<PAGE> 1
As filed with the Securities and Exchange Commission on October 2, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
Form S-8
Registration Statement
Under
The Securities Act of 1933
----------
CITADEL COMMUNICATIONS CORPORATION
(Exact name of issuer as specified in its charter)
Nevada 86-0748219
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
140 South Ash Avenue
Tempe, Arizona 85281
(Address of principal executive offices) (Zip Code)
Citadel Communications Corporation 1996 Equity Incentive Plan and
Individual Stock Option Agreements with employees and consultants, each
of which constitutes an employee benefit plan within the meaning of
Rule 405 under the Securities Act.
(full title of plan)
Lawrence R. Wilson
President and Chief Executive Officer
140 South Ash Avenue
Tempe, Arizona 85281
(Name and address of agent for service)
(602) 731-5222
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================================================================
Title of Proposed maximum Proposed maximum
Securities to Amount to be offering price aggregate Amount of
be registered registered per share (1) offering price (1) registration fee (1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 3,045,948
$.001 par value Shares $.97 to $20.03 $16,529,603.49 $4,877
==============================================================================================================================
</TABLE>
(1) Calculated in accordance with Rule 457(h) on the basis of the exercise
prices of options granted as follows: 616,464 shares ($.97); 74,118 shares
($1.64); 713,796 shares ($1.79); 30,000 shares ($4.00); 1,148,055 shares
($5.72); 67,500 shares ($10.00); 189,000 shares ($16.00); and, with respect
to 207,015 shares not subject to options granted, in accordance with Rule
457(c) on the basis of the average of the high and low sales prices of the
Company's Common Stock on October 1, 1998.
<PAGE> 2
INTRODUCTORY STATEMENT
This Registration Statement on Form S-8 is being filed to register
3,045,948 shares of Common Stock, par value $.001 per share (the "Common
Stock"), of Citadel Communications Corporation (the "Company"), for issuance
upon the exercise of options granted or to be granted under the Company's 1996
Equity Incentive Plan and other options granted to employees of, and consultants
to, the Company.
Pursuant to Rule 428(b)(1), promulgated under the Securities Act of
1933, as amended (the "Securities Act"), the information required by Part I of
Form S-8 will be sent or given to employees, as specified in such Rule, in the
form of a prospectus that meets the requirements of Section 10(a) of the
Securities Act. In accordance with the note which precedes the instructions to
Part I of Form S-8, the documents containing the information specified in Part I
of Form S-8 have not been filed with the Securities and Exchange Commission
either as part of this registration statement or as a prospectus or prospectus
supplement.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed with the Securities and
Exchange Commission by the Company under the Securities Act of 1933, as amended
(the "Securities Act"), or the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), are incorporated herein by reference: (1) the Company's
prospectus dated June 30, 1998 filed on July 1, 1998 pursuant to Rule 424(b)(4)
under the Securities Act; (2) the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1998; and (3) the description of the Common
Stock contained in the Company's Registration Statement on Form 8-A under
Section 12 of the Exchange Act, dated June 23, 1998 and as amended on June 30,
1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this registration statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents. Any statement contained in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this registration statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. EXPERTS.
Certain legal matters with respect to the validity of the shares of
common stock offered hereby will be passed upon for the Company by Lionel Sawyer
& Collins, Las Vegas, Nevada.
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<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.7502 of the Nevada General Corporation Law (the "NGCL")
empowers a corporation to indemnify any person who was or is a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation), by reason of the fact that he is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the corporation, and, with respect to any criminal proceeding,
had no reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the
corporation, and with respect to any criminal proceeding, he had reasonable
cause to believe that his conduct was unlawful.
Section 78.7502 of the NGCL also empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including amounts paid in settlement and attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted under similar standards, except that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation or for
amounts paid in settlement to the corporation unless, and only to the extent
that, the court in which such action or suit was brought or other court of
competent jurisdiction shall determine upon application that in view of all the
circumstances of the case, that despite the adjudication of liability such
person is fairly and reasonably entitled to indemnity for such expenses which
the court shall deem proper.
Section 78.7502 of the NGCL further provides that, to the extent that a
director or officer of a corporation has been successful on the merits or
otherwise, in the defense of any action, suit or proceeding referred to above or
in the defense of any claim, issue or matter therein, he must be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith and that indemnification provided for by Section
78.751 of the NGCL shall not be deemed exclusive of any other rights to which
the indemnified party may be entitled, except that such indemnification may not
be made to any director or officer if a final adjudication establishes that his
acts or omissions involved intentional misconduct, fraud or a knowing violation
of the law and was
-3-
<PAGE> 5
material to the cause of action, unless a court of competent jurisdiction orders
otherwise, utilizing the standard described in the immediately preceding
paragraph.
The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of the offices and directors incurred
in defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by the officer or
director to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he is not entitled to be indemnified by the
corporation; these provisions do not affect any rights to advancement of
expenses to which corporate personnel other than officers and directors may be
entitled under any contract or otherwise by law.
Any indemnification referred to above, unless ordered by a court or
paid as incurred in advance of final disposition upon receipt of a proper
undertaking to repay the same, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made: (i) by the stockholders; (ii) by the board of
directors by majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding; (iii) if a majority vote of a quorum
consisting of directors who were not parties to the act, suit or proceeding so
orders, by independent legal counsel in a written opinion; or (iv) if a quorum
consisting of directors who were not parties to the act, suit or proceeding
cannot be obtained, by independent legal counsel in a written opinion.
The Company's Amended and Restated Certificate of Incorporation
provides as follows:
To the full extent permitted by law, the Corporation shall
indemnify any person made or threatened to be made a party to an action
or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he or she is or was a
director of the Corporation or any predecessor of the Corporation or
serves or served any other enterprise as director at the request of the
Corporation or any predecessor of the Corporation.
The Company's Bylaws further implement the permissive provisions of
Section 78.751 of the NGCL discussed above.
As permitted by Section 78.037 of the NGCL, the Company's Amended and
Restated Certificate of Incorporation provides as follows:
To the full extent permitted by the General Corporation Law of
the State of Nevada in effect from time to time and to no greater
extent, no officer or member of the Board of Directors shall be liable
for monetary damages for breach of fiduciary duty in his or her
capacity as an officer or a director in any action brought by or on
behalf of the Corporation or any of its shareholders.
-4-
<PAGE> 6
Section 78.037 currently provides that any such provision of a
corporation's articles of incorporation may not eliminate or limit the liability
of a director or officer for (a) acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law; or (b) the payment of dividends
in violation of the NGCL.
The Company maintains insurance to protect persons entitled to
indemnification pursuant to its Amended and Restated Certificate of
Incorporation and Bylaws and the NGCL against expenses, judgments, fines and
amounts paid in settlement, to the fullest extent permitted by the NGCL.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Indenture dated as of July 1, 1997 among Citadel Broadcasting Company,
Citadel License, Inc. and The Bank of New York, as Trustee, with the
forms of 10 1/4% Senior Subordinated Notes due 2007 and 10 1/4% Series
B Senior Subordinated Notes due 2007 included therein (incorporated by
reference to Exhibit 4.1 to Citadel Broadcasting Company's Registration
Statement No. 333-36771 on Form S-4).
4.2 Indenture dated as of July 1, 1997 among Citadel Broadcasting Company,
Citadel License, Inc. and The Bank of New York, as Trustee, with the
forms of 13 1/4% Exchange Debentures due 2009 and 13 1/4% Series B
Exchange Debentures due 2009 included therein (incorporated by
reference to Exhibit 4.2 to Citadel Broadcasting Company's Registration
Statement No. 333-36771 on Form S-4).
