<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________to __________
COMMISSION FILE NUMBER 1-8625
-----------------------
CITADEL HOLDING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-3885184
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
600 NORTH BRAND BOULEVARD 91203
GLENDALE, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (818) 956-7100
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------ ---------------
COMMON STOCK, $.01 PAR VALUE PER SHARE AMERICAN STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant, as of March 15, 1994 was $20,034,000.
The number of shares of common stock, par value $.01 per share, of Registrant
outstanding as of March 15, 1994 was 6,595,624 shares.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
CITADEL HOLDING CORPORATION
ANNUAL REPORT ON FORM 10-K/A
FOR THE YEAR ENDED DECEMBER 31, 1993
PART III
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Item 10. Directors and Executive Officers of the Registrant............... II-2
Item 11. Executive Compensation............................................ II-5
Item 12. Security Ownership of Certain Beneficial Owners and Management.... II-9
Item 13. Certain Relationships and Related Transactions.................... II-11
</TABLE>
II-1
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The following table sets forth certain information, except where otherwise
indicated, as of December 31, 1993 with respect to the directors of Citadel and
Fidelity. All Citadel directors serve approximately one-year terms and are
elected at each annual stockholders' meeting. Fidelity continues to have a
classified board, approximately one-third of the members of which are elected
each year to serve three-year terms.
<TABLE>
<CAPTION>
TERM AS
FIDELITY FIRST
DIRECTOR BECAME POSITION HELD WITH
NAME OF DIRECTOR AGE EXPIRES DIRECTOR CITADEL AND FIDELITY
- - ---------------- --- -------- -------- --------------------
<S> <C> <C> <C> <C>
James J. Cotter......... 56 1995 1986 Director and Chairman of
Citadel
Richard M. Greenwood.... 46 1995 1992 Director, President and Chief
Executive Officer of Citadel
and Fidelity, Chairman of
Fidelity
Donald R. Boulanger..... 49 1996 1991 Director of Citadel and
Fidelity
Peter W. Geiger......... 67 1994 1990 Director of Citadel and
Fidelity
Mel Goldsmith........... 66 1994 1992 Director of Citadel and
Fidelity
Ralph B. Perry III...... 58 1995 1985 Director of Fidelity only
S. Craig Tompkins....... 43 N/A 1993 Director of Citadel only
Zelbie Trogden.......... 57 1996 1993 Director of Citadel and
Fidelity
Alfred Villasenor, Jr. . 64 1994 1987 Director of Citadel and
Fidelity
</TABLE>
Set forth below is certain information concerning the principal occupation and
business experience of each of the individuals named during the past five
years.
Mr. Cotter was re-elected to the Board of Directors of Citadel and Fidelity in
June 1991, named Acting Chairman in October 1991 of Citadel and Fidelity, and
named Chairman of the Board of Citadel on June 5, 1992. Mr. Cotter resigned
from the Board of Fidelity in December 1993. Mr. Cotter also serves as Chairman
of the Board of Doran Street Real Estate Corporation ("Doran"), a real estate
subsidiary of Citadel. Mr. Cotter previously served as a director of Citadel
from February 1986 to May 1988. He has been Chairman of the Board of Craig
Corporation ("Craig") (retail grocery and real estate management business) since
1988 and a director since 1985. He is also Executive Vice President and a
director of The Decurion Corporation (motion picture exhibition). Mr. Cotter
began his association with The Decurion Corporation in 1969. Mr. Cotter has been
the Chief Executive Officer and a director of Townhouse Cinemas Corporation
since 1987. Mr. Cotter is the General Partner of James J. Cotter, Ltd., a
limited partner in Hecco Ventures I, a California Limited Partnership and a
general partner in Hecco Ventures II, a California General Partnership (Hecco I
and Hecco II are involved in investment activities), and has been a director of
Stater Bros., Inc. (retail grocery) since 1987. Mr. Cotter is also a director of
the Reading Company ("Reading") (the assets of which consist principally of cash
equivalents and real estate) and has served as the Chairman of the Board of that
company since 1991. Craig is a 47% owner of Reading and a 50 % owner of Stater
Bros., Inc. Mr. Cotter is the proprietor of Cecilia Packing Corporation (citrus
fruit and packing operation). See "Principal Holders of Citadel Common Stock."
