a meeting fee of $1,000 for each Board or Committee meeting attended
and reimbursement of expenses incurred in attending meetings. Trustees do not
receive compensation for meetings by means of conference telephone or similar
communications equipment.
Prior to the initial public offering of the Common Shares of the Company
(the "Public Offering"), the shareholders of the Company approved the 1993
Trustees' Option Plan (the "Trustees' Option Plan"). The Trustees Option Plan
was amended and restated effective as of December 30, 1997. As amended, options
to purchase a total of 125,000 Common Shares of the Company are available to
non-employee Trustees. Each non-employee Trustee automatically is granted on
December 31 of each year an option to purchase 5,000 Common Shares having an
exercise price equal to 100% of the fair market value of the shares on the date
of grant. Previously, the plan provided for annual grants of 500 Common Shares.
On December 31, 1997, each of the four non-employee Trustees was granted options
to purchase 5,000 Common Shares at an exercise price of $9.313. On December 31,
1996, 1995 and 1994, each of the four non-employee Trustees was granted an
option to purchase 500 Common Shares at an exercise price of $7.50, $7.875, and
$13.50, respectively. The amended Trustees' Option Plan also provides for an
automatic grant of 5,000 options to purchase Common Shares with an exercise
price equal to 100% of the fair market value of the shares on the date of grant
upon the appointment or election of each new non-employee Trustee to the Board.
Previously, the Company awarded options to purchase 500 Common Shares at an
exercise price of $17.25 per share (the Public Offering price of the Common
Shares) to each of the four non-employee Trustees upon their initial election to
the Board in August 1993. As of December 31, 1997, there were 30,000 options to
purchase Common Shares held by the Trustees. To date, all options granted to the
Trustees under the Trustees' Option Plan have been exercisable immediately upon
grant, but as of December 31, 1997 none had been exercised.
The terms of each option are contained in an Option Agreement, signed by
the optionee, that includes such terms and conditions, consistent with the
Trustees' Option Plan, as amended, and Rule 16b-3 ("Rule 16b-3") under Section
16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
the Compensation Committee determines to be necessary or advisable. Currently,
the Option Agreements provide that options are fully exercisable as of the date
of the grant and terminate five years thereafter.
The Board of Trustees may amend, suspend or terminate the Trustees' Option
Plan at any time, in its sole discretion; provided, however, that the Board of
Trustees may not amend the Trustees' Option Plan without approval of the
shareholders of the Company if such approval is required by Rule 16b-3.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's Trustees,
executive officers and persons who own more than ten percent of a registered
class of the Company's equity securities to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Shares and other equity
securities of the Company. Officers, Trustees and greater than ten percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms which they file.
The Company believes that all such filing requirements applicable to its
officers and Trustees were complied with in 1997 except for the following: (i) a
late filing by Terry Stevens, an officer of the Company, in July 1997 reporting
a purchase of 24 shares pursuant to the Company's dividend reinvestment plan
that occurred in June 1997; and (ii) a late filing by Frank Pasquerilla in
November 1997 reporting the purchase of
7
<PAGE> 10
381 shares in September 1997 and a late filing in July 1997 reporting a purchase
of 1,910 shares pursuant to the Company's dividend reinvestment plan that
occurred in June 1997.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning the annual and
long-term compensation for services in all capacities to the Company for 1995,
1996 and 1997 of the Chief Executive Officer of the Company and those persons
who were, as of December 31, 1997, the other four most highly compensated
executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
------------------- ------------- -------------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS(2) OTHER(3)
- --------------------------- ---- ------ -------- ---------- --------
<S> <C> <C> <C> <C> <C>
FRANK J. PASQUERILLA 1997 $463,500 $55,620 0 $ 9,907
Chairman of the Board of Trustees 1996 450,000 0 0 11,536
and Chief Executive Officer 1995 450,000 0 0 12,120
MARK E. PASQUERILLA 1997 250,661 24,815 0 8,412
Trustee and President 1996 243,360 0 0 6,615
1995 243,360 0 0 6,871
JOHN M. KRIAK(4) 1997 197,760 19,578 0 8,251
Trustee, Executive Vice President 1996 192,000 0 120,000 5,206
and Chief Financial Officer 1995 127,167 0 120,000(7) 5,944
NICHOLAS O. ANTONAZZO(5) 1997 234,181 16,053 0 10,473
Executive Vice President 1996 210,409 0 120,000 9,916
of Real Estate 1995 192,409 0 0 10,287
THOMAS STEPHENSON(6) 1997 198,533 17,870 0 10,478
Executive Vice President 1996 192,700 0 120,000 8,489
of Asset Management 1995 192,700 0 0 8,945
</TABLE>
- ---------
(1) Bonus awards established under the Company's Key Executive Capital Incentive
Plan were not paid in 1996 or 1997. In early 1998 a special bonus was
approved by the Compensation Committee, based upon corporate and individual
performance achieved in 1997. All bonuses shown above were deferred and will
be paid to the executives at retirement.
