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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.
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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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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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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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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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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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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
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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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