<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 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, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
[End of Cover Page]
- --------------------------------------------------------------------------------
<PAGE>
[LOGO OF AZTAR]
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
April 1, 1997
Dear Fellow Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of Shareholders
of Aztar Corporation to be held on Thursday, May 22, 1997 at The Ritz Carlton
Hotel, 2401 East Camelback Road, Phoenix, Arizona, at 11:00 a.m. local time.
The principal business of the Annual Meeting will be the election of three
directors to serve individual three-year terms. As more fully described in the
accompanying Proxy Statement, the Board of Directors recommends that you vote
FOR the election of the Board's nominees. Each of these nominees is currently a
director of Aztar and has provided dedicated service to the Company.
Your vote is most important, regardless of the number of shares you own.
Whether or not you plan to attend the Annual Meeting, please sign, date and
return the enclosed proxy card as soon as possible in the postage-paid envelope
provided. This will not prevent you from voting in person at the Annual Meeting
or at any adjournment or postponement thereof, but will assure that your vote
is counted if you are unable to attend.
As in past years, members of the Company's management will review the
performance and prospects of the Company at the Annual Meeting and will be
available to answer your questions. Your Board of Directors and Management look
forward to greeting personally all of you who are able to attend.
On behalf of your Board of Directors, thank you for your continued support.
Sincerely,
PAUL E. RUBELI
Paul E. Rubeli
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
[LOGO OF AZTAR]
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 22, 1997
To the Shareholders of Aztar Corporation:
Notice is hereby given that the 1997 Annual Meeting of Shareholders (the
"Meeting") of Aztar Corporation ("Aztar") will be held at The Ritz Carlton
Hotel, 2401 East Camelback Road, Phoenix, Arizona, at 11:00 a.m. on Thursday,
May 22, 1997, for the following purposes:
1. To elect three Directors to serve until the 2000 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 or postponement thereof.
NOTE: The Board of Directors is not aware of any other business to come
before the Meeting.
Pursuant to Aztar's By-Laws, the Board of Directors has fixed Wednesday,
March 26, 1997 as the record date for the determination of shareholders
entitled to notice of and to vote at the Meeting and at any adjournments or
postponements thereof. Only holders of Aztar's common stock at the close of
business on that date are entitled to notice of, and to vote at, the Meeting
and at any adjournments or postponements thereof.
Aztar's Board of Directors and Management cordially invite you to attend the
Meeting. In addition, you are requested to sign and date the enclosed proxy
card, which is solicited by the Board of Directors, and to mail it promptly in
the enclosed postage-paid envelope. The proxy will not be used if you attend
and vote at the Meeting in person.
By Order of the Board of Directors
NELSON W. ARMSTRONG, JR.
Nelson W. Armstrong, Jr.
Secretary
Approximate date of mailing to shareholders:
April 1, 1997
I M P O R T A N T
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AND VOTED AT THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND MAIL
PROMPTLY YOUR PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY STATEMENT
OF
AZTAR CORPORATION
2390 EAST CAMELBACK ROAD, SUITE 400
PHOENIX, ARIZONA 85016
ANNUAL MEETING OF SHAREHOLDERS
May 22, 1997
GENERAL
This Proxy Statement and the enclosed Proxy Card are furnished in connection
with the solicitation of proxies by the Board of Directors of Aztar
Corporation ("Aztar" or the "Company"), to be used at the 1997 Annual Meeting
of Shareholders of Aztar and at any adjournments or postponements thereof (the
"Meeting"). The Meeting will be held at The Ritz Carlton Hotel, 2401 East
Camelback Road, Phoenix, Arizona, on Thursday, May 22, 1997, at 11:00 a.m.
This Proxy Statement, together with the accompanying Notice of Annual Meeting
and Proxy Card, are being first mailed to shareholders on or about April 1,
1997.
