<PAGE> 1
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Section 240.14a-11(c) or
Section 240.14a-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 26, 1999
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Crown American Realty Trust (the
"Company") will be held at the Wyndham Garden Hotel, 3454 Forbes Avenue,
Pittsburgh, Pennsylvania on Monday, April 26, 1999 at 10:00 a.m. (local time),
for the purpose of considering and acting upon the following:
(1) The election of three persons to serve as Trustees for a
three-year term expiring at the Annual Meeting of Shareholders in 2002; 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 12, 1999 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 1998 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 29, 1999
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 26, 1999
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 Monday, April 26, 1999 at the Wyndham Garden Hotel, 3454 Forbes
Avenue, Pittsburgh, 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 12, 1999, the Company had outstanding
26,207,919 Common Shares of Beneficial Interest ("Common Shares"). This proxy
statement and the proxy in the accompanying form are being mailed on or about
March 29, 1999 to holders of record of the Common Shares as of the close of
business on March 12, 1999. 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,
1998, which includes consolidated financial statements, is enclosed with this
Proxy Statement.
VOTING
Shareholders of record as of the close of business on March 12, 1999 (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 subsidiaries,
principally Crown American Properties, L.P., a Delaware limited partnership (the
"Operating Partnership"), and Crown American
1
<PAGE> 4
Financing Partnership, L.P., a Delaware limited partnership (the "Financing
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,
1998, and all Trustees and executive officers of the Company as a group
beneficially owned as of the February 28, 1999 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 (1)
- ---- ----------------- ------------
<S> <C> <C>
Frank J. Pasquerilla 2,960,505(2) 11.1%
Mark E. Pasquerilla 131,694(3) *
Clifford A. Barton 30,507(5) *
Donald F. Mazziotti 12,548(4) *
Zachary L. Solomon 122,500(5) *
Peter J. Siris 75,000(6)
Nicholas O. Antonazzo 65,835(7) *
John M. Kriak 71,195(8) *
Thomas Stephenson 56,157(9) *
All Trustees and executive officers as a group (10
persons) 3,558,755(10) 13.4%
</TABLE>
- ---------
* Less than 1%
(1) The percentage of class was determined by dividing the number of shares
beneficially owned by the number of Common Shares outstanding, in each case
treating the shares which may be acquired upon exercise of outstanding
options as outstanding that are exercisable within 60 days of the Record
Date as required by Rule 13d-3(d)(1) under the Securities Exchange Act of
1934, as amended. For purposes of inclusion in the table and percentage of
loss, options represent the right to acquire Common Partnership Units,
which may be converted into Common Shares of the Company.
(2) Includes 878,633 Common Shares held of record by Frank J. Pasquerilla,
235,558 Common Shares held of record by Mr. Pasquerilla's wife, 11,823
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 5,475 Common Shares allocated under the
Crown American Associates Key Executive Plan (the "Associate Executive
Plan"). Also includes 1,829,016 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.
(3) Includes 17,433 Common Shares held of record by Mark E. Pasquerilla
individually and 109,786 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 4,475 Common Shares allocated to the
executive in connection with the Executive Incentive Plan. Does not include
1,829,016 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.
(4) Includes 11,500 shares which may be acquired upon the exercise of
outstanding share options.
(5) Includes 12,500 shares which may be acquired upon the exercise of
outstanding share options.
2
<PAGE> 5
(6) Includes 14,000 Common Shares held in trust for his son, with respect to
which Mr. Siris is the trustee, beneficial ownership of which shares is
disclaimed. Also includes 9,000 Common Shares held in an investment fund
over which Mr. Siris has voting and dispositive power and options to
acquire a total of 10,000 shares which were allocated to Mr. Siris upon his
election as a trustee of the Company and on December 31, 1998.
(7) Includes 2,305 Common Shares held jointly by Mr. Antonazzo and his wife,
with whom he shares voting and dispositive power. Also includes 15,530
Common Shares allocated to the executive in connection with the Executive
Incentive Plan. Includes 48,000 shares which may be acquired upon the
exercise of outstanding options.
