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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): April 3, 1995
CITADEL HOLDING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 1-8625 95-3885184
(STATE OR OTHER (COMMISSION FILE (I.R.S. EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION NO.)
INCORPORATION)
4565 Colorado Street, Los Angeles, California 90401
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (818) 549-3130
600 North Brand Boulevard, Glendale, California 91203
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
Page 1 of 4 pages
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ITEM 5. OTHER EVENTS.
See Exhibits listed in Response to Item 7. With respect to the agreement by
Citadel Holding Corporation, a Delaware corporation ("Citadel"), to grant Craig
Corporation, a Delaware corporation ("Craig"), a warrant for 666,000 shares of
common stock, as described in Exhibit 99.1, such agreement was separately
negotiated by Citadel and Craig and neither Roderick H. Dillon, Jr. ("Dillon"),
nor any of the entities associated with Dillon, were a party to such agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
10.1 Stock Exchange and Settlement Agreement, dated April 3, 1995, by
and among Citadel Holding Corporation, a Delaware corporation, and Dillon
Investors, L.P., a Delaware partnership, Roderick H. Dillon, Jr., an individual,
Roderick H. Dillon, Jr. Foundation, an Ohio trust, and Roderick H. Dillon, Jr.-
IRA, and consented to by Craig Corporation, a Delaware corporation
99.1 Press Release of Citadel Holding Corporation, dated April 4,
1995
99.2 Settlement Agreement, dated April 3, 1995, by and among Craig
Corporation, a Delaware corporation, and Dillon Investors, L.P., a Delaware
partnership, Roderick H. Dillon, Jr., an individual, Roderick H. Dillon, Jr.
Foundation, an Ohio trust, and Roderick H. Dillon, Jr.-IRA
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CITADEL HOLDING CORPORATION,
a Delaware corporation
By: /s/ Steve Wesson
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Name: Steve Wesson
Title: President and Chief Executive Officer
April 4, 1995
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EXHIBIT INDEX
10.1 Stock Exchange and Settlement Agreement, dated April 3, 1995, by
and among Citadel Holding Corporation, a Delaware corporation, and Dillon
Investors, L.P., a Delaware partnership, Roderick H. Dillon, Jr., an individual,
Roderick H. Dillon, Jr. Foundation, an Ohio trust, and Roderick H. Dillon, Jr.-
IRA, and consented to by Craig Corporation, a Delaware corporation
99.1 Press Release of Citadel Holding Corporation, dated April 4,
1995
99.2 Settlement Agreement, dated April 3, 1995, by and among Craig
Corporation, a Delaware corporation, and Dillon Investors, L.P., a Delaware
partnership, Roderick H. Dillon, Jr., an individual, Roderick H. Dillon, Jr.
Foundation, an Ohio trust, and Roderick H. Dillon, Jr.-IRA
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EXHIBIT 10.1
STOCK EXCHANGE AND SETTLEMENT AGREEMENT
This Settlement Agreement (this "Agreement") is made and entered into
on April 3, 1995 by and among Citadel Holding Corporation, a Delaware
corporation ("Citadel"), and Dillon Investors, L.P., a Delaware partnership
("Dillon LP"), Roderick H. Dillon, Jr., an individual ("Dillon"), Roderick H.
Dillon, Jr. Foundation, an Ohio trust ("Dillon Trust"), and Roderick H. Dillon,
Jr.-IRA ("Dillon IRA"; Dillon LP, Dillon, Dillon Trust and Dillon IRA are
collectively referred to herein as the "Dillon Parties").
R E C I T A L S
- - - - - - - -
1. Citadel and Dillon LP are parties to a lawsuit filed by Dillon LP
in the Court of Chancery of the State of Delaware in and for New Castle County
(C.A. No. 13867) (the "Delaware Action").
2. Citadel and the Dillon Parties are parties to a lawsuit filed by
Citadel in the United States District Court, Central District of California
(Case No. CV-94-7735 R) (the "Federal Action", and collectively with the
Delaware Action, the "Actions").
3. Citadel desires to sell to the Dillon Parties, and the Dillon
Parties desire to purchase from Citadel, shares of common stock of Fidelity
Federal Bank, a Federal Savings Bank ("Fidelity").
4. Citadel and the Dillon Parties desire to avoid the cost, expense
and risk associated with further litigation with respect to the Actions.