4.3 Amendment to Certificate of the Designations, Voting Powers Preferences
and Relative, Participating, Optional and Other Special Rights and
Qualifications, Limitations or Restrictions of the 13 1/4% Series A
Exchangeable Preferred Stock and the 13 1/4% Series B Exchangeable
Preferred Stock of Citadel Broadcasting Company (incorporated by
reference to Exhibit 3(i)(b) to Citadel Broadcasting Company's
Registration Statement No. 333-36771 on From S-4).
4.4 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3(i) to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1998).
4.5 Amended and Restated Bylaws of the Company (incorporated by reference
to Exhibit 3(ii) to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1998).
-5-
<PAGE> 7
5 Opinion of Lionel Sawyer & Collins (including consent).
23.1 Consent of Lionel Sawyer & Collins (including in its opinion filed
herewith as Exhibit 5).
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of Deliotte & Touche LLP.
23.6 Consent of Erwin & Company.
23.7 Consent of Balukoff, Lindstrom & Co., P.A.
24. Power of Attorney (included on signature page).
99.1 Citadel Communications Corporation 1996 Equity Incentive Plan, as
amended (incorporated by reference to Exhibit 10.2 to Citadel
Broadcasting Company's Registration statement No. 333-36771 on Form
S-4).
99.2. Citadel Communications Corporation Nonqualified Stock Option Agreement
made and entered into as of June 28, 1996 between the Company and
Lawrence R. Wilson (incorporated by reference to Exhibit 10.3 to
Citadel Broadcasting Company's Registration Statement No. 333-36771 on
Form S-4).
99.3 Form of Citadel Communications Corporation Stock Option Agreement for
grants effective as of December 21, 1994 (incorporated by reference to
Exhibit 10.4 to Citadel Broadcasting Company's Registration Statement
No. 333-36771 on Form S-4).
99.4 Form of Citadel Communications Corporation Stock Option Agreement for
grants effective as of February 21, 1994 (incorporated by reference to
Exhibit 10.5 to Citadel Broadcasting Company's Registration Statement
No. 333-36771 on Form S-4).
99.5 Deschutes Option Exchange Agreement dated as of December 31, 1996 by
and between the Company and Edward T. Hardy (incorporated by reference
to Exhibit 10.24 to Citadel Broadcasting Company's Amendment No. 1 to
Registration
Statement No. 333-36771 on Form S-4).
99.6 Deschutes Option Exchange Agreement dated as of December 31, 1996 by
and between the Company and Edward T. Hardy (incorporated by reference
to Exhibit
-6-
<PAGE> 8
10.25 to Citadel Broadcasting Company's Amendment No. 1 to Registration
Statement No. 333-36771 on Form S-4).
99.7 Deschutes Option Exchange Agreement dated as of December 31, 1996 by
and between the Company and Charles V. Chackel.
99.8 Form of Citadel Communications Corporation Stock Option Agreement for
grants effective as of January 1, 1996 (incorporated by reference to
Exhibit 10.26 to Citadel Broadcasting Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997).
99.9 Option Agreement dated as of November 25, 1997 by and between the
Company and Patricia Diaz Dennis.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change
in the information set forth in the registration
statement;
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the registration statement or
any material change to such information in the
registration statement;
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
-7-
<PAGE> 9
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
-8-
<PAGE> 10
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Lawrence R. Wilson and Donna L. Heffner and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to al
intends and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their substitute or substitutes, may lawfully do or cause to be done by venture
hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tempe, State of Arizona, on October 2, 1998.
CITADEL COMMUNICATIONS CORPORATION
By: /s/ LAWRENCE R. WILSON
---------------------------------------
Lawrence R. Wilson
Chairman of the Board, Chief Executive
Officer and President
-9-
<PAGE> 11
Pursuant to the requirements of the Securities Act, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ LAWRENCE R. WILSON Chairman of the Board, Chief October 2, 1998
- ------------------------------------- Executive Officer and
Lawrence R. Wilson President (Principal Executive
Officer)
/s/ DONNA L. HEFFNER Vice President and Chief October 2, 1998
- ------------------------------------- Financial Officer (Principal
Donna L. Heffner Financial and Accounting Officer)
/s/ PATRICIA DIAZ DENNIS Director October 2, 1998
- -------------------------------------
Patricia Diaz Dennis
/s/ SCOTT E. SMITH Director October 2, 1998
- -------------------------------------
Scott E. Smith
/s/ TED L. SNIDER, SR. Director October 2, 1998
- -------------------------------------
Ted L. Snider, Sr.
/s/ JOHN E. VON SCHLEGELL Director October 2, 1998
- ------------------------------------
John E. Von Schlegell
</TABLE>
-10-
<PAGE> 12
CITADEL COMMUNICATIONS CORPORATION
EXHIBIT INDEX
4.1 Indenture dated as of July 1, 1997 among Citadel Broadcasting Company,
Citadel License, Inc. and The Bank of New York, as Trustee, with the
forms of 10 1/4% Senior Subordinated Notes due 2007 and 10 1/4% Series
B Senior Subordinated Notes due 2007 included therein (incorporated by
reference to Exhibit 4.1 to Citadel Broadcasting Company's Registration
Statement No. 333-36771 on Form S-4).
4.2 Indenture dated as of July 1, 1997 among Citadel Broadcasting Company,
Citadel License, Inc. and The Bank of New York, as Trustee, with the
forms of 13 1/4% Exchange Debentures due 2009 and 13 1/4% Series B
Exchange Debentures due 2009 included therein (incorporated by
reference to Exhibit 4.2 to Citadel Broadcasting Company's Registration
Statement No. 333-36771 on Form S-4).
4.3 Amendment to Certificate of the Designations, Voting Powers Preferences
and Relative, Participating, Optional and Other Special Rights and
Qualifications, Limitations or Restrictions of the 13 1/4% Series A
Exchangeable Preferred Stock and the 13 1/4% Series B Exchangeable
Preferred Stock of Citadel Broadcasting Company (incorporated by
reference to Exhibit 3(i)(b) to Citadel Broadcasting Company's
Registration Statement No. 333-36771 on From S-4).
4.4 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3(i) to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1998).
4.5 Amended and Restated Bylaws of the Company (incorporated by reference
to Exhibit 3(ii) to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1998).
5 Opinion of Lionel Sawyer & Collins (including consent).
23.1 Consent of Lionel Sawyer & Collins (including in its opinion filed
herewith as Exhibit 5).
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of Deliotte & Touche LLP.
23.6 Consent of Erwin & Company.
23.7 Consent of Balukoff, Lindstrom & Co., P.A.
24. Power of Attorney (included on signature page).
-11-
<PAGE> 13
99.1 Citadel Communications Corporation 1996 Equity Incentive Plan, as
amended (incorporated by reference to Exhibit 10.2 to Citadel
Broadcasting Company's Registration statement No.
333-36771 on Form S-4).
99.2. Citadel Communications Corporation Nonqualified Stock Option Agreement
made and entered into as of June 28, 1996 between the Company and
Lawrence R. Wilson (incorporated by reference to Exhibit 10.3 to
Citadel Broadcasting Company's Registration Statement No. 333- 36771 on
Form S-4).
99.3 Form of Citadel Communications Corporation Stock Option Agreement for
grants effective as of December 21, 1994 (incorporated by reference to
Exhibit 10.4 to Citadel Broadcasting Company's Registration Statement
No. 333-36771 on Form S-4).
99.4 Form of Citadel Communications Corporation Stock Option Agreement for
grants effective as of February 21, 1994 (incorporated by reference to
Exhibit 10.5 to Citadel Broadcasting Company's Registration Statement
No. 333-36771 on Form S-4).