(8) Includes 2,912 Common Shares allocated to the executive in connection with
the Executive Incentive Plan and 1,083 Common Shares under the Associates
Executive Plan. Includes 48,000 shares which may be acquired upon the
exercise of outstanding options.
(9) Includes 4,165 Common Shares allocated to the executive in connection with
the Executive Incentive Plan. Includes 48,000 shares which may be acquired
upon the exercise of outstanding options.
(10) Includes 1,829,016 Common Shares reported as beneficially owned by Crown
Investments which are included in the reported holdings of Frank J.
Pasquerilla. Also includes the shares which may be acquired upon the
exercise of outstanding share options as described above.
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 3,190,426(1) 11.9%
Pasquerilla Plaza
Johnstown, PA 15901
The Prudential Insurance Company of America 2,425,503(2) 9.1%
Prudential Plaza
Newark, NJ 07102-3777
</TABLE>
- ---------
(1) Includes 1,450,050 Common Shares (or 5.53% of the outstanding shares)
currently held by Crown Investments and 378,966 Common Shares that Crown
Investments has the right to acquire. Crown Investments presently owns
9,786,847 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 12.0% 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 12.0%
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 limitation that 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 12.0% ownership limitation, Crown Investments is deemed to own Common
Shares held by certain affiliates and related parties; as of
3
<PAGE> 6
December 31, 1998, Crown Investments believes it would be deemed to own
1,361,410 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 January 26, 1999, 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
Three trustees will be elected at the Annual Meeting to serve until the
annual meeting of shareholders in 2002 and until their successors are duly
elected and qualified. The Board of Trustees has approved the nominations of
Mark E. Pasquerilla, Peter J. Siris and Clifford A. Barton 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 three
nominees. In the event that at the date of the Annual Meeting any 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 nominees 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 1998; instead, the entire Board of
Trustees voted to approve the nominations of Messrs. Pasquerilla, Siris and
Barton.
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.
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.
4
<PAGE> 7
<TABLE>
<CAPTION>
TRUSTEE PRINCIPAL OCCUPATION OR
NAME SINCE EMPLOYMENT, DIRECTORSHIPS, AGE
---- ----- ------------------------------
<S> <C> <C>
Nominees for a term expiring in 2002:
Mark E. Pasquerilla 1993 Vice Chairman of the Company since September 1998;
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.
(bank holding company); Age 39
Clifford A. Barton 1993 Retired since January 1994; Chairman, President and
Chief Executive Officer of USBANCORP, Inc. from prior
to 1992 to January 1994; Director of USBANCORP, Inc.,
U.S. Bank, Three Rivers Bank & Trust Co., USBANCORP
Trust Co., United Bancorp Life Insurance Company,
UBAN Associates, Inc., UBAN Mortgage Company, TRB
Financial Services Inc. and Standard Mortgage
Corporation of Georgia; Age 70
Peter J. Siris 1998 Trustee of the Company since April 1998; President of
Guerrilla Capital Management since 1998; Managing
Director at UBS Securities from 1990 to 1995; Senior
Vice President of ABN-Amro-Chicago, Corp. from
February 1997 to March 1997; Senior Vice President of
WARNACO, Inc. from 1995 to 1996 and President of
various investment banking companies and venture
capital companies worldwide; Director of Crown
American Corporation, the predecessor to the Company,
from 1992 to 1993; Age 44
Continuing Trustees with a term expiring in 2001:
John M. Kriak 1995 Vice Chairman and Chief Operating Officer of the
Company since September 1998; Executive Vice
President and Chief Financial Officer of the Company
since May 1995 to August 1998; 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.; Director of
Somerset Trust Company; Age 51
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 1990 to 1994;
Director of Delta Development Group, Inc. since 1988;
Age 53
</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 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 since 1993; Chairman and Chief Executive
Officer of Crown American Corporation and its
subsidiaries since prior to 1993; Age 72
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 64
</TABLE>
VOTE REQUIRED
Only affirmative votes are counted in the election of Trustees. The three
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
1998 because such committee and management of the Company favor participation by
all Trustees whenever possible.