NOW, THEREFORE, in consideration of the foregoing and the provisions
set forth below, the parties hereto agree as follows:
ARTICLE ONE
SETTLEMENT OF THE ACTIONS
1.1. In consideration of all the promises, conditions, and covenants
set forth herein and subject to the provisions of this Agreement, and except for
the obligations of the Dillon Parties hereunder, effective as of and conditioned
upon consummation of the Closing (as defined below), Citadel hereby forever
releases, acquits, and discharges the Dillon Parties, Bradley C. Shoup
("Shoup"), Timothy M. Kelley ("Kelley"), Ralph V. Whitworth ("Whitworth") and
Jordan M. Spiegel ("Spiegel"), and all of their past and present predecessors,
successors, assigns, directors, employees, partners, agents, attorneys,
affiliates, and parent and subsidiary corporations and partnerships (the Dillon
Parties, Shoup, Kelley, Whitworth, Spiegel and such other persons are
collectively referred to herein as the "Dillon Releasees"), of and from any and
all manner of actions, causes of action, rights in law or in equity, suits,
debts, liens, judgments, indebtedness, contracts, agreements, promises,
liabilities, claims, cross-claims, demands, damages, losses, accounts,
reckonings, obligations, interest, costs, or expenses, of any type, kind, or
nature whatsoever, known or unknown, fixed or contingent, liquidated or
unliquidated, claimed or unclaimed, whether based in contract, tort, or other
legal, statutory, or equitable theory of recovery, each as though fully set
forth at length herein, that Citadel has or at anytime had against the Dillon
Releasees, or any of them, by reason of any matter, cause, act, omission, or
thing whatsoever from the beginning of time through the Closing Date (as defined
below), arising out of or in connection with (i) all claims
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asserted or that could have been asserted in, or arising out of the facts
asserted or that could have been asserted in, the Actions, (ii) the initiation,
prosecution and defense of the Actions, (iii) all claims asserted, that could
have been asserted, or that relate in any way to, the securities of Citadel,
including, without limitation, claims under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and regulations thereunder
(collectively, the "Exchange Act Laws"), and (iv) all claims asserted or that
could have been asserted with respect to, or that relate in any way to, the
purchase or ownership of the securities of Citadel by the Dillon Parties.
1.2 In consideration of all the promises, conditions, and covenants
set forth herein and subject to the provisions of this Agreement, and except for
the obligations of Citadel hereunder, effective as of and conditioned upon
consummation of the Closing, the Dillon Parties hereby forever release, acquit,
and discharge Citadel, James J. Cotter ("Cotter"), Peter W. Geiger ("Geiger"),
S. Craig Tompkins ("Tompkins"), Alfred Villasenor ("Villasenor") and Steve
Wesson ("Wesson") and all of their past and present predecessors, successors,
assigns, directors, employees, partners, agents, attorneys, affiliates, and
parent and subsidiary corporations and partnerships (Citadel, Cotter, Geiger,
Tompkins, Villasenor, Wesson and such other persons are collectively referred to
herein as the "Citadel Releasees"), of and from any and all manner of actions,
causes of action, rights in law or in equity, suits, debts, liens, judgments,
indebtedness, contracts, agreements, promises, liabilities, claims, cross-
claims, demands, damages, losses, accounts, reckonings, obligations, interest,
costs, or expenses, of any type, kind, or nature whatsoever, known or unknown,
fixed or contingent, liquidated or unliquidated, claimed or unclaimed, whether
based in contract, tort, or other legal, statutory, or equitable theory of
recovery, each as though fully set forth at length herein, that the Dillon
Parties, or any of them, have or at anytime have had against the Citadel
Releasees, or any of them, by reason of any matter, cause, act, omission, or
thing whatsoever from the beginning of time through the Closing Date, arising
out of or in connection with (i) all claims asserted or that could have been
asserted in, or arising out of the facts asserted or that could have been
asserted in, the Actions, (ii) the initiation, prosecution and defense of the
Actions, (iii) all claims asserted, that could have been asserted, or that
relate in any way to, the securities of Citadel, including, without limitation,
claims under the Exchange Act Laws, and (iv) all claims asserted or that could
have been asserted with respect to, or that relate in any way to, the purchase
or ownership of the securities of Citadel by the Dillon Parties.
1.3 It is understood and agreed that the parties hereto, and each of
them, hereby expressly waive all rights under Section 1542 of the Civil Code of
California, and any law or principle of similar effect of any state or territory
of the United States. Said section reads as follows:
"SECTION 1542. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR."
The advice of legal counsel has been obtained by each of the parties
hereto prior to signing this Agreement.
1.4 The parties hereto agree that they shall forthwith cause their
respective Delaware trial counsel to apply to the Court of Chancery to vacate
the trial date for the Delaware Action, currently set for April 18-21, 1995.
The parties further agree
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that all discovery and pretrial proceedings in the Federal Action (to the extent
permitted by applicable laws and/or rules of procedure) and, upon approval of
the Court of Chancery to vacate the trial date, the Delaware Action, will be
stayed for a period of 30 days from the date hereof. Upon the expiration of such
30 days, in the absence of either the Closing or an agreement of the parties
hereto to a further stay of proceedings, discovery and pretrial proceedings in
the Actions shall recommence, and the parties shall forthwith cause their
respective counsel jointly to confer, to the extent necessary, with the
applicable courts to establish a schedule for completion of discovery and other
pretrial proceedings and the fixing of a new trial date at the earliest time
consistent with the discovery requirements and the courts' calendars.
1.5 Citadel and the Dillon Parties hereby authorize and direct their
respective attorneys to execute and file on the Closing Date stipulations for
dismissal with prejudice of the Actions, and such actions at such time shall be
a term of this Agreement.
1.6 This Agreement constitutes the compromise, settlement and release
of disputed claims, denials and defenses made or that could have been made by
Citadel or the Dillon Parties, or any of them, and is being entered into solely
for the purpose of avoiding the burdens, inconveniences and expenses of further
litigation and disputes between the parties with respect to the Actions.
