SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 2, 1998
-------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------- -----------
Commission file number 1-5440
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AZTAR CORPORATION
- ---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 86-0636534
- ----------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2390 East Camelback Road, Suite 400, Phoenix, Arizona 85016
- --------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 381-4100
----------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes X No
----- -----
At April 30, 1998, the registrant had outstanding 45,219,063 shares of
its common stock, $.01 par value.
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Page
----
Consolidated Balance Sheets at April 2, 1998 and
January 1, 1998 3
Consolidated Statements of Operations for the quarters
ended April 2, 1998 and April 3, 1997 5
Consolidated Statements of Cash Flows for the quarters
ended April 2, 1998 and April 3, 1997 6
Consolidated Statements of Shareholders' Equity for the
quarters ended April 2, 1998 and April 3, 1997 8
Notes to Consolidated Financial Statements 9
2
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited)
---------------------------------------
(in thousands, except share data)
<CAPTION>
April 2, January 1,
1998 1998
---------- ----------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 31,532 $ 46,129
Accounts receivable, net 37,142 44,133
Inventories 6,362 6,779
Prepaid expenses 9,833 10,374
Deferred income taxes, net 11,403 11,403
---------- ----------
Total current assets 96,272 118,818
Investments in and advances to
unconsolidated partnership 9,144 9,375
Other investments 22,923 22,319
Property and equipment:
Buildings, riverboats and equipment, net 791,690 802,230
Land 98,762 98,762
Construction in progress 5,878 1,215
Leased under capital leases, net 601 672
---------- ----------
896,931 902,879
Deferred income taxes, net 242 331
Other deferred charges and assets 37,928 37,774
---------- ----------
$1,063,440 $1,091,496
========== ==========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited) (continued)
---------------------------------------
(in thousands, except share data)
<CAPTION>
April 2, January 1,
1998 1998
---------- ----------
<S> <C> <C>
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accruals $ 52,156 $ 56,939
Accrued payroll and employee benefits 24,147 23,630
Accrued interest payable 317 13,167
Income taxes payable 1,192 896
Current portion of long-term debt 22,718 27,166
Current portion of other long-term
liabilities 2,931 2,931
---------- ----------
Total current liabilities 103,461 124,729
Long-term debt 484,447 491,932
Other long-term liabilities 24,264 24,204
Contingencies and commitments
Series B ESOP convertible preferred stock
(redemption value $6,733 and $6,857) 6,733 6,593
Shareholders' equity:
Common stock, $.01 par value (45,207,062
and 45,198,889 shares outstanding) 491 491
Paid-in capital 412,053 412,029
Retained earnings 49,118 48,654
Less: Treasury stock (17,126) (17,126)
Unearned compensation (1) (10)
---------- ----------
Total shareholders' equity 444,535 444,038
---------- ----------
$1,063,440 $1,091,496
========== ==========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
For the periods ended April 2, 1998 and April 3, 1997
---------------------------------------------------------------
(in thousands, except per share data)
<CAPTION>
First Quarter
------------------
1998 1997
-------- --------
<S> <C> <C>
Revenues
Casino $164,291 $157,148
Rooms 12,052 12,566
Food and beverage 13,047 12,732
Other 7,435 7,310
-------- --------
196,825 189,756
Costs and expenses
Casino 76,192 74,485
Rooms 7,140 7,326
Food and beverage 13,089 13,206
Other 6,399 5,751
Marketing 21,211 19,748
General and administrative 19,521 17,387
Utilities 2,883 3,454
Repairs and maintenance 5,985 5,794
Provision for doubtful accounts 2,992 2,154
Property taxes and insurance 6,064 6,120
Rent 5,439 4,536
Depreciation and amortization 13,044 12,741
-------- --------
179,959 172,702
-------- --------
Operating income 16,866 17,054
Interest income 416 510
Interest expense (15,136) (15,801)
-------- --------
Income before other items and income taxes 2,146 1,763
Equity in unconsolidated partnership's loss (1,125) (1,166)
-------- --------
Income before income taxes 1,021 597
Income taxes (403) 2,080
-------- --------
Net income $ 618 $ 2,677
======== ========
Net income per common share $ .01 $ .06
Net income per common share assuming dilution $ .01 $ .05
Weighted average common shares applicable to:
Net income per common share 45,202 45,005
Net income per common share assuming dilution 46,942 46,699
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
For the periods ended April 2, 1998 and April 3, 1997
---------------------------------------------------------------
(in thousands)
<CAPTION>
First Quarter
---------------------
1998 1997
--------- ---------
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 618 $ 2,677
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 13,732 13,399
Provision for losses on accounts receivable 2,992 2,154
Loss on reinvestment obligation 219 217
Rent expense (247) (324)
Distribution in excess of equity in income
of partnership 231 255
Deferred income taxes 89 98
Change in assets and liabilities:
(Increase) decrease in accounts receivable 4,386 2,226
(Increase) decrease in refundable income taxes -- 1,201
(Increase) decrease in inventories and
prepaid expenses 782 (120)
Increase (decrease) in accounts payable,
accrued expenses and income taxes payable (17,102) (28,126)
Other items, net 1,017 118
--------- ---------
Net cash provided by (used in) operating activities 6,717 (6,225)
--------- ---------
Cash Flows from Investing Activities
Payments received on notes receivable 722 634
Purchases of property and equipment (3,862) (3,936)
Additions to other long-term assets (3,090) (1,818)
--------- ---------
Net cash provided by (used in) investing activities (6,230) (5,120)
--------- ---------
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt 84,700 55,600
Proceeds from issuance of common stock 20 --
Principal payments on long-term debt (99,029) (55,701)
Principal payments on other long-term liabilities (325) (326)
Debt issuance costs -- (100)
Preferred stock dividend (329) (352)
Redemption of preferred stock (121) (124)
--------- ---------
Net cash provided by (used in) financing activities (15,084) (1,003)
--------- ---------
Net increase (decrease) in cash and cash equivalents (14,597) (12,348)
Cash and cash equivalents at beginning of period 46,129 44,131
--------- ---------
Cash and cash equivalents at end of period $ 31,532 $ 31,783
========= =========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)(continued)
For the periods ended April 2, 1998 and April 3, 1997
---------------------------------------------------------------
(in thousands)
<CAPTION>
First Quarter
-------------------
1998 1997
-------- --------
<S> <C> <C>
Supplemental Cash Flow Disclosures
Summary of non-cash investing and financing activities:
Reduction in land and other long-term liabilities $ -- $ 2,000
Capital lease obligations incurred for property
and equipment 2,322 552
Tax benefit from stock options and preferred stock
dividend 18 21
Forfeiture of restricted stock -- 22
Cash flow during the period for the following:
Interest paid, net of amount capitalized $ 27,307 $ 26,686
Income taxes paid (refunded) -- (3,398)
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited)
For the periods ended April 2, 1998 and April 3, 1997
---------------------------------------------------------------
(in thousands, except number of shares)
<CAPTION>
First Quarter
--------------------
1998 1997
-------- --------
<S> <C> <C>
Common stock:
Beginning and ending balance $ 491 $ 489
-------- --------
Paid-in capital:
Beginning balance 412,029 411,158
Stock options exercised for 3,405 shares in 1998 20 --
Tax benefit from stock options exercised 4 --
-------- --------
Ending balance 412,053 411,158
-------- --------
Retained earnings:
Beginning balance 48,654 44,846
Preferred stock dividend and losses on redemption,
net of income tax benefit of $14 and $21 (154) (174)
Net income 618 2,677
-------- --------
Ending balance 49,118 47,349
-------- --------
Treasury stock:
Beginning balance (17,126) (17,102)
Forfeiture of 3,334 shares of restricted stock
in 1997 -- (22)
-------- --------
Ending balance (17,126) (17,124)
-------- --------
Unearned compensation:
Beginning balance (10) (117)
Amortization 9 22
Forfeiture of restricted stock -- 22
-------- --------
Ending balance (1) (73)
-------- --------
$444,535 $441,799
======== ========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Note 1: General
- ----------------
The consolidated financial statements reflect all adjustments, such adjust-
ments being normal recurring accruals, which are necessary, in the opinion of
management, for the fair presentation of the results of the interim periods;
interim results, however, may not be indicative of the results for the full
year.