The Audit Committee consists of Mr. Barton, Mr. Siris and Mr. Solomon. 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 1998.
The Compensation Committee currently consists of Messrs. Barton, Siris,
Mazziotti 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
Executive Incentive Plan, the Retirement Savings Plan and the Savings
Restoration Plan. The Compensation Committee held four meetings in 1998.
The Board of Trustees held four regular meetings and five special meetings
in 1998. 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
1998.
6
<PAGE> 9
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. Generally,
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. On December 31, 1998, each of the four non-employee Trustees was
granted options to purchase 5,000 Common Shares at an exercise price of $7.75.
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. As of December 31, 1998,
there were 46,500 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, of which 1,000 and 6,000 options have
been exercised by Donald Mazziotti and a former trustee, respectively.
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 1998 except for (i) two late filings
by Mr. Solomon, a trustee of the Company, in October 1998 with respect to
purchases aggregating 30,000 shares in August 1998 and a late filing by Mr.
Mazziotti in March 1999 with respect to 48 shares acquired through the Company
dividend reimbursement plan in September and December of 1998.
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 1996,
1997 and 1998 of the Chief Executive Officer of the Company and
7
<PAGE> 10
those persons who were, as of December 31, 1998, 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 1998 $472,770 $75,643 0 $10,449
Chairman of the Board of Trustees 1997 463,500 55,620 0 9,907
and Chief Executive Officer 1996 450,000 0 0 11,536
MARK E. PASQUERILLA 1998 258,180 23,236 0 8,860
Trustee, Vice Chairman 1997 250,661 24,815 0 8,412
and President 1996 243,360 0 0 6,615
JOHN M. KRIAK 1998 217,125 16,284 0 11,181
Trustee, Vice Chairman and 1997 197,760 19,578 0 8,251
Chief Operating Officer(4) 1996 192,000 0 120,000 5,206
NICHOLAS O. ANTONAZZO 1998 202,145 15,160 0 11,032
Executive Vice President 1997 234,181 16,053 0 10,473
of Real Estate 1996 210,409 0 120,000 9,916
THOMAS STEPHENSON 1998 204,509 30,676 0 11,068
Executive Vice President 1997 198,533 17,870 0 10,478
of Asset Management 1996 192,700 0 120,000 8,489
</TABLE>
- ---------
(1) Bonuses under the Executive Incentive Plan for 1998 were earned based on
corporate and individual performances achieved in that year. All such
bonuses were deferred 100% by all of the named executives with the exception
of Mark E. Pasquerilla who elected to defer 50% of his bonus and to receive
50% in cash in early 1999. Bonuses under the Executive Incentive Plan were
not earned for 1997 because the criteria used to determine whether bonuses
would be granted was not met. However, special bonuses were approved by the
Compensation Committee based on individual performances achieved in 1997.
All such bonuses approved for 1997 were deferred 100% by the named
executives. For 1996 no bonuses were earned or approved under the Executive
Incentive Plan. After the end of each plan year the Company pays the
non-deferred bonuses in cash to the executives and also deposits cash equal
to the aggregate amount of the deferred bonuses into a trust account with a
bank. Amounts held in the trust are allocated to each executive and are
invested in Common Shares of the Company and in other investments as
determined by the Trustee; gains, losses and earnings on the assets are
allocated to each executive's account. Upon retirement, each executive will
be entitled to receive the value of his allocated account in the trust in a
lump sum or over a period of years as elected by the executive.
(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 1993 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 is resigning as an officer of the Company effective on or about
May 1, 1999.
OPTION GRANTS
In 1998, no options were granted to the above named five officers under the
1993 Crown American Realty Option Plan (the "Employee Option Plan").
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<PAGE> 11
OPTION EXERCISES IN 1998 AND 1998 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 1998, (ii) the net value realized upon such exercises, (iii) the number
of common Partnership Units covered by unexercised options held at December 31,
1998 and (iv) the value of such unexercised options at December 31, 1998.
Neither Frank J. Pasquerilla, Chairman and Chief Executive Officer, nor Mark E.