Mr. Greenwood joined the Company in June 1992 as President and Chief Executive
Officer of both Citadel and Fidelity and Chairman of the Board of Fidelity. Mr.
Greenwood is also a director of Doran. Prior to joining the Company, he served
as Chief Financial Officer of CalFed, Inc. and California Federal Bank from 1990
to 1992. From 1988 to 1990, Mr. Greenwood was Chief Financial Officer and
Treasurer of Valley National Corporation and Valley National Bank located in
Phoenix, Arizona. Mr. Greenwood served from 1978 to 1988 in various positions
at Citicorp/Citibank, including Vice President, Division Treasurer (Europe,
Middle East and Africa) and Senior Vice President of Citicorp Homeowners' (a
mortgage bank).
Mr. Boulanger has been President and a director of National Deposit Life
Insurance Company since 1989. National Deposit Life Insurance Company is a
major provider of corporate retirement plans. From 1983 to 1989,
II-2
<PAGE>
Mr. Boulanger was Senior Vice President at Kaufman and Broad Corp. (now Broad,
Inc.) where he was responsible for a large life insurance holding company's
investments.
Mr. Geiger is presently a financial and marketing consultant. He retired as
Vice President and Senior Account Officer of Bank of America where he served
from 1959 to 1990. His responsibilities at Bank of America included the
development, structuring, analysis and negotiation of large corporate financings
for major media and entertainment companies.
Mr. Goldsmith has been a private real estate investor and a consultant to The
Decurion Corporation since 1984, advising company management concerning real
estate transactions, employee compensation and general operations.
Mr. Perry has been a partner of the law firm of Graven Perry Block Brody &
Qualls, a professional corporation, located in Los Angeles, California, since
1968. Graven Perry Block Brody & Qualls performs legal services for the Company
from time to time. See "Related Party Transactions-- Attorneys' Fees." Mr.
Perry was a director of Craig from 1985 to 1993 and a director of Reading
since 1988.
Mr. Tompkins is the President of each of Craig and Reading. Mr. Tompkins
also serves on the Board of Directors of Craig, Reading, Doran and G & L Realty,
Inc. (a real estate company with operations in Southern California). Prior to
joining Craig Corporation and the Reading Company in March 1993, Mr. Tompkins
was a partner specializing in corporate and real estate law at the law firm of
Gibson, Dunn & Crutcher from January 1984 through February 1993. Mr. Tompkins
holds a bachelor's degree (magna cum laude) from Claremont McKenna College and a
J.D. (magna cum laude) from Harvard Law School.
Mr. Trogden was Senior Vice President of Bank of America in charge of
providing credit and banking services to the entertainment and media industries
until his retirement in June 1993. Prior to joining Bank of America, Mr.
Trogden was employed in various positions with Security Pacific National Bank
from 1960 until the 1992 merger of Security Pacific and Bank of America.
Mr. Villasenor has been President and the owner of Unisure Insurance Services,
Incorporated, a corporation specializing in life, business life and group health
insurance for over 30 years. Mr. Villasenor served on the Board of Directors of
ELAR, a reinsurance company from 1990 to 1991.
EXECUTIVE OFFICERS
Set forth below are the executive officers of the Company (other than Mr.
Greenwood--see "Directors" above), together with the positions currently held by
those persons.
<TABLE>
<CAPTION>
POSITION WITH FIDELITY POSITION WITH CITADEL
NAME AGE OR SUBSIDIARY OR SUBSIDIARY
- - ---- --- ---------------------- ---------------------
<S> <C> <C> <C>
Walter H. Morris, Jr. (1) 42 Executive Vice --
President and Chief
Lending Officer
James E. Stutz 50 Executive Vice --
President, Retail
Banking
Kirk S. Sellman (1) 44 Executive Vice --
President, Retail
Banking
Steve Wesson 36 Executive Vice --
President, Real
Estate Asset
Management
Frederick N. Bailard (1) 46 Senior Vice --
President, Real
Estate Asset
Management
James F. Barnett III 30 Senior Vice --
President, Credit
Administration
Robert P. Condon 52 President and Chief President and Chief Executive
Executive Officer of Officer of Gateway Investment
Citadel Service Services, Inc.