The notes to the interim consolidated financial statements are presented to
enhance the understanding of the financial statements and do not necessarily
represent complete disclosures required by generally accepted accounting
principles. There was no interest capitalized during the quarters ended 1998
or 1997. Capitalized costs related to various development projects, included
in other deferred charges and assets, were $2,556,000 and $954,000 at April
2, 1998 and January 1, 1998, respectively. For additional information
regarding significant accounting policies, Las Vegas Tropicana redevelopment,
long-term debt, lease obligations, and other matters applicable to the
Company, reference should be made to the Company's Annual Report to
Shareholders for the year ended January 1, 1998.
Note 2: Investments in and Advances to Unconsolidated Partnership
- -----------------------------------------------------------------
<TABLE>
Following are summarized operating results for the Company's unconsolidated
partnership, accounted for using the equity method for the periods ended
April 2, 1998 and April 3, 1997 (in thousands):
<CAPTION>
First Quarter
-------------------
1998 1997
-------- --------
<S> <C> <C>
Revenues $ 4,122 $ 4,154
Operating expenses (684) (684)
-------- --------
Operating income 3,438 3,470
Interest expense (1,292) (1,374)
-------- --------
Net income $ 2,146 $ 2,096
======== ========
</TABLE>
<TABLE>
The Company's share of the above operating results, after intercompany
eliminations, is as follows (in thousands):
<CAPTION>
First Quarter
-------------------
1998 1997
-------- --------
<S> <C> <C>
Equity in unconsolidated
partnership's loss $ (1,125) $ (1,166)
</TABLE>
9
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Note 3: Long-term Debt
- -----------------------
<TABLE>
At April 2, 1998 and January 1, 1998, long-term debt included (in thousands):
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
11% Senior Subordinated Notes Due 2002 $200,000 $200,000
13 3/4% Senior Subordinated Notes Due 2004 178,104 178,061
Reducing revolving credit note ("Credit
Facility"); floating rate, 8.2% at
April 2, 1998; matures December 31, 1999 125,000 139,000
Other notes payable; 7% to 14.6%; maturities
to 2002 1,199 1,213
Obligations under capital leases 2,862 824
-------- --------
507,165 519,098
Less current portion (22,718) (27,166)
-------- --------
$484,447 $491,932
======== ========
</TABLE>
As of April 2, 1998 and January 1, 1998, there were no borrowings under the
supplemental reducing revolving loan agreement maturing on March 15, 1999
(the "Supplemental Credit Facility").
Note 4: Other Long-term Liabilities
- -------------------------------------
<TABLE>
At April 2, 1998 and January 1, 1998, other long-term liabilities consisted
of (in thousands):
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Accrued rent expense $ 11,080 $ 11,327
Obligation to City of Evansville and
other civic and community organizations 4,238 4,550
Deferred compensation and retirement plans 11,408 10,776
Las Vegas Boulevard beautification assessment 469 482
-------- --------
27,195 27,135
Less current portion (2,931) (2,931)
-------- --------
$ 24,264 $ 24,204
======== ========
</TABLE>
Note 5: Income Taxes
- ----------------------
The Company is responsible, with certain exceptions, for the taxes of Ramada
Inc. ("Ramada") through December 20, 1989. The Internal Revenue Service
("IRS") has completed its examinations of the income tax returns for the
years 1988 through 1991 and has settled for all but one issue. Income taxes
for the 1997 first quarter included a non-recurring tax benefit of $2,323,000
primarily related to cash received as a result of the settlement agreement
between the IRS and Ramada. The IRS is examining the income tax returns for
the years 1992 and 1993. Management believes that adequate provision for
income taxes and interest has been made in the financial statements.
10
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Note 6: Net Income Per Share
- -----------------------------
Net income per common share and net income per common share, assuming
dilution, are computed based on the provisions of Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 128, Earnings
per Share ("SFAS 128"), which superseded and simplified the standards for
computing earnings per share previously found in Accounting Principles Board
Opinion No. 15, Earnings per Share ("APB 15"). SFAS 128 replaced the
presentation of net income per common and common equivalent share under APB
15 with a presentation of net income per common share. Net income per common
share excludes dilution and is computed by dividing income applicable to
common shareholders by the weighted-average number of common shares
outstanding. Net income per common share, assuming dilution, is computed
similarly under SFAS 128 as it was under APB 15 and is based on the weighted-
average number of common shares outstanding after consideration of the
dilutive effect of stock options and the assumed conversion of the preferred
stock at the stated rate. In accordance with the provisions of SFAS 128, the
Company has restated the 1997 first quarter earnings per share data.
<TABLE>
The computations under SFAS 128 of net income per common share and net income
per common share, assuming dilution, for the periods ended April 2, 1998 and
April 3, 1997, are as follows:
<CAPTION>
First Quarter
--------------------
1998 1997
-------- --------
<S> <C> <C>
Net income $ 618 $ 2,677
Deduct: preferred stock dividends and losses on
redemption (net of income tax benefits of $14
and $21 credited to retained earnings) (154) (174)
-------- --------
Net income applicable to computations $ 464 $ 2,503
======== ========
Weighted-average common shares applicable to net
income per common share 45,202 45,005
Effect of dilutive securities:
Stock option incremental shares 861 765
Assumed conversion of preferred stock 879 929
-------- --------
1,740 1,694
-------- --------
Weighted-average common shares applicable to net
income per common share assuming dilution 46,942 46,699
======== ========
Net income per common share $ .01 $ .06
Net income per common share assuming dilution $ .01 $ .05
</TABLE>
11
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Note 7: Contingencies and Commitments
- --------------------------------------
The Company agreed to indemnify Ramada against all monetary judgments in
lawsuits pending against Ramada and its subsidiaries as of the conclusion of
the restructuring of Ramada (the "Restructuring") on December 20, 1989, as
well as all related attorneys' fees and expenses not paid at that time,
except for any judgments, fees or expenses accrued on the hotel business
balance sheet and except for any unaccrued and unreserved aggregate amount up
to $5,000,000 of judgments, fees or expenses related exclusively to the hotel
business. Aztar is entitled to the benefit of any crossclaims or
counterclaims related to such lawsuits and of any insurance proceeds
received. In addition, the Company agreed to indemnify Ramada for various
lease guarantees made by Ramada relating to the restaurant business conducted
through its Marie Callender Pie Shops, Inc. subsidiary. In connection with
these matters, the Company has an accrued liability of $3,902,000 and
$3,905,000 at April 2, 1998 and January 1, 1998, respectively.
The Company is a party to various other claims, legal actions and complaints
arising in the ordinary course of business or asserted by way of defense or
counterclaim in actions filed by the Company. Management believes that its
defenses are substantial in each of these matters and that the Company's
legal posture can be successfully defended without material adverse effect on
its consolidated financial statements.
The Tropicana Las Vegas lease agreement contains a provision that requires
the Company to maintain an additional security deposit with the lessor of
$21,000,000 in cash or a letter of credit if the Tropicana Las Vegas
operation fails to meet certain financial tests. A determination was made
for the period ended April 2, 1998, that the additional security deposit
would be required by July 1, 1998; however, the lessor has waived the
requirement. The Company has a 50% partnership interest in the lessor.
The Company has severance agreements with certain of its senior executives.
Severance benefits range from a lump-sum cash payment equal to three times
the sum of the executive's annual base salary and the average of the
executive's annual bonuses awarded in the preceding three years plus payment
of the value in his outstanding stock options and vesting and distribution of
any restricted stock to a lump-sum cash payment equal to the sum of his
annual base salary and average bonus, plus the other described benefits. In
certain agreements, the termination must be as a result of a change in
control of the Company. Based upon current salary levels and stock options,
the aggregate commitment under the severance agreements should all these
executives be terminated was approximately $16,000,000 at April 2, 1998.
12
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis
Financial Condition
During the first quarter of 1998, the Company borrowed $84.7 million and
repaid $98.7 million under the Credit Facility, leaving an outstanding
balance of $125 million at April 2, 1998. As of April 2, 1998, there were no
borrowings under the Supplemental Credit Facility. The Company's debt to
operating cash flow ratio as calculated under the Credit Facility was 3.98 to
1 at April 2, 1998 and the maximum allowable ratio was 4.90 to 1. The
Company's senior debt to operating cash flow ratio was 1.37 to 1 at April 2,
1998 and the maximum allowable ratio was 1.75 to 1.