Pasquerilla, Vice Chairman and 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 1998 AND DECEMBER 31, 1998 OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS AT
OPTIONS AT DECEMBER 31,
PARTNERSHIP DECEMBER 31, 1998 1998(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 24,000/96,000 $0/$0
Vice Chairman, Chief Operating
Officer, Trustee
NICHOLAS O. ANTONAZZO 0 $0 24,000/96,000 $0/$0
Executive Vice President of Real
Estate
THOMAS STEPHENSON 0 $0 24,000/96,000 $0/$0
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.
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.
9
<PAGE> 12
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 1998, the Committee reviewed the base salary amounts for the
Company's top executive group. The salaries were evaluated using the 1998
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 1998 to be
3% to 5%. For 1998, the Compensation Committee approved a merit pool increase
for employees of the Company consisting of 3% of the aggregate base salaries of
participating employees and distributed on the basis of individual annual
performance reviews.
In 1999, all officers will be excluded from the annual merit increase
program and 15 officers, including the CEO, have had base salaries reduced from
5% to 14%. The salary reductions were part of an overall cost reduction program
in 1999 focused on achieving growth targets.
EXECUTIVE INCENTIVE PLAN
Eighteen 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.
Eighteen executives received a bonus based upon the Company achieving a
predetermined corporate goal and a review of their individual performance. The
aggregate of the bonuses paid in early 1999 related to the 1998 performance was
$312,703. Frank J. Pasquerilla, Chairman and CEO, received $75,643.
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 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 1998, the Compensation Committee approved three 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, 1998, twenty-six Company executives were participating
in the Employee Option Plan. Frank J. Pasquerilla, Chairman and Chief Executive
Officer, and Mark E. Pasquerilla, Vice Chairman and 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
10
<PAGE> 13
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 1998, the Company contributed an aggregate amount of $52,590 under the
Savings Plan on behalf of the most highly compensated executive officers of the
Company participating in such Plan. This includes both the supplemental employer
contribution and the Company's matching contribution. The Company contributed
$10,449 under the Savings Plan on behalf of Frank J. Pasquerilla.
SAVINGS RESTORATION PLAN
The Company implemented the Savings Restoration Plan (the "Restoration
Plan") in 1997. Nineteen of the Company's executives 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, eight employees are participating in the Restoration Plan.
Respectfully submitted,
/s/ Clifford A. Barton
/s/ Zachary T. Solomon
/s/ Peter J. Siris
/s/ Donald Mazziotti
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<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 group 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
CROWN AMERICAN
AMERICAN REALTY
Measurement Period REALTY PEER S&P 500
(Fiscal Year Covered) TRUST INDEX INDEX
<S> <C> <C> <C>
8/17/93 100.00 100.00 100.00
12/31/94 87.40 109.28 105.34
12/31/95 56.67 116.84 144.93
12/31/96 59.65 167.78 178.06
12/31/97 81.23 191.83 237.49
12/31/98 73.97 187.95 305.35
</TABLE>
The peer group consists of the following publicly traded real estate
investment trusts engaged in similar lines of business of the Company: 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 has been continued on a
month-to-month basis. Total management and leasing fees paid by Crown
Enterprises to the Company for 1998 were approximately $0.1 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
at the time of the Public Offering, 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 stipulated aggregate amount of base rents (the
"Quarterly Guaranteed Support")
12
<PAGE> 15
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. 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 1998 was $3.78 million. At December 31, 1998, approximately $0.9
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 which was refinanced during 1998 as
part of the $465,000,000 mortgage loan with GE Capital Corporation. Crown
Investments has guaranteed the payment of $250 million of such indebtedness.
Crown Holding has also guaranteed $10.9 million of debt owed by the Operating
Partnership related to one property owned by the Operating Partnership.
CROWN AMERICAN ASSOCIATES LEASE AT PASQUERILLA PLAZA
Approximately 14,200 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 1998 was $0.3 million.
LEASE AT LOGAN VALLEY MALL BETWEEN THE COMPANY AND CROWN ENTERPRISES
Crown American Enterprises, Inc. ("Crown Enterprises") entered into a lease
for a 1,962 square foot mall shop space at the Company's Logan Valley Mall.