VOTING AND REVOCABILITY OF PROXIES
March 26, 1997 has been fixed as the record date (the "Record Date") for the
determination of shareholders entitled to notice of and to vote at the
Meeting. Only holders of shares of Aztar's common stock, par value $.01 per
share ("Common Stock"), at the close of business on that date are entitled to
notice of, and to vote at, the Meeting and any adjournment or postponement
thereof. As of March 26, 1997, there were 45,006,999 shares of Common Stock
outstanding. Holders of Common Stock as of the close of business on the Record
Date are entitled to one vote per share, subject to the provisions of the
Company's Certificate of Incorporation.
Proxies solicited by the Board of Directors of the Company which are
properly executed and returned to the Company will be voted at the Meeting,
and at any adjournments or postponements thereof, in accordance with the
directions given thereon. Executed proxies on which no directions are
indicated will be voted FOR Proposal 1 (the election of the Company's nominees
as directors). If any other matters are properly brought before the Meeting,
the proxies solicited by the Board of Directors will be voted on such matters
as determined in accordance with the judgment of the persons named thereon.
Other than the election of three directors to the Board of Directors, the
Board of Directors is not currently aware of any other matters to be brought
before the Meeting.
The presence in person or by proxy of the holders of record of a majority of
the shares of Common Stock issued and outstanding is necessary to constitute a
quorum at the Meeting. If a quorum is not present or represented at the
Meeting, the shareholders entitled to vote, present or represented by proxy,
have the power to adjourn the meeting from time to time, without notice other
than an announcement at the Meeting, until a quorum is present or represented.
Assuming a quorum is present, directors will be elected by a plurality of the
votes cast at the Meeting. Under applicable Delaware law, abstentions and
broker non-votes will be disregarded and will have no effect on the outcome of
the vote on the election of directors.
A vote FOR the Board of Directors' nominees on the accompanying Proxy Card
will give the proxies named therein discretionary authority to vote with
respect to the election of any person recommended by the Board of Directors as
a director where the nominee is unable or unavailable to serve (an event not
now anticipated).
1
<PAGE>
Execution of a Proxy Card will not affect your right to attend the Meeting
and to vote in person. A shareholder executing a proxy may revoke such proxy
at any time before it is voted by (i) filing a written notice of revocation
with the Secretary of the Company at the address provided above, (ii) filing a
duly executed proxy bearing a later date or (iii) attending and voting in
person at the Meeting. Attendance at the Meeting without voting thereat will
not revoke a proxy previously executed and duly submitted by you.
Regardless of the number of shares of Common Stock owned, it is important
that shareholders be represented by proxy or in person at the Meeting.
Shareholders are requested to vote by completing the enclosed Proxy Card and
returning it in the enclosed postage-paid envelope.
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. A class of three
directors will be elected at the Meeting to serve until the 2000 Annual
Meeting of Shareholders and until their respective successors have been
elected. The Company's Board of Directors has nominated the following three
individuals to serve as directors: A. Sam Gittlin, Robert M. Haddock and
Terence W. Thomas, all of whom are currently members of the Board. Each of the
Board of Directors nominees has consented to being named in this Proxy
Statement and to serve as a director if elected. However, if for any reason
any Board nominee should become unable or unavailable to serve as a director,
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 Board of Directors intends to vote all of the shares
for which it is given proxies, to the extent permitted thereunder, FOR the
election of the Board's nominees.
The table below includes certain information as of February 24, 1997
regarding the three nominees of the Board of Directors and also regarding the
other eight Directors (as of March 3, 1997 for Ms. Faiss) whose terms of
office will continue after the Meeting.
<TABLE>
<CAPTION>
NAME, AGE, AND PRINCIPAL OCCUPATIONS (1992-PRESENT) AND YEAR FIRST
YEAR PRESENT CERTAIN OTHER DIRECTORSHIPS BECAME A
TERM EXPIRES PRESENTLY HELD DIRECTOR(/1/)
-------------- ---------------------------------------- -------------
<C> <S> <C>
NOMINEES
A. Sam Gittlin, 82 Chairman and Chief Executive Officer of 1963
(1997) Gittlin Companies, Inc. (manufacturing,
distributing and financial services)
since 1946.
