SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy Statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Aztar Corporation
- ----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(l)(ii), 14a-6(i)(l), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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[End of Cover Page]
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A Z T A R [in logo format]
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
NOTICE AND PROXY STATEMENT
For the Annual Meeting of Shareholders To Be Held on May 12, 1994.
To the Shareholders of Aztar Corporation:
Notice is hereby given that the 1994 Annual Meeting of Shareholders
(the "Meeting") of Aztar Corporation ("Aztar" or the "Company") will be
held at The Ritz Carlton Hotel, 2401 East Camelback Road, Phoenix,
Arizona, at 11:00 a.m. on May 12, 1994, for the following purposes:
1. To elect three Directors to serve until the 1997 Annual Meeting
of Shareholders or until their successors are elected and
qualified;
2. To transact such other business as may be properly come before
the Meeting or any adjournment(s) thereof.
The holders of each of the 37,365,955 shares of the Company's
Common Stock (the "Common Stock") outstanding as of March 16, 1994, are
entitled to notice of, and to vote on, each matter to be presented at
the Meeting or any adjournment(s) thereof. The holders of record of a
majority of the Common Stock present in person or represented by proxy
shall constitute a quorum for the transaction of business at the
Meeting. Each share is entitled to one vote. The affirmative vote of
the holders of a plurality of the shares of Common Stock present in
person or represented by proxy at the Meeting is required for the
election of Directors. Under applicable Delaware law, in determining
whether a nominee for Director has received the affirmative vote of a
plurality of the shares of Common Stock, abstentions and broker non-
votes will be disregarded and will have no effect on the outcome of the
vote.
The enclosed proxy is being solicited by the Company's Board of
Directors. On matters coming before the Meeting as to which a choice
has been specified by the Shareholders by means of the ballot on the
proxies, the shares will be voted or not voted accordingly. The
proxies may be revoked at any time prior to the Meeting by written
request to the Secretary of the Company or by voting in person at such
Meeting. If no choices are specified on proxies delivered by parties
other than brokers, the shares which are represented by such proxy will
be voted FOR the election of Management's nominees for Directors.
Management is not aware at this time of any matters other than the
election of Directors that will be presented for consideration at the
Meeting. If any other matters properly come before the Meeting or any
adjournment(s) thereof, the persons named in the enclosed proxy will
vote thereon in accordance with their judgment. The Management of the
Company cordially invites you to attend the Meeting.
By Order of the Board of Directors
Nelson W. Armstrong, Jr.
Secretary
Approximate date of mailing to Shareholders:
March 28, 1994
I M P O R T A N T
Shareholders are earnestly requested to fill in, date, sign and mail
promptly the enclosed proxy whether or not they plan to attend the
Meeting. A postage-paid envelope is enclosed for mailing in the United
States. Since proxies may be revoked at any time, the execution of your
proxy will not affect your right to vote your shares in person if you are
present at the Meeting.
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ELECTION OF DIRECTORS OF THE COMPANY
Nominees for Election as Directors
Pursuant to the Company's Certificate of Incorporation, the Board of
Directors consists of not less than five nor more than thirteen Directors
and is divided among three classes of members holding three-year staggered
terms with each class as nearly equal in number as possible. The class
whose term expires this year is comprised of the following three
individuals, each of whom is a nominee for re-election to one of the three
board positions to be filled at this Meeting for a term extending to the
1997 Annual Meeting of Shareholders or until his successor is elected and
qualified. Management does not know of any nominee who will be
unavailable, but should any unavailability occur, the persons named in the
enclosed proxy may vote with discretionary authority for a substitute. The
enclosed proxy cannot be voted for a greater number of persons than three.
The table below includes certain information as of February 18, 1994,
regarding the three nominees and also regarding the other seven Directors
whose terms of office will continue after the Meeting.
Name, Age, and Principal Occupations (1989-Present) Year First
Year Present and Certain Other Directorships Became a
Term Expires Presently held Director (1)
- -------------- ------------------------------------ ------------
Nominees
A. Sam Gittlin, 79 Chairman and Chief Executive Officer of 1963
(1994) Gittlin Companies, Inc. (manufacturing,
distributing and financial services)
since 1946.
