<PAGE>
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 [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
AZTAR CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] 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:
-------------------------------------------------------------------------
(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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Notes:
[End of Cover Page]
<PAGE>
[LOGO OF AZTAR]
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
NOTICE AND PROXY STATEMENT
For the Annual Meeting of Shareholders To Be Held on May 10, 1995.
To the Shareholders of Aztar Corporation:
Notice is hereby given that the 1995 Annual Meeting of Shareholders (the
"Meeting") of Aztar Corporation ("Aztar" or the "Company") will be held at
TropWorld Casino & Entertainment Resort, Brighton Avenue and Boardwalk,
Atlantic City, New Jersey, at 11:00 a.m. on May 10, 1995, for the following
purposes:
1. To elect four Directors to serve until the 1998 Annual Meeting of
Shareholders or until their successors are elected and qualified;
2. To transact such other business as may properly come before the Meeting
or any adjournment(s) thereof.
The holders of each of the 37,946,899 shares of the Company's Common Stock
(the "Common Stock") outstanding as of March 14, 1995, 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. If any
other matters properly come before the Meeting or any adjournment(s) thereof
(including any matters that were deemed to have been omitted from this Notice
and Proxy Statement under Rule 14a-8 of the Securities and Exchange Act of
1934, as amended), 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, 1995
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.
<PAGE>
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 four individuals, each of whom
is a nominee for re-election to one of the four board positions to be filled
at this Meeting for a term extending to the 1998 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 four. The table below includes certain information as
of February 21, 1995, regarding the four nominees and also regarding the other
seven Directors whose terms of office will continue after the Meeting.
<TABLE>
<CAPTION>
NAME, AGE, AND PRINCIPAL OCCUPATIONS (1990-PRESENT) AND YEAR FIRST
YEAR PRESENT CERTAIN OTHER DIRECTORSHIPS BECAME A
TERM EXPIRES PRESENTLY HELD DIRECTOR(1)
-------------- ---------------------------------------- -----------
<C> <S> <C>
NOMINEES
Edward M. Carson, 65 Chairman of First Interstate Bancorp since 1975
(1995) 1990; President of First Interstate
Bancorp from 1985 to 1990; Director of
Terra Industries, Inc. (agribusiness
products)
John R. Norton, III, 65 Chairman and Chief Executive Officer of 1978(2)
(1995) J.R. Norton Company (diversified
agriculture production); Director of
Pinnacle West Capital Corporation
(holding company); Arizona Public Service
Company (electric utility); and Terra
Industries, Inc. (agribusiness products)
Robert S. Rosow, 75 Independent Certified Public Accountant 1969
(1995) since 1953
Richard Snell, 64 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.
OTHER DIRECTORS
John B. Bohle, 51 Senior Vice President and Director of Paul 1992
(1996) Ray Berndtson, Inc. since 1981 (executive
recruiting services)
A. Sam Gittlin, 80 Chairman and Chief Executive Officer of 1963
(1997) Gittlin Companies, Inc. (manufacturing,
distributing and financial services)
since 1946.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS (1990-
NAME, AGE, AND PRESENT) AND YEAR FIRST
YEAR PRESENT CERTAIN OTHER DIRECTORSHIPS BECAME A
TERM EXPIRES PRESENTLY HELD DIRECTOR(1)
-------------- ---------------------------- -----------
<C> <S> <C>
Robert M. Haddock, 50 Executive Vice President and Chief 1989
(1997) 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)
Paul E. Rubeli, 51 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)
Vesta Valentine Temen, 62 Retired (formerly Vice President of 1994
(1996) Administration at TropWorld from 1982
to 1994)
Terence W. Thomas, 64 Chairman of the Board of Arizona 1978
(1997) Wholesale Supply Company and of
National Brands, Inc. (wholesale
distributors of consumer products)
since 1984
Carroll V. Willoughby, 81 Retired (formerly Senior Group Vice 1970
(1996) President of Ramada from 1970 to 1981)
</TABLE>
- --------
(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 three 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.