Therefore, this Agreement is not to be, and shall never be construed or deemed
to be, an admission or concession by Citadel or the Dillon Parties, or any of
them, of liability or culpability, or lack thereof, at any time for any purpose
concerning the Actions hereby compromised, settled and released. Further,
nothing contained herein or in any form of communication between Citadel and the
Dillon Parties, their respective attorneys and representatives, or any of them,
pertaining to the consummation of this Agreement or the compromise, settlement
and releases reflected herein shall be construed or deemed to be an admission or
concession of liability or culpability, or lack thereof, by Citadel or the
Dillon Parties, or any of them, concerning such matters.
ARTICLE TWO
AGREEMENT TO SELL AND PURCHASE
2.1 Sale of Fidelity Stock. On the terms and subject to the
----------------------
conditions set forth herein, Citadel hereby agrees to sell to the Dillon
Parties, and the Dillon Parties hereby agree to purchase from Citadel, 1,295,000
shares (the "Class B Shares") of Class B Common Stock, par value $.01 per share
(the "Class B Common Stock"), of Fidelity. Concurrently with this purchase and
sale, the Class B Shares will be converted, pursuant to Fidelity's Amended and
Restated Charter S (the "Fidelity Charter"), into an equal number of shares (the
"Class A Shares") of Class A Common Stock, par value $.01 per share (the "Class
A Common Stock"), of Fidelity, such that the Dillon Parties will acquire Class A
Shares hereunder. The closing (the "Closing") of such purchase and sale shall
occur on the fifth (5th) business day following the Effective Date (as defined
below) (the "Closing Date").
2.2 Consideration. In consideration of the sale of the Class B
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Shares by Citadel, the Dillon Parties shall deliver to Citadel (a) an aggregate
of 666,000 shares of common stock, $.01 par value per share, of Citadel (the
"Tendered Citadel Stock"), and(b) $2,220,000 in cash by means of a wire transfer
of immediately available funds to an account designated in writing by Citadel
(the "Cash Component").
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2.3 Closing. On the Closing Date, the following deliveries shall
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occur, each of which shall be conditioned on one another:
(a) Citadel shall deliver to Fidelity a certificate or certificates
evidencing the Class B Shares, duly endorsed in blank or accompanied by separate
stock powers, and Fidelity shall deliver to Dillon, as representative of the
Dillon Parties, certificates evidencing the Class A Shares, which certificates
shall not have imprinted on them or otherwise be subject to any legends (or
comparable written restrictions) limiting the transferability, voting or other
rights of the holder(s) of such certificates;
(b) The Dillon Parties shall deliver to Citadel certificates
evidencing the Tendered Citadel Stock, duly endorsed in blank or accompanied by
separate stock powers;
(c) The Dillon Parties shall deliver to Citadel the Cash
Component; and
(d) Each of Citadel and the Dillon Parties (each separately) shall
deliver to the other a written certificate of its authorized representative
dated the Closing Date to the effect that its representations and warranties
herein remain true and correct on and as of the Closing Date with the same force
and effect as if made on and as of the Closing Date.
2.4 Notice under Fidelity Charter. Citadel agrees to deliver to
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Fidelity on the Closing Date the certificate contemplated by Section
5(A)(2)(d)(i) of the Fidelity Charter upon a transfer (other than by way of a
dividend or distribution by Citadel to its stockholders generally) of Class B
Common Stock.
2.5 Allocation of the Purchase Price and the Class A Shares. Prior
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to the Closing Date, Dillon shall inform Citadel of the respective number of
shares of the Tendered Citadel Stock and of the respective portions of the Cash
Component that will be delivered by each of the Dillon Parties, and each Dillon
Party shall receive the same proportion of the Class A Shares as the proportion
of shares of Tendered Citadel Stock and the Cash Component it or he (as
applicable) delivers.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
3.1 Mutual Representations and Warranties. Each party hereby
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represents and warrants to the others as follows:
(a) If such party is a corporation, it is a corporation duly
incorporated, validly existing and in good standing under the laws of its state
of incorporation and is duly qualified and authorized to do business in the
State of California. If such party is a partnership, it is a partnership duly
formed, validly existing and in good standing as a partnership under the laws of
its state of organization. If such party is a trust, it is a trust duly created
and validly existing as a trust under the laws of the state under which it was
created.
(b) It has full power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby.
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(c) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will violate, result in a
breach of any of the terms or provisions of, constitute a default (or any event
that, with the giving of notice or the passage of time or both would constitute
a default) under, accelerate any obligations under, or conflict with, (i) its
charter or bylaws (or other organizational documents), if applicable, or any
agreement, indenture or other instrument to which it is party or by which it or
its properties are bound, (ii) any judgment, decree, order or award of any
court, governmental body or arbitrator to which it is subject, or (iii) any law,
rule or regulation applicable to it.
(d) Such party has made its own independent evaluation and
determination as to the value and fairness of the consideration it is delivering
under the terms of this Agreement and is not relying on any other party hereto
for such purposes.
(e) It or he (as applicable) has carefully read the entirety of this
Agreement, knows and understands the contents hereof, and enters into this
Agreement in good faith, freely and voluntarily without undue influence,
coercion, fraud or duress.