Robert M. Haddock, 49 Executive Vice President and Chief 1989
(1994) Financial Officer of the Company
(with Ramada from 1980 to May 1985;
rejoined Ramada in November 1985, and
served as Executive Vice President
and Chief Financial Officer of Ramada
from March 1987 to completion of the
Restructuring)
Terence W. Thomas, 63 Chairman of the Board of Arizona 1978
(1994) Wholesale Supply Company and of
National Brands, Inc. (wholesale
distributors of consumer products)
since 1984
Other Directors
John B. Bohle, 50 Senior Vice President and Director of 1992
(1996) Paul R. Ray and Company, Inc. since 1981
(executive recruiting services)
Edward M. Carson, 64 Chairman of First Interstate Bancorp 1975
(1995) since 1990; President of First
Interstate Bancorp from 1985 to 1990;
Director of Terra Industries, Inc.
(agribusiness products)
John R. Norton, III, 64 Chairman and Chief Executive Officer 1978(2)
(1995) of J.R. Norton Company (diversified
agriculture production); Director of
Pinnacle West Capital Corporation
(holding company); Arizona Public
Service Company (electric utility);
America West Airlines, Inc.; and
Terra Industries, Inc. (agri-business
products)
Robert S. Rosow, 74 Independent Certified Public Accountant 1969
(1995) since 1953
Paul E. Rubeli, 50 Chairman, President and Chief Executive 1985
(1996) Officer of the Company; previously
President and Chief Executive Officer
of the Company (formerly Executive
Vice President, Gaming, of Ramada, 1982
to December 1989, and President and Chief
Operating Officer of the Company to
February 1990)
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Name, Age, and Principal Occupations (1989-Present) Year First
Year Present and Certain Other Directorships Became a
Term Expires Presently held Director (1)
- -------------- ------------------------------------ ------------
Richard Snell, 63 Chairman, President and Chief Executive 1981
(1995) Officer of Pinnacle West Capital
Corporation (holding company) and
Chairman of Arizona Public Service
Company (electric utility) since February
1990; Director of Pinnacle West, Arizona
Public Service, and Banc One Arizona
Corporation (bank holding company);
previously Chairman of the Company from
December 1989 to February 1992, Chairman
and Chief Executive Officer of the Company
from December 1989 to February 1990, and
Chairman, President and Chief Executive
Officer of Ramada from 1981 to
December 1989.
Carroll V. Willoughby, Retired (formerly Senior Group Vice 1970
80 President of Ramada from 1970 to 1981)
(1996)
__________
(1) Aztar Corporation was incorporated in Delaware in June 1989 to operate
the gaming business of Ramada Inc. ("Ramada") after the restructuring of
Ramada (the "Restructuring"), which was completed on December 20, 1989.
All members of the Board of Directors of Ramada as composed at the
conclusion of the Restructuring, with one exception, became members of
the Aztar Board of Directors at the incorporation of the Company. The
terms of Directors set forth above include, with two exceptions, periods
of service as Directors of Ramada.
(2) Mr. Norton previously served as a Director of Ramada between October
1978 and May 1985, when he resigned to become U.S. Deputy Secretary of
Agriculture. He rejoined the board in 1986.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND DIRECTORS AND OFFICERS
5% Beneficial Owners
The table below sets forth certain information regarding beneficial
owners of more than 5% of the Common Stock as of February 18, 1994, as
indicated by documents on file with the Securities and Exchange Commission.
The Company knows of no other beneficial owner of more than 5 percent of its
outstanding Common Stock.
Shares of Common Stock Percent of
Name of Beneficial Owner Beneficially Owned Class
------------------------ ---------------------- ---------
Gabelli Funds, Inc. . . . . . 3,609,325 9.66%
One Corporate Center
Rye, NY 10580
Directors and Executive Officers
The table below sets forth certain information regarding Directors' and
executive officers' beneficial ownership of Common Stock as of February 18,
1994.
Shares of Common Stock Percent of
Directors Beneficially Owned* Class
--------- ----------------------- ---------
John B. Bohle . . . . . . . . . . . . . 7,000 **
Edward M. Carson . . . . . . . . . . . 8,400 **
A. Sam Gittlin . . . . . . . . . . . . 12,100 **
Robert M. Haddock . . . . . . . . . . . 721,405 1.9%
John R. Norton, III . . . . . . . . . . 21,500 **
Robert S. Rosow . . . . . . . . . . . . 28,596 **
Paul E. Rubeli . . . . . . . . . . . . 857,651 2.3%
Richard Snell . . . . . . . . . . . . . 48,000 **
Terence W. Thomas . . . . . . . . . . . 10,000 **
Carroll V. Willoughby . . . . . . . . . 43,000 **
Named Executive Officers
------------------------
Nelson W. Armstrong, Jr. . . . . . . . 99,101 **
Meridith P. Sipek . . . . . . . . . . . 55,851 **
Craig F. Sullivan . . . . . . . . . . . 54,535 **
All Directors and Executive Officers
as a group (14 persons) . . . . . . . .2,013,156 5.39%
_________
*Including, for Mr. Gittlin, 1,100 shares held by a partnership in which
he is a general partner and as to which he has effective voting and
investment power and 3,000 shares owned by Mrs. Gittlin and as to which
Mr. Gittlin disclaims any beneficial interest; for Mr. Norton, 13,500
shares held by a self directed 401(k) profit sharing plan; for Mr. Rosow,
400 shares held in an estate of which Mr. Rosow is the independent
executor and in which he disclaims any beneficial interest; for Messrs.
