EXHIBIT 99.1
SETTLEMENT AGREEMENT
This Settlement Agreement between KelCor, Inc. and its affiliates, as
defined under the Securities Exchange Act of 1934, ("KelCor") and Xxxxxx Realty
Trust, Inc. and its affiliates, as defined under the Securities Exchange Act of
1934, ("Xxxxxx") is entered into as of this 24th day of June 1997.
WHEREAS, Xxxxxx is a publicly-traded corporation and KelCor is a
shareholder of Xxxxxx; and
WHEREAS, KelCor has commenced an action against Xxxxxx styled KelCor,
Inc. x. Xxxxxx Realty Trust, Inc., in the Circuit Court for St. Louis County,
Civil Action Xx. 00 XX- 000000 (the "Lawsuit") on June 5, 1997, seeking a
declaratory judgment and preliminary and permanent injunctive relief barring
Xxxxxx from conducting an annual meeting of shareholders and from voting certain
proxies in connection with any annual or special meeting of shareholders of the
Trust, inter alia; and
WHEREAS, the parties appeared and began argument on KelCor's motion for
a preliminary injunction on June 13, 1997; and
WHEREAS, the parties desire amicably to resolve their differences, for
the sole purpose of settlement, and without admitting the merits of any position
taken by either party in the course of the Lawsuit and without admitting any
fault or liability.
NOW, THEREFORE, the undersigned parties agree as follows:
1. Xxxxxx shall postpone its Annual Meeting of Shareholders to a date
at least forty- five (45) days after the special meeting referred to in the next
paragraph and, if Section 6(a)
hereof is applicable pursuant to the terms of this Agreement, no later than 45
days after the court enters its order in the Lawsuit with respect to the voting
rights of the "Excess Shares" of the PICO Group (as defined below in Section
5(d).
2. Xxxxxx shall call a special meeting of shareholders to be held
thirty (30) days after the date on which the parties can mail their proxy
materials as provided in paragraph 4, below, to vote on a single issue that
shall be the same as Proposal A (except that subparagraph (f) of the amendment
proposed therein will be deleted and the remaining subparagraphs appropriately
re-lettered) as contained in the proxy statement filed by Xxxxxx with the
Securities and Exchange Commission ("SEC") on June 3, 1997 (the "By-Law
Amendment Proposal") and, in connection with such meeting:
(a) Xxxxxx shall set the record date as Friday, June 27, 1997;
and
(b) The affirmative vote of 62.0% of the issued and
outstanding shares of Xxxxxx will be required to pass the By-Law Amendment
Proposal. As used in this Settlement Agreement, "issued and outstanding shares
of Xxxxxx" shall refer to 866,624 shares without disqualification of any shares
that may be deemed Excess Shares pursuant to the present By-Law Section 8.8(b).
3. KelCor and Xxxxxx shall file their proxy materials regarding the
By-Law Amendment Proposal with the SEC no sooner than the first (1st) business
day after the full execution of this Settlement Agreement and no later than
three (3) business days after the full execution of this Settlement Agreement..
4. KelCor and Xxxxxx, and each of their directors, officers and agents,
shall not mail proxy solicitation materials or otherwise actively solicit
proxies prior to thirteen (13) days after the full execution of this Settlement
Agreement; provided, if the SEC reviews the proxy
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solicitation material of KelCor and/or Xxxxxx, both parties agree to mail such
materials and conduct any other solicitation of proxies no earlier than the
third (3rd) business day after the SEC has completed its reviews and notified
KelCor and Xxxxxx that it has no further comments. Both KelCor and Xxxxxx agree
to promptly proceed with all matters relating to the SEC review, if any, of such
proxy solicitation material.
5. KelCor and Xxxxxx agree that the Special Meeting of Shareholders and
the Annual Meeting of Shareholders will be conducted as follows:
(a) Xxxxxx will appoint an independent inspector of elections
mutually acceptable to Xxxxxx and KelCor to tabulate votes on all
matters brought before the special meeting or the annual meeting with
the fees and expenses of such independent inspector to be split by
Xxxxxx and KelCor;
(b) Representatives of all shareholders will be allowed to
attend the special meeting and the annual meeting;
(c) All stockholders will be provided reasonable opportunity
to speak at the special meeting and annual meeting on all matters
brought before the special meeting or annual meeting; and
(d) If the court determines that some of the shares of Xxxxxx
stock owned directly or indirectly by PICO Holdings, Inc. and its
affiliates, as defined under the Securities Exchange Act of 1934
(collectively, the "PICO Group"), are "Excess Shares" under the Xxxxxx
Bylaws and cannot be voted at the annual meeting, then Xxxxxx and
Kelcor agree to follow the court's instructions with respect to the
voting of any such Excess Shares at the annual meeting.
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6. Upon the tabulation of votes on the By-Law Amendment Proposal at the
special meeting of shareholders:
(a) if the By-Law Amendment Proposal receives less than 62.0%
of the vote of the issued and outstanding shares of Xxxxxx as of the record date
for the special meeting of shareholders, then paragraph 6(b) of this Settlement
Agreement shall be void in its entirety.
(b) if the By-Law Amendment Proposal receives 62.0% or more of
the vote of the issued and outstanding shares of Xxxxxx as of the record date
for the special meeting of shareholders, then KelCor (i) shall not challenge the
passage of the By-Law Amendment and Proposal, (ii) shall accept the By-Law
Amendment as valid and enforceable and (iii) shall dismiss Count I of the
Lawsuit with prejudice with each party to bear its own costs.
KELCOR, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Witnessed:
/s/ Xxxxx Xxxxxxx
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Its Attorney
XXXXXX REALTY TRUST, INC.
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
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Witnessed:
/s/ Xxxxxxxxx X. Xxxxxxxx
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Its Attorney
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