3.2 Representations and Warranties of Citadel. Citadel hereby
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represents and warrants to the Dillon Parties as follows:
(a) The Class B Shares are duly and validly authorized and issued,
fully paid and nonassessable, and Citadel is the sole owner of the Class B
Shares, and the Dillon Parties are acquiring the Class A Shares, free and clear
of any liens, encumbrances, pledges, security interests or other restrictions.
(b) Citadel has not sold, assigned, pledged, hypothecated or otherwise
transferred any of its interests in the Actions, or either of the Actions, or
any claim released hereby, to any other person or entity.
(c) Citadel has continually held either the Class B Shares or the
share of common stock of Fidelity that was reclassified into the Class B Common
Stock pursuant to the recapitalization of Fidelity that occurred on August 4,
1994 with the approval of the Office of Thrift Supervision for a period of at
least three consecutive years, and the Class A Shares represent less than 10% of
the issued and outstanding shares of Class A Common Stock.
(d) Section 1.4 of this Agreement is its valid and binding agreement,
enforceable against it in accordance with its terms. On the Effective Date,
this Agreement will be its valid and binding agreement, enforceable against it
in accordance with its terms.
(e) To Citadel's knowledge, neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any of the terms or provisions of, or result in a breach of, any
approval by the Office of Thrift Supervision (the "OTS") of the August 4, 1994
recapitalization of Fidelity or any agreement executed by and between any of the
OTS, Fidelity and Citadel in connection with such recapitalization.
(f) Citadel is not, and has not been since the August 4, 1994
recapitalization of Fidelity, an "affiliate" (as defined in Rule 144 promulgated
by the
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Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended) of Fidelity.
(g) To Citadel's knowledge, no approval or consent from the OTS is
required in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
3.3 Representations and Warranties of the Dillon Parties. Each of
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the Dillon Parties hereby represents and warrants to Citadel and, solely as to
Section 3.3(a), to Fidelity as follows:
(a) It or he (as applicable) is not an "affiliate" (as defined by
reference above) of Citadel and is not a member of any "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) of which Citadel or any
affiliate of Citadel is a member.
(b) It or he (as applicable) has not sold, assigned, pledged,
hypothecated or otherwise transferred any of its or his interests in the
Actions, or either of the Actions, or any claim released hereby, to any other
person or entity.
(c) The Tendered Citadel Stock includes all shares of common stock of
Citadel that will be beneficially owned as of the Closing Date by any of the
Dillon Parties, their respective "affiliates" (as defined by reference above) or
any members (including, without limitation, all beneficiaries and principals of
any individual retirement or comparable accounts that are members) of the
"group" (within the meaning of Section 13(d)(3) of the Exchange Act) of which
the Dillon Parties were members for purposes of the filing of Amendment No. 8 to
Schedule 13D dated January 10, 1995 covering the common stock of Citadel, filed
with the SEC under the Exchange Act.
(d) The Dillon Parties are the sole owners of, and Citadel is
acquiring, the Tendered Citadel Stock free and clear of any liens, encumbrances,
pledges, security interests or other restrictions.
(e) This Agreement is its or his (as applicable) valid and binding
agreement, enforceable against it or him in accordance with its terms.
3.4 Survival of Representations and Warranties. All representations,
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warranties and agreements of each party hereto shall survive the Closing.
ARTICLE FOUR
OTHER AGREEMENTS
4.1 No Purchase. The Dillon Parties, and each of them, agree that
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neither they nor their respective affiliates will purchase or otherwise acquire
any beneficial interest, or any long or short position, in any securities of
Citadel (including, without limitation, common stock, preferred stock, debt
securities and any derivatives of any of the foregoing) prior to the first
anniversary of the Closing Date. In addition, during such period, the Dillon
Parties shall not make, or in any way participate, directly or indirectly, in
any "solicitation" of "proxies" or "written consent" to vote, or seek to advise
or influence any person with respect to the voting of, any voting securities of
Citadel, or become a "participant" in any "election contest" (as such terms are
used in the proxy rules of the SEC).
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4.2 Further Assurances. Each party hereto shall promptly execute and
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deliver such further agreements and instruments, and take such further actions,
as the other party may reasonably request in order to carry out the purpose and
intent of this Agreement.
ARTICLE FIVE
MISCELLANEOUS
5.1 Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and shall be deemed given if delivered personally
or by facsimile transmission (with subsequent letter confirmation by mail) or
two days after being mailed by certified or registered mail, postage prepaid,
return receipt requested, to the parties, their successors in interest or their
assignees at the following addresses, or at such other addresses as the parties
may designate by written notice in the manner aforesaid:
If to the Dillon Parties: 21 East State Street, Suite 1410
Columbus, Ohio 43215-4228
Telecopy: (614) 222-4224
Attention: Roderick H. Dillon, Jr.
If to Citadel: Citadel Holding Corporation
4565 Colorado Street
Los Angeles, California
Telecopy: (818) 549-3564
Attention: President
5.2 Assignability and Parties in Interest. This Agreement shall not
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be assignable by any of the parties. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective permitted successors and
assigns.
5.3 Governing Law. This Agreement shall be governed by, and
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construed and enforced in accordance with, the internal substantive law, and not
the law pertaining to conflicts or choice of law, of the State of California.