Robert M. Haddock, 52 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
(as such term is defined below)).
Terence W. Thomas, 66 Chairman of the Board of Arizona 1978
(1997) Wholesale Supply Company and of
National Brands, Inc. (wholesale
distributors of consumer products)
since 1984.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE BOARD'S NOMINEES FOR ELECTION
AS DIRECTORS.
2
<PAGE>
OTHER DIRECTORS
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS (1992-PRESENT)
NAME, AGE, AND AND YEAR FIRST
YEAR PRESENT CERTAIN OTHER DIRECTORSHIPS BECAME A
TERM EXPIRES PRESENTLY HELD DIRECTOR(/1/)
-------------- ------------------------------------ -------------
<C> <S> <C>
John B. Bohle, 53 Senior Vice President and Director 1992
(1999) of Ray & Berndtson
since 1981 (executive recruiting
services).
Edward M. Carson, 67 Retired (formerly Chairman of First 1975
(1998) Interstate Bancorp from 1990 to
1995); President of First
Interstate Bancorp from 1985 to
1990; Director of Castle & Cooke,
Inc. (real estate and resorts);
Terra Industries, Inc.
(agribusiness products), and Wells
Fargo Bank.
Linda C. Faiss, 54 Senior Vice President of Dunn Reber 1997(/3/)
(1999) Glenn Marz since 1989
(advertising/public relations
agency)
John R. Norton, III, 67 Chairman and Chief Executive Officer 1978(/2/)
(1998) of 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, 77 Independent Certified Public 1969
(1998) Accountant since 1953.
Paul E. Rubeli, 53 Chairman, President and Chief 1985
(1999) Executive Officer
of the Company; previously
President and Chief
Executive Officer of the Company
(formerly Executive
Vice President, Gaming, of Ramada
(as defined below),
1982 to December 1989, and
President and Chief Operating
Officer of the Company to February
1990).
Richard Snell, 66 Chairman and Chief Executive Officer 1981
(1998) of Pinnacle West Capital
Corporation (holding company) and
Chairman of Arizona Public Service
Company (electric utility);
Director of Pinnacle West, Arizona
Public Service, Banc One Arizona
Corporation (bank holding company),
and Central Newspapers, Inc.;
previously Chairman of the Company
from December 1989 to February
1992.
Vesta Valentine Temen, 64 Retired (formerly Vice President of 1994
(1999) Administration at
the Tropicana Casino and Resort--
Atlantic City from 1982 to 1994).
</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 four 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.
(3) Ms. Faiss was appointed to the Aztar Board of Directors effective March 3,
1997, subject to approval by the appropriate gaming authorities.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
HOLDERS AND DIRECTORS AND OFFICERS
5% BENEFICIAL OWNERS
Persons and groups owning in excess of 5 percent of the Common Stock are
required to file certain reports with the Securities and Exchange Commission
regarding such ownership pursuant to applicable federal securities law. Based
upon such reports, the table below sets forth certain information regarding
beneficial owners of more than 5 percent of the Common Stock as of March 3,
1997. 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>
Gabelli Funds, Inc....................... 4,025,000 8.9%
One Corporate Center
Rye, NY 10580
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
The table below sets forth certain information regarding Directors' and
executive officers' beneficial ownership of Common Stock as of March 3, 1997.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENT OF
DIRECTORS BENEFICIALLY OWNED* CLASS
--------- ---------------------- ----------
<S> <C> <C>
John B. Bohle............................. 10,000 **
Edward M. Carson.......................... 11,400 **
Linda C. Faiss............................ -0- **
A. Sam Gittlin............................ 15,100 **
Robert M. Haddock......................... 673,277 1.5%
John R. Norton, III....................... 24,000 **
Robert S. Rosow........................... 31,596 **
Paul E. Rubeli............................ 928,688 2.1%
Richard Snell............................. 51,000 **
Vesta Valentine Temen..................... 14,833 **
Terence W. Thomas......................... 13,200 **
<CAPTION>
NAMED EXECUTIVE OFFICERS
------------------------
<S> <C> <C>
Nelson W. Armstrong, Jr................... 95,397 **
Neil A. Ciarfalia......................... 14,333 **
Meridith P. Sipek......................... 64,000 **
All Directors and Executive Officers as a
group (15 persons)........................ 1,996,207 4.4%
</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 pension 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 and Thomas 11,000 shares each; for Mr. Bohle 10,000
shares; and for Mrs. Temen 7,000 shares, which they may acquire by the
exercise of stock options within 60 days; for Messrs. Haddock, Rubeli,
Armstrong, Ciarfalia and Sipek, 657,610, 772,610, 70,000, 8,333 and
55,000 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), 1,682,458 shares, which they may
acquire by the exercise of options within 60 days.