99.5 Deschutes Option Exchange Agreement dated as of December 31, 1996 by
and between the Company and Edward T. Hardy (incorporated by reference
to Exhibit 10.24 to Citadel Broadcasting Company's Amendment No. 1 to
Registration Statement No. 333-36771 on Form S-4).
99.6 Deschutes Option Exchange Agreement dated as of December 31, 1996 by
and between the Company and Edward T. Hardy (incorporated by reference
to Exhibit 10.25 to Citadel Broadcasting Company's Amendment No. 1 to
Registration Statement No. 333-36771 on Form S-4).
99.7 Deschutes Option Exchange Agreement dated as of December 31, 1996 by
and between the Company and Charles V. Chackel.
99.8 Form of Citadel Communications Corporation Stock Option Agreement for
grants effective as of January 1, 1996 (incorporated by reference to
Exhibit 10.26 to Citadel Broadcasting Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997).
99.9 Option Agreement dated as of November 25, 1997 by and between the
Company and Patricia Diaz Dennis.
-12-
<PAGE> 1
Exhibit 5
[Logo]
OCTOBER 2, 1998
Citadel Communications Corporation
140 South Ash Avenue
Tempe, Arizona 85281
Eckert Seamans Cherin & Mellott, LLC
600 Grant Street
42nd Floor
Pittsburgh, Pennsylvania 15219
Re: Registration of 3,045,948 Shares of Common Stock of Citadel
Communications Corporation (the "Company") Issued Pursuant to the
Exercise of Options Granted or to be Granted under the Company's 1996
Equity Incentive Plan and Other Options Granted to Employees of, and
Consultants to, the Company.
Ladies and Gentlemen:
We are acting as special Nevada counsel for the Company in connection with
the registration by the Company under the Securities Act of 1933, as amended, of
3,045,948 shares of Common Stock, par value $0.001 per share, of the Company
(the "Common Stock"), to be offered to the public under a Registration
Statement on Form S-8 relating to such offering (the "Registration Statement").
This Opinion Letter is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the "Accord") of the ABA Section of Business
Law (1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and this Opinion Letter should be
read in conjunction therewith. The Law covered by the Opinions expressed herein
is limited to the State of Nevada.
We have examined originals or copies of each of the documents listed below:
<PAGE> 2
Page 2
1. Certificate of Corporate Existence of the Company certified by the
Nevada Secretary of State dated October 1, 1998;
2. The Eighth Amended and Restated Articles of Incorporation of the
Company certified by Nevada's Secretary of State as of October 1, 1998
("Articles");
3. The Amended and Restated Bylaws of the Company certified by the
Company's Secretary as of October 2, 1998;
4. The forms of the various stock option agreements listed on Exhibit A,
attached hereto and incorporated herein by reference (the "Option
Agreements");
5. The resolutions of the Company's board of directors listed on Exhibit
3 to the Secretary's Certificate, attached hereto as Exhibit B and
incorporated herein by reference.
We have examined originals or copies of such other corporate records and
certificates of corporate officers and public officials as we have deemed
necessary or advisable for purposes of this Opinion Letter. We have relied upon
the certificates of all public officials and corporate officers, including, but
not limited to, the certificate of the Company's Secretary, attached hereto as
Exhibit B, with respect to the accuracy of all factual matters contained
therein.
We have assumed that the Option Agreements are valid, binding and
enforceable under the laws of the jurisdiction governing such agreements.
Based upon the foregoing, and subject to the following, it is our opinion
that:
1. The Company is a corporation, duly incorporated, validly existing and
in good standing under the laws of the State of Nevada.
2. The Common Stock, when issued, delivered and paid for as contemplated
by the Option Agreements, will be duly authorized, validly issued,
fully paid and nonassessable.
We express no opinion concerning any securities law or rule. This Opinion
Letter is intended solely for use in connection with registration of the Common
Stock as described in the
<PAGE> 3
Page 3
Registration Statement, and it may not be relied upon for any other purpose, or
reproduced or filed publicly, without the written consent of this firm;
provided, however, we hereby consent to the filing of this Opinion Letter as an
exhibit to the Registration Statement. In giving this consent, we do not hereby
admit that we are in a category of persons whose consent is required pursuant
to Section 7 of the Securities Act of 1933 or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ LIONEL SAWYER & COLLINS
------------------------------
LIONEL SAWYER & COLLINS
<PAGE> 4
EXHIBIT A
LIST OF STOCK OPTION AGREEMENTS
1. Citadel Communications Corporation 1996 Equity Incentive Plan, as amended.
2. Citadel Communications Corporation Nonqualified Stock Option Agreement
made and entered into as of June 28, 1996 between the Company and Lawrence
R. Wilson.
3. Form of Citadel Communications Corporation Stock Option Agreement for
grants effective as of December 21, 1994.
4. Form of Citadel Communications Corporations Stock Option Agreement for
grants effective as of February 21, 1994.
5. Deschutes Option Exchange Agreement dated as of December 31, 1996 by and
between the Company and Edward T. Hardy.
6. Deschutes Option Exchange Agreement dated as of December 31, 1996 by and
between the Company and Edward T. Hardy.
7. Deschutes Option Exchange Agreement dated as of December 31, 1996 by and
between the Company and Charles V. Chackel.
8. Form of Citadel Communications Corporation Stock Option Agreement for
grants effective as of January 1, 1996.
9. Option Agreement dated as of November 25, 1997 by and between the Company
and Patricia Diaz Dennis.
<PAGE> 5
EXHIBIT B
CITADEL COMMUNICATIONS CORPORATION
SECRETARY'S CERTIFICATE
The undersigned, Donna Heffner, Secretary of Citadel Communications
Corporation, a Nevada corporation (the "Company"), does hereby certify as of
the date hereof as follows:
1. I am the duly elected and presently acting Secretary of the Company
and as such have had access to the corporate records of the Company and am
familiar with the matters therein contained and herein certified.
2. Attached hereto as Exhibit 1 is a copy of the Company's Articles of
Incorporation (the "Articles") as certified by Nevada's Secretary of State on
October 1, 1998. The Articles have not been amended, modified, annulled or
revoked and are in full force and effect.
3. Attached hereto as Exhibit 2 is a copy of the Company's bylaws, dated
June 26, 1998. Such bylaws have not been amended, modified, annulled or revoked
and are in full force and effect.
4. Attached hereto as Exhibit 3 is a list of resolutions of the
Company's Board of Directors authorizing the Company to enter into certain
stock option agreements with, among others, certain employees of the Company
(the "Option Agreements"). Such resolutions are the only resolutions or actions
of the Company's Board of Directors dealing with the Option Agreements and such
resolutions have not been amended, modified, annulled or revoked and are in
full force and effect.
5. The number of shares of the Company's common stock either outstanding
or reserved subject to warrants or options (but excluding the number of shares
to be issued pursuant to the Option Agreements) is 25,725,271.
In witness whereof, I have hereunto set my hand this 2nd day of October,
1998.
/s/ DONNA HEFFNER
-----------------
Donna Heffner
Secretary
Page 5
<PAGE> 6
EXHIBIT 1
ARTICLES OF INCORPORATION
Omitted from this copy of this certificate--on file in the offices of Lionel
Sawyer & Collins.
Page 6
<PAGE> 7
EXHIBIT 2
BYLAWS
Omitted from this copy of this certificate--on file in the offices of Lionel
Sawyer & Collins.
Page 7
<PAGE> 8
EXHIBIT 3
LIST OF RESOLUTIONS
1. Written Action of the Board of Directors of Citadel Communications
Corporation dated June 27, 1996.