The Tropicana Las Vegas lease agreement contains a provision that requires
the Company to maintain an additional security deposit with the lessor of $21
million in cash or a letter of credit if the Tropicana Las Vegas operation
fails to meet certain financial tests. A determination was made for the
period ended April 2, 1998, that the additional security deposit would be
required by July 1, 1998; however, the lessor has waived the requirement.
Results of Operations
Quarter Ended April 2, 1998 Compared to Quarter Ended April 3, 1997
The Company's consolidated revenues for the 1998 first quarter were $196.8
million, a 4% increase over $189.8 million for the 1997 first quarter.
Consolidated casino revenue was $7.1 million or 5% higher in the 1998 versus
1997 first quarter, reflecting increases at Tropicana Atlantic City and the
Company's riverboat properties that were partially offset by decreases at the
Company's properties in Nevada. Consolidated operating income was $16.9
million for the first quarter of 1998, down slightly from $17.1 million for
the first quarter of 1997.
Consolidated interest expense was $0.7 million or 4% lower in the 1998 versus
1997 first quarter primarily as a result of lower levels of debt outstanding
during the first quarter of 1998 in connection with the Credit Facility.
For a discussion of income taxes, refer to "Note 5: Income Taxes".
TROPICANA ATLANTIC CITY Total revenues at Tropicana Atlantic City were
$100.1 million in the 1998 first quarter, up 8% from $92.4 million in the
1997 first quarter. Casino revenue was 8% higher in the 1998 versus 1997
first quarter, primarily reflecting a 20% increase in games revenue combined
with a 3% increase in slot revenue. The increase in games revenue was a
result of increases in the hold percentage and the volume of play. The
increase in slot revenue was attained in spite of a reduction in coin offers
to slot players.
Tropicana Atlantic City had operating income of $13.9 million in the 1998
first quarter, a 64% improvement over $8.4 million in the 1997 first quarter.
Casino costs were 1% lower in the 1998 versus 1997 first quarter primarily
due to a 21% reduction in coin offers to slot players that more than offset
increased costs related to the increase in casino revenue. The provision for
13
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
doubtful accounts was $1.2 million higher in the 1998 versus 1997 first
quarter due to an increase in the allowance for potential uncollectible
markers associated with the property's ongoing emphasis on the games segment
of the business. Operating income is after rent and depreciation and
amortization expenses. Rent expense was $1.9 million in the 1998 first
quarter compared to $1.4 million in the 1997 first quarter. Depreciation and
amortization was $5.5 million in both periods.
TROPICANA LAS VEGAS At Tropicana Las Vegas, total revenues were $37.6
million in the 1998 first quarter, an 8% decrease from $40.8 million in the
1997 first quarter. Casino revenue was 10% lower in the 1998 versus 1997
first quarter, primarily due to a 26% decrease in games revenue that was
partially offset by a 4% increase in slot revenue. The decrease in games
revenue was primarily attributable to a decline in baccarat revenue in the
1998 versus 1997 first quarter. The decrease in baccarat revenue was a
result of decreases in the volume of play and the hold percentage.
Tropicana Las Vegas had an operating loss of $3.5 million for the 1998 first
quarter compared to operating income of $0.6 million for the 1997 first
quarter. Operating loss or income is after rent and depreciation and
amortization expenses. Rent expense was $2.5 million in the 1998 first
quarter compared to $2.3 million in the 1997 first quarter. Depreciation and
amortization was $2.5 million in the first quarter of 1998 compared to $2.2
million in last year's first quarter.
RAMADA EXPRESS At Ramada Express, total revenues were $21.3 million in the
1998 first quarter, down 3% from $22.0 million in the 1997 first quarter.
Operating income was $2.9 million in the 1998 first quarter compared to $4.3
million in the 1997 first quarter. Operating income is after rent and
depreciation and amortization expenses. Rent expense was $0.1 million in
both periods. Depreciation and amortization was $1.7 million in the 1998
first quarter compared to $1.8 million in the 1997 first quarter.
CASINO AZTAR EVANSVILLE Total revenues at Casino Aztar Evansville were $31.3
million in the 1998 first quarter, a 10% increase over $28.4 million in last
year's first quarter. Operating income was $8.0 million in the 1998 first
quarter, an 8% improvement over $7.4 million in the 1997 first quarter.
Operating income is after rent and depreciation and amortization expenses.
Rent expense was $0.8 million in the first quarter of 1998 compared to $0.6
million in the first quarter of 1997. Depreciation and amortization was $2.4
million in the 1998 first quarter compared to $2.3 million in last year's
first quarter.
CASINO AZTAR CARUTHERSVILLE Total revenues at Casino Aztar Caruthersville
were $6.5 million in the 1998 first quarter compared to $6.2 million in the
1997 first quarter. Casino Aztar Caruthersville had an operating loss of
$0.3 million in the first quarter of 1998 compared to $0.7 million in the
first quarter of 1997. Operating loss is after depreciation and amortization
of $0.8 million in the 1998 first quarter compared to $0.9 million in the
1997 first quarter.
Other Matters
In April 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued a Statement of Position No.
14
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
98-5 entitled "Reporting on the Costs of Start-up Activities" ("SOP"). The
SOP stipulates that all costs that meet its definition of start-up
activities, which the Company has referred to as preopening costs, must be
expensed as incurred. The provisions of the SOP are effective for fiscal
years beginning after December 15, 1998. Upon adoption, entities are
required to write off all capitalized start-up costs as a cumulative effect
of a change in accounting principle. Entities are not required to report the
pro forma effect of retroactive application. The Company will adopt this SOP
when required. The Company's policy is, and has been, to capitalize these
costs as incurred and to expense them in the period the related facility
commences operations. Adoption of the SOP will have only a prospective
effect on the Company's financial statements as there are no capitalized
preopening costs at April 2, 1998 and the Company is not, nor plans to be,
engaged in start-up activities in 1998.
Management has initiated an enterprise-wide program to prepare the Company's
computer systems and applications for the year 2000. This is necessary
because computer programs have been written using two digits rather than four
to define the applicable year. The Company expects to incur internal staff
costs as well as consulting and other expenses related to infrastructure and
facilities enhancements necessary to prepare the systems for the year 2000.
Tropicana Atlantic City has undertaken a $6 million capital program, which is
expected to be complete by July 1999, to purchase upgrades for its major
hardware and software systems. When this capital program is completed, the
Atlantic City Tropicana should have addressed most of its year 2000 issues.
Tropicana Las Vegas and Ramada Express have decided to purchase upgrades for
several major software systems. Conversion to these upgrades is expected to
be completed by July 1999. The cost of these new software systems for both
operations combined is approximately $2.0 million which represents
substantially all of the expected costs to make both these properties year
2000 compliant. Casino Aztar Evansville and Casino Aztar Caruthersville use
primarily third-party standard vendor software and are working with such
vendors to ensure year 2000 compliance and no significant costs are expected
to be incurred at these properties. The Company expects its year 2000 date
conversion projects to be completed on a timely basis. However, there can be
no assurance that the systems of other companies on which the Company's
systems rely will be timely converted or that any such failure to convert by
another company would not have an adverse effect on the Company's systems.
PART - II OTHER INFORMATION
Item 1. Legal Proceedings
(a) In connection with Case No. CV-S-94-1126-DAE(RJJ)-BASE FILE (the
"Poulos/Ahearn Case"), Case No. CV-S-95-00923-LDG(RJJ)(the "Schreier
Case") and Case No. CV-S-95-936 LDG(RLH)(the "Cruise Ship Case"),
(collectively, the "Consolidated Cases"), as reported under Part I, Item
3 of the Company's Form 10-K for the year ended January 1, 1998, the
plaintiffs filed a motion on March 18, 1998, for class certification.
On March 19, 1998, the Magistrate Judge granted defendants' motion
seeking to bifurcate discovery into "class" and "merits" phases, and to
stay "merits" discovery pending a decision on plaintiffs' motion for
class certification. The Magistrate's order (rendered orally at the
conclusion of the hearing) gives the defendants until May 22, 1998, to
complete discovery from the class representatives, and until June 12,
15
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
1998, to file their opposition to the motion for class certification.
The plaintiffs' reply memorandum is due on June 30, 1998, and the matter
will then be submitted to the court for decision. The stay of merits
discovery remains in effect until the court decides the motion for class
certification.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Page No.