** Less than 1% of the outstanding shares of Common Stock.
4
<PAGE>
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 and Snell. This Committee is responsible for reviewing the audit's
scope, timing and fee arrangements with Aztar's independent public
accountants; 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 and Thomas. Its responsibilities include reviewing the
executive compensation programs for Aztar's 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 Board of Directors in situations
in which the 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 Mrs. Temen and 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 1996 the Board of Directors held six meetings. The Audit Committee
held four meetings, the Compensation and Stock Option Committee held three
meetings, the Finance Committee held three meetings, the Nominating Committee
held four 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.
5
<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>
LONG TERM
COMPENSATION
-------------
ANNUAL COMPENSATION AWARDS
---------------------------------------- -------------
RESTRICTED ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS OTHER ANNUAL STOCK COMPENSATION
POSITION YEAR ($)(1) ($) COMPENSATION $(2) AWARDS(S)$(3) ($)(4)
- ------------------ ------ ------- ------- ----------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Paul E. Rubeli 1996 539,090 -0- -0- 1,290
Chairman of the Board, 1995 515,878 -0- 585,000 1,232
President and Chief 1994 495,100 108,145 -0- 1,248
Executive Officer
Robert M. Haddock 1996 421,220 -0- -0- 1,290
Executive Vice 1995 403,163 -0- 429,000 1,232
President 1994 387,000 84,125 -0- 1,248
and Chief Financial
Officer
Nelson W. Armstrong, Jr. 1996 162,200 15,500 -0- 1,290
Vice President, 1995 151,191 -0- 117,000 1,232
Administration & 1994 142,621 16,599 -0- 1,248
Secretary
Meridith P. Sipek 1996 146,315 13,912 -0- 1,197
Controller 1995 133,709 -0- 117,000 1,120
1994 124,058 14,324 -0- 1,144
Neil A. Ciarfalia 1996 145,469 13,827 53,269 -0- 625
Treasurer 1995 104,877 -0- 42,903 54,750 -0-
1994 -0- -0- -0- -0- -0-
</TABLE>
- -------
(1) The 1996 fiscal year included 27 pay periods as compared to 26 pay periods
in prior years. Mr. Ciarfalia was employed by the Company during 1995.
(2) Reimbursement of relocation expenses: 1996 $49,235; 1995 $38,840.
(3) Restricted Stock Holdings: The number of restricted shares of Common Stock
held at fiscal year-end 1996 and the value of such holdings, based on the
number of shares awarded times the closing market price at fiscal year-
end, is 20,000 shares and $145,000 for Mr. Rubeli; 14,667 shares and
$106,336 for Mr. Haddock; 4,000 shares and $29,000 for Mr. Armstrong;
4,000 shares and $29,000 for Mr. Sipek; and 4,000 shares and $29,000 for
Mr. Ciarfalia. Time-based restricted shares vest equally over a three-year
period from the date of grant (one-third on each anniversary date);
performance-based restricted shares vest when certain preestablished price
levels of the Common Stock are achieved; and both classes are eligible to
receive dividends, if dividends are declared and paid.