5.4 Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
5.5 Complete Agreement. This Agreement is an integrated agreement
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containing the entire agreement among the parties with respect to the subject
matter hereof and shall supersede all previous oral and written and all
contemporaneous oral negotiations, commitments and understandings.
5.6 Modifications, Amendments and Waivers. This Agreement may be
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modified, amended or otherwise supplemented only by a writing signed by the
party against whom it is sought to be enforced. No waiver of any right or power
hereunder shall be deemed effective unless and until a writing waiving such
right or power is executed by the party waiving such right or power.
5.7 No Third Party Beneficiaries. Except as expressly provided in
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Sections 1.1 and 1.2 hereof, there are no third party beneficiaries under this
Agreement or intended by any party hereto.
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5.8 Expenses. Each party hereto shall bear its own costs and
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expenses, including, without limitation, attorneys' fees, incurred in connection
with the Actions and this Agreement.
5.9 Contract Interpretation; Construction of Agreement.
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(a) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Article, section, party and recital references are to this
Agreement unless otherwise stated.
(b) None of the parties hereto, nor their respective counsel, shall be
deemed the drafter of this Agreement for purposes of construing the provisions
of this Agreement, and all language in all parts of this Agreement shall be
construed in accordance with its fair meaning, and not strictly for or against
any party.
5.10 Effectiveness of Agreement. The "Effective Date" shall be the
--------------------------
later to occur of (i) the date on which Citadel notifies Dillon in writing that
Citadel's Board of Directors has approved this Agreement or (ii) the date on
which Craig Corporation ("Craig") notifies Dillon in writing that Craig's Board
of Directors has approved the Settlement Agreement of even date herewith among
Craig and the Dillon Parties (the "Craig/Dillon Settlement Agreement");
provided, however, that if the Effective Date does not occur on or before April
13, 1995, then this Agreement shall automatically terminate at 11:59 p.m., Los
Angeles time, on April 13, 1995 and shall thereafter have no legal force or
effect whatsoever.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
CITADEL HOLDING CORPORATION, DILLON INVESTORS, L.P.,
A DELAWARE CORPORATION A DELAWARE PARTNERSHIP
By: /s/ Steve Wesson By: /s/ Roderick H. Dillon, Jr.
____________________________ ________________________________
Title: President Title: General Partner
_________________________ _____________________________
RODERICK H. DILLON, JR.
FOUNDATION, AN OHIO TRUST
By: /s/ Roderick H. Dillon, Jr.
________________________________
Title: Trustee
_____________________________
RODERICK H. DILLON, JR.-IRA
/s/ Roderick H. Dillon, Jr.
________________________________
By: Roderick H. Dillon, Jr.
/s/ Roderick H. Dillon, Jr.
________________________________
Roderick H. Dillon, Jr.
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CONSENT
Notwithstanding any provision to the contrary set forth in the Credit
Agreement dated as August 2, 1994 (the "Credit Agreement") among Citadel Realty,
Inc., Citadel Holding Corporation ("Citadel"), and Craig Corporation ("Craig")
or the guaranty thereof by Citadel, Craig hereby consents to the transactions
contemplated by the foregoing Stock Exchange and Settlement Agreement and waives
any prohibition thereof in the Credit Agreement or guaranty thereof.
CRAIG CORPORATION,
A DELAWARE CORPORATION
By: /s/ S. Craig Tompkins
_______________________________
Title: President
____________________________
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EXHIBIT 99.1
CITADEL HOLDING CORPORATION
ANNOUNCES SETTLEMENT OF DILLON LITIGATION
Los Angeles, California (April 4, 1995) - Citadel Holding Corporation
announced today that it and one of its stockholders, Craig Corporation, have
entered into settlement agreements with Roderick Dillon and certain of his
affiliates relating to two lawsuits existing among the parties. One of Dillon's
partnership affiliates is a plaintiff in a Delaware action filed against
Citadel, its directors and Craig challenging Citadel's 1994 common and preferred
stock issuances to Craig. Citadel is a plaintiff in a federal court action in
Los Angeles challenging the accuracy of disclosures made by Dillon and certain
of his affiliates in filings with the Securities and Exchange Commission.
The settlement agreements contemplate that, among other things, Dillon
and his affiliates would purchase from Citadel 1.295 million shares of Class B
Common Stock of Fidelity Federal Bank, a Federal Savings Bank, in exchange for
which Citadel would receive from the Dillon entities 666,000 shares of Citadel
Common Stock and $2.22 million in cash. Additionally, all existing litigation
among Citadel, Craig Corporation and the Dillon entities would be terminated,
with mutual releases executed and delivered. The Dillon entities would also
agree, for a period of one year following the closing, not to purchase or
acquire any other beneficial interests in any of Citadel's securities, and not
to engage in any solicitation of consents or proxies during such period.
The settlement terms also include an agreement by Craig not to
exercise, prior to February 4, 1996, its right to tender any shares of the 3%
Cumulative Voting Convertible Preferred Stock of Citadel for conversion into
Citadel Common Stock without the prior consent of holders of a majority of the
outstanding shares of Citadel Common Stock. In exchange for such agreement from
Craig, Citadel would agree to grant Craig a two-year warrant to acquire the
666,000 shares of Citadel Common Stock being acquired from the Dillon entities
at a price of $3.00 per share, and Citadel would also agree to reimburse Craig
for certain expenses associated with the litigation.
