NEW YORK, Oct. 16, 2006 (PRIMEZONE) -- Murray, Frank & Sailer LLP and Labaton Sucharow & Rudoff LLP Announce the Proposed Settlement of a Class Action and Derivative Action Involving Citadel Security Software, Inc.
TO: All persons and entities who:
1) purchased common stock of Citadel Security Software, Inc. ("Citadel" or
the "Company") between February 12, 2004 and December 16, 2004,
inclusive, excluding Defendants, officers and directors of Citadel at
all relevant times, members of their immediate families, and their
legal representatives, heirs, successors, or assigns and any entity in
which Defendants have or had a controlling interest (the "Class");
and/or
2) are current holders of Citadel common stock.
YOU ARE HEREBY NOTIFIED that pursuant to Court Order, hearings will be held regarding proposed settlements (the "Settlements") in the cases Ruth Lentz v. Citadel Security Software, Inc., et al., Civil Action No. 3-05-CV-0100-D (the "Class Action"), and Hans J. Baier v. Steven B. Solomon, et al., Civil Action No. 3:05-CV-0846-D (the "Derivative Action"), both docketed in the United States District Court for the Northern District of Texas.
The hearing on whether to approve the Settlement in the Class Action will be held before the Honorable Sidney A. Fitzwater, United States District Judge, at Courtroom 1516 of the United States Courthouse, United States District Court, Northern District of Texas, Dallas Division, 1100 Commerce Street, Dallas, Texas, on December 15, 2006 at 11: 00 a.m. The purpose of the Settlement of the Class Action is to settle the claims asserted on behalf of the Class against the Company in exchange for a settlement amount to be distributed to Class members. At this hearing, the Court will determine: (1) whether the terms of the Settlement described in the Stipulation of Settlement ("Stipulation") dated September 19, 2006 and filed with the Court, which among other things, provides for creation of a Settlement Fund in the amount of $1,750,000, should be approved as fair, just, reasonable and adequate; (2) whether the proposed plan to distribute the Settlement Fund to the Class ("Plan of Allocation") is fair, just, reasonable and adequate; (3) whether the Class Action should be dismissed with prejudice as set forth in the Stipulation; and (4) whether the application of Plaintiffs' counsel in the Class Action for an award of attorneys' fees and expenses should be approved, a portion of which will be used to compensate Plaintiffs' counsel in the Derivative Action.
The hearing for the Settlement in the Derivative Action will be held before the Honorable Sidney A. Fitzwater, United States District Judge, at Courtroom 1516 of the United States Courthouse, United States District Court, Northern District of Texas, Dallas Division, 1100 Commerce Street, Dallas, Texas, on December 15, 2006 at 11:00 a.m. The purpose of the Settlement of the Derivative Action (which is an action brought on behalf of the Company, rather than on behalf of shareholders) is to provide a benefit to the Company, rather than provide a direct benefit to stockholders. At this hearing the Court will determine whether the settlement of the Derivative Action, whereby the case will be dismissed with prejudice as set forth in the Stipulation, is in the best interests of the Company, given the substantial benefit to the Company that will be received as a result of the dismissal of the Derivative Action in light of the harm that the Company would suffer as a result of continued litigation. Derivative actions do not provide common stock holders with direct monetary compensation as a result of the Settlement of the Derivative Action.
The Court may adjourn or continue the hearings on the Settlements of the Class Action and/or the Derivative Action without further notice to the Class or current Citadel shareholders.
IF YOU ARE A MEMBER OF THE CLASS DESCRIBED ABOVE, YOUR RIGHTS WILL BE AFFECTED AND YOU MAY BE ENTITLED TO SHARE IN THE SETTLEMENT FUND OF THE CLASS ACTION. FURTHERMORE, IF YOU ARE A CURRENT HOLDER OF CITADEL COMMON STOCK, YOUR RIGHTS AS A SHAREHOLDER WILL BE AFFECTED BY THE SETTLEMENT OF THE DERIVATIVE ACTION. If you are a Class member, or a current shareholder, and have not received the 1) Notice of Proposed Settlement of Class Action and Derivative Action, Motion for Attorneys' Fees, and Fairness Hearings (the "Notice"), and/or 2) Proof of Claim and Release, please request copies by writing to:
Citadel Securities Litigation c/o Strategic Claims Services Concord Plaza 2710 Concord Road, Suite 5 Aston, Pennsylvania 19014 www.strategicclaims.net
The Notice and Proof of Claim are also available at www.murrayfrank.com.
Inquiries about the Class Action, other than requests for Notice or Proof of Claim and Release forms, may be made to the following Plaintiffs' counsel:
Gregory Linkh, Esq. Murray, Frank & Sailer LLP 275 Madison Avenue, Suite 801 New York, New York 10016 Joseph Sternberg, Esq. Labaton Sucharow & Rudoff LLP 100 Park Avenue New York, NY 10017
Inquiries about the Derivative Action, other than requests for Notice or Proof of Claim and Release forms, may be made to the following Derivative Plaintiffs' counsel:
William B. Federman, Esq. Federman & Sherwood 120 N. Robinson, Ste. 2720 Oklahoma City, Oklahoma 73102
To participate in the Class Action Settlement, you must submit a Proof of Claim and Release form no later than January 4, 2007. If you are a Class member and do not exclude yourself from the Class, you will be bound by the Final Order and Judgment of the Court. To exclude yourself from the Class, you must submit a request for exclusion postmarked no later than November 20, 2006, in the manner set forth in the Notice. If you are a Class member and do not submit a proper Proof of Claim and Release, you will not share in the Settlement in the Class Action, but you nevertheless will be bound by the Final Order and Judgment of the Court. If you are 1) a Class member who wishes to object to the Settlement of the Class Action, and/or 2) a holder of Citadel common stock who wishes to object to the Settlement of the Derivative Action, please refer to the Notice, which provides instructions on how to do so.
Please do not contact the Court for information.
Dated: September 26, 2006 By Order of the Court