(4) Under the provisions of the Aztar Employee Stock Ownership Plan (the
"Aztar ESOP"), shares of Aztar's Series B ESOP Convertible 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 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 the
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 appraisal value of the
Preferred Stock, the value of the conversion of the Preferred Stock into
Common Stock at 10.5764 shares of 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 the Preferred Stock is $120.00
per share. Participant accounts are generally payable only on termination
of employment or on retirement. The following shares of Preferred Stock
that were credited to the participants' accounts in 1996 (other than
shares attributable to dividends from the participants' accounts) were
approximately 11 shares for Mr. Rubeli; 11 shares for Mr. Haddock; 11
shares for Mr. Armstrong; 10 shares for Mr. Sipek; and 5 shares for Mr.
Ciarfalia. Subject to compensation limits and plan eligibility, similar
allocations were made to participants' accounts in 1995 and 1994.
6
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUE
The following table sets forth for the chief executive officer and the next
four most highly compensated executive officers of the Company, the aggregate
number of option exercises and the value realized on such options exercised,
based on the difference between the fair market value of a share of Common
Stock at the exercise date less the applicable exercise price and the
aggregate number of exercisable and unexercisable options held at fiscal year-
end and the value of such options based on the market value of a share of
Common Stock at year-end less the applicable exercise price.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
SHARES FY-END (#) AT FY-END ($)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------ ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
Paul E. Rubeli.......... 27,236 62,507 772,610/0 2,522,020/0
Robert M. Haddock....... 27,236 72,720 657,610/0 2,127,520/0
Nelson W. Armstrong,
Jr...................... 11,348 43,066 70,000/0 248,000/0
Meridith P. Sipek....... 3,405 12,922 55,000/0 187,100/0
Neil A. Ciarfalia....... -0- -0- 8,333/16,667 0/0
</TABLE>
SUPPLEMENTAL RETIREMENT PLANS
In connection with the Restructuring, the Company 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 age 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; and $40,944 for Mr. Sipek.
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 Board of Directors. 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 are 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 Common Stock at an exercise price equal to the
market price of the 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
7
<PAGE>
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 age 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, and
$11,424 for Mr. Rosow.
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 and Sipek 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." During 1995, the Severance Agreements were
rewritten as Aztar Agreements, and Mr. Ciarfalia received a similar "change in
control" agreement. The new Severance Agreements provide for the payment of
severance benefits to the executive officer if his employment is terminated
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. Upon such termination with respect to any of the executives, the
benefits described below would become payable to such executives.
In the case of Messrs. Rubeli and Haddock, severance benefits consist of a
lump-sum cash payment, payable within 13 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 Ciarfalia if their employment had terminated during 1996, excluding
any payment relating to stock options or restricted stock, would be $1,175,896
for Mr. Rubeli; $918,452 for Mr. Haddock; $167,115 for Mr. Armstrong; $150,754
for Mr. Sipek, and $142,200 for Mr. Ciarfalia.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Stock Option Committee (the "Compensation Committee")
is comprised of Messrs. Carson, Gittlin, Rosow and Thomas. Mr. Carroll V.
Willoughby, a former member of the Board of Directors, was a member of the
Compensation Committee up to the date of his retirement from the Board, May 8,
1996. Mr. Willoughby was a former Senior Group Vice President of Ramada.
BOARD COMPENSATION COMMITTEE REPORT
During the Company's last fiscal year the Compensation Committee held three
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.
8
<PAGE>
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 respective
life cycle, of companies of a similar size, and of companies in the same
industry, including, but not limited to, all of the companies that comprised
the Dow Jones Casino Index at that time. The Dow Jones Casino Index 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 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 Compensation 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 90% effective with the 1995 bonus year for the chief executive
officer, among others). In special circumstances, notwithstanding the pre-
established performance targets, the Compensation Committee at its discretion
may award up to the maximum bonus available to a specific officer(s) 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.