Carson, Gittlin, Norton, Rosow, Snell, Thomas and Willoughby 8,000 shares
each, and for Mr. Bohle 7,000 shares, which they may acquire by the
exercise of stock options within 60 days; for Messrs. Haddock, Rubeli,
Armstrong, Sipek, and Sullivan 659,883, 774,034, 91,704, 52,591, and
49,257 shares, respectively, which they may acquire by the exercise of
stock options within 60 days; and for the Directors and executive
officers as a group (14 persons), 1,732,208 shares, which they may
acquire by the exercise of options within 60 days;
**Less than 1% of the outstanding shares of Common Stock.
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The Board and its Committees
The Board has standing Audit, Compensation and Stock Option, Executive,
Finance and Nominating committees.
The Audit Committee is comprised of Messrs. Gittlin, Norton, Rosow, Snell
and Willoughby. This Committee is responsible for reviewing the audit scope,
timing and fee arrangements with Aztar's independent public accountants, as
well as reviewing the audit findings and other financial data submitted by
both the Company's internal auditors and its independent public accountants
and presenting such findings to the Board.
The Compensation and Stock Option Committee is comprised of Messrs.
Carson, Gittlin, Rosow, Thomas and Willoughby. Its responsibilities include
reviewing the executive compensation programs for the senior executive
officers including their salary and bonus arrangements, as well as
administering the Company's Stock Option and Incentive Plan and the 1990
Nonemployee Directors Stock Option Plan.
The Executive Committee is comprised of Messrs. Haddock, Rubeli and
Snell. The Executive Committee may act for the full Company Board in
situations in which the Company Board delegates such authority to the
Executive Committee or in situations in which the Executive Committee finds
that emergency circumstances justify expedited action.
The Finance Committee is comprised of Messrs. Bohle, Carson, Haddock,
Norton and Thomas. Its responsibilities include reviewing the various
financial activities of the Company and presenting its findings to the
Board.
The Nominating Committee is comprised of Messrs. Bohle, Carson, Norton,
Rubeli and Snell. The duties of the Nominating Committee are to nominate
persons for election or re-election to the Board of Directors. The
Nominating Committee may consider proposed nominees for Directors which are
forwarded by Shareholders to the Secretary of the Company at the address set
forth on the first page of this Proxy Statement.
During 1993 the Board of Directors held eight meetings. The Audit
Committee held five meetings, the Compensation and Stock Option Committee
held two meetings, the Finance Committee held one meeting, the Nominating
Committee held two meetings, and there were no meetings of the Executive
Committee. With the exception of Messrs. Bohle, Snell and Thomas, no
Director attended less than 75 percent of the meetings of the Board and
committees of which he was a member. Because of their involvement with the
Ambassador Real Estate Investors L.P. ("AREI") and the Ambassador General
Partnership ("AGP"), Messrs. Bohle and Snell excused themselves from all
Board meetings, or the portions of such meetings, at which the acquisitions
of the partnership interests were discussed.
Transactions with Management and Others
Subsidiary banks of First Interstate Bancorp, of which Mr. Carson is
Chairman, have or had during 1993 various banking relationships with the
Company or its subsidiaries. The relationships include: trustee for the
First Mortgage Notes under the First Mortgage Notes Indenture, participation
in the Tropicana Loan, agent for and participation in the financing of
Ramada Express Hotel and Casino in Laughlin, Nevada, and bank operational
services and bank card processing arrangements from which the First
Interstate banks derived approximately $522,000 of gross fees in 1993.