2. Minutes of a Combined Meeting of the Board of Directors of Citadel
Communications Corporation, Citadel Broadcasting Company and Citadel License,
Inc., held November 25, 1997.
3. Minutes of a Meeting of the Board of Directors of Citadel
Communications Corporation held December 20, 1993.
4. Written Action of the Board of Directors of Citadel Communications
Corporation dated December 21, 1994.
5. Written Action of the Board of Directors of Citadel Communications
Corporation dated December 18, 1996.
6. Written Action of the Board of Directors of Citadel Communications
Corporation dated June, 1997.
7. Written Action of the Board of Directors of Citadel Communications
Corporation dated June 15, 1998.
Page 8
<PAGE> 1
Exhibit 23.2
The Board of Directors
Citadel Communications Corporation:
We consent to incorporation by reference in the registration statement on Form
S-8 of Citadel Communications Corporation of our report dated March 26, except
as to note 25 which is as of June 4, 1998, relating to the consolidated balance
sheets of Citadel Communications Corporation and subsidiaries as of December
31, 1996 and 1997, and the related consolidated statements of operations,
shareholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1997, which report appears in the prospectus of
Citadel Communications Corporation dated June 30, 1998.
/s/ KPMG PEAT MARWICK LLP
- -------------------------
Phoenix, Arixona
October 1, 1998
<PAGE> 1
Exhibit 23.3
The Board of Directors
Citadel Communications Corporation:
We consent to incorporation by reference in the registration statement on Form
S-8 of Citadel Communications Corporation of our report dated February 14, 1997
relating to the consolidated balance sheets of Deschutes River Broadcasting,
Inc. and subsidiaries as of December 31, 1995 and 1996, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
the years then ended, which report appears in the prospectus of Citadel
Communications Corporation dated June 30, 1998.
KPMG Peat Marwick LLP
/s/ KPMG PEAT MARWICK LLP
- -------------------------
Portland, Oregon
October 1, 1998
<PAGE> 1
Exhibit 23.4
The Board of Directors
Citadel Communications Corporation:
We consent to incorporation by reference in the registration statement on Form
S-8 of Citadel Communications Corporation of our report dated September 29,
1997 relating to the balance sheet of Maranatha Broadcasting Company, Inc.'s
Radio Broadcasting Division as of December 31, 1996, and the related statements
of operations and division equity, and cash flows for the year then ended,
which report appears in the prospectus of Citadel Communications Corporation
dated June 30, 1998.
KPMG Peat Marwick LLP
/s/ KPMG PEAT MARWICK LLP
- -------------------------
Phoenix, Arizona
October 1, 1998
<PAGE> 1
Exhibit 23.5
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Citadel Communications Corporation on Form S-8 of our report dated March 28,
1997 (relating to the consolidated financial statements of Tele-Media
Broadcasting Company and Its Partnership Interests), appearing in the Amendment
No. 3 to Registration Statement No. 333-51011 of Citadel Communications
Corporation.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
Pittsburgh, PA
September 30, 1998
<PAGE> 1
Exhibit 23.6
ERWIN & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Citadel Communications Corporation
We consent to incorporation by reference in the registration statement on Form
S-8 of Citadel Communications Corporation of our reports dated April 1, 1997 on
the balance sheet of Snider Corporation as of December 31, 1996 and the related
statements of income, stockholders' equity and cash flows for the year then
ended and April 23, 1997 on the combined balance sheet of Snider Broadcasting
Corporation and subsidiary and CDB Broadcasting Corporation as of December 31,
1996 and the related combined statements of operations, stockholders' deficit
and cash flows for the year then ended, which reports appear in the prospectus
of Citadel Communications Corporation dated June 30, 1998.
/s/ ERWIN & COMPANY
- -------------------
Little Rock, Arkansas
October 1, 1998
<PAGE> 1
Exhibit 23.7
The Board of Directors
Citadel Communications Corporation:
We consent to incorporation by reference in the registration statement on Form
S-8 of Citadel Communications Corporation of our independent auditors' report
on the combined financial statements of Pacific Northwest Broadcasting
Corporation and Affiliates as of and for the year ended December 31, 1996,
which report appears in the prospectus of Citadel Communications Corporation
dated June 30, 1998.
/s/ BALUKOFF LINDSTROM & CO., P.A.
- ----------------------------------
October 1, 1998
<PAGE> 1
Exhibit 99.7
DESCHUTES OPTION EXCHANGE AGREEMENT
This Deschutes Option Exchange Agreement (this "Agreement") is made and
entered into by and between CITADEL COMMUNICATIONS CORPORATION, a Nevada
corporation (the "Company") and Charles V. Chackel (the "Undersigned") as of
December 31, 1996.
WHEREAS, the Company entered into a Merger Agreement (the "Merger
Agreement") dated as of August 30, 1996, by and among the Corporation, Deschutes
and Citadel Acquisition Corporation, a Nevada corporation and wholly-owned
subsidiary of the Corporation ("CAC") (as of September 17, 1996, CAC changed its
name to Deschutes License, Inc. ("DLI"), and as of December 18, 1996 DLI has
assigned its rights under the Merger Agreement to Deschutes Acquisition
Corporation, a Nevada corporation and wholly-owned subsidiary of the Corporation
("DAC")) pursuant to which Deschutes will be merged with and into DAC, with DAC
to be the surviving corporation and DAC's name to be changed to "Deschutes River
Broadcasting, Inc." immediately upon the consummation of the Merger Agreement on
the terms and conditions set forth in the Merger Agreement;
WHEREAS, as of August 30, 1996 the Undersigned was granted an incentive
stock option to purchase 47,619 shares of Common Stock of Deschutes for a
purchase price of $2.10 per share and as of August 30, 1996 the Undersigned was
granted a nonqualified stock option to purchase 190,476 shares of Common Stock
of Deschutes for a purchase price of $2.10 per share (the "Undersigned's
Deschutes Options");
WHEREAS, pursuant to the Merger Agreement the Undersigned's Deschutes
Options are to be converted into options to purchase the Class A Common Stock of
the Company pursuant to this Agreement and a separate Award Agreement of even
date made under the Company's 1996 Equity Incentive Plan;
THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth and for good and valuable consideration, the Company and
the undersigned agree as follows:
1. Grant of Option. The Company grants to the Undersigned the right to
purchase a total of 23,294 shares of the Class A Common Stock of the Company,
$.001 par value (the "Stock") at the Purchase Price (the "Options" or "Option").
2. Purchase Price. The price at which the Undersigned shall be entitled
to purchase the Stock covered by the Options shall be $17.17 per share (the
"Purchase Price").
3. Exercise of Option. The Options may be exercised by the Undersigned
as of the date hereof, from time to time, as to all or any part of the shares
covered hereby, by
<PAGE> 2
delivery to the Company of written notice of exercise and payment of the
Purchase Price. Notwithstanding any other provision of this Agreement, the
Options, to the extent not previously exercised, shall automatically terminate
and be of no further force or effect on and as of 5:00 o'clock M.S.T., on the
date which is the tenth (10th) anniversary of the date hereof.
4. Method of Exercising Option. Subject to the terms and conditions of
this Agreement, the Options may be exercised by timely delivery to the Company
of a written notice, which notice shall be effective on the date received by the
Company. The written notice shall state the Undersigned's election to exercise
the Options, the number of shares in respect of which an election to exercise
has been made, the method of payment elected, the exact name or names in which
the shares will be registered and the Undersigned's Social Security number. Such
notice shall be signed by the Undersigned and shall be accompanied by payment of
the purchase price of such shares. In the event the Options shall be exercised
by a person or persons other than the Undersigned pursuant to Paragraph 6
hereof, such notice shall be signed by such other person or persons and shall be
accompanied by proof acceptable to the Company of the legal right of such person
or persons to exercise the Options. All shares delivered by the Company upon
exercise of the Options as provided herein shall be fully paid and nonassessable
upon delivery.