With the continued proliferation of gaming across the country, there has
been a significant demand for experienced senior executives in the gaming
industry. After four years of relative stability, the senior management group
experienced over a thirty percent turnover in a two-year period. As a result,
the Committee again retained the services of an independent compensation
consultant in late 1994 (which engagement continued in 1995). The study
indicated that the Company's direct compensation levels are consistently below
industry median practices. However, considering the continuing pressures on
earnings and cash flows and wanting to maintain compensation packages that are
performance related, it was decided to maintain the restrictions in place on
salary adjustments and therefore, only nominal salary increases were made. In
addition, the maximum percentages of base salaries utilized for bonus accruals
were increased, and an additional grant of time-based restricted stock
(restricted shares vest equally over a three-year period from the date of
grant--one-third on each anniversary date) to certain members of the senior
management group including the executive officers, and a grant of performance-
based restricted stock (restrictions vest when certain preestablished price
levels of the Common Stock are achieved) to the executive officers was made in
February 1995. No grants were made to the executive officers in 1996.
Based on the Company's 1996 income, no bonuses were paid to the chief
executive officer and the executive vice president and chief financial officer
for the 1996 bonus plan year. Based on individual performances, the other
executive officers received discretionary bonuses for the 1996 bonus plan
year.
9
<PAGE>
The Compensation Committee does not anticipate that any of the compensation
payable to the named executive officers in 1996 or 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 review 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. As described
above, during 1994 and 1995, 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
10
<PAGE>
COMPARATIVE STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return from
January 2, 1992 to January 2, 1997, of the Company, the Standard & Poor's 500
Index and the Dow Jones Casino Industry Group. The graph assumes an investment
of $100 on January 2, 1992 in each of Common Stock, the stocks comprising the
Standard & Poor's 500 Index and the stocks comprising the Dow Jones Casino
Industry Group. As of January 25, 1995, the companies that comprised the Dow
Jones Casino Industry Group were revised.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG AZTAR TOTAL CUMULATIVE RETURN, DOW JONES CASINO
INDEX AND S&P 500 INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period AZTAR TOTAL DOW JONES S&P
(Fiscal Year Covered) CUMULATIVE CASINO INDEX 500 INDEX
- --------------------- ----------- ------------ ---------
<S> <C> <C> <C>
Measurement Pt- 1/2/92 $100.0 $100.0 $100.0
FYE 12/31/92 $128.9 $156.0 $104.4
FYE 12/30/93 $115.6 $238.1 $112.3
FYE 12/29/94 $102.2 $183.6 $110.5
FYE 12/28/95 $137.8 $235.6 $147.2
FYE 1/2/97 $128.9 $265.3 $176.6
</TABLE>
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 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 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 and
entitled to vote is required for approval of any matter other than the
election of Directors which properly comes before the Meeting or any
adjournments or postponements thereof. Under applicable Delaware law, in
determining whether any such other matter has received the affirmative vote of
the requisite number of shares
11
<PAGE>
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 1996 Annual Meeting was held on May 8, 1996, and the 1997
Annual Meeting is scheduled to be held on May 22, 1997, which is within 30
days of the anniversary date of the 1996 Annual Meeting. Accordingly, assuming
the 1997 Annual Meeting is held as scheduled, notice of a proposed director
nomination or new business to be brought before the 1997 Annual Meeting must
have been received in proper form on or after February 21, 1997 and on or
prior to March 23, 1997. In addition, assuming the 1997 Annual Meeting is held
as scheduled and the 1998 Annual Meeting of Shareholders is held within 30
days of May 22, 1998, notice of a proposed director nomination or new business
to be brought before the 1998 Annual Meeting must be received in proper form
on or after February 21, 1998 and on or prior to March 23, 1998.