(2) Options represent the right to acquire common Partnership Units, which may
be converted into Common Shares of the Company. Neither Frank J. Pasquerilla
nor Mark E. Pasquerilla currently participates in the Crown American Realty
Option Plan.
(3) The amount shown represents the Company's contribution to its Retirement
Savings Plan on behalf of the named executive.
(4) Mr. Kriak became the Executive Vice President and Chief Financial Officer of
the Company on May 3, 1995. On an annualized basis for 1995, Mr. Kriak's
salary was $192,000.
(5) Mr. Antonazzo has been an Executive Vice President of Crown American
Corporation since prior to 1993.
(6) Mr. Stephenson was hired in April 1994. From prior to 1990 until joining the
Company, Mr. Stephenson was Senior Vice President of Operations for the Hahn
Co., a shopping center developer.
(7) These options were canceled on January 3, 1996. Outstanding options granted
to Mr. Antonazzo and Mr. Stephenson prior to 1995 were also cancelled in
1996.
8
<PAGE> 11
OPTION GRANTS
In 1997, no options were granted to the above named five officers under the
1993 Crown American Realty Option Plan (the "Employee Option Plan").
OPTION EXERCISES IN 1997 AND 1997 YEAR-END VALUES
The following table sets forth as to three of the persons named in the
Summary Compensation Table information with respect to (i) the options exercised
during 1997, (ii) the net value realized upon such exercises, (iii) the number
of common Partnership Units covered by unexercised options held at December 31,
1997 and (iv) the value of such unexercised options at December 31, 1997.
Neither Frank J. Pasquerilla, Chairman and Chief Executive Officer, nor Mark E.
Pasquerilla, President, currently participates in the Employee Option Plan.
Common Partnership Units obtained under the Employee Option Plan may be
converted into Common Shares of the Company.
AGGREGATED OPTION EXERCISES IN 1997 AND DECEMBER 31, 1997 OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS AT
OPTIONS AT DECEMBER 31,
PARTNERSHIP DECEMBER 31, 1997 1997(1)
UNITS ----------------- -------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME AND PRINCIPAL POSITION EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- --------------------------- -------- -------- ------------- -------------
<S> <C> <C> <C> <C>
JOHN M. KRIAK 0 $0 0/120,000 $0/$157,500
Executive Vice President, Chief
Financial Officer and Trustee
NICHOLAS O. ANTONAZZO 0 $0 0/120,000 $0/$157,500
Executive Vice President of Real
Estate
THOMAS STEPHENSON 0 $0 0/120,000 $0/$157,500
Executive Vice President of Asset
Management
</TABLE>
- ---------
(1) The value of unexercised in-the-money options has been determined under the
assumption that the value of an option for a Partnership Unit in Crown
American Properties, L.P. is equivalent to that of an option for a Common
Share of Beneficial Interest in the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement in whole or in part, the following report and the
Stock Performance Graph on Page 12 shall not be incorporated by reference into
any such filings.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF TRUSTEES
The Compensation Committee of the Board of Trustees of the Company is
responsible for setting and administering the Company's executive compensation
programs. The philosophy of the Company is to ensure that executive compensation
is designed to provide competitive levels of compensation that are consistent
with the Company's annual and long term business performance goals. The
Compensation Committee has based its compensation policy for its executive
officers on a variety of factors, including job responsibility, salaries paid to
executive officers of other REITs similar to the Company and job experience and
performance of such officers.