The settlement agreements remain subject to the approval of the boards
of directors of both Citadel and Craig. In that regard, the board of Citadel is
seeking the advice of an independent investment banking firm as to the fairness
of the financial terms of the settlement, from a financial point of view, to the
public stockholders of Citadel.
Citadel shares are listed on the American Stock Exchange under the
symbol "CDL". Contact: Steve Wesson, President and Chief Executive Officer,
Citadel Holding Corporation, (818) 549-3130.
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EXHIBIT 99.2
SETTLEMENT AGREEMENT
This Settlement Agreement (this "Agreement") is made and entered into
on April 3, 1995 by and among Craig Corporation, a Delaware corporation
("Craig"), and Dillon Investors, L.P., a Delaware partnership ("Dillon LP"),
Roderick H. Dillon, Jr., an individual ("Dillon"), Roderick H. Dillon, Jr.
Foundation, an Ohio trust ("Dillon Trust"), and Roderick H. Dillon, Jr.-IRA
("Dillon IRA"; and collectively with Dillon LP, Dillon Trust, and Dillon, the
"Dillon Parties").
R E C I T A L S
- - - - - - - -
1. Craig and Dillon LP are parties to a lawsuit filed by Dillon LP in
the Court of Chancery of the State of Delaware in and for New Castle County
(C.A. No. 13867) (the "Delaware Action").
2. The Dillon Parties are parties to a lawsuit filed by Citadel
Holding Corporation, a Delaware corporation ("Citadel"), in the United States
District Court, Central District of California (Case No. CV-94-7735 R) (the
"Federal Action," and collectively with the Delaware Action, the "Actions").
3. Craig and the Dillon Parties desire to avoid the cost, expense and
risk associated with further litigation with respect to the Actions.
NOW, THEREFORE, in consideration of the foregoing and the provisions
set forth below, the parties hereto agree as follows:
ARTICLE ONE
SETTLEMENT OF THE ACTIONS
1.1 In consideration of all the promises, conditions, and covenants
set forth herein and subject to the provisions of this Agreement, and except for
the obligations of the Dillon Parties hereunder, effective as of and conditioned
upon consummation of the Closing (as defined below), Craig hereby forever
releases, acquits, and discharges the Dillon Parties, Bradley C. Shoup
("Shoup"), Timothy M. Kelley ("Kelley"), Ralph V. Whitworth ("Whitworth") and
Jordan M. Spiegel ("Spiegel"), and all of their past and present predecessors,
successors, assigns, directors, employees, partners, agents, attorneys,
affiliates, and parent and subsidiary corporations and partnerships (Shoup,
Kelley, Whitworth, Spiegel, the Dillon Parties and such other persons are
collectively referred to herein as the "Dillon Releasees"), of and from any and
all manner of actions, causes of action, rights in law or in equity, suits,
debts, liens, judgments, indebtedness, contracts, agreements, promises,
liabilities, claims, cross-claims, demands, damages, losses, accounts,
reckonings, obligations, interest, costs, or expenses, of any type, kind, or
nature whatsoever, known or unknown, fixed or contingent, liquidated or
unliquidated, claimed or unclaimed, whether based in contract, tort, or other
legal, statutory, or equitable theory of recovery, each as though fully set
forth at length herein, that Craig has or at anytime has had against the Dillon
Releasees, or any of them, by reason of any matter, cause, act, omission, or
thing whatsoever from the beginning of time through the Closing Date (as defined
below), arising out of or in connection with (i) all claims asserted or that
could have been asserted in, or arising out of the facts asserted or that could
have been asserted in, the Actions, (ii) the initiation, prosecution and defense
of the Actions, (iii) all claims asserted, that could have been asserted, or
that relate in any way to, the securities of Citadel, including, without
limitation, claims under the Securities
<PAGE>
Exchange Act of 1934, as amended, and the rules and regulations thereunder
(collectively, the "Exchange Act Laws"), and (iv) all claims asserted or that
could have been asserted with respect to, or that relate in any way to, the
purchase or ownership of the securities of Citadel by the Dillon Parties..
1.2 In consideration of all the promises, conditions, and covenants
set forth herein and subject to the provisions of this Agreement, and except for
the obligations of Craig hereunder, effective as of and conditioned upon
consummation of the Closing, the Dillon Parties hereby forever release, acquit,
and discharge Craig and all of its past and present predecessors, successors,
assigns, directors, employees, partners, agents, attorneys, affiliates, and
parent and subsidiary corporations and partnerships (Craig and such other
persons are collectively referred to herein as the "Craig Releasees"), of and
from any and all manner of actions, causes of action, rights in law or in
equity, suits, debts, liens, judgments, indebtedness, contracts, agreements,
promises, liabilities, claims, cross-claims, demands, damages, losses, accounts,
reckonings, obligations, interest, costs, or expenses, of any type, kind, or
nature whatsoever, known or unknown, fixed or contingent, liquidated or
unliquidated, claimed or unclaimed, whether based in contract, tort, or other
legal, statutory, or equitable theory of recovery, each as though fully set
forth at length herein, that the Dillon Parties, or any of them, have or at
anytime have had against the Craig Releasees, or any of them, by reason of any
matter, cause, act, omission, or thing whatsoever from the beginning of time
through the Closing Date, arising out of or in connection with (i) all claims
asserted or that could have been asserted in, or arising out of the facts
asserted or that could have been asserted in, the Actions, (ii) the initiation,
prosecution and defense of the Actions, (iii) all claims asserted, that could
have been asserted, or that relate in any way to, the securities of Citadel,
including, without limitation, claims under the Exchange Act Laws, and (iv) all
claims asserted or that could have been asserted with respect to, or that relate
in any way to, the purchase or ownership of the securities of Citadel by Craig.