In accordance with federal securities laws, proposals to be submitted by
shareholders for consideration at the Company's next Annual Meeting and
inclusion in the Company's 1998 Proxy Statement must be received by the
Company at its executive offices in Phoenix, Arizona, not later than December
1, 1997.
12
<PAGE>
AZTAR CORPORATION
PROXY
ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul E. Rubeli and Nelson W. Armstrong, Jr.,
and each of them, with full power of substitution, attorneys and proxies, to
represent and to vote all shares of Common Stock, par value $.01 per share
("Aztar Common Stock"), of Aztar Corporation ("Aztar") which the undersigned
is entitled to vote at the Annual Meeting of Shareholders to be held on
Thursday, May 22, 1997 at 11:00 a.m., local time, at The Ritz Carlton Hotel,
2401 East Camelback Road, Phoenix, Arizona (the "Meeting") and at any
adjournments or postponements thereof, as directed on the reverse side of this
proxy, with all powers the undersigned would possess if personally present at
the Meeting.
THE BOARD OF DIRECTORS OF AZTAR RECOMMENDS A VOTE FOR PROPOSAL 1.
IF RETURNED CARDS ARE SIGNED AND DATED BUT NOT MARKED, YOU WILL BE DEEMED TO
HAVE VOTED FOR PROPOSAL 1.
THIS PROXY WILL BE VOTED AS DIRECTED ON THE REVERSE SIDE. IF NO
SPECIFICATIONS ARE MADE, YOUR SHARES WILL BE VOTED FOR PROPOSAL 1. BROKER
NON-VOTES WILL BE DISREGARDED. IN THEIR DISCRETION, THE NAMED PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING. A MAJORITY OF THE NAMED PROXIES, OR ANY SUBSTITUTE OR
SUBSTITUTES, WHO SHALL BE PRESENT AND ACT AT THE MEETING (OR IF ONLY ONE
SHALL BE PRESENT AND ACT, THEN THAT ONE) SHALL HAVE ALL THE POWERS OF THE
NAMED PROXIES HEREUNDER.
(PLEASE SIGN ON REVERSE SIDE)
. FOLD AND DETACH HERE .
[LOGO OF AZTAR APPEARS HERE]
<PAGE>
- --------------------------------------------------------------------------------
Please mark
your votes [X]
as indicated
in this example
THE BOARD OF DIRECTORS OF AZTAR RECOMMENDS A VOTE FOR PROPOSAL 1.
---
FOR WITHHOLD AUTHORITY
all nominees to vote for
listed below all nominees below
[_] [_]
1. The election as directors of all nominees listed below (except as marked to
the contrary):
A. Sam Gitlin, Robert M. Haddock and Terence W. Thomas, (to withhold
authority to vote for any individual nominee, check the "FOR all nominees"
box above and write that nominee's name in the space provided below.)
--------------
2. With discretionary power upon such other business as may properly come before
the Meeting or any adjournments or postponements thereof.
IF RETURNED CARDS ARE SIGNED AND DATED BUT NOT MARKED, THE UNDERSIGNED WILL BE
DEEMED TO HAVE VOTED FOR PROPOSAL 1 AND TO HAVE APPOINTED THE PROXIES WHOSE
---
NAMES APPEAR ON THE FACE HEREOF TO VOTE ON SUCH OTHER MATTERS AS MAY BE PROPERLY
BEFORE THEM.
PROXIES CAN ONLY BE GIVEN BY SHAREHOLDERS OF RECORD ON MARCH 26, 1997. PLEASE
SIGN YOUR NAME BELOW EXACTLY AS IT APPEARS HEREON. WHEN SHARES OF AZTAR STOCK
ARE HELD OF RECORD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE
AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR
OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON.
Signature(s) ____________________________ Date ______________________________
NOTE: (Please sign as name appears hereon. Joint Owners should each sign. When
signing as attorney, executor, administrator, trustee, guardian, please give
full title as such.)
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