Corporation
Diana E. Cookmeyer 45 Senior Vice President --
and Chief
Administration Officer
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
POSITION WITH CITADEL OR
NAME AGE FIDELITY OR SUBSIDIARY SUBSIDIARY
---- --- ---------------------- -------------
<S> <C> <C> <C>
Godfrey B. Evans 40 Senior Vice Senior Vice
President, General President,
Counsel and Secretary General Counsel
and Secretary
Andre S. W. Shih 42 Senior Vice Senior Vice
President, Treasurer President,
and Acting Chief Treasurer and
Financial Officer Acting Chief
Financial Officer
Heidi Wulfe 39 Senior Vice Senior Vice
President, Controller President,
and Chief Accounting Controller and
Officer Chief Accounting
Officer
</TABLE>
- - -----------------
(1) Mr. Morris resigned March 18, 1994. Mr. Sellman resigned January 3, 1994.
Mr. Bailard resigned February 2, 1994.
Mr. Morris joined Fidelity in June 1992 as Executive Vice President and Chief
Lending Officer. Prior to joining Fidelity, Mr. Morris was President and Chief
Executive Officer of First Interstate Mortgage Company, a wholly-owned mortgage
banking subsidiary of First Interstate Bank of California from 1989 to 1992. In
1988, Mr. Morris served as a Vice President of First Interstate Bank, Ltd. and
an executive officer of First Interstate Capital Markets Limited from 1986 to
1987.
Mr. Stutz joined Fidelity in January 1994 as Executive Vice President, Retail
Banking. Prior to joining Fidelity, Mr. Stutz served since 1985 as Executive
Vice President and Chief Operating Officer, Consumer Banking of HomeFed Bank,
where he was responsible for creating and overseeing the retail and consumer
banking operations of a 215 branch network. Mr. Stutz was also Chairman,
President and Chief Executive Officer of Columbus Savings, a wholly-owned
subsidiary of HomeFed Corporation, where he was responsible for the
consolidation of several savings institutions and the subsequent merger of the
company into HomeFed Bank. Mr. Stutz served from 1971 until 1994 in various
positions at HomeFed Bank.
Mr. Sellman joined Fidelity in January 1991 as Executive Vice President,
Retail Banking. Prior to joining Fidelity, Mr. Sellman was Senior Vice
President, Retail Banking, for Gibraltar Savings and Loan Association
("Gibraltar") from 1980 to 1990. He also was Senior Vice President, Retail
Banking for Gibraltar Savings Bank, FSB (a Gibraltar affiliated company in
Seattle, Washington), from 1987 to 1990.
Mr. Wesson joined Fidelity as Executive Vice President, Real Estate Asset
Management in January 1994. Mr. Wesson became President and Chief Executive
Officer of Doran in late 1993 and has been actively involved in the strategic
direction of the business since that time. Prior to this appointment, Mr.
Wesson was Chief Executive Officer of Burton Property Trust, the U.S. real
estate subsidiary of a major U.K. corporation, the Burton Group PLC. In this
position he was responsible for the workout of the company's portfolio of real
estate assets and eventual closure of the business.
Mr. Bailard served as Senior Vice President, General Counsel and Corporate
Secretary for Citadel from August 1992 through August 1993 when Mr. Bailard
became Senior Vice President in charge of Real Estate Asset Management for
Fidelity. From 1990 to 1992, Mr. Bailard served as Executive Vice President and
General Counsel of Valley Federal Savings and Loan Association, where he served
as Senior Vice President and General Counsel from 1989 to 1990. From 1980 to
1988, Mr. Bailard was employed as chief legal officer by Ducommun Incorporated,
a Los Angeles-based diversified industrial company.
Mr. Barnett joined Fidelity in January 1992 as Senior Vice President and
Internal Asset Review Manager. In February 1993, Mr. Barnett was appointed
Senior Vice President, Credit Administration. Prior to joining Fidelity, Mr.
Barnett was a Federal Thrift Regulator for the Office of Thrift Supervision
between 1987 and 1991. He was responsible for the examination, supervision and
problem resolution of multi-billion dollar thrift institutions in the West
Region.