1.3 As used herein, the terms "Closing" and "Closing Date" shall mean
the Closing and Closing Date, respectively, contemplated by the Stock Exchange
and Settlement Agreement of even date herewith among Citadel and the Dillon
Parties.
1.4 It is understood and agreed that the parties hereto, and each of
them, hereby expressly waive all rights under Section 1542 of the Civil Code of
California, and any law or principle of similar effect of any state or territory
of the United States. Said section reads as follows:
"SECTION 1542. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR."
The advice of legal counsel has been obtained by each of the parties
hereto prior to signing this Agreement.
1.5 The parties hereto agree that they shall forthwith cause their
respective Delaware trial counsel to apply to the Court of Chancery to vacate
the trial date for the Delaware Action, currently set for April 18-21, 1995.
The parties further agree that, upon approval of the Court of Chancery to vacate
the trial date, all discovery and pretrial proceedings in the Delaware Action
will be stayed for a period of 30 days from the date hereof. Upon the
expiration of such 30 days, in the absence of either the Closing or an agreement
of the parties hereto to a further stay of proceedings, the parties shall
forthwith
2
<PAGE>
cause their respective counsel jointly to confer, to the extent necessary, with
the Court of Chancery to establish a schedule for completion of discovery and
other pretrial proceedings and the fixing of a new trial date at the earliest
time consistent with the discovery requirements and the Court's calendar.
1.6 Craig and the Dillon Parties hereby authorize and direct their
respective attorneys to execute and file on the Closing Date stipulations for
dismissal with prejudice of the Delaware Action, and such actions at such time
shall be a term of this Agreement.
1.7 This Agreement constitutes the compromise, settlement and release
of disputed claims, denials and defenses made or that could have been made by
Craig or the Dillon Parties, or any of them, and is being entered into solely
for the purpose of avoiding the burdens, inconveniences and expenses of further
litigation and disputes between the parties with respect to the Actions.
Therefore, this Agreement is not to be, and shall never be construed or deemed
to be, an admission or concession by Craig or the Dillon Parties, or any of
them, of liability or culpability, or lack thereof, at any time for any purpose
concerning the Actions hereby compromised, settled and released. Further,
nothing contained herein or in any form of communication between Craig and the
Dillon Parties, their respective attorneys and representatives, or any of them,
pertaining to the consummation of this Agreement or the compromise, settlement
and releases reflected herein shall be construed or deemed to be an admission or
concession of liability or culpability, or lack thereof, by Craig or the Dillon
Parties, or any of them , concerning such matters.
ARTICLE TWO
AGREEMENT NOT TO ELECT TO CONVERT
CITADEL HOLDING CORPORATION PREFERRED STOCK
2.1 As further consideration of all the promises, conditions, and
covenants set forth herein and subject to the provisions of this Agreement,
Craig hereby covenants that, prior to February 4, 1996, Craig will not, absent
the approval of a majority of the outstanding shares of common stock of Citadel,
exercise its right to tender any share or shares of the 3% Cumulative Voting
Convertible Preferred Stock (the "Preferred Stock") of Citadel, for conversion
into common stock of Citadel pursuant to Section 7 of the Certificate of
Designation of the Preferred Stock. Craig further agrees to obtain from any
transferee of any shares of Preferred Stock an undertaking to the same effect as
this and the preceding sentence. Effective as of the Effective Date (as defined
below), Craig will enter into an agreement with Citadel to the effect of this
Section 2.1.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
3.1 Mutual Representations and Warranties. Each party hereby
-------------------------------------
represents and warrants to the others as follows:
(a) Each party that is a corporation is a corporation duly
incorporated, validly existing and in good standing under the laws of its state
of incorporation and is duly qualified and authorized to do business in the
State of California. Each party that is a partnership is a partnership duly
formed, validly existing and in good standing as a partnership under the laws of
its state of organization. Each party that is a trust is a trust duly created,
and validly existing as a trust under the laws of the state under which it was
created.
3
<PAGE>
(b) It has full power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby. This Agreement is its or
his (as applicable) valid and binding agreement, enforceable against it or him
in accordance with its terms (as to Craig, its representation in this sentence
is limited solely to Section 1.5 until the Effective Date, at which time this
representation shall apply to the entire Agreement).