Crown Enterprises subsequently assigned this lease to Crown Max LLC, a company
which is owned by Crown Enterprises and an unrelated third party. The lease
began on January 1, 1998 and had a ten-year term with an annual base rent of
$44,000 plus contributions to common area maintenance and real estate taxes. The
terms were comparable to rates for similar space rented to third parties at this
property. During the year ended December 31, 1998 Crown Enterprises paid an
aggregate of $64,728 to the Company for this space. Crown Enterprises used this
space to operate a virtual-reality entertainment facility. In addition to the
rental income, the Company was interested in determining the economic
feasibility of adding similar entertainment facilities to other Company malls.
Crown Enterprises closed the entertainment facility on December 31, 1998, and
the Company and Crown Enterprises will pay an additional $22,000 to the Company
as consideration for the lease termination as of December 31, 1998. The total
amounts received by the Company under the lease, including the lease termination
payment, exceeded the Company's non-recoverable investment in the leased
premises.
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 8,090,388 common
Partnership Units, Crown American Investment Company, an affiliate of Crown
Investments, owns 1,786,459 common Partnership Units and Frank J. Pasquerilla
individually owns 79,551 Common Partnership Units. The obligation to redeem
Crown
13
<PAGE> 16
Investments' and Frank Pasquerilla's 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 (including Frank Pasquerilla)
beneficially or constructively owning more than 12.0% 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 12.0% 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.
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 1998 and which amount is expected to be approximately the same in
1999. Conversely, Crown Associates and its affiliates charge the Company for use
of their corporate aircraft, hotel and dining services. Such costs totaled $0.8
million for 1998. 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, 1998 of $0.1 million.
PARTNERSHIP UNITS 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 was 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. Effective as of January 1, 1998, 437,888 additional Common Partnership
Units were issued to Crown Investments as consideration for the contribution of
Middletown Mall to the Operating Partnership, as approved by the Independent
Trustees. The 437,888 units represents approximately 1.2% of the total common
Partnership Units outstanding prior to the issuance of the new units.
14
<PAGE> 17
PARTNERSHIP UNITS ISSUED TO FRANK J. PASQUERILLA
In 1998, Frank J. Pasquerilla and Crown Enterprises contributed their
respective interests in Greater Lewistown Shopping Mall, a Pennsylvania general
partnership ("GLSP") of which Frank J. Pasquerilla and Crown Enterprises were
the sole partners to Crown American Lewistown Associates, L.P., a Pennsylvania
limited partnership ("CALA") of which the Operating Partnership is a limited
partner holding a 99.5% interest, in exchange for (1) the issuance of 79,551
Partnership Units to Frank J. Pasquerilla valued at $810,068, (2) a cash payment
to Crown Enterprises of $4,071 and (3) the assumption of all of the outstanding
indebtedness owed by GLSP to National Bank of the Commonwealth ("NBOC") in the
amount of $3,685,885 pursuant to a loan agreement between GLSP and NBOC.
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, 1998. 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.
SHAREHOLDER PROPOSALS
The Board of Trustees does not know of any other business that may be
presented for consideration at the Annual Meeting. If any other business should
properly come before the Annual Meeting, it is the intention of those named in
the Proxies solicited hereby to vote the shares represented by such Proxies in
accordance with their judgment in such matters.
A proposal submitted by a shareholder for the regular annual meeting of
shareholders to be held in 2000 must be received by the Secretary, Crown
American Realty Trust, Pasquerilla Plaza, Johnstown, Pennsylvania 15901 on or
prior to November 29, 1999 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
MONDAY, APRIL 26, 1999 - 10:00 A.M. (LOCAL TIME)
The undersigned shareholder of CROWN AMERICAN REALTY TRUST (the "Company") does
hereby appoint TERRY L. STEVENS 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 Monday,
April 26, 1999 (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 29, 1999, and of the Annual
Report to Shareholders for 1998.
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 three
Trustees for a term
expiring in 2002:
NOMINEES: Mark E. Pasquerilla
Clifford A. Barton
Peter J. Siris
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
nominees' 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.
- -------------------------------------------------------------------------------