Mr. Condon joined Gateway Investment Services, Inc. ("Gateway"), Citadel's
securities brokerage subsidiary, as President and Chief Executive Officer in
September 1993. Prior to joining Gateway, Mr. Condon served as General Manager
of Wellpoint Life Insurance Company, a subsidiary of Blue Cross of California.
Before that he was President and Chief Executive Officer of CalFed Investment
Services, in charge of the development and sale of alternative investment
products through the bank branch network.
II-4
<PAGE>
Ms. Cookmeyer joined Fidelity in April 1991. In her current capacity as
Senior Vice President and Chief Administrative Officer, Ms. Cookmeyer manages
the Human Resources, MIS, Administrative Services, Marketing, and Business
Excellence functions Fidelity. Prior to joining Fidelity, she spent 17 years
in management and human resources consulting with such firms as McKinsey &
Company, Towers, Perin, Forster, and Crosby, and Coopers & Lybrand.
Mr. Evans joined Fidelity as Senior Vice President and Senior Corporate
Counsel in 1987 and in 1988 was appointed Senior Vice President and Senior
Corporate and Regulatory Counsel to both Citadel and Fidelity. In November
1989, Mr. Evans was named General Counsel of Citadel. In December 1990, Mr.
Evans became the Corporate Secretary of Citadel and Fidelity. Mr. Evans
currently holds the title of Senior Vice President, General Counsel and
Corporate Secretary of Fidelity and Citadel. From 1982 to 1987, he was an
attorney with the law firm of Gibson, Dunn & Crutcher, practicing in the areas
of corporate, thrift institution and securities law.
Mr. Shih joined Fidelity in July 1991 as Vice President, Director of Corporate
Development and Asset Liability Management. In December 1991, he was named
Senior Vice President. Prior to joining Fidelity, Mr. Shih was a principal of
Kesselman & Shih, a financial advisory firm, which he co-founded in 1990. From
1985 to 1990, Mr. Shih was a Vice President of First Interstate Bank, where he
worked in the business analysis, internal consulting and financial analysis
areas.
Ms. Wulfe, a C.P.A., joined Fidelity and Citadel in 1989 as Vice President and
Controller, and in 1991 she was name Senior Vice President. From 1987 to 1989,
she was Vice President and Controller at Antelope Valley Savings and Loan
Association. From 1977 to 1987, she was a CPA with the accounting firm of
Grant Thornton, Accountants and Management Consultants, specializing in
financial institutions.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth the compensation earned
during the year ended December 31, 1993 by the Company's Chief Executive Officer
and the four other most highly compensated executive officers who were serving
as executive officers at December 31, 1993.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------------- ------------
SECURITIES
UNDERLYING
OTHER STOCK
ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) GRANTED COMPENSATION(2)
- - --------------------------- ---- ------ -------- --------------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Richard M. Greenwood 1993 $376,846 $50,000 $39,359(3) 20,000 $ 0
President and Chief 1992 $209,173 0 25,986(3) 0 0
Executive Officer 1991 N/A N/A N/A N/A N/A
Walter H. Morris, Jr. (4) 1993 $178,500 $ 0 0 0 $ 0
Executive Vice President 1992 87,500 15,000 0 0 0
and Chief Lending Officer 1991 N/A N/A N/A N/A N/A
Andre S. W. Shih 1993 $134,847 $25,000 0 0 $ 0
Senior Vice President, 1992 125,000 19,500 0 0 0
Treasurer and Acting Chief 1991 55,289 0 0 0 0
Financial Officer
Frederick N. Bailard (4) 1993 $132,692 $ 0 0 0 $1,171
Senior Vice President, Real 1992 45,673 5,000 0 0 0
Estate Asset Management 1991 N/A N/A N/A N/A N/A
Kirk S. Sellman (4) 1993 $137,308 $ 0 0 0 $4,269
Executive Vice President, 1992 125,000 15,000 0 0 3,351
Retail Banking 1991 115,500 5,563(5) 0 0 0
</TABLE>
II-5
<PAGE>
(1) Excludes perquisites if the aggregate amount thereof is less than $50,000,
or 10% of salary plus bonus, if less.