----------
3. Second Amended and Restated By-Laws of Aztar
Corporation, as adopted February 25, 1998. *
10.1 Amendment to Severance Agreement, dated March 23,
1998, by and between Aztar Corporation and Paul
E. Rubeli. *
10.2 Amendment to Severance Agreement, dated March 24,
1998, by and between Aztar Corporation and Robert
M. Haddock. *
10.3 Amendment to Severance Agreement, dated March 24,
1998, by and between Aztar Corporation and Nelson
W. Armstrong, Jr. *
10.4 Amendment to Severance Agreement, dated March 24,
1998, by and between Aztar Corporation and
Meridith P. Sipek. *
10.5 Amendment to Severance Agreement, dated March 24,
1998, by and between Aztar Corporation and Joe
Cole. *
10.6 Amendment to Severance Agreement, dated March 24,
1998, by and between Aztar Corporation and Neil
A. Ciarfalia. *
27. Financial Data Schedule. *
* See exhibit index at page E-1 of this report for a
listing of exhibits filed with this report.
All other exhibits have been omitted because the
information is either not required or not applicable.
(b) Reports on Form 8-K:
On February 3, 1998, the Company filed a report on Form
8-K (as amended and replaced in its entirety by Form 8-
K/A filed the same day) under Item 5. Other Events to
file, as Exhibit 99.1, a news release issued by the
Registrant which referenced, as Exhibit 99.2, an option
agreement dated February 2, 1998, entered into between
the Company and the parties constituting the Jaffe
Group.
16
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AZTAR CORPORATION
------------------------------
(Registrant)
Date May 13, 1998 By ROBERT M. HADDOCK
-------------------------- ---------------------------
Robert M. Haddock
Executive Vice President and
Chief Financial Officer
17
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
Exhibit Index
- -------------
3. Second Amended and Restated By-Laws of Aztar Corporation, as
adopted February 25, 1998.
10.1 Amendment to Severance Agreement, dated March 23, 1998, by and
between Aztar Corporation and Paul E. Rubeli.
10.2 Amendment to Severance Agreement, dated March 24, 1998, by and
between Aztar Corporation and Robert M. Haddock.
10.3 Amendment to Severance Agreement, dated March 24, 1998, by and
between Aztar Corporation and Nelson W. Armstrong, Jr.
10.4 Amendment to Severance Agreement, dated March 24, 1998, by and
between Aztar Corporation and Meridith P. Sipek.
10.5 Amendment to Severance Agreement, dated March 24, 1998, by and
between Aztar Corporation and Joe Cole.
10.6 Amendment to Severance Agreement, dated March 24, 1998, by and
between Aztar Corporation and Neil A. Ciarfalia.
27. Financial Data Schedule.
E-1
<PAGE>
SECOND AMENDED
AND RESTATED
BY-LAWS
OF
AZTAR CORPORATION
(hereinafter called the "Corporation")
As adopted February 25, 1998
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be located in Wilmington, New Castle County, Dela-
ware.
Section 2. Other Offices. The Corporation may also have
offices and places of business at such other places, both within and
without the State of Delaware, as the Board of Directors of the Corpo-
ration (the "Board of Directors") may from time to time determine or its
business may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders
for the election of directors or for any other purpose shall be held at
such time and place, either within or without the State of Delaware as
shall be designated from time to time by the Board of Directors and
stated in the notice of the meeting or in duly executed waivers of notice
thereof.
Section 2. Annual Meetings. The Annual Meetings of
Stockholders for the purpose of electing directors and for the transac-
tion of such other business as may properly be brought before the
meeting shall be held on such date and at such time as shall be designat-
ed from time to time by the Board of Directors and stated in the notice
of the meeting.
Section 3. Special Meetings. Unless otherwise required by
law or by the Restated Certificate of Incorporation of the Corporation
(the "Certificate of Incorporation"), Special Meetings of Stockholders,
for any purpose or purposes, may be called by either (i) the Chairman of
the Board of Directors (the "Chairman"), or (ii) the President, and shall
be called by either the Chairman or the President at the request in
writing of a majority of the Board of Directors.
Section 4. Notice of Meetings. Except as otherwise
provided by law, written or printed notice of each meeting of the
stockholders, whether annual or special, shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting or, in the event that the
stockholders are to vote upon any proposal to merge or consolidate the
corporation or to sell, lease or exchange all or substantially all of its
property and assets, not less than twenty (20) nor more than sixty (60)
before the date of such meeting. Such notice shall be delivered either
personally or by mail or at the direction of the Chairman, the President
or the Secretary. Each notice of meeting shall state the place, date and
hour of the meeting.
Section 5. Nature of Business. At any meeting, only such
business shall be conducted as shall have been brought before the
meeting by or at the direction of the Board of Directors or by any
stockholder who complies with the procedures set forth in this Section 5.
No business may be transacted at any meeting of share-
holders, other than business that is either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the
Board of Directors (or any duly authorized committee thereof), (b)
otherwise properly brought before such meeting of stockholders by or at
the direction of the Board of Directors (or any duly authorized commit-
tee thereof) or (c) in the case of an Annual Meeting of Stockholders,
otherwise properly brought before such meeting by any stockholder (i)
who is a stockholder of record on the date of the giving of the notice
provided for in this Section 5 and on the record date for the determina-
tion of stockholders entitled to vote at such Annual Meeting of Stock-
holders and (ii) who complies with the notice procedures set forth in
this Section 5.
In addition to any other applicable requirements, for
business to be properly brought before an Annual Meeting of Stockhold-
ers by a stockholder, such stockholder must have given timely notice
thereof in proper written form to the Secretary.
To be timely, a stockholder's notice to the Secretary must
be delivered to or mailed and received at the principal executive offices
of the Corporation not less than sixty (60) days nor more than ninety
(90) days prior to the anniversary date of the immediately preceding
Annual Meeting of Stockholders; provided, however, that in the event
that the Annual Meeting of Stockholders is called for a date that is not
within thirty (30) days before or after such anniversary date, notice by
the stockholder in order to be timely must be so received not later than
the close of business on the tenth (10th) day following the day on which
notice of the date of the Annual Meeting of Stockholders was mailed or
public disclosure of the date of the Annual Meeting of Stockholders was
made, whichever first occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth as to each matter such stockholder proposes to
bring before the Annual Meeting of Stockholders (i) a brief description
of the business desired to be brought before the Annual Meeting of
Stockholders and the reasons for conducting such business at the Annu-
al Meeting of Stockholders, (ii) the name and record address of such
stockholder, (iii) the class or series and number of shares of capital
stock of the Corporation which are owned beneficially or of record by
such stockholder as of the record date for the meeting (if such date
shall then have been made publicly available and shall have occurred)
and as of the date of such notice, (iv) a description of all arrangements
or understandings between such stockholder and any other person or
persons (including their names) in connection with the proposal of such
business by such stockholder and any material interest of such stock-
holder in such business, (v) any other information which would be
required to be disclosed in a proxy statement or other filings required to
be made in connection with the solicitations of proxies for the proposal
pursuant to Section 14 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations promulgat-
ed thereunder if such stockholder were engaged in such a solicitation,
and (vi) a representation that such stockholder intends to appear in
person or by proxy at the Annual Meeting of Stockholders to bring such
business before the meeting.
No business shall be conducted at the Annual Meeting of
Stockholders except business brought before the Annual Meeting of
Stockholders in accordance with the procedures set forth in this Section
5; provided, however, that, once business has been properly brought
before the Annual Meeting of Stockholders in accordance with such
procedures, nothing in this Section 5 shall be deemed to preclude discus-
sion by any stockholder of any such business. If the Chairman of an
Annual Meeting of Stockholders determines that business was not
properly brought before the Annual Meeting of Stockholders in accor-
dance with the foregoing procedures, the Chairman shall declare to the
meeting that the business was not properly brought before the meeting
and such business shall not be transacted.
When a meeting is adjourned to another time or place,
notice of the adjourned meeting need not be given if the time and place
thereof are announced at the meeting at which the adjournment is
taken, unless the adjournment is for more than thirty (30) days, or
unless after the adjournment a new record date is fixed for the ad-
journed meeting, in which case notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting. At
the adjourned meeting, any business may be transacted that might have
been transacted at the original meeting.