(c) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will violate, result in a
breach of any of the terms or provisions of, constitute a default (or any event
that, with the giving of notice or the passage of time or both would constitute
a default) under, accelerate any obligations under, or conflict with, (i) its
charter or bylaws (or other organizational documents), if applicable, or any
agreement, indenture or other instrument to which it is party or by which it or
its properties are bound, (ii) any judgment, decree, order or award of any
court, governmental body or arbitrator to which it is subject, or (iii) any law,
rule or regulation applicable to it.
(d) It or he (as applicable) has carefully read the entirety of this
Agreement, knows and understands the contents hereof, and enters into this
Agreement in good faith, freely and voluntarily without undue influence,
coercion, fraud or duress.
(e) It or he (as applicable) has not sold, assigned, pledged,
hypothecated or otherwise transferred any of its or his interests in the
Actions, or either of the Actions, or any claim released hereby, to any other
person or entity.
3.2 Bring-Down and Survival of Representations and Warranties. All
---------------------------------------------------------
representations, warranties and agreements of each party hereto shall be deemed
to have been given again on and as of the Closing Date with the same force and
effect as if made on and as of the Closing Date and shall survive the Closing.
ARTICLE FOUR
OTHER AGREEMENTS
4.1 Further Assurances. Each party hereto shall promptly execute and
------------------
deliver such further agreements and instruments, and take such further actions,
as the other party may reasonably request in order to carry out the purpose and
intent of this Agreement.
ARTICLE FIVE
MISCELLANEOUS
5.1 Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed given if delivered personally
or by facsimile transmission (with subsequent letter confirmation by mail) or
two days after being mailed by certified or registered mail, postage prepaid,
return receipt requested, to the parties, their successors in interest or their
assignees at the following addresses, or at such other addresses as the parties
may designate by written notice in the manner aforesaid:
If to the Dillon Parties: 21 East State Street, Suite 1410
Columbus, Ohio 43215-4228
Telecopy: (614) 222-4224
Attention: Roderick H. Dillon, Jr.
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<PAGE>
If to Craig: Craig Corporation
550 S. Hope St.
Los Angeles, California 90071
Telecopy: (213) 239-0555
Attention: President
5.2 Assignability and Parties in Interest. This Agreement shall not
-------------------------------------
be assignable by any of the parties. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective permitted successors and
assigns.
5.3 Governing Law. This Agreement shall be governed by, and
-------------
construed and enforced in accordance with, the internal substantive law, and not
the law pertaining to conflicts or choice of law, of the State of California.
5.4 Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
5.5 Complete Agreement. This Agreement is an integrated agreement
------------------
containing the entire agreement among the parties with respect to the subject
matter hereof and shall supersede all previous oral and written and all
contemporaneous oral negotiations, commitments and understandings.
5.6 Modifications, Amendments and Waivers. This Agreement may be
-------------------------------------
modified, amended or otherwise supplemented only by a writing signed by the
party against whom it is sought to be enforced. No waiver of any right or power
hereunder shall be deemed effective unless and until a writing waiving such
right or power is executed by the party waiving such right or power.
5.7 No Third Party Beneficiaries. Except as expressly provided in
----------------------------
Sections 1.1 and 1.2 hereof, there are no third party beneficiaries under this
Agreement or intended by any party hereto.
5.8 Expenses. Each party hereto shall bear its own costs and
--------
expenses, including, without limitation, attorneys' fees, incurred in connection
with the Delaware Action and this Agreement.
5.9 Contract Interpretation; Construction of Agreement.
--------------------------------------------------
(a) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Article, section, party and recital references are to this
Agreement unless otherwise stated.
(b) None of the parties hereto, nor their respective counsel, shall be
deemed the drafter of this Agreement for purposes of construing the provisions
of this Agreement, and all language in all parts of this Agreement shall be
construed in accordance with its fair meaning, and not strictly for or against
any party.
5.10 Effectiveness of Agreement. The "Effective Date" shall be the
--------------------------
later to occur of (i) the date on which Citadel notifies Dillon in writing that
Citadel's Board of Directors has approved the Stock Exchange and Settlement
Agreement of even date herewith among Citadel and the Dillon Parties or (ii) the
date on which Craig notifies Dillon in writing
5
<PAGE>
that Craig's Board of Directors has approved this Agreement; provided, however,
that if the Effective Date does not occur on or before April 13, 1995, then this
Agreement shall automatically terminate at 11:59 p.m., Los Angeles time, on
April 13, 1995 and shall thereafter have no legal force or effect whatsoever.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
CRAIG CORPORATION, DILLON INVESTORS, L.P.,
A DELAWARE CORPORATION A DELAWARE PARTNERSHIP
By: /s/ S. Craig Tompkins By: /s/ Roderick H. Dillon, Jr.
______________________________ ________________________________
Title: President Title: General Partner
RODERICK H. DILLON, JR. FOUNDATION,
AN OHIO TRUST
By: /s/ Roderick H. Dillon, Jr.
________________________________
Title: Trustee
_____________________________
RODERICK H. DILLON, JR.-IRA
By: /s/ Roderick H. Dillon, Jr.
---------------------------------
Roderick H. Dillon, Jr.
/s/ Roderick H. Dillon, Jr.
---------------------------------
Roderick H. Dillon, Jr.
6