(2) Consists of matching contributions under the Company's 401(k) Plan.
(3) When Mr. Greenwood was hired on June 3, 1992, the Company agreed to make him
an interest free loan of $240,000 described below. The amount shown
includes interest on such loan in 1993 of $9,984, an automobile allowance
of $20,040, an excess group life insurance policy for which Fidelity paid
premium in the amount of $2,345 and other benefits.
(4) Mr. Morris resigned March 18, 1994. Mr. Bailard resigned February 2, 1994.
Mr. Sellman resigned January 3, 1994.
(5) Includes amounts earned under the Company's Management Incentive
Compensation Plan (see "Employee Benefit Plans--Management Incentive
Compensation Program") with respect to each year in question, even if
payment was made in the following year.
STOCK OPTIONS
On March 24, 1993, the Company granted to Mr. Greenwood a stock option to
purchase 20,000 shares of Citadel common stock at a price of $21.90 per share.
The Company granted no other stock options and no stock appreciation rights
("SARs") to executives or employees in 1993. The following table sets forth the
stock options outstanding held by the named executives as of December 31, 1993.
All options are exercisable. No SARs are outstanding.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL RALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
--------------------------------------------------------------- -----------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS/SARS EMPLOYEES IN EXERCISE OR EXPIRATION 5% 10%
NAME GRANTED FISCAL YEAR BASE PRICE DATE $35.67/SHARE $56.80/SHARE
- - ----------------------- ------------ ---------------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Richard M. Greenwood 20,000 100% $21.90 2003 $713,400 $1,136,000
Walter H. Morris, Jr. 0 0 -- -- -- --
Andre S. W. Shih 0 0 -- -- -- --
Frederick N. Bailard 0 0 -- -- -- --
Kirk S. Sellman 0 0 -- -- -- --
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED OPTIONS/SARs AT FY-END(#) OPTIONS/SARs AT FY-END(#)
NAME ON EXERCISE (#) VALUE REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - -------------------------- --------------- ------------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
Richard M. Greenwood N/A N/A 20,000/0 0(1)
Walter H. Morris, Jr. -- -- -- --
Andre S. W. Shih -- -- -- --
Frederick N. Bailard -- -- -- --
Kirk S. Sellman -- -- -- --
</TABLE>
- - ------------
(1) None of the options held by Mr. Greenwood are in-the-money.
II-6
<PAGE>
RETIREMENT INCOME (DEFINED BENEFIT) PLAN
The Company maintains a Retirement Income Plan which is a qualified, non-
contributory defined benefit retirement plan. The Retirement Plan provides for
monthly retirement payments or an actuarially equivalent lump sum to or on
behalf of each covered employee or beneficiary upon retirement at age 65 or upon
early retirement (i.e. the attainment of age 55 and the completion of 10 years
of service) and, under certain circumstances, upon disability, death or other
termination of employment, based upon the employee's average monthly
compensation and the aggregate number of years of service.
The following table illustrates approximate annual benefits payable at normal
retirement age for various combinations of service and compensation:
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------
AVERAGE FINAL COMPENSATION 15 20 25 30 35
- - ----------------------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
$ 50,000 11,302 15,069 18,836 22,603 26,370
100,000 24,427 32,569 40,711 48,853 56,995
150,000 37,552 50,069 62,586 75,103 87,620
200,000 37,552 50,069 62,586 75,103 87,620
250,000 37,552 50,069 62,586 75,103 87,620
300,000 37,552 50,069 62,586 75,103 87,620
350,000 37,552 50,069 62,586 75,103 87,620
400,000 37,552 50,069 62,586 75,103 87,620
</TABLE>
Compensation under the Retirement Income Plan includes all regular pay,
excluding overtime, commissions and bonuses, limited by IRC 401(a)(17)
compensation limit ($150,000 for 1994). The benefit amounts listed above were
computed on a 10-year certain and life basis, which is the normal form under the
plan.