Section 6. Quorum. Except as otherwise provided by law
or by the Certificate of Incorporation, the holders of record of a major-
ity of the capital stock issued and outstanding and entitled to vote
thereat, present in person or represented by proxy, shall constitute a
quorum for the transaction of business; provided, that, at any meeting
at which the holders of shares of any series or class of capital stock
shall be entitled, voting as a class, to elect one or more directors, the
holders of record of a majority of the issued and outstanding shares of
such series or class of capital stock entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum for the
purpose of such election. If, however, such quorum shall not be present
or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall
have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally noticed. If the
adjournment is for more than thirty (30) days, or if after the adjourn-
ment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder entitled to
vote at the meeting.
Section 7. Organization. At each meeting of the stock-
holders, the Chairman, or, in his absence or refusal to act, any other
person who shall have been designated by resolution adopted by the
affirmative vote of a majority of the entire Board of Directors or by
the Chairman, shall act as chairman of the meeting. Except as other-
wise provided by law, the chairman of the meeting shall prescribe the
agenda and the rules of order for the conduct of each meeting of
stockholders and make all determinations relating to all questions
arising thereat concerning the order of business and the conduct of the
meeting, including, but not limited to, whether a particular item of
business shall have been properly brought before the meeting.
The Secretary or, in his absence or refusal to act, an
Assistant Secretary, or, in the absence or refusal to act of the Secretary
and all of the Assistant Secretaries, any person appointed by the chair-
man of the meeting, shall act as secretary of the meeting.
Section 8. Voting. Unless otherwise required by law, the
Certificate of Incorporation or these By-Laws, any question brought
before any meeting of stockholders shall be decided by the vote of the
holders of a majority of the stock represented and entitled to vote
thereat. Except as otherwise required by law or the Certificate of
Incorporation, each stockholder represented at a meeting of stockhold-
ers shall be entitled to cast one vote for each share of the capital stock
entitled to vote thereat held by such stockholder. Such votes may be
cast in person or by proxy but no proxy shall be voted on or after three
years from its date, unless such proxy provides for a longer period. The
Board of Directors, in its discretion, or the officer of the Corporation
presiding at a meeting of stockholders, in his discretion, may require
that any votes cast at such meeting shall be cast by written ballot.
Section 9. Inspectors. Prior to each meeting of stockhold-
ers, the Board of Directors shall appoint one or more Inspectors who are
not directors or candidates for director who shall ascertain and report
on the number of shares represented at the meeting, shall receive and
determine the validity of proxies and the qualifications of voters and
shall receive, inspect, count and report to the meeting the votes cast on
all matters submitted to a vote at such meeting. In case of the failure of
the Board of Directors to make such appointment or in case of the
failure of any Inspector so appointed to act, the chairman of the meet-
ing shall make such appointment or fill such vacancies.
Each Inspector, immediately before entering upon his
duties, shall subscribe to an oath or affirmation faithfully to execute
the duties of Inspector at such meeting with strict impartiality and
according to the best of his ability. Each report of an Inspector shall be
in writing and signed by him or by a majority of them if there be more
than one Inspector acting at such meeting.
Section 10. List of Stockholders Entitled to Vote. The
officer of the Corporation who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to
vote at
the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten (10) days prior to the meet-
ing, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during
the whole time thereof, and may be inspected by any stockholder of the
Corporation who is present.
Section 11. Stock Ledger. The stock ledger of the Corpo-
ration shall be the only evidence as to who are the stockholders entitled
to examine the stock ledger, the list required by Section 10 of this
Article II or the books of the Corporation, or to vote in person or by
proxy at any meeting of stockholders.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board
of Directors shall consist of not less than five (5) nor more than thirteen
(13) members, the exact number of which shall initially be fixed by the
Incorporator and thereafter from time to time by the Board of Direc-
tors. Except as provided in Section 2 of this Article, directors shall be
elected by a plurality of the votes cast at Annual Meetings of Stockhold-
ers, and each director so elected shall hold office until a director of the
same class succeeding such director is duly elected, subject, however, to
prior death, resignation, retirement or removal. Any director may
resign at any time upon notice to the Corporation. Such resignation
shall take effect at the date of its receipt, or any later date specified
therein, and the acceptance of such resignation, unless required by the
terms thereof, shall not be necessary to make it effective. Except for
any director who attained his 70th birthday on or before February 25,
1998, the mandatory retirement date for each director shall be the date
of the Annual Meeting of Stockholders which follows such director's
70th birthday. No person shall be eligible for nomination, election or
re-election who at the time of such proposed election shall have attained
his or her 70th birthday. Directors need not be stockholders.
Section 2. Vacancies. Vacancies and newly created
directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office,
provided that a quorum is present, and any other vacancy occurring in
the Board of Directors may be filled by a majority of the directors then
in office, even if less than a quorum, or by a sole remaining director.
Any director elected to fill a vacancy not resulting from an increase in
the number of directors shall have the same remaining term as that of
his predecessor or, if such director has no predecessor, that of the class
of directors to which such director has been elected.
Section 3. Duties and Powers. The business of the Corpo-
ration shall be managed by or under the direction of the Board of
Directors which may exercise all such powers of the Corporation and do
all such lawful acts and things as are not by statute or by the Certifi-
cate of Incorporation or by these By-Laws directed or required to be
exercised or done by the stockholders.
Section 4. Meetings. The Board of Directors of the
Corporation may hold meetings, both regular and special, either within
or without the State of Delaware. Regular meetings of the Board of
Directors may be held without notice at such time and at such place as
may from time to time be determined by the Board of Directors. Special
meetings of the Board of Directors may be called by the Chairman, the
President, or any three (3) directors. Notice thereof stating the place,
date and hour of the meeting shall be given to each director either by
mail not less than forty-eight (48) hours before the date of the meeting,
by telephone, telegram, telex or cable on twenty-four (24) hours' notice,
or on such shorter notice as the person or persons calling such meeting
may deem necessary or appropriate in the circumstances.
Section 5. Organization. At every meeting of the Board
of Directors, the Chairman, or, in his absence or refusal to act, the Vice
Chairman (if any) or the President, or, if each such person is absent or
refuses to act, a chairman chosen by a majority of the directors present,
shall act as chairman of the meeting. The Secretary or, in his absence or
refusal to act, an Assistant Secretary, or, in the absence or refusal to act
of the Secretary and all of the Assistant Secretaries, any person appoint-
ed by the chairman of the meeting, shall act as secretary of the meeting.
Section 6. Nomination of Directors. Only persons who are
nominated in accordance with the following procedures shall be eligible
for election as directors of the Corporation, except as may be otherwise
provided in the Certificate of Incorporation with respect to the right of
holders of preferred stock of the Corporation to nominate and elect a
specified number of directors in certain circumstances. Nominations of
persons for election to the Board of Directors may be made at any
Annual Meeting of Stockholders, or at any Special Meeting of Stock-
holders called for the purpose of electing directors, (a) by or at the
direction of the Board of Directors (or any duly authorized committee
thereof) or (b) by any stockholder of the Corporation (i) who is a stock-
holder of record an the date of the giving of the notice provided for in
this Section 6 and on the record date for the determination of stock-
holders entitled to vote at such meeting and (ii) who complies with the
notice procedures set forth in this Section 6.
In addition to any other applicable requirements, for a
nomination to be made by a stockholder, such stockholder must have
given timely notice thereof in proper written form to the Secretary.