5. Method of Payment for Options. Upon the exercise of all or any part
of an Option, the Purchase Price shall be payable in full by check, or, in the
event the Company is at the time of exercise a reporting Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in shares of
Stock owned by the Undersigned to the extent permitted by law, or in any
combination thereof at the election of the Undersigned. Payment of the Purchase
Price with shares of Stock owned by the Undersigned, to the extent permitted
under this Agreement, shall be made by assigning and delivering such shares to
the Company. The shares shall be valued at Fair Market Value on the exercise
date of the Option. For purposes of this Agreement, the "Fair Market Value" of
the Stock as of any date shall be the average of the closing bid and asked
prices for the Stock as reported on the Nasdaq National Market System (or on any
national securities exchange on which the Stock is then listed) for the date or,
if no prices are so reported for that date, such prices on the next preceding
date for which closing bid and asked prices were reported. If at any time the
Stock is not listed on any national securities exchange, the Fair Market Value
shall be the fair market value determined by the Board of Directors of the
Company (the "Board") in good faith and in its reasonable discretion using such
methods or procedures as may be established from time to time by the Board in
its reasonable discretion.
To the extent permitted under this Agreement, if the Undersigned elects
to pay for all or part of the shares purchased upon the exercise of the Option
in Stock, a share certificate or certificates, together with a duly executed
stock power authorizing the transfer of such shares to the Company, shall be
delivered to the Company with the notice of exercise. Should the number of such
shares delivered for credit against the purchase price have a Fair Market Value
less than the full purchase price, the Undersigned shall pay the difference
-2-
<PAGE> 3
between the Fair Market Value of the Stock to be conveyed to the Company and the
full purchase price by check. Should the share certificate delivered be for a
number of shares in excess of that number to be conveyed to the Company for
credit against the full purchase price, the Company will issue to the
Undersigned a new share certificate representing the number of shares in excess
of the nearest whole number of shares having a Fair Market Value not in excess
of the amount required to pay the full purchase price. No fractional shares
shall be accepted in payment or be reissued by the Company under this provision.
6. Death of the Undersigned. In the event of the death of the
Undersigned, the Option shall lapse unless it is exercised within three hundred
sixty days (360) days after the date of the Undersigned's death by the
Undersigned's legal representative or representatives or by the person or
persons entitled to do so under the Undersigned's last will and testament or if
the Undersigned fails to make a testamentary disposition of such Option or shall
die intestate, by the person or persons entitled to receive such Option under
the applicable laws of descent and distribution. The Company shall have the
right to require evidence satisfactory to it of the rights of any person or
persons seeking to exercise the Option under this Paragraph 6 to exercise the
Option.
7. Adjustments in Number of Shares and Purchase Price. In the event a
stock dividend is declared upon the Stock, the remaining shares of Stock then
subject to Options under this Agreement shall be adjusted proportionately
without any change in the aggregate purchase price therefor. In the event the
Stock shall be changed into or exchanged for a different number or class of
shares of stock of the Company or of another corporation, whether through
reorganization, recapitalization, stock split, combination of shares, merger or
consolidation, there shall be substituted for each such remaining share of Stock
then subject to Options granted under this Agreement the number and class of
shares of stock into which each outstanding share of Stock shall be so
exchanged, all without any change in the aggregate purchase price for the shares
then subject to Options granted under this Agreement.
8. Delivery of Shares. No shares of Stock shall be delivered upon
exercise of the Options unless and until (i) the purchase price shall have been
paid in full in the manner herein provided; (ii) applicable taxes required to be
withheld have been paid or withheld in full; (iii) approval of any governmental
authority required in connection with the Options, or the issuance of shares
thereunder, has been received by the Company; (iv) the Undersigned has complied
with all terms and conditions of this Agreement; and (v) if required by the
Company, the Undersigned has delivered to the Company an Investment Letter in
form and content satisfactory to the Company as provided for in Paragraph 13
hereof.
9. Repurchase Option. In the event the Undersigned's employment with
DAC terminates for any reason whatsoever, or for no reason including termination
by the Undersigned's voluntary resignation or at the direction of DAC, with or
without cause, or of the Undersigned's death or disability, the Company (or its
nominee) shall have the right (but not the obligation) to purchase any shares of
Stock held by the Undersigned. The purchase
-3-
<PAGE> 4
price to be paid by the Company for the Undersigned's Stock shall be the Fair
Market Value per share.
(a) The Company (or its nominee) shall exercise this right to
repurchase the shares of Stock, if at all, within six (6) months following the
date of the termination of the Undersigned's employment with DAC by delivering
written notice of exercise to the Undersigned or the Undersigned's personal
representative.
(b) Payment on such exercise by the Company shall be made by
an initial payment on the Consummation Date (defined below) equal to 20% of the
purchase price, and the balance shall be made in four (4) equal annual
installments of principal and accrued interest commencing on the first
anniversary of the Consummation Date, and on the next four (4) anniversaries of
the Commencement Date. Interest on the unpaid principal amount shall commence to
accrue from the Consummation Date at the prime rate of interest in effect on the
Consummation Date as announced in the Wall Street Journal (or a reasonable
substitute selected by the Board), and it shall be adjusted annually thereafter
to the then-existing Wall Street Journal-announced prime rate (or a reasonable
substitute selected by the Board), which adjusted rate of interest shall remain
in effect for the entire year then beginning (interim changes in the prime rate
during the year being disregarded). The "Consummation Date" for purposes of this
Paragraph shall be the sixtieth (60th) day following delivery of the Company's
notice of exercise, provided that such date may be extended by the Undersigned
or the Undersigned's personal representative by written notice to a date not
later than the earlier of ten (10) days after all holding periods under Section
422 of the Internal Revenue Code expire or consummation of a transaction (e.g.,
merger, consolidation, stock sale) pursuant to which the holder of the
Undersigned's shares would be entitled to receive consideration of any kind. The
Company may, at its election, prepay amounts due under this Paragraph, without
premium or penalty.
10. Restrictions on Transfer. In the event any shares of Stock acquired
pursuant to exercise of options hereunder, or any interest therein, are to be
transferred, voluntarily or involuntarily (including, without limitation, any
sale, encumbrance, foreclosure or transfer in lieu thereof, or by operation of
law, any division of marital property on account of divorce or legal separation
being deemed a "transfer" for purposes hereof, but excluding transfers to which
Paragraph 9 hereof applies), the Company (or its nominee) shall have a right of
first refusal as follows:
(a) The Undersigned (or the holder of such shares if not the
Undersigned) shall give the Company advance written notice detailing all the
terms of the proposed transfer. The Company (or its nominees) shall have the
right (but not the obligation), exercisable upon delivery to the transferring
shareholder of written notice of acceptance within thirty (30) days following
receipt of the notice of proposed transfer described in the preceding sentence,
to repurchase all or any of such shares on the terms and conditions set forth in
such notice;
-4-
<PAGE> 5
(i) provided that the per share purchase price shall
be the lesser of (X) the price, plus the Fair Market Value of any
non-cash consideration, stated in the notice or (Y) the Fair Market
Value of the shares (and shall be the Fair Market Value in the event of
a transfer not involving any consideration); and
(ii) provided further that the purchase price shall
be payable, at the election of the Company (or its nominees), either on
the terms set forth in the transferor's notice or in installments with
interest as set forth in Paragraph 9(b). The Company may, at its
election, prepay amounts due under this Paragraph, without premium or
penalty.