The approximate years of credited service as of December 31, 1993 for each of
the named executive officers are as follows:
<TABLE>
<CAPTION>
NAME SERVICE
- - --------------------- -------
<S> <C>
Richard M. Greenwood 1 year
Walter H. Morris, Jr. 1 year
Andre S. W. Shih 2 years
Kirk S. Sellman 3 years
Frederick N. Bailard 1 year
</TABLE>
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL AGREEMENTS
Mr. Greenwood and the Company entered into a three-year employment agreement
as of June 3, 1992, his date of hire. Mr. Greenwood's agreement with the
Company provides for compensation during the first twelve months at the rate of
$365,000 per year, increasing to $385,000 for the second twelve months and
$415,000 for the third twelve months. In the event of termination by the
Company other than for "cause", or by Mr. Greenwood for "cause", Mr. Greenwood
would be entitled to receive, in addition to accrued benefits under any
applicable benefits plans, an amount equal to the sum of (i) the balance of the
amount which would have been paid to Mr. Greenwood had his employment continued
through the remainder of the twelve month period in which such termination
occurred and (ii) $365,000 if such termination occurs during the first twelve
months, $385,000 if such termination occurs during the second twelve months, and
$0 if such termination occurs during the third twelve months of his employment.
In the event of an "Acquisition of Control" (as defined in the agreement) of the
Company by any person other than Craig, Reading, Hecco Ventures I, Tucson
Electric Power Company or any one or more of their respective affiliates, Mr.
Greenwood would be entitled to receive additional severance compensation in the
amount of $500,000 during the first twelve months of his employment, reducing to
$250,000 and $0 for the second and third twelve months of his employment,
respectively. This additional compensation is also payable in the event of
termination without "cause" by Mr. Greenwood, or failure of the parties to enter
into a new employment contract, following any such "Acquisition of Control." Mr.
Greenwood is also entitled to participate in the Company's health, pension and
bonus programs.
In March 1993, the Board of Directors approved entering into severance
agreements with Messrs. Sellman, Bailard and Morris under which the Company
agreed to pay each of them a sum equal to one year's salary if they are
discharged or effectively discharged following a "change in control" involving
any person other than Craig, Reading, Hecco Ventures I, Tucson Electric Power
Company or one or more of their respective affiliates. The Board of Directors
approved entering into the same or similar agreements with approximately 16
other Company officers.
II-7
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following are members of the Compensation Committees of Citadel and
Fidelity:
Mr. James J. Cotter -- Citadel
Mr. Mel Goldsmith -- Citadel and Fidelity
Mr. Ralph B. Perry III -- Fidelity
Mr. Alfred Villasenor, Jr. -- Citadel and Fidelity
None of the Committee members are employees of Citadel or Fidelity, nor are
they involved in any interlocking directorships. Mr. Perry is a member of a law
firm that provides legal services to the Company. See Item 13. "Certain
Relationships and Related Transactions--Attorneys' Fees." Mr. Greenwood serves
in an advisory capacity to the Compensation Committees of Citadel and Fidelity.
COMPENSATION OF DIRECTORS
Nonemployee directors are paid fees in the amount of a $23,000 annual retainer
plus $1,000 for each board meeting and $850 for each committee meeting attended
in person (or $300 in the case of telephonic meetings). In addition, Mr.
Villasenor is paid $850 quarterly for his attendance at the Fidelity CRA
Committee meetings. Committee chairmen who are not Company employees receive an
additional $2,500 per year. For directors who fail to attend a meeting (unless
excused for illness), the attendance fee for the ensuing 12 meetings is reduced
by $100 per meeting. Failure to attend two or more meetings reduces the
attendance fee by $250 per meeting for the ensuing 12 meetings.
In December 1993, the Board increased Mr. Cotter's annual retainer to $100,000
retroactive to October 1991. Mr. Cotter receives no meeting fees in addition to
the retainer and all annual retainers and meeting fees paid to Mr. Cotter since
October 1991 were netted from payments due retroactively. As of December 1993,
the net amount owed to Mr. Cotter under this new compensation arrangement was
$117,525. The first quarterly installment of the 1994 annual retainer in the
amount of $25,000 was paid on January 2, 1994.
II-8
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 1994, (i) the name of each
person known to Citadel to be the beneficial owner of more than 5% of the
outstanding Citadel Common Stock, (ii) the total number of shares of Citadel
Common Stock beneficially owned by each such person and (iii) the percentage of
all Citadel Common Stock outstanding held by each such person.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP(1) CLASS
- - ------------------- ------------ ----------
<S> <C> <C>
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109........ 364,968(2) 5.53%
Vanguard/Windsor Fund, Inc.