In July 1993, the Company acquired more than two-thirds of all the
limited partnership interests in AREI, all of the general partnership
interests in AREI, and the remaining general partnership interests in AGP,
and exercised its right under the agreement of limited partnership of AREI
to call the remaining limited partnership interests of AREI (collectively,
the "AREI/AGP Acquisition"). AREI owned a 99.9 percent general partnership
interest in AGP, which acquired a substantial interest in TropWorld Casino
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and Entertainment Resort in a sale-leaseback transaction in 1984. The
Company acquired the limited partnership interests in AREI at a purchase
price of $93,421 per investor limited partnership interest and $1,528,947
for all special limited partnership interests, and the aggregate cash
consideration, including costs incurred to complete the transaction, was
approximately $62 million. In the AREI/AGP Acquisition, the Company
acquired the one-half of one investor limited partnership interest of Mr.
Bohle for $46,710.50 and the one investor limited partnership interest of
Mr. Snell for $93,421. In addition, in the AREI/AGP Acquisition, the
Company acquired the general partnership interest of Mr. Snell in AREI for
$290,816.50 in cash and the assumption of a note of Mr. Snell given to AREI
in connection with the acquisition of such general partnership interest in
the principal amount of $208,928.50, and Aztar acquired the general
partnership interest of Mr. Snell in AGP for $29,110.50 in cash and the
assumption of a note of Mr. Snell given to AGP in connection with the
acquisition of such general partnership interest in the principal amount of
$13,215.97. Until the completion of the acquisition, Mr. Snell served as
Managing General Partner of AGP and AREI and received an annual aggregate
fee of $100,000 for serving in his respective capacities. Mr. Snell
received a fee of $50,000 for the year 1993.
Executive Compensation
The following table sets forth the annual compensation paid and accrued
by the Company for services rendered during each fiscal year presented, for
the chief executive officer and the next four most highly compensated
executive officers of the Company.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
--------------------- ----------------------
Restricted Securities All Other
Stock/ Underlying Compen-
Name and Principal Fiscal Salary Bonus Award(s) Options sation
Position Year ($) ($) $ (1) (#) ($) (2)
- ------------------ ---- ------ ----- --------- ---------- ---------
Paul E. Rubeli 1993 495,373 97,395 - 0 - - 0 - 2,420
Chairman of the 1992 481,592 261,091 - 0 - - 0 - 2,600
Board, President 1991 458,400 226,665 100,000 200,000
and Chief
Executive Officer
Robert M. Haddock 1993 387,214 75,763 - 0 - - 0 - 2,420
Executive Vice 1992 376,439 203,071 - 0 - - 0 - 2,600
President and 1991 358,400 176,295 80,000 160,000
Chief Financial
Officer
Nelson W. Armstrong, 1993 138,651 13,145 - 0 - - 0 - 1,650
Jr. 1992 134,815 36,859 - 0 - - 0 - 1,768
Vice President, 1991 131,473 25,314 10,000 20,000
Administration
and Secretary
Meridith P. Sipek 1993 120,585 11,338 - 0 - - 0 - 1,430
Controller 1992 117,218 31,776 - 0 - - 0 - 1,456
1991 114,118 21,779 10,000 20,000
Craig F. Sullivan 1993 114,175 10,697 - 0 - - 0 - 1,430
Treasurer 1992 111,000 29,980 - 0 - - 0 - 1,352
1991 108,200 20,574 7,500 15,000
_______
(1) Restricted Stock Holdings: The number of restricted shares of Aztar
Common Stock held at fiscal year-end 1993 and the value of such holdings,
based on number of shares awarded times the closing market price at fiscal
year-end, is 6,666 shares and $43,329 for Mr. Rubeli; 5,334 shares and
$34,671 for Mr. Haddock; 666 shares and $4,329 for Mr. Armstrong; 666
shares and $4,329 for Mr. Sipek; and 500 shares and $3,250 for Mr.
Sullivan. Restricted shares vest equally over a three-year period from
the date of grant (one-third on each anniversary date) and are eligible to
receive dividends, if dividends are declared and paid.
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(2) Under the provisions of the Aztar Employee Stock Ownership Plan (the
"Aztar ESOP"), shares of the Preferred Stock that were purchased by the
Aztar ESOP with the proceeds of a loan are allocated to participating
employees' accounts on a pro rata basis based on relative compensation
with some limitations. In addition, as long as the loan is outstanding,
cash dividends on the Preferred Stock are to be utilized for loan
repayments. The value of the cash dividends on Preferred Stock held in a
participant's account that are used for loan repayments is replaced by
Preferred Stock of an equal value. The value of the Preferred Stock is
the greater of the latest appraised value of the Preferred Stock, the
value of the conversion of the Preferred Stock into Aztar Common Stock at
10.5764 shares of Aztar Common Stock for each share of Preferred Stock, or
$100.00 for each share of Preferred Stock, the liquidation preference.
