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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): September 23, 2005
CASTLE ENERGY CORPORATION
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(Exact Name of Registrant as Specified in Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation or Organization)
0-10990 76-0035225
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(Commission File Number) (I.R.S. Employer Identification No.)
357 South Gulph Road, Suite 260, King of Prussia, PA 19406
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(Address of Principal Executive Offices) (Zip Code)
(610) 992-9900
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(Registrant's telephone number, including area code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2 below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 230.14a-12(b))
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 - ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On September 23, 2005, the Compensation Committee of the Board of
Directors of Castle Energy Corporation approved the following annual salaries
for three of its officers effective September 1, 2005.
Richard Staedtler, Chief Executive Officer $250,000
William C. Liedtke, III, General Counsel $175,000
Mary A. Cade, Chief Financial Officer and $165,000
Chief Accounting Officer
In addition, the Board of Directors approved a salary continuation plan
for 18 months for the estate of Joseph L. Castle II, former Chairman and Chief
Executive Officer of the Company. Mr. Castle's annual salary and bonus was
$300,000/per year at the time of his death on August 15, 2005. The salary
continuation compensation will be based upon $300,000 per year.
ITEM 8.01 - OTHER EVENTS
On September 19, 2005, the Company settled its long-standing litigation
with Chevron (formerly ChevronTexaco) for a cash payment by the Company to
Chevron of $5.75 million. Chevron had filed the lawsuit against the Company and
two of its inactive subsidiaries in August 2002 seeking indemnification and
statutory damages and relief arising from environmental damage to the now
dismantled Indian Refinery in Lawrenceville, Illinois. A subsidiary of the
Company operated that refinery for approximately five years. Texaco had operated
the refinery approximately 75 years.
The settlement included a complete release of the Company and
indemnification of the Company to any and all environmental claims with respect
to the Indian Refinery. The Company's Board of Directors believed that, although
the Company had meritorious defenses to Chevron's claims, it was in the
Company's best interests to settle this litigation given the costs of defending
the matter, including the diversion of the Company's management personnel.
The Company expects to record a one-time charge of approximately
$2,700,000 (consisting of a gross charge of $4,200,000, net of $1,500,000 in tax
benefits) in the fourth quarter of the Company's fiscal year ending September
30, 2005 as a result of the settlement. The Company had previously recorded a
$1,550,000 reserve.
EXHIBIT
10.149 - Settlement Agreement and Mutual Release, dated September 19, 2005,
between Chevron Environmental Management Company, Chevron Environmental
Service Company and Texaco Inc. and Castle Energy Corporation, Indian
Refining I Limited Partnership, Indian Refining & Marketing I Inc. and
William S. Sudhaus
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SIGNATURE
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 thereunto duly authorized.
CASTLE ENERGY CORPORATION
Date: September 28, 2005 By: /s/ RICHARD E. STAEDTLER
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Richard E. Staedtler
Chief Executive Officer
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