9
<PAGE> 12
The Company's compensation program is designed to enhance the Company's
ability to attract and retain highly qualified individuals while providing
financial motivation necessary to achieve targeted Company performance.
BASE SALARY
The Base Salary program is designed to provide salary opportunities which
are competitive with a community of competitor companies, as well as to reward
individual contributions through performance driven salary growth. In the first
quarter of 1997, the Committee reviewed the base salary amounts for the
Company's top executive group. The salaries were evaluated using the 1997
Shopping Center Compensation Survey and related industry executive compensation
data. According to the survey data, base salaries of the Company's top
executives are competitive compared to the median survey base salary figures for
the Company's industry.
For salary planning purposes, a merit percentage guideline is established
by the Company annually. The merit percentage guideline is applied toward each
exempt employee's base salary in consideration of the individual's performance,
job responsibility, company internal equity and career considerations. A survey
of comparable companies reported a projected merit increase range for 1997 to be
3% to 5%. For 1997, the Compensation Committee approved a merit pool increase
for employees of the Company consisting of 3% of the aggregate base salaries of
all employees and distributed on the basis of individual annual performance
reviews.
EXECUTIVE INCENTIVE PLAN
Nineteen of the Company's executives are eligible for an annual incentive
award under the Executive Incentive Plan which was adopted in 1993. The
Executive Incentive Plan is self-funded through the earnings in excess of the
Company's targeted Funds from Operations ("FFO"). Under the Executive Incentive
Plan, individual awards are 90% driven by participants meeting or exceeding
predetermined corporate and individual performance goals.
In order to increase equity ownership of the executives in the Company and
to promote the long-term success of the Company by creating a long-term
mutuality of interests between the executives and the shareholders of the
Company, the Compensation Committee reviewed a variety of executive equity
ownership alternatives presented by the Committee's compensation consultant.
The Compensation Committee approved an amendment to the Executive Incentive
Plan to provide that an executive may elect to receive his incentive award in
the form of Common Shares which will be held by a trust established under the
Executive Incentive Plan. Each executive who defers receipt of 100% of his
incentive award in this manner will receive additional Common Shares equivalent
to 20% of his incentive award. An independent trustee will manage and invest the
assets of the trust as it deems appropriate. Upon the executive's retirement,
the trust will distribute to the executive the Common Shares allocated to such
executive plus any dividends and earnings accumulated with respect thereto.
No bonuses were awarded under the Executive Incentive Plan for fiscal year
1997 because the criteria used to determine whether bonuses would be granted was
not met.
SPECIAL BONUS AWARDS
The Compensation Committee, recognizing positive activities and trends in
the Company's business and in management's performance in 1997, established a
special bonus pool to reward executives for their efforts and performance.
Nineteen executives received a bonus based on a review of their individual
performance. A performance review was used to determine individual awards. The
aggregate of the bonuses paid was $224,795.
EMPLOYEE OPTION PLAN
The Company adopted the Employee Option Plan on August 17, 1993. The
objective of the Employee Option Plan is to provide capital accumulation
opportunities to a select group of Company executives by
10
<PAGE> 13
allowing them to acquire an equity interest in the Company, thus increasing the
executives' incentives to make continued major contributions to the Company.
Additionally, the Company hopes to maintain continuity of the management team
with the provision of options.
In 1997, the Compensation Committee approved two additional executives for
participation in the Employee Option Plan. The selection of the new participants
and the number of options awarded to them was based upon their perceived value
to the Company and, if applicable, individual job performance. These executives
received grant amounts equal to the grant amounts awarded to the initial
Employee Option Plan participants with similar positions and responsibilities.
As of December 31, 1997, twenty-four Company executives were participating
in the Employee Option Plan. Frank J. Pasquerilla, Chairman and Chief Executive
Officer, and Mark E. Pasquerilla, President, are not currently participating in
the Employee Option Plan.
RETIREMENT SAVINGS PLAN
The Company instituted the Retirement Savings Plan (the "Savings Plan") on
August 17, 1993 pursuant to Section 401(k) of the Internal Revenue Code. The
Savings Plan covers employees of the Company who have completed one year of
service, working 1,000 hours per year, and have attained the age of 21.