(b) The date for consummating such purchase shall be the
sixtieth (60th) day following delivery of the Company's (or its nominees')
notice of exercise. Failure by the Company (or its nominees) (without default by
the transferring shareholder) to close such purchase within the above 60-day
period shall give the transferring shareholder the right to transfer such shares
or interest therein on the terms and to the person described in the notice
during the 60-day period; provided that the shares or interest therein to be
transferred shall for all purposes remain subject to this agreement. If the
transferring shareholder fails to close the proposed transfer on those terms
within such second 60-day period, the proposed transfer shall again be subject
to the terms of this Paragraph 10. Notwithstanding the foregoing, such shares
may be transferred or retransferred without invoking this right of first refusal
between the Undersigned and trusts of which the Undersigned and/or the
Undersigned's spouse are the sole beneficiaries by giving prior written notice
certifying such a transfer is to be made; provided that following any such
transfer, such shares shall remain subject to this right of first refusal and
all the other provisions of this Agreement.
(c) For so long as the Company's right to repurchase the Stock
as set forth in Paragraphs 9 and 10 remain effective, neither the Undersigned,
nor the Undersigned's personal representative(s), devisee(s), heir(s),
successor(s), or assignee(s) shall sell, assign or otherwise transfer any shares
of Stock or interest therein without obtaining the written agreement of the
purchaser, assignee or transferee that the shares remain subject to this
repurchase right, and the Undersigned agrees that certificates evidencing the
Stock may be legended to reflect the foregoing restrictions.
11. Stockholders Agreement. By accepting the options granted under this
Agreement, the Undersigned further agrees to be bound as a member of Management
to Sections 3 and 6 of the Second Amended and Restated Stockholders Agreement,
dated as of June 28, 1996 among the Company and certain other parties thereto
(the "Stockholders Agreement"), which provisions require the Undersigned to
consent to and sell any stock or options owned by the Undersigned as of the date
of this Agreement, and any stock or options acquired by the Undersigned on or
after the date of this Agreement, in any Approved Sale (as that term is defined
in the Stockholders Agreement).
-5-
<PAGE> 6
12. Termination of Restrictions. Paragraphs 10 and 11 shall terminate
and be of no further force or effect automatically upon the closing of an
initial public stock offering of the Company's common stock under the Securities
Act the result of which is that the Company's common stock is traded, or quoted,
as applicable, on a national securities exchange, over the counter on NASDAQ, or
through the NASD's National Market System.
13. Securities Act. The Company shall have the right, but not the
obligation, to cause the shares of Stock issuable upon exercise of the Options
to be registered under the appropriate rules and regulations of the Securities
and Exchange Commission.
The Company shall not be required to deliver any shares of Stock
pursuant to the exercise of all or any part of the Options if, in the opinion of
counsel for the Company, such issuance would violate the Securities Act of 1933,
as amended (the "Securities Act"), or any other applicable federal or state
securities laws or regulations. The Company may require that the Undersigned,
prior to the issuance of any such shares pursuant to exercise of the Options,
sign and deliver to the Company a written statement ("Investment Letter")
stating (i) that the Undersigned is acquiring the shares for investment and not
with a view to the sale or distribution thereof; (ii) that the Undersigned will
not sell any shares received upon exercise of the Options or any other shares of
the Company that the Undersigned may then own or thereafter acquire except
either (a) through a broker on a national securities exchange or (b) with the
prior written approval of the Company; and (iii) containing such other terms and
conditions as counsel for the Company may reasonably require to assure
compliance with the Securities Act or other applicable federal or state
securities laws and regulations. Such Investment Letter shall be in form and
content acceptable to the Company in its sole discretion.
If shares of Stock or other securities issuable pursuant to the
exercise of the Options have not been registered under the Securities Act of
1933 or other applicable federal or state securities laws or regulations, the
certificates representing such shares shall bear a legend restricting the
transferability thereof, such legend to be substantially in the following form:
The Securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or qualified under any applicable state securities
laws. They have been acquired for investment and not with a
view to distribution thereof within the meaning of the Act and
regulations thereunder. They may not be sold or otherwise
transferred unless (a) there is an effective registration
statement under such Act and applicable state securities laws
covering such transaction involving said securities or (b)
this Corporation receives an opinion of legal counsel for the
holder of these securities (concurred in by legal counsel for
this Corporation) stating that such transaction is exempt from
registration or this
-6-
<PAGE> 7
Corporation otherwise satisfies itself that such transaction
is exempt from resolution.
Any such shares of Stock shall also bear the restrictive legends, in
substantially the same form, that are contained in the Stockholders Agreement.
14. Federal and State Taxes. Upon exercise of the Options, or any part
thereof, the Undersigned may incur certain liabilities for federal, state or
local taxes and the Company may be required by law to withhold such taxes for
payment to taxing authorities. Upon determination by the Company of the amount
of taxes required to be withheld, if any, with respect to the shares to be
issued pursuant to the exercise of the Options, the Undersigned shall pay to the
Company by check or by authorizing the Company to withhold from monies owing by
the Company to the Undersigned an amount equal to the amount of any taxes which
the Company is required to withhold with respect to such Stock.
15. Administration. This Agreement shall in all respects be
administered by the Board. The Board shall have the sole and complete discretion
with respect to all matters under this Agreement and decisions of the majority
of the Board with respect to this Agreement shall be final and binding upon the
Undersigned and the Company.
16. Continuation of Employment. This Agreement shall not be construed
to confer upon the Undersigned any right to continue in the employ of the
Company or its subsidiaries and shall not limit any right of the Company or its
subsidiaries to terminate the employment of the Undersigned.
17. Obligation to Exercise. The Undersigned shall have no obligation to
exercise any Option granted by this Agreement.
18. Governing Law. This Agreement shall be interpreted and administered
under the internal laws, and not the laws of conflicts, of the State of Arizona.
19. Amendment and Termination. Except as otherwise provided in this
Agreement, this Agreement may be amended or terminated only by a written
agreement executed by the Company and the Undersigned. Any amendment or
modification of this agreement shall be signed by a duly authorized officer of
the Company other than the Undersigned.
20. Counterparts. This Agreement may be executed in any number of
counterparts, all such counterparts shall be deemed to constitute one and the
same instrument, and each of the executed counterparts shall be deemed an
original hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth above.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
-7-
<PAGE> 8
[SIGNATURE PAGE FOR DESCHUTES OPTION EXCHANGE AGREEMENT]
CITADEL COMMUNICATIONS
CORPORATION
By:/s/ DONNA L. HEFFNER
---------------------------
Its: Vice President
-----------------------
/s/ Charles V. Chackel
---------------------------
THE UNDERSIGNED
-----------------------
The spouse of the Undersigned hereby
confirms that the community property
of the Undersigned and of the spouse
of the Undersigned is subject to and
bound by the agreement set forth above.
- -----------------------
SPOUSE
- -----------------------
DATE
-8-
<PAGE> 1
Exhibit 99.9
OPTION AGREEMENT
This Option Agreement (this "Agreement") is made and entered into by
and between CITADEL COMMUNICATIONS CORPORATION, a Nevada corporation (the
"Company"), and PATRICIA DIAZ DENNIS (the "Undersigned") as of November 25,
1997.
WHEREAS, the Company has elected to provide an incentive to motivate,
attract and retain the services of persons upon whose judgment, efforts and
contributions the success of the Company's business depends. The Company
believes that the granting of the Option herein described to the Undersigned is
consistent with the foregoing goals. The Company and the Undersigned desire to
enter into an agreement reflecting the terms and conditions of the Option
granted to the Undersigned.
THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth and for good and valuable consideration, the Company and
the Undersigned agree as follows:
1. Grant of Option. The Company grants to the Undersigned the right to
purchase a total of 2,500 shares of the Class A Common Stock of the Company,
$.001 par value per share (the "Stock"), at the Purchase Price (the "Options" or
"Option").
2. Purchase Price. The price at which the Undersigned shall be entitled
to purchase the Stock covered by the Options shall be $30.00 per share (the
"Purchase Price").
3. Exercise of Option. The Options may be exercised by the Undersigned
from and after the date hereof, from time to time, as to all or any part of the
shares covered hereby, by delivery to the Company of written notice of exercise
and payment of the Purchase Price. Notwithstanding any other provision of this
Agreement, the Options, to the extent not previously exercised, shall
automatically terminate and be of no further force or effect on and as of 5:00
o'clock M.S.T., on the date which is the tenth (10th) anniversary of the date
hereof (the "Expiration Date").
4. Method of Exercising Option. Subject to the terms and conditions of
this Agreement, the Options may be exercised by timely delivery to the Company
of a written notice, which notice shall be effective on the date received by the
Company. The written notice shall state the Undersigned's election to exercise
the Options, the number of shares in respect of which an election to exercise
has been made, the method of payment elected, the exact name or names in which
the shares will be registered and the Undersigned's Social Security number. Such
notice shall be signed by the Undersigned and shall be accompanied by payment of
the purchase price of such shares. In the event the Options shall be exercised
by a person or persons other than the Undersigned pursuant to Paragraph 6
hereof, such notice shall be signed by such other person or persons and shall be
accompanied by proof acceptable to the Company of the legal right of such person
or persons to exercise the Options. All shares delivered by the Company upon
exercise of the Options as provided herein shall be fully paid and nonassessable
upon delivery.
<PAGE> 2
5. Method of Payment for Options. Upon the exercise of all or any part
of an Option, the Purchase Price shall be payable in full by check, or by any
such other method of payment approved by the Board of Directors of the Company
(the "Board") in its sole and absolute discretion.
6. Termination of Directorship; Death of the Undersigned.
(a) In the event the Undersigned is no longer a director of
the Company or any subsidiary of the Company ("Directorship") for any reason
whatsoever other than death of the Undersigned, or for no reason including
termination by the Undersigned's voluntary resignation or of the Undersigned's
disability, any unexercised option shall lapse and terminate thirty (30) days
after the effective date of termination of the Undersigned's Directorship unless
the Board elects, in its sole and absolute discretion, to allow the Undersigned
to exercise such Option for a period in excess of thirty (30) days following
termination of the Undersigned's Directorship. In no event shall the Option, or
any part thereof, be exercisable after the Expiration Date.
(b) In the event of the death of the Undersigned, the Option
shall lapse unless it is exercised within ninety (90) days after the date of the
Undersigned's death by the Undersigned's legal representative or representatives
or by the person or persons entitled to do so under the Undersigned's last will
and testament or if the Undersigned fails to make a testamentary disposition of
such Option or shall die intestate, by the person or persons entitled to receive
such Option under the applicable laws of descent and distribution. The Company
shall have the right to require evidence satisfactory to it of the rights of any
person or persons seeking to exercise the Option under this Paragraph 6(b) to
exercise the Option.
7. Adjustments in Number of Shares and Purchase Price. In the event a
stock dividend is declared upon the Stock, the remaining shares of Stock then
subject to Options under this Agreement shall be adjusted proportionately
without any change in the aggregate purchase price therefor. In the event the
Stock shall be changed into or exchanged for a different number or class of
shares of stock of the Company or of another corporation, whether through
reorganization, recapitalization, stock split, combination of shares, merger or
consolidation, there shall be substituted for each such remaining share of Stock
then subject to Options granted under this Agreement the number and class of
shares of stock into which each outstanding share of Stock shall be so
exchanged, all without any change in the aggregate purchase price for the shares
then subject to Options granted under this Agreement.
8. Delivery of Shares. No shares of Stock shall be delivered upon
exercise of the Options unless and until (i) the purchase price shall have been
paid in full in the manner herein provided; (ii) applicable taxes required to be
withheld have been paid or withheld in full; (iii) approval of any governmental
authority required in connection with the Options, or the issuance of shares
thereunder, has been received by the Company; (iv) the Undersigned has complied
with all terms and conditions of this Agreement; and (v) if required by the
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<PAGE> 3
Company, the Undersigned has delivered to the Company an Investment Letter in
form and content satisfactory to the Company as provided for in Paragraph 13
hereof.
9. Repurchase Option. In the event the Undersigned is no longer a
director of the Company or any subsidiary of the Company for any reason
whatsoever, or for no reason including termination by the Undersigned's
voluntary resignation or of the Undersigned's death or disability, the Company
(or its nominee) shall have the right (but not the obligation) to purchase any
shares of Stock held by the Undersigned. The purchase price to be paid by the
Company for the Undersigned's Stock shall be the Fair Market Value per share.
For purposes of this Agreement, the "Fair Market Value" of the Stock as of any
date shall be the average of the closing bid and asked prices for the Stock as
reported on the Nasdaq National Market System (or on any national securities
exchange on which the Stock is then listed) for the date or, if no prices are so
reported for that date, such prices on the next preceding date for which closing
bid and asked prices were reported. If at any time the Stock is not listed on
any national securities exchange, the Fair Market Value shall be the fair market
value determined by the Board in good faith and in its reasonable discretion
using such methods or procedures as may be established from time to time by the
Board in its reasonable discretion.
(a) The Company (or its nominee) shall exercise this right to
repurchase the shares of Stock, if at all, within six (6) months following the
date of the termination of the Undersigned's Directorship by delivering written
notice of exercise to the Undersigned or the Undersigned's personal
representative.
(b) Payment on such exercise by the Company shall be made by
an initial payment on the Consummation Date (defined below) equal to 20% of the
purchase price, and the balance shall be made in four (4) equal annual
installments of principal and accrued interest commencing on the first
anniversary of the Consummation Date, and on the next four (4) anniversaries of
the Commencement Date. Interest on the unpaid principal amount shall commence to
accrue from the Consummation Date at the prime rate of interest in effect on the
Consummation Date as announced in the Wall Street Journal (or a reasonable
substitute selected by the Board), and it shall be adjusted annually thereafter
to the then-existing Wall Street Journal-announced prime rate (or a reasonable
substitute selected by the Board), which adjusted rate of interest shall remain
in effect for the entire year then beginning (interim changes in the prime rate
during the year being disregarded). The "Consummation Date" for purposes of this
Paragraph shall be the sixtieth (60th) day following delivery of the Company's
notice of exercise, provided that such date may be extended by the Undersigned
or the Undersigned's personal representative by written notice to a date not
later than the earlier of ten (10) days after all holding periods under Section
422 of the Internal Revenue Code expire or consummation of a transaction (e.g.,
merger, consolidation, stock sale) pursuant to which the holder of the
Undersigned's shares would be entitled to receive consideration of any kind. The
Company may, at its election, prepay amounts due under this Paragraph, without
premium or penalty.