The latest appraisal value of Preferred Stock is $110.00 per share.
Participant accounts are generally payable only on termination of
employment or on retirement. The following shares of Preferred Stock that
were credited to the participants' accounts in 1993 (other than shares
attributable to dividends from the participants' accounts) were
approximately 22 shares for Mr. Rubeli; 22 shares for Mr. Haddock; 15
shares for Mr. Armstrong; 13 shares for Mr. Sipek; and 13 shares for Mr.
Sullivan. Similar allocations were made to participants' accounts in
1992.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Value
The following table sets forth the aggregate number of exercisable and
unexercisable options held by the chief executive officer and the next four
most highly compensated executive officers of the Company and the value of
such options based on the market value of a share of Aztar Common Stock at
year-end less the applicable exercise price. None of the named executives
exercised an option during 1993.
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options at
at FY-End (#) FY-End ($)
------------------------- -----------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
Paul E. Rubeli 774,034 1,866,940
66,666 99,999
Robert M. Haddock 659,883 1,572,560
53,334 80,001
Nelson W. Armstrong, Jr. 91,704 195,657
6,666 9,999
Meridith P. Sipek 52,591 138,132
6,666 9,999
Craig F. Sullivan 49,257 133,131
5,000 7,500
Supplemental Retirement Plans
In connection with the Restructuring, the Company has assumed certain of
the obligations of Ramada for a deferred compensation program designed to
provide supplementary retirement benefits to certain executive officers and
to certain key employees. Certain of the executive officers of the Company
participated in the deferred compensation program. The maximum available
benefit (payable over 15 years commencing with the participant's retirement
at or after 65) is 15% of his expected salary at age 65 (determined by
assuming annual increases in salary at the time of electing to participate
at the compounded rate of 6%), the normal benefit. As a result of the
Restructuring completed in 1989, participants are fully vested in their
accrued benefits. The annual benefits payable upon retirement at age 65 are
$124,504 for Mr. Rubeli; $85,944 for Mr. Haddock; $42,069 for Mr. Armstrong;
$40,944 for Mr. Sipek, and $32,755 for Mr. Sullivan.
The Company has a Non-qualified Retirement Plan for Senior Executives to
supplement the retirement income for certain executives selected at the
discretion of the Aztar Board. The non-funded plan provides that such an
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executive upon retirement at age 65 will receive annually 50% of the average
of the last five full years of compensation from the Company less any
amounts received under an Aztar tax qualified defined benefit plan and
primary Social Security. Messrs. Rubeli and Haddock are participants in the
plan and the estimated annual benefits payable upon retirement at age 65
based on actuarial assumptions are $579,783 for Mr. Rubeli and $466,394 for
Mr. Haddock.
Compensation of Directors
Directors who are not full-time employees of the Company are each paid
$25,000 per year and are reimbursed for any expenses incurred in attending
Directors' meetings. In addition, each such nonemployee Director receives a
fee of $1,000 for attending each Directors' meeting and $750 for attending
each committee meeting; committee chairpersons receive an additional $500
for each committee meeting attended. For his duties as a member of the
Special Committee of the Board formed with respect to the acquisition of the
AREI and AGP limited and special limited partnership interests, Mr. Norton
received a fee of $5,000.
In addition, nonemployee Directors shall be granted an option to purchase
5,000 shares of Common Stock when first appointed to the Board and are
entitled to receive annually on the day after the Annual Meeting of
Shareholders options to purchase 1,000 shares of Company Common Stock at an
exercise price equal to the market price of the Company Common Stock on such
dates.
In connection with the Restructuring, the Company has assumed the
obligations of Ramada for a deferred compensation plan for those Directors
who were not employed by the Company. Under the Directors' Deferred
Compensation Program (the "Directors' Program"), a monthly benefit will be
paid for a period of 10 years beginning at the later of age 70 or the
cessation of the directorship. Benefits vest fractionally each month during
the first five years of participation; however, Directors who were 65 upon
entering the Directors' Program, or who would reach age 65 during the
vesting period, would be fully vested at that time. Normal benefits payable
are based on the amount of the initial deferral and the number of years of
participation from entry into the Directors' Program until age 70. All of
the nonemployee Directors of Ramada participated in the Directors' Program.
As a result of the Restructuring, participants are fully vested in their
accrued benefits. Participants were given a one-time irrevocable election
to receive a lump sum cash payment of the present value of their benefits in
lieu of the 120 monthly installments currently provided in the agreements.