To be timely, a stockholder's notice to the Secretary must
be delivered to or mailed and received at the principal executive offices
of the Corporation (a) in the case of an Annual Meeting of Stockhold-
ers, not less than sixty (60) days nor more than ninety (90) days prior to
the anniversary date of the immediately preceding Annual Meeting of
Stockholders; provided, however, that in the event that the Annual
Meeting of Stockholders is called for a date that is not within thirty
(30) days before or after such anniversary date, notice by the stockhold-
er in order to be timely must be so received not later then the close of
business on the tenth (10th) day following the day on which notice of
the date of the Annual Meeting of Stockholders was mailed or public
disclosure of the date of the Annual Meeting was made, whichever first
occurs; and (b) in the case of a Special Meeting of Stockholders called
for the purpose of electing directors, not later than the close of business
on the tenth (10th) day following the day on which notice of the date of
the Special Meeting of Stockholders was mailed or public disclosure of
the date of the Special Meeting of Stockholders was made, whichever
first occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth (a) as to each person whom the stockholder
proposes to nominate for election as a director (i) the name, age, busi-
ness address and residence address of the person, (ii) the principal
occupation or employment of the person, (iii) the class or series and
number of shares of capital stock of the Corporation which are owned
beneficially or of record by the person as of the record date for the
meeting (if such date shall then have been made publicly available and
shall have occurred) and as of the date of such notice and (iv) any other
information relating to the person that would be required to be dis-
closed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursu-
ant to Section 14 of the Exchange Act, and the rules and regulations
promulgated thereunder; and (b) as to the stockholder giving the notice
(i) the name and record address of such stockholder, (ii) the class or
series and number of shares of capital stock of the Corporation which
are owned beneficially or of record by such stockholder as of the record
date for the meeting (if such date shall then have been made publicly
available and shall have occurred) and as of the date of such notice,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be
made by such stockholder, (iv) a representation that such stockholder
intends to appear in person or by proxy at the meeting to nominate the
persons named in its notice and (v) any other information relating to
such stockholder that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14
of the Exchange Act and the rules and regulations promulgated thereun-
der. Such notice must be accompanied by a written consent of each
proposed nominee to being named as a nominee and to serve as a direc-
tor if elected.
No person shall be eligible for election as a director of
the Corporation unless nominated in accordance with the procedures set
forth in this Section 6. If the Chairman of the meeting determines that
a nomination was not made in accordance with the foregoing proce-
dures, the Chairman shall declare to the meeting that the nomination
was defective and such defective nomination shall be disregarded.
Section 7. Quorum. Except as may be otherwise specifi-
cally required by law, the Certificate of Incorporation or these By-
Laws, at all meetings of the Board of Directors, a majority of the entire
Board of Directors shall constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meet-
ing at which there is a quorum shall be the act of the Board of Direc-
tors. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting,
until a quorum shall be present.
Section 8. Actions of Board. Unless otherwise provided
by the Certificate of Incorporation or these By-Laws, any action re-
quired or permitted to be taken at any meeting of the Board of Direc-
tors or of any committee thereof may be taken without a meeting, if all
the members of the Board of Directors or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board of Directors or committee.
Section 9. Meetings by Means of Conference Telephone.
Unless otherwise provided by the Certificate of Incorporation or these
By-Laws, members of the Board of Directors of the Corporation, or any
committee designated by the Board of Directors, may participate in a
meeting of the Board of Directors or such committee by means of a
conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this Section 9 shall constitute
presence in person at such meeting.
Section 10. Committees. The Board of Directors may, by
resolution passed by a majority of the entire Board of Directors, desig-
nate one or more committees, each committee to consist of one or more
of the directors of the Corporation. The Board of Directors may desig-
nate one or more directors as alternate members of any committee, who
may replace any absent or disqualified member at any meeting of any
such committee. In the absence or disqualification of a member of a
committee, and in the absence of a designation by the Board of Direc-
tors of an alternate member to replace the absent or disqualified mem-
ber, the member or members thereof present at any meeting and not dis-
qualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to
act at the meeting in the place of any absent or disqualified member.
Any committee, to the extent allowed by law and provided in the
resolution establishing such committee, shall have and may exercise all
the powers and authority of the Board of Directors in the management
of the business and affairs of the Corporation. Each committee shall
keep regular minutes and report to the Board of Directors when re-
quired.
Section 11. Compensation. The directors may be paid
their expenses, if any, of attendance at each meeting of the Board of
Directors and may be paid a fixed sum for attendance at each meeting
of the Board of Directors or a stated salary as director. No such pay-
ment shall preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor. Members of special
or standing committees may be allowed like compensation for attending
committee meetings.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall
be chosen by the Board of Directors and shall be a President, a Secre-
tary and a Treasurer. The Board of Directors, in its discretion, may also
choose a Chairman (who must be a director), a Chief Executive Officer,
a Controller, and one or more Vice Presidents. The Chairman may
designate any Vice President to be an Executive Vice President, Senior
Vice President or Group Vice President. The Chairman may, in his
discretion, appoint one or more Assistant Vice Presidents, Assistant
Secretaries, Assistant Treasurers and Assistant Controllers, with such
duties, not inconsistent with these By-Laws, as he may delegate. Any
number of offices may be held by the same person, unless otherwise
prohibited by law, the Certificate of Incorporation or these By-Laws.
The officers of the Corporation need not be stockholders of the Corpo-
ration nor, except in the case of the Chairman, need such officers be
directors of the Corporation.
Section 2. Additional Officers. The Board may elect such
other officers and agents as it shall deem necessary, who shall exercise
such powers and perform such duties as shall be determined from time
to time by the Board.
Section 3. Compensation. The salaries of all officers and
agents of the Corporation shall be fixed by the Chairman. The salary of
the Chairman shall be set by the Board of Directors.
Section 4. Tenure. The officers of the Corporation shall
hold office until the first Meeting of the Board of Directors following
the Annual Meeting of Stockholders next following their respective
election and until their successors are chosen or until their earlier
resignation or removal; but any officer elected by the Board or appoint-
ed by the Chairman or the President may be removed with or without
cause at any time by the Chief Executive Officer or by the affirmative
vote of a majority of the Board of Directors. Where not prohibited by
law, the Chairman or the President may terminate the employment of
any employee of the Corporation and of any wholly-owned or con-
trolled subsidiary or affiliate of the Corporation. Any vacancy occur-
ring in any office of the Corporation shall be filled by the Board except
that the Chairman or the President may, in his discretion, fill any
vacancy with respect to the assistant officers mentioned in Section 1 of
this Article IV.
Section 5. Voting Securities Owned by the Corporation.
Powers of attorney, proxies, waivers of notice of meeting, consents and
other instruments relating to securities owned by the Corporation may
be executed in the name of and on behalf of the Corporation by the
President or any Vice President and any such officer may, in the name
of and on behalf of the Corporation, take all such action as any such
officer may deem advisable to vote in person or by proxy at any meet-
ing of security holders of any corporation in which the Corporation
may own securities and at any such meeting shall possess and may
exercise any and all rights and power incident to the ownership of such
securities and which, as the owner thereof, the Corporation might have
exercised and possessed if present. The Board of Directors may, by
resolution, from time to time confer like powers upon any other person
or persons.
Section 6. Chairman of the Board. The Chairman, if there
be one, shall preside at all meetings of the stockholders and of the
Board of Directors. Except where by law the signature of the President
is required, the Chairman shall possess the same power as the President
to sign all contracts, certificates and other instruments of the Corpora-
tion which may be authorized by the Board of Directors. During the
absence or disability of the President, the Chairman shall exercise all
the powers and discharge all the duties of the President. The Chairman
shall also perform such other duties and may exercise such other powers
as from time to time may be assigned to him by these By-Laws or by the
Board of Directors.
Section 7. President. The President shall, subject to the
control of the Board of Directors and, if there be one, the Chairman,
have general supervision of the business of the Corporation and shall
see that all orders and resolutions of the Board of Directors are carried
into effect. He shall execute all bonds, mortgages, contracts and other
instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise
signed and executed and except that the other officers of the Corpora-
tion may sign and execute documents when so authorized by these By-
Laws, the Board of Directors or the President. In the absence or disabil-
ity of the Chairman, or if there be none, the President shall preside at
all meetings of the stockholders and the Board of Directors. If there be
no Chairman, the President shall be the Chief Executive Officer of the
Corporation. The President shall also perform such other duties and
may exercise such other powers as from time to time may be assigned to
him by these By-Laws, the Board of Directors or the Chairman.
Section 8. Vice Presidents. At the request of the President
or in his absence or in the event of his inability or refusal to act (and if
there be no Chairman), the Vice President or the Vice Presidents if
there is more than one (in the order designated by the Board of Direc-
tors) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Each Vice President shall perform such other duties and
have such other powers as the Board of Directors, the Chairman or the
President from time to time may prescribe. If there be no Chairman
and no Vice President, the Board of Directors shall designate the officer
of the Corporation who, in the absence of the President or in the event
of the liability or refusal of the President to act, shall perform the
duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President.