Executives of the Company are able to participate on the same terms as
non-executive employees, subject to any legal limitations on amounts which may
be contributed or the benefits which may be payable under the Savings Plan.
The Company is contributing a percentage, which varies from 2% to 5%
depending upon the age of the employee, of each eligible employee's base salary
to the Savings Plan as a supplemental employer contribution subject to
applicable limitations under the Internal Revenue Code. Participants also may
elect to contribute, within certain percentage limitations, on a pre-tax basis.
Employee contributions are matched by the Company up to 50% of the first 3% of
the participant's salary.
Receipt of benefits attributable to the Company's matching contribution and
the supplemental employer contribution is subject to the vesting and forfeiture
provisions of the Savings Plan. Other amounts are fully vested at all times.
For 1997, the Company contributed $9,907 under the Savings Plan on behalf
of Frank J. Pasquerilla. This includes both the supplemental employer
contribution and the Company's matching contribution.
SAVINGS RESTORATION PLAN
The Company implemented the Savings Restoration Plan (the "Restoration
Plan") in 1997. All of the Company's most highly compensated employees are
eligible for participation. The Restoration Plan allows participants to defer
current compensation which cannot be deferred under the Savings Plan due to
limitations imposed thereon, including the maximum amount of contributions which
may be made. At present, ten employees are participating in the Restoration
Plan.
Respectfully submitted,
/s/ Clifford A. Barton
/s/ Margaret T. Monaco
/s/ Zachary T. Solomon
11
<PAGE> 14
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following line graph compares the cumulative total shareholder return
among the Company's Common Shares, the Standard & Poor's 500 Stock Index and a
peer community of real estate investment trust companies selected by the
Company. The Company believes that the business and operations of the peer group
members closely resemble those of the Company. The graph assumes a $100
investment as of August 17, 1993 in the Company's Common Shares, the Index and
the peer group. Returns for the month of August 1993 have been prorated.
<TABLE>
<CAPTION>
CROWN PEER
Measurement Period AMERICAN GROUP S&P 500
(Fiscal Year Covered) REALTY INDEX INDEX
<S> <C> <C> <C>
8/93 100.00 100.00 100.00
12/93 87.90 89.27 105.39
6/94 83.38 100.36 101.82
12/94 87.40 99.48 106.78
6/95 86.24 100.18 128.36
12/95 56.67 107.22 146.91
6/96 58.68 118.12 161.74
12/96 59.65 152.24 180.64
6/97 77.35 150.73 214.76
12/97 81.23 160.55 237.49
</TABLE>
The peer group includes publicly traded real estate investment trusts
engaged in similar lines of business of the Company and consists of the
following: CBL & Associates Properties Inc., Simon DeBartolo Group, General
Growth Properties Inc., Macerich Company, Taubman Centers Inc. and Urban
Shopping Centers Inc.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT AGREEMENTS
The Company has agreed to manage certain properties retained by Crown
American Enterprises, Inc., a Pennsylvania corporation ("Crown Enterprises"),
and other affiliated companies controlled by the Pasquerilla family pursuant to
various management agreements (the "Management Agreements"). For its services,
the Company receives a management fee, payable monthly in arrears, equal to 5%
of revenues (excluding certain items) actually collected and $5.50 per square
foot for new leases signed and $3.50 per square foot for renewal leases. The
Company also receives 15% of temporary tenant revenues. Each Management
Agreement's initial term ended January 31, 1996 and have been continued on a
month-to-month basis. Total management and leasing fees for 1997 were
approximately $0.2 million.