The annual benefits payable, upon cessation of the directorship, for those
Directors who elected not to receive the cash payment are: $6,708 for Mr.
Gittlin, $45,039 for Mr. Norton, $11,424 for Mr. Rosow, and $6,238 for Mr.
Willoughby.
Severance Agreements
In connection with the Restructuring, the Company has assumed the
obligations of Ramada under the severance agreements (the "Severance
Agreements") with Messrs. Rubeli, Haddock, Armstrong, Sipek and Sullivan and
certain other key employees. The Severance Agreements set forth the terms
and conditions of each such executive's termination of employment with the
Company following a "change in control" (the "First Trigger Event"). Each
Severance Agreement provides for the payment of severance benefits to the
executive officer if his employment is terminated within 24 months following
a First Trigger Event, either by the Company without "cause" (as defined) or
by the executive with "good reason" (as defined), which includes the
assignment to the executive of duties inconsistent with his prior status or
a reduction in his base salary or benefits (the "Second Trigger Event").
Upon the occurrence of a Second Trigger Event with respect to any of such
executives, the benefits described below would become payable to such
executive.
In the case of Messrs. Rubeli and Haddock, severance benefits consist of a
lump-sum cash payment, payable within 15 days after termination of
employment, equal to twice the sum of the executive's annual base salary
plus the average bonuses awarded to him in the three years preceding
termination of employment, cash-out of outstanding options and vesting and
distribution of any restricted stock. The other executive officers would
receive their annual base salary plus average bonus, plus the other
described benefits. The Company would also maintain employee insurance
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benefits plans in effect for the executives' continued benefit, or provide
substantially equivalent benefits, for two years. Except in the case of the
severance benefits of Messrs. Rubeli and Haddock, the amount of the
severance benefits is limited to the amount that would be deductible by the
Company under the federal tax laws. Based upon current salary levels, the
appropriate lump-sum cash payment that would be payable under the Severance
Agreements to Messrs. Rubeli, Haddock, Armstrong, Sipek and Sullivan if
their employment had terminated during 1993, excluding any payment relating
to stock options or restricted stock, would be $1,298,570 for Mr. Rubeli;
$1,010,110 for Mr. Haddock; $154,724 for Mr. Armstrong; $132,152 for Mr.
Sipek, and $125,451 for Mr. Sullivan. Messrs. Rubeli and Haddock also have
an employment agreement with the Company that provides for the payment of
two years' salary should their employment be terminated by the Company
without cause.
Compensation Committee Interlocks and Insider Participation
Mr. Carson, a member of the Compensation and Stock Option Committee, is
Chairman of First Interstate Bancorp. Subsidiary banks of First Interstate
Bancorp have or had during 1993 various banking relationships with the
Company or its subsidiaries. The relationships include: trustee for the
First Mortgage Notes under the First Mortgage Notes Indenture, participation
in the Tropicana Loan, agent for and participation in the financing of
Ramada Express Hotel and Casino in Laughlin, Nevada, and bank operational
services and bank card processing arrangements from which the First
Interstate banks derived approximately $522,000 of gross fees in 1993. Mr.
Willoughby, a member of the Compensation and Stock Option Committee, is a
former Senior Group Vice President of Ramada.
Board Compensation Committee Report
The Compensation and Stock Option Committee (the "Compensation Committee")
is comprised of Messrs. Carson, Gittlin, Rosow, Thomas and Willoughby.
During the Company's last fiscal year the Compensation Committee held two
meetings. The functions performed by the Compensation Committee include
reviewing the executive compensation programs for the senior executive
officers, including their salary and bonus arrangements, as well as
administering the Company's Stock Option and Incentive Plan and the 1990
Nonemployee Directors Stock Option Plan.
Upon the completion of the Restructuring and the commencement of operations
of Aztar (a new company in a new industry group), the Compensation
Committee, in conjunction with outside consultants, studied various
executive compensation practices of companies in the early stages of their
life cycle, of companies of a similar size, and of companies in the same
industry, including, but not limited to, all of the companies in the Dow
Jones Casino Index, which is utilized in the Performance Graph set forth in
the following subsection. The Compensation Committee concluded that an
appropriate compensation package for the chief executive officer and the
senior management group, at this stage of the Company's development, should
be comprised of an ownership interest; a base salary; and an annual
incentive bonus plan based on the Company's financial performance. The
Compensation Committee believes that such a package would compensate
executives in a manner that rewards both current performance and long-term
performance and would provide the executive with a financial interest in the
success of the Company similar to the interests of the Company's
Shareholders. The Compensation Committee also concluded that the total
compensation should be at a level for each executive which would allow the
Company to attract and retain talented executives whose services are
necessary to ensure the continued success of the Company.