Section 9. Secretary. The Secretary shall attend all
meetings of the Board of Directors and all meetings of stockholders and
record all the proceedings thereat in a book or books to be kept for that
purpose; the Secretary shall also perform like duties for the standing
committees when required. The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and special meetings of
the Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors, the Chairman or the President,
under whose supervision he shall be. If the Secretary shall be unable or
shall refuse to cause to be given notice of all meetings of the stockhold-
ers and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then either the Board of Directors or the President
may choose another officer to cause such notice to be given. The
Secretary shall have custody of the seal of the Corporation and the
Secretary or any Assistant Secretary, if there be one, shall have authori-
ty to affix the same to any instrument requiring it and when so affixed,
it may be attested by the signature of the Secretary or by the signature
of any such Assistant Secretary. The Board of Directors may give
general authority to any other officer to affix the seal of the Corpora-
tion and to attest the affixing by his signature. The Secretary shall see
that all books, reports, statements, certificates and other documents and
records required by law to be kept or filed are properly kept or filed, as
the case may be.
Seciton 10. Treasurer. The Treasurer shall have the
custody of the corporate funds and securities and shall keep full and
accurate accounts of receipts and disbursements in books belonging to
the Corporation and shall deposit all moneys and other valuable effects
in the name and to the credit of the Corporation in such depositories as
may be designated by the Board of Directors. The Treasurer shall
disburse the funds of the Corporation as may be ordered by the Board
of Directors, taking proper vouchers for such disbursements, and shall
render to the Chairman, the President and the Board of Directors, at its
regular meetings, or when the Board of Directors so requires, an account
of all his transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall
give the Corporation a bond in such sum and with such surety or sure-
ties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.
Section 11. The Controller. The Controller shall be the
Chief Accounting Officer of the Corporation. He shall cause regular
audits of books and records of the Corporation to be made. He shall
perform such other duties and exercise such other powers as the Board
of Directors, the Chairman or the President may from time to time
prescribe. To such extent as the Board shall deem proper, the duties of
the Controller may be performed by one or more assistants, to be ap-
pointed by the Board of Directors, the Chairman, the President or the
Treasurer.
Section 12. Assistant Secretaries. Except as may be
otherwise provided in these By-Laws, Assistant Secretaries, if there be
any, shall perform such duties and have such powers as from time to
time may be assigned to them by the Board of Directors, the Chairman,
the President, any Vice President, if there be one, or the Secretary, and
in the absence of the Secretary or in the event of his disability or
refusal to act, shall perform the duties of the Secretary, and when so
acting, shall have all the powers of and be subject to all the restrictions
upon the Secretary.
Section 13. Assistant Treasurers. Assistant Treasurers, if
there be any, shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of Directors, the
Chairman, the President, any Vice President, if there be one, or the
Treasurer, and in the absence of the Treasurer or in the event of his
disability or refusal to act, shall perform the duties of the Treasurer,
and when so acting, shall have all the powers of and be subject to all the
restrictions upon the Treasurer. If required by the Board of Directors,
an Assistant Treasurer shall give the Corporation a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his office and
for the restoration to the Corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his possession or under
his control belonging to the Corporation.
Section 14. Assistant Controllers. The Assistant Control-
ler, or if there shall be more than one, the Assistant Controllers, in the
order designated by the Board of Directors, the Chairman or the Presi-
dent (or, if there be no such designation, then in the order of their
appointment), shall, in the absence or disability of the Controller,
perform the duties and exercise the powers of the Controller and shall
perform such other duties and have such other powers as the Chairman
or the President may from time to time prescribe.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in
the Corporation shall be entitled to have a certificate signed, in the
name of the Corporation (i) by the Chairman, the President or a Vice
President and (ii) by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the
number of shares owned by him in the Corporation.
Section 2. Signatures. Where a certificate is countersigned
by (i) a transfer agent other than the Corporation or its employee, or (ii)
a registrar other than the Corporation or its employee, any other signa-
ture on the certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued by
the Corporation with the same effect as if he were such officer, trans-
fer agent or registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may
direct a new certificate to be issued in place of any certificate thereto-
fore issued by the Corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate, the Board of Directors may,
in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate, or his
legal representative, to advertise the same in such manner as the Board
of Directors shall require and/or to give the Corporation a bond in such
sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be
transferable in the manner prescribed by law and in these By-Laws.
Transfers of stock shall be made on the books of the Corporation only
by the person named in the certificate or by his attorney lawfully
constituted in writing and upon the surrender of the certificate there-
for, which shall be cancelled before a new certificate shall be issued.
Section 5. Record Date. In order that the Corporation
may determine the stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or entitled to
receive payment of any dividend or other distribution or allotment of
any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty days nor less than ten days before the date
of such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
Section 6. Beneficial Owners. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its
books as the owner of shares to receive dividends, and to vote as such
owner, and to hold liable for calls and assessments a person registered
on its books as the owner of shares, and shall not be bound to recognize
any equitable or other claim to or interest in such share or shares on the
part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by law.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required
by law, the Certificate of Incorporation or these By-Laws, to be given
to any director, member of a committee or stockholder, such notice may
be given by mail, addressed to such director, member of a committee or
stockholder, at his address as it appears on the records of the Corpora-
tion, with postage thereon prepaid, and such notice shall be deemed to
be given at the time when the same shall be deposited in the United
States mail. Written notice may also be given personally or by telegram,
telex or cable.
Section 2. Waivers of Notice. Whenever any notice is
required by law, the Certificate of Incorporation or these By-Laws, to
be given to any director, member of a committee or stockholder, a
waiver thereof in writing, signed, by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be
deemed equivalent thereto.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of
the Corporation, subject to the provisions of the Certificate of Incorpo-
ration, if any, may be declared by the Board of Directors at any regular
or special meeting, and may be paid in cash, in property, or in shares of
the capital stock. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such
sum or sums as the Board of Directors from time to time, in its absolute
discretion, deems proper as a reserve or reserves to meet contingencies,
or for equalizing dividends, or for repairing or maintaining any proper-
ty of the Corporation, or for any proper purpose, and the Board of
Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for
money and notes of the Corporation shall be signed by such officer or
officers or such other person or persons as the Board of Directors may
from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation
shall be fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its
organization and the words "Corporate Seal, Delaware". The seal may
be used by causing it or a facsimile thereof to be impressed or affixed
or reproduced or otherwise.
ARTICLE VII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Pro-
ceedings Other Than Those by or in the Right of the Corporation.
Subject to Section 3 of this Article VIII, the Corporation shall indemni-
fy any person who was or is a party or witness or is threatened to be
made a party or witness to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investiga-
tive (other than an action by or in the right of the Corporation) by
reason of the fact that he, his testator, or intestate, is or was a director
or an officer of the Corporation, or is or was a director or officer of the
Corporation serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, against ex-
penses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a man-
ner he reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or proceed-
ing, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equiva-
lent, shall not, of itself, create a presumption that the person did not act
in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful. No Amendment to or repeal of this Section 1
of Article VIII shall apply to or have any effect on any right to indem-
nification provided hereunder with respect to any acts or omissions
occurring prior to such Amendment or appeal.
Section 2. Power to Indemnify in Actions, Suits or Pro-
ceedings by or in the Right of the Corporation. Subject to Section 3 of
this Article VIII, the Corporation shall indemnify any person who was
or is a party or witness or is threatened to be made a party or witness to
any threatened, pending or completed action or suit by or in the right of
the Corporation to procure a judgment in its favor by reason of the fact
that he, his testator, or intestate, is or was a director or an officer of the
Corporation, or is or was a director or officer of the Corporation
serving at the request of the Corporation as a director, officer, employ-
ee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation; except that no indemnification
shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the Corporation unless
and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity
for such expenses which the Court of Chancery or such other court shall
deem proper. No Amendment to or repeal of this Section 2 of Article
VIII shall apply to or have any effect on any right to indemnification
provided hereunder with respect to any acts or omissions occurring
prior to such Amendment or appeal.