2
<PAGE>
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 21, 1995, 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.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
------------------------ ---------------------- ----------
<S> <C> <C>
FMR Corporation (Fidelity)................. 2,799,500 7.4%
82 Devonshire Street
Boston, MA 02109
Gabelli Funds, Inc......................... 2,928,900 7.7%
One Corporate Center
Rye, NY 10580
State of Wisconsin Investment Board........ 3,636,000 9.6%
P. O. Box 7842
Madison, WI 53707
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
The table below sets forth certain information regarding Directors' and
executive officers' beneficial ownership of Common Stock as of February 21,
1995.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENT OF
DIRECTORS BENEFICIALLY OWNED* CLASS
--------- ---------------------- ----------
<S> <C> <C>
John B. Bohle............................. 8,000 **
Edward M. Carson.......................... 9,400 **
A. Sam Gittlin............................ 13,100 **
Robert M. Haddock......................... 840,739 2.2%
John R. Norton, III....................... 22,000 **
Robert S. Rosow........................... 29,596 **
Paul E. Rubeli............................ 1,000,699 2.6%
Richard Snell............................. 49,000 **
Vesta Valentine Temen..................... 39,572 **
Terence W. Thomas......................... 11,000 **
Carroll V. Willoughby..................... 44,000 **
<CAPTION>
NAMED EXECUTIVE OFFICERS
------------------------
<S> <C> <C>
Nelson W. Armstrong, Jr................... 118,093 **
Meridith P. Sipek......................... 77,257 **
Craig F. Sullivan......................... 77,535 **
All Directors and Executive Officers as a
group (15 persons)....................... 2,399,674 6.3%
</TABLE>
- --------
* 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, 13,000
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 9,000 shares
each; for Mr. Bohle 8,000 shares; and for
3
<PAGE>
Mrs. Temen 37,413 shares, which they may acquire by the exercise of stock
options within 60 days; for Messrs. Haddock, Rubeli, Armstrong, Sipek, and
Sullivan 713,217, 827,082, 92,696, 59,257, and 54,257 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 (15 persons), 1,898,327
shares, which they may acquire by the exercise of options within 60 days.
** Less than 1% of the outstanding shares of Common Stock.
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 Mrs. Temen and 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 1994 the Board of Directors held seven meetings. The Audit Committee
held five meetings, the Compensation and Stock Option Committee held four
meetings, the Finance Committee held four meetings, the Nominating Committee
held three meetings, and there were no meetings of the Executive Committee. No
Director attended less than 75 percent of the meetings of the Board and
committees of which he/she was a member.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Subsidiary banks of First Interstate Bancorp, of which Mr. Carson is
Chairman, have or had during 1994 various banking relationships with the
Company or its subsidiaries. The relationships include: 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 $483,000 of gross fees in 1994.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the annual compensation paid and accrued by
the Company for services rendered during each fiscal year presented, for the
chief executive officer and the next four most highly compensated executive
officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------
ALL OTHER
FISCAL SALARY BONUS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) $ (1)
- --------------------------- ------ ------- ------- ------------
<S> <C> <C> <C> <C>
Paul E. Rubeli.............................. 1994 495,100 108,145 1,248
Chairman of the Board, 1993 495,373 97,395 2,420
President and Chief 1992 481,592 261,091 2,600
Executive Officer
Robert M. Haddock........................... 1994 387,000 84,125 1,248
Executive Vice President 1993 387,214 75,763 2,420
and Chief Financial Officer 1992 376,439 203,071 2,600
Nelson W. Armstrong, Jr..................... 1994 142,621 16,599 1,248
Vice President, 1993 138,651 13,145 1,650
Administration and Secretary 1992 134,815 36,859 1,768
Meridith P. Sipek........................... 1994 124,058 14,324 1,144
Controller 1993 120,585 11,338 1,430
1992 117,218 31,776 1,456
Craig F. Sullivan........................... 1994 117,450 44,100 1,040
Treasurer 1993 114,175 10,697 1,430
1992 111,000 29,980 1,352
</TABLE>
- --------
(1) 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
appraised value of Preferred Stock is $104.00 per share. Participant
accounts are generally payable only on termination of employment or on
retirement. The following shares of Preferred Stock that were credited to
the participants' accounts in 1994 (other than shares attributable to
dividends from the participants' accounts) were approximately 12 shares
for Mr. Rubeli; 12 shares for Mr. Haddock; 12 shares for Mr. Armstrong; 11
shares for Mr. Sipek; and 10 shares for Mr. Sullivan. Subject to
compensation limits, similar allocations were made to participants'
accounts in 1993 and 1992.
5
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUE
The following table sets forth the aggregate number of exercisable and
unexercisable options held by the chief executive officer and the next four
most highly compensated executive officers of the Company and the value of
such options based on the market value of a share of Aztar Common Stock at
year-end less the applicable exercise price. None of the named executives
exercised an option during 1994.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT FY-END (#) FY-END ($)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------- -------------------------
<S> <C> <C>
Paul E. Rubeli.............. 827,082 1,398,000
-0- -0-
Robert M. Haddock........... 713,217 1,176,000
-0- -0-
Nelson W. Armstrong, Jr. ... 92,696 143,000
-0- -0-
Meridith P. Sipek........... 59,257 104,600
-0- -0-
Craig F. Sullivan........... 54,257 100,850
-0- -0-
</TABLE>
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
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.