Based on the results of the above-mentioned study, the Compensation
Committee set a base salary for the chief executive officer in mid-1990
which increased his base salary to a level which was more in line with the
comparable compensation of the chief executive officers and/or division
heads of other casino companies. At such time, base salaries were also set
for the other executive officers. Only modest adjustments to the base
salaries of the chief executive officer and the other executive officers
have been made since that time. A bonus plan was also established for the
chief executive officer; similar plans were established for the other
executive officers. The bonus plans are based on the degree to which the
Company meets certain goals set by the Committee based on the annual
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profitability of the Company (defined as total Company income before income
taxes), which may lead to accrual of bonuses which may not exceed stated
maximum percentages of base salaries (up to 70% for the chief executive
officer, among others). Bonuses, if earned, are payable as soon as
practicable after each fiscal year-end. In order to provide the senior
management group (approximately 26 persons including the chief executive
officer and the other executive officers) with an ownership interest, an
initial grant of nonqualified stock options and restricted stock (both
vesting equally over a three-year period) was made upon and shortly
following the completion of the Restructuring. A second grant of options to
the senior management group and of options and restricted stock to the
executive officers was made in December, 1991. No grants have been made to
the executive officers since that time.
Based on the Company's 1993 operating budget, the Committee, at the
beginning of the year, set performance targets for the chief executive
officer and the other executive officers (at various levels of total Company
income before income taxes) for the 1993 bonus plan year. Certain levels of
income, as compared to the pre-established targets, were achieved by the
Company in 1993 and the bonuses were accrued as earned under the plan.
The Compensation Committee does not anticipate that any of the compensation
payable to the named executive officers in the coming year will exceed the
limits on deductibility set forth in section 162(m) of the Internal Revenue
Code of 1986, as amended. The Compensation Committee has not established a
policy regarding compensation in excess of these limits, but will continue
to monitor this issue.
The executive compensation policies and procedures that were established
after the Restructuring have remained constant. The Compensation Committee
may periodically engage outside consultants to provide updated information
on compensation practices in general as well as in the industry. During
1993, the Committee did not retain the services of an independent
compensation consultant.
By Compensation and Stock Option Committee
Edward M. Carson
A. Sam Gittlin
Robert S. Rosow
Terence W. Thomas
Carroll V. Willoughby
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COMPARATIVE STOCK PRICE PERFORMANCE GRAPH
Aztar commenced operations on December 20, 1989, upon completion of the
Restructuring of Ramada Inc. The graph below compares the cumulative total
stockholder return from December 20, 1989 to December 30, 1993, of the
Company, the Standard & Poor's 500 Index and the Dow Jones Casino Industry
Group. The graph assumes an investment of $100 on December 20, 1989 in each
of Aztar Common Stock, the stocks comprising the Standard & Poor's 500 Index
and the stocks comprising the Dow Jones Casino Industry Group.
AZTAR TOTAL CUMULATIVE RETURN
VS. STANDARD & POORS 500 STOCKS INDEX,
DOW JONES CASINO INDEX
Measurement Period
(Fiscal Year Covered)
AZTAR S&P 500 STOCKS DJ CASINO INDEX
12/20/89 100.0 100.0 100.0
1989 94.1 102.3 104.0
1990 46.3 93.9 68.8
1991 66.2 121.7 108.3
1992 85.3 127.1 168.9
1993 76.5 136.7 257.7
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SHAREHOLDER PROPOSALS AND OTHER MATTERS
The cost of this solicitation will be borne by the Company. The
solicitation of proxies will be made primarily by mail. Regular employees
of the Company may solicit proxies by telephone or telegraph or in person.
Arrangements may be made with brokerage firms and other custodians, nominees
and fiduciaries to send proxy materials to their principals. The Company
may reimburse persons holding shares in their names or those of their
nominees for their expenses in sending proxies and proxy materials to
principals. In addition, the Company has retained Beacon Hill Partners to
assist in the solicitation of proxies at an estimated cost of $5,500.
Representatives of Coopers & Lybrand will be present at the Annual Meeting
and will be available to respond to appropriate questions from the Company's
Shareholders. The representatives will have an opportunity to make a
statement at the Annual Meeting if they desire to do so.