SUPPORT AGREEMENT
In connection with the formation of the Company and consummation of the
Public Offering, Crown Investments entered into a cash flow support agreement,
which was subsequently amended (as amended, the "Support Agreement"), with the
Operating Partnership and the Financing Partnership with respect to four malls,
all of which were opened in 1991 and were in various stages of initial lease-up,
with mall store occupancy rates below 75%. The Support Agreement provides that
Crown Investments will guarantee, on a quarterly basis, up to a maximum of $1
million per quarter, that each of these four malls will generate a
12
<PAGE> 15
stipulated aggregate amount of base rents (the "Quarterly Guaranteed Support")
for each quarter, which Quarterly Guaranteed Support will be derived on the
basis of the difference between the aggregate amount of base rents earned (as
defined) in the quarter at each mall and the stipulated aggregate amount of base
rents. The stipulated aggregate amount of base rents is a fixed amount that was
an estimate of the base rents to be earned at each mall assuming a 75% mall
store occupancy level. Crown Investments was also obligated to fund any tenant
improvement and leasing costs associated with any lease of shortfall space (as
defined in the Support Agreement). The obligations of Crown Investments under
the Support Agreement will terminate as to a particular mall if the aggregate
base rents at such mall meets the Quarterly Guaranteed Support over four
consecutive quarters (as determined by the independent trustees of the Company).
In December 1997, the Support Agreement was amended further such that the amount
of the Quarterly Guaranteed Support will be reduced by an amount equal to two
and one-half percent (2.5%) of the gross sales price upon the future sale of any
outparcel, peripheral land or such other real estate ("Outparcel") situate at
one of the malls ("Quarterly Support Amount Reduction). During 1995, Crown
Holding advanced $6.4 million to the Company, primarily to pre-fund estimated
future payments required under the Support Agreement. Total cash flow support
earned by the Company for 1997 was $3.7 million, of which amount $1.9 million
was covered by the advance payment in 1995. At December 31, 1997, approximately
$1.0 million of cash flow support was accrued, but not yet funded by Crown
Investments.
CROWN INVESTMENTS AND CROWN HOLDING GUARANTIES
Concurrently with the Public Offering in 1993, the Financing Partnership
borrowed an aggregate amount of $300 million ($280.6 million at December 31,
1997). Crown Investments has guaranteed the payment of approximately $250
million of such indebtedness. Crown Holding has also guaranteed $11.3 million of
debt related to one property owned by the Company.
CROWN AMERICAN ASSOCIATES LEASE AT PASQUERILLA PLAZA
Approximately 13,000 square feet of Pasquerilla Plaza, the Company's
headquarters building, is leased to Crown American Associates ("Crown
Associates") under a lease with a term ending July 31, 2003. The rent was
determined based on rental rates being paid by existing third party tenants, the
fact that Crown Associates' lease includes certain furnishings and equipment and
the fact that Crown Associates is permitted to use facilities in the building
that are not available to other third party tenants. The lease includes a
five-year renewal option at then market rents. Total rent earned thereunder by
the Company in 1997 was $0.2 million.
CROWN RIGHTS
Pursuant to the Operating Partnership Agreement, Crown Investments and its
affiliates received certain rights (the "Crown Rights") which enable them to
require the Operating Partnership to redeem part or all of their Partnership
Units for a price equal to the equivalent value of the shares of the Company (on
a one-for-one basis). Crown Investments currently owns 7,652,500 common
Partnership Units and Crown American Investment Company, an affiliate of Crown
Investments, owns 1,786,459 common Partnership Units. The obligation to redeem
Crown Investments' common Partnership Units may be assumed by the Company in
exchange for, at the Company's election, either shares (on a one-for-one basis)
or the cash equivalent thereof, provided that the Company may not pay for such
redemption with Common Shares to the extent that it would result in Crown
Investments and its affiliates beneficially or constructively owning more than
9.8% of the outstanding Common Shares. Crown Investments and its affiliates may
require the Company to assume the obligation to pay for such redemption with
Common Shares to the extent that Crown Investments and its affiliates own less
than 9.8% of the outstanding Common Shares. Crown Investments has pledged
substantially all its common Partnership Units (the "Pledged Units") as
collateral for a loan made by an unrelated third party. In June 1995 the Company
filed a Registration Statement on Form S-3 with the SEC relating to the Pledged
Units. If at the time of any such permitted exchange the Shelf Registration is
not effective, the Company is obligated to purchase a specified portion of the
Pledged Units. The Company also has the right to purchase the Pledged Units in
lieu of effecting an exchange.