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.
6
<PAGE>
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 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 1994, excluding
any payment relating to stock options or restricted stock, would be $1,363,500
for Mr. Rubeli; $1,060,620 for Mr. Haddock; $163,206 for Mr. Armstrong;
$139,431 for Mr. Sipek, and $132,317 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 1994 various banking relationships with the Company
or its subsidiaries. The relationships include: 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 $483,000 of gross fees in 1994. Mr. Willoughby, a member of the
Compensation and Stock Option Committee, is a former Senior Group Vice
President of Ramada.
7
<PAGE>
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 four 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 such 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 believed that
such a package would compensate executives in a manner that rewarded 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 that 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 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). In special
circumstances, notwithstanding the pre-established performance targets, the
Compensation Committee at its discretion may award the maximum bonus available
to a specific officer under the plan, based on subjective factors such as
outstanding performance by an officer in his specific area of responsibility.
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 were made to the
executive officers in 1992, 1993 or 1994.
Based on the Company's 1994 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 1994 bonus plan year. Certain levels of income,
as compared to the pre-established targets, were achieved by the Company in
1994 and the bonuses were accrued as earned under the plan. Based on his
perfomance, Mr. Sullivan was awarded a bonus as if the maximum performance
target for him had been achieved.
8
<PAGE>
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 1994, the
Committee retained 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
9
<PAGE>
COMPARATIVE STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return from
December 28, 1989 to December 29, 1994, 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 28, 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.
COMPARISON OF FIVE-YEAR TOTAL CUMULATIVE RETURN
AMONG AZTAR, DJ CASINO INDEX AND S&P 500 STOCKS INDEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period AZTAR DJ
(Fiscal Year Covered) CORPORATION CASINO INDEX S&P 500 STOCKS
- --------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt- 12/28/89 100.0 100.0 100.0
FYE 1/3/91 49.2 66.1 91.8
FYE 1/2/92 70.3 104.1 119.0
FYE 12/31/92 90.6 162.4 124.3
FYE 12/30/93 81.3 247.7 133.6
FYE 12/29/94 71.9 191.0 131.5
</TABLE>
10
<PAGE>
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 $6,000.
Representatives of Coopers & Lybrand L. L. P. 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 1994 Annual Meeting was held on May 12, 1994, and the 1995
Annual Meeting is scheduled to be held on May 10, 1995, which is within 30
days of the anniversary date of the 1994 Annual Meeting. Accordingly, assuming
the 1995 Annual Meeting is held as scheduled, notice of a proposed director
nomination or new business to be brought before the 1995 Annual Meeting must
have been received in proper form on or after February 9, 1995 and on or prior
to March 11, 1995. In addition, assuming the 1995 Annual Meeting is held as
scheduled and the 1996 Annual Meeting of Shareholders is held within 30 days
of May 10, 1996, notice of a proposed director nomination or new business to
be brought before the 1996 Annual Meeting must be received in proper form on
or after February 9, 1996 and on or prior to March 11, 1996.
Proposals to be submitted by shareholders for consideration at the Company's
next Annual Meeting and inclusion in the Company's 1996 Proxy Statement must
be received by the Company at its executive offices in Phoenix, Arizona, not
later than November 28, 1995.
11
<PAGE>
APPENDIX A
(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. [LOGO OF AZTAR]
AZTAR CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE 1995 ANNUAL MEETING
OF SHAREHOLDERS
The undersigned hereby appoints Robert M. Haddock 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
1995 Annual Meeting of Shareholders on May 10, 1995 and at any adjournment(s)
thereof.
A VOTE FOR PROPOSAL 1 IS RECOMMENDED BY THE BOARD OF DIRECTORS.
1. ELECTION OF [_] FOR all [_] WITHHOLD
DIRECTORS nominees listed AUTHORITY to
below vote for all
(except as marked nomineeslisted
to the contrary below
below)
Edward M. Carson John R. Norton, III Robert S. Rosow Richard Snell
(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,
including any matters that were deemed to have been omitted from this Notice
and Proxy Statement under Rule 14a-8 of the Securities and Exchange Act of
1934, as amended.
(continued and to be signed on reverse side)
P R O X Y