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<PAGE> 4
10. Restrictions on Transfer. In the event any shares of Stock acquired
pursuant to exercise of options hereunder, or any interest therein, are to be
transferred, voluntarily or involuntarily (including, without limitation, any
sale, encumbrance, foreclosure or transfer in lieu thereof, or by operation of
law, any division of marital property on account of divorce or legal separation
being deemed a "transfer" for purposes hereof, but excluding transfers to which
Paragraph 9 hereof applies), the Company (or its nominee) shall have a right of
first refusal as follows:
(a) The Undersigned (or the holder of such shares if not the
Undersigned) shall give the Company advance written notice detailing all the
terms of the proposed transfer. The Company (or its nominees) shall have the
right (but not the obligation), exercisable upon delivery to the transferring
shareholder of written notice of acceptance within thirty (30) days following
receipt of the notice of proposed transfer described in the preceding sentence,
to repurchase all or any of such shares on the terms and conditions set forth in
such notice;
(i) provided that the per share purchase price shall
be the lesser of (X) the price, plus the Fair Market Value of any
non-cash consideration, stated in the notice or (Y) the Fair Market
Value of the shares (and shall be the Fair Market Value in the event of
a transfer not involving any consideration); and
(ii) provided further that the purchase price shall
be payable, at the election of the Company (or its nominees), either on
the terms set forth in the transferor's notice or in installments with
interest as set forth in Paragraph 9(b). The Company may, at its
election, prepay amounts due under this Paragraph, without premium or
penalty.
(b) The date for consummating such purchase shall be the
sixtieth (60th) day following delivery of the Company's (or its nominees')
notice of exercise. Failure by the Company (or its nominees) (without default by
the transferring shareholder) to close such purchase within the above 60-day
period shall give the transferring shareholder the right to transfer such shares
or interest therein on the terms and to the person described in the notice
during the 60-day period; provided that the shares or interest therein to be
transferred shall for all purposes remain subject to this agreement. If the
transferring shareholder fails to close the proposed transfer on those terms
within such second 60-day period, the proposed transfer shall again be subject
to the terms of this Paragraph 10. Notwithstanding the foregoing, such shares
may be transferred or retransferred without invoking this right of first refusal
between the Undersigned and trusts of which the Undersigned and/or the
Undersigned's spouse are the sole beneficiaries by giving prior written notice
certifying such a transfer is to be made; provided that following any such
transfer, such shares shall remain subject to this right of first refusal and
all the other provisions of this Agreement.
(c) For so long as the Company's right to repurchase the Stock
as set forth in Paragraphs 9 and 10 remain effective, neither the Undersigned,
nor the Undersigned's
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<PAGE> 5
personal representative(s), devisee(s), heir(s), successor(s), or assignee(s)
shall sell, assign or otherwise transfer any shares of Stock or interest therein
without obtaining the written agreement of the purchaser, assignee or transferee
that the shares remain subject to this repurchase right, and the Undersigned
agrees that certificates evidencing the Stock may be legended to reflect the
foregoing restrictions.
11. Stockholders Agreement. By accepting the options granted under this
Agreement, the Undersigned further agrees to be bound as a member of Management
to Sections 3 and 6 of the Second Amended and Restated Stockholders Agreement,
dated as of June 28, 1996 among the Company and certain other parties thereto,
as such has been amended (the "Stockholders Agreement"), which provisions
require the Undersigned to consent to and sell any stock or options owned by the
Undersigned as of the date of this Agreement, and any stock or options acquired
by the Undersigned on or after the date of this Agreement, in any Approved Sale
(as that term is defined in the Stockholders Agreement).
12. Termination of Restrictions. Paragraphs 10 and 11 shall terminate
and be of no further force or effect automatically upon the closing of an
initial public stock offering of the Company's common stock under the Securities
Act the result of which is that the Company's common stock is traded, or quoted,
as applicable, on a national securities exchange, over the counter on NASDAQ, or
through the NASD's National Market System.
13. Securities Act. The Company shall have the right, but not the
obligation, to cause the shares of Stock issuable upon exercise of the Options
to be registered under the appropriate rules and regulations of the Securities
and Exchange Commission.
The Company shall not be required to deliver any shares of Stock
pursuant to the exercise of all or any part of the Options if, in the opinion of
counsel for the Company, such issuance would violate the Securities Act of 1933,
as amended (the "Securities Act"), or any other applicable federal or state
securities laws or regulations. The Company may require that the Undersigned,
prior to the issuance of any such shares pursuant to exercise of the Options,
sign and deliver to the Company a written statement ("Investment Letter")
stating (i) that the Undersigned is acquiring the shares for investment and not
with a view to the sale or distribution thereof; (ii) that the Undersigned will
not sell any shares received upon exercise of the Options or any other shares of
the Company that the Undersigned may then own or thereafter acquire except
either (a) through a broker on a national securities exchange or (b) with the
prior written approval of the Company; and (iii) containing such other terms and
conditions as counsel for the Company may reasonably require to assure
compliance with the Securities Act or other applicable federal or state
securities laws and regulations. Such Investment Letter shall be in form and
content acceptable to the Company in its sole discretion.
If shares of Stock or other securities issuable pursuant to the
exercise of the Options have not been registered under the Securities Act of
1933 or other applicable federal or state
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<PAGE> 6
securities laws or regulations, the certificates representing such shares shall
bear a legend restricting the transferability thereof, such legend to be
substantially in the following form:
The Securities evidenced by this certificate
have not been registered under the Securities
Act of 1933, as amended (the "Act"), or qualified
under any applicable state securities laws. They
have been acquired for investment and not with a
view to distribution thereof within the meaning
of the Act and regulations thereunder. They may
not be sold or otherwise transferred unless (a)
there is an effective registration statement
under such Act and applicable state securities
laws covering such transaction involving said
securities or (b) this Corporation receives an
opinion of legal counsel for the holder of these
securities (concurred in by legal counsel for
this Corporation) stating that such transaction
is exempt from registration or this Corporation
otherwise satisfies itself that such transaction
is exempt from resolution.
Any such shares of Stock shall also bear the restrictive legends, in
substantially the same form, that are contained in the Stockholders Agreement.
14. Federal and State Taxes. Upon exercise of the Options, or any part
thereof, the Undersigned may incur certain liabilities for federal, state or
local taxes and the Company may be required by law to withhold such taxes for
payment to taxing authorities. Upon determination by the Company of the amount
of taxes required to be withheld, if any, with respect to the shares to be
issued pursuant to the exercise of the Options, the Undersigned shall pay to the
Company by check or by authorizing the Company to withhold from monies owing by
the Company to the Undersigned an amount equal to the amount of any taxes which
the Company is required to withhold with respect to such Stock.
15. Administration. This Agreement shall in all respects be
administered by the Board. The Board shall have the sole and complete discretion
with respect to all matters under this Agreement and decisions of the majority
of the Board with respect to this Agreement shall be final and binding upon the
Undersigned and the Company.
16. Continuation of Directorship. This Agreement shall not be construed
to confer upon the Undersigned any right to continue as a director of the
Company or any of its subsidiaries.
17. Obligation to Exercise. The Undersigned shall have no obligation to
exercise any Option granted by this Agreement.
18. Governing Law. This Agreement shall be interpreted and administered
under the internal laws, and not the laws of conflicts, of the State of Arizona.
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<PAGE> 7
19. Amendment and Termination. Except as otherwise provided in this
Agreement, this Agreement may be amended or terminated only by a written
agreement executed by the Company and the Undersigned. Any amendment or
modification of this agreement shall be signed by a duly authorized officer of
the Company other than the Undersigned.
20. Counterparts. This Agreement may be executed in any number of
counterparts, all such counterparts shall be deemed to constitute one and the
same instrument, and each of the executed counterparts shall be deemed an
original hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth above.
CITADEL COMMUNICATIONS
CORPORATION
By:/s/ DONNA L. HEFFNER
--------------------------------
Its Authorized Officer
ACCEPTED AND AGREED:
/s/ PATRICIA DIAZ DENNIS
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The Undersigned
The spouse of the Undersigned hereby
confirms that the community property
of the Undersigned and of the spouse
of the Undersigned is subject to and
bound by the agreement set forth above.
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Spouse
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DATE
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