1300 Morris Drive
Valley Forge, Pennsylvania 19482... 447,500(3) 6.78%
Craig Corporation
116 North Robertson Boulevard
Los Angeles, California 90048...... 592,712(4) 8.99%
Dillon Investors, L.P.
21 East State Street, Suite 1410
Columbus, Ohio 43215............... 647,000(5) 9.81%
</TABLE>
- - ----------
(1) Except as otherwise indicated, the persons listed as beneficial owners of
the shares have the sole voting and investment power with respect to such
shares.
(2) As reported in a Schedule 13G dated February 11, 1994 filed by FMR Corp.
FMR Corp. is the parent holding company of Fidelity Management & Research
Company, an investment advisor to Fidelity Low-Priced Stock Fund (the
"Fund"), which holds 364,968 shares or 5.53% of the outstanding shares of
the Company. FMR does not have sole power to vote or direct the voting of
shares held by the Fund, which power resides with the Fund's Board of
Trustees.
(3) As reported in Amendment No. 6 to a Schedule 13G of Vanguard/Windsor Fund,
Inc. dated February 2, 1994 and as otherwise advised by such stockholder.
The Company is advised that Wellington Management Company acts as investment
adviser to Vanguard/Windsor Fund, Inc.
(4) As reported in Amendment No. 10 dated October 19, 1993 to a Schedule 13D
filed by Craig with respect to the Company and as otherwise advised by
Craig. Pursuant to their application, Craig, Mr. Cotter and Reading (which
is 47% owned by Craig) were in April of 1991 granted approval by the OTS,
subject to certain conditions for one year, to acquire control of the
Company and/or to increase, from time to time, their equity ownership in the
Company. The OTS has extended the approval to April 23, 1994 and Craig, Mr.
Cotter and Reading may apply for an extension beyond that date. Mr. Cotter
is the Chairman of the Board and a principal stockholder of Craig, but
disclaims any beneficial ownership of the Common Stock held by Craig.
(5) As reported in a Schedule 13D dated March 17, 1994 of Dillon Investors, L.P.
("DI"), Roderick H. Dillon, Jr., general partner of DI, Roderick H. Dillon,
Jr.-IRA and Roderick H. Dillon, Jr.-Foundation. Mr. Dillon is a private
investor with Dillon Capital Management Limited Partnership, an investment
management firm. Mr. Dillon owns 10,000 shares of the Company (5,000
individually and 5,000 shares through his IRA) totaling .152% of the
Company's outstanding shares (.076% individually and .076% through his IRA).
The Roderick H. Dillon, Jr.-Foundation holds 2,000 shares or .030% of the
outstanding shares of the Company.
II-9
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the shares of Citadel Common Stock owned as of
January 31, 1994 by all directors, each executive officer named in Item 10 and
by the directors and executive officers of Citadel as a group as of December 31,
1993. Except as noted and subject to applicable community property and similar
statues, the indicated beneficial owner of the shares has sole voting power and
sole investment power.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- - ------------------------ -------------------- ----------------
<S> <C> <C>
James J. Cotter...................... 592,712(1) 8.99%
Richard M. Greenwood................. 20,000(2) *
Donald R. Boulanger.................. 201 *
Peter W. Geiger...................... -- --
Mel Goldsmith........................ 603 *
Ralph B. Perry III................... -- --
S. Craig Tompkins.................... -- --
Zelbie Trogden....................... -- --
Alfred Villasenor, Jr................ 900 *
Walter H. Morris, Jr................. -- --
James E. Stutz....................... -- --
Kirk S. Sellman...................... 2,027 *
Steve Wesson......................... -- --
Frederick N. Bailard................. -- --
James F. Barnett III................. -- --
Robert P. Condon..................... -- --
Diana E. Cookmeyer................... -- --
Godfrey B. Evans..................... 300(2) *
Andre S. W. Shih..................... -- --
Heidi Wulfe.......................... -- --
All directors and executive officers
as a group (20 persons)............. 616,743(3) 9.35%
</TABLE>
- - ----------
(1) Mr. Cotter is the Chairman and a principal stockholder of Craig Corporation,
which holds 592,712 shares of Citadel Common Stock. Mr. Cotter disclaims
beneficial ownership of these shares.
