DEC. 15, 2000--CROWN CENTRAL Petroleum Corp. approved a new board of directors at its annual meeting yesterday, much to the dismay of the AFL-CIO, which alleges the appointees would create unfair advantages within the company.

Nominated to the company’s board of directors for Class A stock were Henry A. Rosenberg Jr., Crown’s chairman; Frank B. Rosenberg, a Crown vice president and son of Henry A. Rosenberg Jr.; Stanley A. Hoffberger, a private real estate developer; Barry L. Miller, chief financial officer of Rosemore Inc.; John E. Wheeler Jr., Crown’s chief financial officer; and Michael F. Dacey, a private investor.

Jack Africk, the former vice chairman of UST Inc., and Rev. Harold Ridley, president of Loyola College, were nominated by holders of Class B shares. Class A shareholders can elect and remove all directors, other than directors to be elected by any other class or classes or series of stock. Class B shareholders can elect and remove two directors, who may not be employees of the company or of any subsidiary of Crown.

Joseph Drexler, director of the Paper, Allied-Industrial, Chemical and Energy Workers International Union, had urged shareholders to vote against the nominees, alleging it was an attempt by Henry Rosenberg to strengthen his control of the company and weaken any outside opposition. Henry Rosenberg also heads Rosemore, which was voted down in its attempt to buy Crown this past August.

“What it does is further entrench Rosenberg because it gives him more influence over the board of directors,” Drexler said. “Eliminating four outside board members, and naming four insiders, reduces the ability of shareholders to have any affect on the company. Crown is a publicly held company, and should not be treated like a private company.”

George L. Bunting Jr., president and CEO of Bunting Management Group; Patricia A. Goldman, former senior vice president of communications for USAirways Inc.; William L. Jews, president and CEO of Carefirst Inc.; and Thomas M. Gibbons, former chairman of Chesapeake and Potomac Telephone Cos. all stepped down as members of Crown’s board of directors. J. Steven Wise, Crown’s manager of corporate and government affairs, said that all four former board members informed Crown in 1999 that they would be moving on for “personal reasons,” and that this was the best time to do so.

The union contends that the nominations of Henry Rosenberg, who sits on the nominating committee that selected the board of directors, and Dacey, who allegedly negotiated Rosemore’s takeover bid, is discouraged by the National Association of Corporate Directors because it could prevent the company from being truly independent.

The union also alleges that Africk received a $3,000 per month consulting fee from Crown from November 1993, through April of this year. Ridley was also considered a bad choice by the union because it alleges Crown is a financial supporter of Loyola College and Henry Rosenberg has served on the school’s board of directors.

Wise said that Africk was a consultant for the company, but the agreement has not been renewed, nor will it be renewed. In response to donating money to Loyola, Wise said that Crown gives money to various organizations, and that the Jesuit college is just a part of that.

“The composition of the board reflects the ownership of the company,” Wise said.

Drexler said that even though the board of directors was approved, the union made its point in warning shareholders of Crown’s problems.

“It was designed to put more pressure on the company and to raise some red flags,” Drexler said. “If you are a possible shareholder, you should know that the company does not pay attention to any outside shareholders.”

“The composition of the board reflects the ownership of the company.” - J. Steven Wise

Union members have been locked out of Crown’s Pasadena, Tex. oil refinery plant since 1996. About 15 workers voiced their displeasure with Crown at the meeting, decrying the lockout, pollution and the company’s dwindling stock price over the years.

On Oct. 11, Crown announced it has reached a tentative collective bargaining agreement with the union. However, on Oct. 17, the union announced that its members rejected a contract proposal by Crown.

Also at the meeting, Henry Rosenberg said that negotiations between Crown and Missouri-based Apex Oil Co. Inc., another Crown suitor, are ongoing.

© 2000 The Daily Record