13
<PAGE> 16
ADMINISTRATIVE SERVICES AND AMOUNTS DUE TO CROWN ASSOCIATES AND CROWN
INVESTMENTS
The Operating Partnership allocates a portion of the cost of its
construction, development, MIS, legal and risk management departments to Crown
Associates and Crown Investments based on estimated usage, which aggregated $0.5
million in 1997 and which amount is expected to be approximately the same in
1998). Conversely, Crown Associates and its affiliates charge the Company for
use of their corporate aircraft, hotel and dining services. Such costs totaled
$0.1 million for 1997. As a result of these current and prior year transactions,
the Company had a net receivable from Crown Associates and Crown Holding at
December 31, 1997 of $0.1 million.
PARTNERSHIP UNITS TO BE ISSUED TO CROWN ASSOCIATES AND/OR ITS AFFILIATES
At the time of the Company's formation in 1993, Crown Associates retained
(i) a 50% tenancy-in-common interest in the fee title to two enclosed shopping
malls (Wyoming Valley Mall located in Wilkes-Barre, Pennsylvania, and Middletown
Mall located in Fairmont, West Virginia), and (ii) related ground leasehold
interests pursuant to long-term ground leases of each of such undivided
interests. The other 50% tenancy-in-common interests in both properties were
held by an unrelated third party, which at the time objected to purchase of the
properties by the Company.
In 1994, the Company, Crown Associates and the unrelated third party
entered into agreements, approved by the Company's independent trustees (the
"Independent Trustees"), under which the Company purchased all interests in the
two malls together with the related working capital. The transactions closed
effective as of January 31, 1995 (Wyoming Valley Mall) and February 1, 1995
(Middletown Mall). The aggregate purchase price paid for the two malls consisted
of $45.2 million in cash, assumption of debt aggregating $7.8 million, of which
$6.0 million was a non-recourse note related to Middletown Mall which was repaid
in full in January 1998, and with respect to Wyoming Valley Mall, an additional
5.1% partnership interest in the Operating Partnership issued to Crown American
Investment Company ("CAIC"), a wholly-owned subsidiary of Crown Investments. The
Company also incurred $1.4 million in transaction costs, including transfer
taxes, debt issuance costs, and legal fees. The funds to pay the purchase price
and transaction costs were obtained through a $45.3 million term loan from a
bank (subsequently increased to $50.0 million during 1995). The loan bore
interest at a variable interest rate indexed to the LIBOR rate and was repaid in
November 1997.
There is additional contingent consideration to Crown Associates and/or its
affiliates with respect to Middletown Mall, to be paid in Partnership Units,
based on this mall's operating performance during the year ended December 31,
1997. Approximately 400,000 additional common Partnership Units are expected to
be issued, effective as of January 1, 1998, as consideration for the
contribution of Middletown Mall to the Operating Partnership, subject to final
determination and approval by the Independent Trustees. The 400,000 units would
represent approximately 1.1% of the total common Partnership Units outstanding
prior to the issuance of the new units. If Middletown Mall is held for
redevelopment during 1998, there may be additional common Partnership Units
issued to Crown Associates and/or its affiliates in 1999 if such redevelopment
and leasing activities result in enhanced funds from operations (as defined)
during 1998.
The Company has entered into an agreement of sale with an unrelated third
party with respect to Middletown Mall and the adjacent outparcel land under
which the purchaser has 30 days to complete its due diligence and can cancel the
agreement for any reason during this period. The purchase price is approximately
$12 million which would result in a gain. Additional consideration may also be
due to Crown Associates and/or its affiliates if such sale is consummated, the
amount of which will be dependent on net proceeds received. For the year ended
December 31, 1997, Middletown contributed $2.2 million in revenues and $0.2
million in income before minority interest.
PAYMENTS TO DELTA DEVELOPMENT GROUP, INC.
During 1997, the Company paid Delta Development Group, Inc. $329,886 for
consulting services rendered in connection with various Company properties.
Donald F. Mazziotti, a member of the Board of Trustees of the Company, was a
principal and part-owner of Delta until 1997. The Company expects to utilize the
services of Delta again in 1998.