(2) Represents shares subject to options granted by the Company.
(3) Includes 20,300 shares subject to options granted by the Company.
* Represents less than one percent of the outstanding shares of Citadel Common
Stock.
II-10
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LOANS BY FIDELITY
Fidelity offers home loans to directors, officers and employees of the
Company. These loans are made in the ordinary course of business and, in the
judgment of management, do not involve more than the normal risk of
collectibility. The loans are secured by real property and are made on
substantially the same terms, including interest rate and collateral, as those
prevailing at the time for comparable transactions with non-affiliated persons.
However, pursuant to the provisions of Fidelity's employee loan program which
existed prior to the enactment of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 ("FIRREA"), the interest rate generally charged was
one-half percent less than the rate for comparable transactions with non-
affiliated persons on fixed-rate loans and was one percent below the margin on
adjustable-rate loans. In addition, employees generally do not pay loan fees or
closing costs on their loans. The rate on these types of loans remains at the
reduced level only for so long as the individual obtaining the loan continues to
be employed by, or serves as a director of, the Company. Since the passage of
FIRREA, Federal Reserve Board regulations applicable to savings institutions
prohibit the making of preferential loans to directors and executive officers of
Fidelity who perform policy-making functions. Accordingly, Fidelity no longer
grants such loans to any director or any officer who influences corporate
policy. Prior to the enactment of FIRREA, directors and executive officers with
policy making functions could participate in Fidelity's employee loan program
and to the extent they had loans outstanding on the effective date of FIRREA's
enactment, such loans have grandfathered status.
<TABLE>
<CAPTION>
HIGHEST UNPAID
INDEBTEDNESS SINCE BALANCE AS OF INTEREST RATE AT YEAR
NAME DECEMBER 31, 1992 DECEMBER 31, 1993 DECEMBER 31, 1993 MADE
- - ---- ------------------ ----------------- ----------------- ----
<S> <C> <C> <C> <C>
Godfrey B. Evans $198,221 $194,416 5.103% 1987
Godfrey B. Evans $ 77,971 $ 76,950 7.0% 1989
S. Craig Tompkins $650,000(1) $646,430 7.75% 1993
</TABLE>
- - ----------
(1) This loan was sold to Residential Funding Corporation post-origination and
Fidelity continues to service the loan.
CITADEL LOAN TO CEO
As part of Mr. Greenwood's compensation package, Citadel extended an interest-
free loan to Mr. Greenwood in the amount of $240,000, payable on demand. The
loan was made principally to refinance a loan extended to Mr. Greenwood by his
previous employer, and Citadel agreed to reimburse Mr. Greenwood for interest
accrued on such refinanced loan in the amount of $8,965 from the date of his
employment with Citadel until the new loan was made on October 27, 1992.
Interest on such loan in the amount of $9,942 was imputed to Mr. Greenwood in
fiscal 1993.
ATTORNEYS' FEES
Graven Perry Block Brody & Qualls performs legal services for the Company from
time to time. The Company paid that firm approximately $157,146 for such legal
services performed during 1993 and costs related thereto. Mr. Perry, a director
of the Company, is a partner of that firm. Prior to joining the Company's Board
of Directors in March 1993, Mr. Tompkins was a partner at Gibson, Dunn &
Crutcher, acting as outside legal counsel to the Company.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of the
Company's stock to file reports of ownership and changes in ownership with the
Securities Exchange Commission (the "SEC") and the American Stock Exchange.
Officers, directors and greater than ten percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons that no Forms 5
were required for those person, the Company believes that during the year ending
December 31, 1993, its officers, directors and greater than ten percent
beneficial owners complied with all applicable filing requirements.
II-11
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE COMPANY
HAS DULY CAUSED THIS AMENDMENT TO REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
CITADEL HOLDING CORPORATION
By /S/ GODFREY B. EVANS
------------------------------------
Godfrey B. Evans
Senior Vice President,
General Counsel & Corporate Secretary
II-12