Unless otherwise required by law or the Company's Certificate of
Incorporation or By-Laws, the affirmative vote of the holders of a majority
of the shares of Common Stock present in person or by proxy at the Meeting
is required for approval of any matter other than the election of Directors
which properly comes before the Meeting or any adjournment(s) thereof.
Under applicable Delaware law, in determining whether any such other matter
has received the affirmative vote of the requisite number of shares of
Common Stock, (i) abstentions will be counted and will have the same effect
as a vote against such other matter, (ii) to the extent that applicable
stock exchange rules provide the broker with discretionary authority with
respect to such matter, broker non-votes will be counted and will have the
same effect as a vote against such other matter and (iii) to the extent that
applicable stock exchange rules do not provide the broker with discretionary
authority with respect to such matter, broker non-votes will be disregarded
and will have no effect on the outcome of the vote.
As previously disclosed, the Company's By-Laws require Shareholders who
intend to nominate directors or propose new business at any Annual Meeting
to provide advance notice of such intended action as well as certain
additional information. This By-Law provision requires Shareholders to
provide the Company with notice of their intent to nominate directors or to
propose new business at an Annual Meeting not less than 60 nor more than 90
days prior to the anniversary date of the immediately preceding Annual
Meeting. However, if the Annual Meeting is not held within 30 days of the
date of the immediately preceding Annual Meeting, then Shareholders must
provide advance notice to the Company within 10 days after notice or prior
public disclosure of the Annual Meeting is given or made to Shareholders.
The Company's 1993 Annual Meeting was held on May 12, 1993, and the 1994
Annual Meeting is scheduled to be held on May 12, 1994, which is within 30
days of the anniversary date of the 1993 Annual Meeting. Accordingly,
assuming the 1994 Annual Meeting is held as scheduled, notice of a proposed
director nomination or new business to be brought before the 1994 Annual
Meeting must have been received in proper form on or after February 11, 1994
and on or prior to March 13, 1994. In addition, assuming the 1994 Annual
Meeting is held as scheduled and the 1995 Annual Meeting of Shareholders is
held within 30 days of May 12, 1995, notice of a proposed director
nomination or new business to be brought before the 1995 Annual Meeting must
be received in proper form on or after February 11, 1995 and on or prior to
March 13, 1995.
Proposals to be submitted by shareholders for consideration at the
Company's next Annual Meeting and inclusion in the Company's 1995 Proxy
Statement must be received by the Company at its executive offices in
Phoenix, Arizona, not later than November 28, 1994.
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| |
| PROXY AZTAR CORPORATION |
| |
| Proxy solicited on behalf of the Board of Directors for the 1994 |
| Annual Meeting of Shareholders |
| |
| The undersigned hereby appoints Paul E. Rubeli and Nelson W. |
| Armstrong, Jr., and each of them, as Proxies with several power of |
| substitution, with all the powers the undersigned would possess if |
| personally present, to vote all the shares of Aztar Corporation which |
| the undersigned is entitled to vote at the 1994 Annual Meeting of |
| Shareholders on May 12, 1994 and at any adjournment(s) thereof. |
| |
| A vote FOR Proposal 1 is recommended by the Board of Directors. |
| |
| 1. ELECTION OF DIRECTORS [ ]for ALL nominees [ ]WITHHOLD AUTHORITY |
| listed below to vote for all |
| (except as marked nominees listed |
| to the contrary below |
| below) |
| |
| A. Sam Gittlin Robert M. Haddock Terrence W. Thomas |
| |
| (INSTRUCTION: To withhold authority to vote for any individual |
| nominee, write that nominee's name on the line below.) |
| _____________________________________________________________________ |
| |
| 2. In their discretion, the Proxies are authorized to vote upon |
| such other business as may properly come before the Meeting or |
| any adjournment(s) thereof. |
| (continued and to be signed on reverse side) |
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
| (continued from reverse side) |
| PLEASE DO NOT FOLD |
| |
| The shares represented by this proxy will be voted as specified |
| herein. If not otherwise specified, shares held by parties other than |
| brokers will be voted by the Proxies FOR Proposal 1. |
| |
| Date__________________________ |
| |
| Signature_____________________ |
| |
| Signature_____________________ |
| |
| Please sign exactly as the |
| name appears to the left. |
| |
| ------------------------------------------------ |
| | PLEASE MARK, SIGN, DATE AND RETURN THE PROXY | |
| | CARD PROMPTLY, USING THE ENCLOSED ENVELOPE. | A Z T A R |
| ------------------------------------------------ [in logo format] |
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