14
<PAGE> 17
AUDITORS
The Board of Trustees engaged Arthur Andersen LLP, independent public
accountants, to audit the books and records of the Company for the year ended
December 31, 1997. Representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting and, while they are not expected to make a
statement, they will have the opportunity to do so if they desire. They will
also be available to respond to appropriate questions. The Company currently
anticipates that Arthur Andersen LLP will also be engaged to audit the Company's
books and records for the current year.
OTHER MATTERS
No business other than that set forth above is expected to come before the
Annual Meeting or any adjournment thereof. Should other business properly come
before the Meeting or any adjournment thereof, the proxy holders will vote upon
the same according to their discretion and best judgment.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies for the Annual Meeting will be paid by
the Company. In addition to the solicitation of proxies by mail, the officers
and regular employees of the Company may, without additional compensation
therefor, solicit proxies in person or by telephone or telegraph. Brokerage
houses and other nominees, custodians or fiduciaries will be requested by the
Company to forward proxy soliciting material and the Company's Annual Report to
Shareholders to the beneficial owners of the shares of the Company's Common
Shares held of record by them, and the Company will reimburse these record
holders for their reasonable out-of-pocket expenses incurred in doing so.
1999 SHAREHOLDER PROPOSALS
A proposal submitted by a shareholder for the regular annual meeting of
shareholders to be held in 1999 must be received by the Secretary, Crown
American Realty Trust, Pasquerilla Plaza, Johnstown, Pennsylvania 15901 on or
prior to November 30, 1998 in order to be eligible for inclusion in the
Company's Proxy Statement for that annual meeting.
By Order of the Board of Trustees,
Ronald P. Rusinak
Vice President, General
Counsel and Secretary
15
<PAGE> 18
CROWN AMERICAN REALTY TRUST
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
SOLICITED BY THE BOARD OF TRUSTEES
HOLIDAY INN, 250 MARKET STREET, JOHNSTOWN, PENNSYLVANIA
WEDNESDAY, APRIL 29, 1998 - 10:00 A.M. (LOCAL TIME)
The undersigned shareholder of CROWN AMERICAN REALTY TRUST (the "Company")
does hereby appoint MARK E. PASQUERILLA and DONATO B. ZUCCO, and each of them
acting individually, with full power of substitution, as proxies of the
undersigned to vote at the Annual Meeting of Shareholders of the Company,
to be held April 29, 1998 (the "Annual Meeting"), and at all adjournments
thereof, all the Common Shares of Beneficial Interest of the Company which
the undersigned may be entitled to vote, on the matters set out on the
reverse side of this card and described in the Proxy Statement and, in their
discretion, on any other business which may properly come before the Annual
Meeting.
The undersigned shareholder hereby also revokes all previous proxies for the
Annual Meeting, acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement both dated March 30, 1998, and of the Annual
Report to Shareholders for 1997.
You are urged to promptly return this proxy in the enclosed envelope
whether or not you expect to attend the Annual Meeting in person so that your
shares may be voted in accordance with your wishes and in order that the
presence of a quorum may be assured at the Meeting.
The shares represented by this Proxy will be voted as directed by the
shareholder. If this proxy is executed but no direction is given, such
shares will be voted "FOR" Item 1.
(Continued and to be signed on the reverse side)
[ X ] PLEASE MARK
YOUR VOTES
AS THIS
FOR all WITHHOLD
Nominees Authority to Vote
(except as shown below) for All Nominees
ITEM (1)-The election [ ] [ ]
of the following two
Trustees for a term
expiring in 2001:
NOMINEES: John M. Kriak and
Donald F. Mazziotti
A vote FOR includes discretionary authority to vote for a substituted
nominee if any of the nominees listed becomes unable to serve or for good
cause will not serve.
(To withhold authority to vote for one or more nominees, print such nominee's or
nominee's name(s) on the line below.
- ---------------------------------------------------------------
Please date and sign exactly as your name appears hereon and return in
the enclosed envelope. If acting as attorney, executor, administrator,
guardian or trustee, please so indicate with your full title when signing.
If a corporation, please sign in full corporate name, by duly authorized
officer. If shares are held jointly, each shareholder named should sign.
SIGNATURE(S) DATE
--------------------------------------------------- ----------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