Section 3. Authorization of Indemnification. Any indem-
nification under this Article VIII (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director or officer is proper
in the circumstances because he has met the applicable standard of
conduct set forth in Section 1 or Section 2 of this Article VIII, as the
case may be. Such determination shall be made (i) by the Board of
Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (ii) if such a
quorum is not obtainable, or, even if obtainable a quorum of disinter-
ested directors so directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders. To the extent, however, that a
director or an officer of the Corporation has been successful on the
merits or otherwise in defense of any action, suit or proceeding de-
scribed above, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actu-
ally and reasonably incurred by him in connection therewith, without
the necessity of authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any
determination under Section 3 of this Article VIII, a person shall be
deemed to have acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation,
or, with respect to any criminal action or proceeding, to have had no
reasonable cause to believe his conduct was unlawful, if his action is
based on the records or books of account of the Corporation or another
enterprise, or on information supplied to him by the officers of the
Corporation or another enterprise in the course of their duties, or on the
advice of legal counsel for the Corporation or another enterprise or on
information or records given or reports made to the Corporation or
another enterprise by an independent certified public accountant or by
an appraiser or other expert selected with reasonable care by the Corpo-
ration or another enterprise. The term "another enterprise" as used in
this Section 4 shall mean any other corporation or any partnership, joint
venture, trust, employee benefit plan or other enterprise of which such
person is or was serving at the request of the Corporation as a director,
officer, employee or agent. The provisions of this Section 4 shall not be
deemed to be exclusive or to limit in any way the circumstances in
which a person may be deemed to have met the applicable standard of
conduct set forth in Sections 1 or 2 of this Article VIII, as the case may
be.
Section 5. Indemnification by a Court. Notwithstanding
any contrary determination in the specific case under Section 3 of this
Article VIII, and notwithstanding the absence of any determination
thereunder, any director or officer may apply to any court of competent
jurisdiction in the State of Delaware for indemnification to the extent
otherwise permissible under Sections 1 and 2 of this Article VIII. The
basis of such indemnification by a court shall be a determination by
such court that indemnification of the director or officer is proper in
the circumstances because he has met the applicable standards of
conduct set forth in Sections 1 or 2 of this Article VIII, as the case may
be. Neither a contrary determination in the specific case under Section
3 of this Article VIII nor the absence of any determination thereunder
shall be a defense to such application or create a presumption that the
director or officer seeking indemnification has not met any applicable
standard of conduct. Notice of any application for indemnification
pursuant to this Section 5 shall be given to the Corporation promptly
upon the filing of such application. If successful, in whole or in part,
the director or officer seeking indemnification shall also be entitled to
be paid the expense of prosecuting such application.
Section 6. Expenses Payable in Advance. Expenses in-
curred by a director or officer in defending or investigating a threat-
ened or pending action, suit or proceeding may be paid by the Corpora-
tion in advance of the final disposition of such action, suit or proceed-
ing upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the Corporation as authorized in
this Article VIII.
Section 7. Nonexclusivity of Indemnification and Ad-
vancement of Expenses. The indemnification and advancement of
expenses provided by or granted pursuant to this Article VIII shall not
be deemed exclusive of any other rights to which those seeking indem-
nification or advancement of expenses may be entitled under any By-
Law, agreement, contract, vote of stockholders or disinterested directors
or pursuant to the direction (howsoever embodied) of any court of
competent jurisdiction or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office,
it being the policy of the Corporation that indemnification of the
persons specified in Sections 1 and 2 of this Article VIII shall be made
to the fullest extent permitted by law. The provisions of this Article
VIII shall not be deemed to preclude the indemnification of any person
who is not specified in Sections 1 and 2 of this Article VIII but whom
the Corporation has the power or obligation to indemnify under the
provisions of the General Corporation Law of the State of Delaware, or
otherwise.
Section 8. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or of another corpora-
tion, partnership, joint venture, trust, employee benefit plan or other
enterprise, against any liability asserted against him and incurred by
his in any such capacity, or arising out of his status as such, whether or
not the Corporation would have the power or the obligation to indemni-
fy him against such liability under the provisions of this Article VIII.
The Corporation may also create a trust fund, grant a security interest
and/or use other means (including, but not limited to, letters of credit,
surety bonds and/or other similar arrangements), as well as enter into
contracts providing indemnification to the full extent authorized or
entitled by law and including as part thereof provisions with respect to
any or all of the foregoing, to ensure the payment of such amounts as
may become necessary to effect indemnification as provided therein, or
elsewhere.
Section 9. Certain Definitions. For purposes of this
Article VIII, references to "the Corporation" shall include, in addition to
the resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
which, if its separate existence had continued, would have had power
and authority to indemnify its directors, officers, employees or agents,
so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was a director or officer of
such constituent corporation serving at the request of such constituent
corporation as a director, officer, employee or agent of another corpora-
tion, partnership, joint venture, trust, employee benefit plan or other
enterprise, shall stand in the same position under the provisions of this
Article VIII with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued. For purposes of this Article VIII, references to
"fines" shall include any excise taxes assessed on a person with respect
to an employee benefit plan, and references to "serving at the request of
the Corporation" shall include any service as a director or officer of the
Corporation which imposes duties on, or involves services by, such
director or officer with respect to an employee benefit plan, its partici-
pants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner "not opposed to the best interests of the Corporation"
as referred to in this Article VIII.
Section 10. Survival of Indemnification and Advancement
of Expenses. The indemnification and advancement of expenses provid-
ed by, or granted pursuant to, this Article VIII shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director or officer and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Section 11. Limitation on Indemnification. Notwithstand-
ing anything contained in this Article VIII to the contrary, except for
proceedings to enforce rights to indemnification (which shall be gov-
erned by Section 5 hereof), the Corporation shall not be obligated to
indemnify any director or officer in connection with a proceeding (or
part thereof) initiated by such person unless such proceeding (or part
thereof) was authorized or consented to by the Board of Directors.
Section 12. Indemnification of Employees and Agents.
The Corporation may, to the extent authorized from time to time by the
Board of Directors, provide rights to indemnification and to the ad-
vancement of expenses to employees and agents of the Corporation
similar to those conferred in this Article VIII to directors and officers
of the Corporation.
ARTICLE IX
AMENDMENTS
Section 1. These By-Laws may be altered, amended or
repealed, in whole or in part, or new By-Laws may be adopted by the
stockholders or by the Board of Director; provided, however, that notice
of such alteration, amendment, repeal or adoption of new By-Laws be
contained in the notice of such meeting of stockholders or Board of
Directors as the case may be. All such amendments must be approved
by either the holders of eighty percent (80%) of the outstanding capital
stock entitled to vote thereon or by a majority of the entire Board of
Directors then in office.
Section 2. Entire Board of Directors. As used in this
Article IX and in these By-Laws generally, the term "entire Board of
Directors" means the total number of directors which the Corporation
would have if there were no vacancies.
AZTAR CORPORATION
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
February 25, 1998
Mr. Paul E. Rubeli
Chairman of the Board, President and
Chief Executive Officer
Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Dear Mr. Rubeli:
By letter agreement dated July 6, 1995 (the "Severance
Agreement"), Aztar Corporation (the "Corporation") agreed to provide you
with certain severance benefits in the event your employment with the
Corporation terminated in a Qualifying Termination (as defined in the
Severance Agreement). In consideration of your valuable services to the
Corporation and in order to induce you to continue your employment with the
Corporation, the Corporation and you hereby agree to amend the Severance
Agreement by amending and restating clause ii) of Section 7.1 of the
Severance Agreement in its entirety, as follows:
"ii) in lieu of any further salary or other payments to you under any
agreement for periods subsequent to the Date of Termination, the
Corporation shall pay as severance pay to you, at the time specified
in Section 7.2, a lump sum severance payment (together with the
payments provided in Sections 7.1(iii) and 7.1(iv) below, the
"Severance Payments") equal to 300% of your base salary as in effect
as of the Date of Termination and 300% of the average of the annual
bonuses awarded to you pursuant to the Corporation's performance bonus
plan (the "Bonus Plan"), or any successor bonus plan thereto, with
respect to the three (3) fiscal years (or your total years of
employment with the Corporation, if less than three (3)) preceding the
Date of Termination;"
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Corporation the enclosed copy of this
letter, which shall then constitute our agreement on this subject.
Sincerely,
AZTAR CORPORATION
By R. HADDOCK
Robert M. Haddock
Executive Vice President and
Chief Financial Officer
Agreed to this of 23rd day
of March 1998.
PAUL E. RUBELI
Paul E. Rubeli
Address: Paul E. Rubeli
Chairman of the Board, President and
Chief Executive Officer
c/o Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
AZTAR CORPORATION
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
February 25, 1998
Robert M. Haddock
Executive Vice President and
Chief Financial Officer
Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Dear Mr. Haddock:
By letter agreement dated July 6, 1995 (the "Severance
Agreement"), Aztar Corporation (the "Corporation") agreed to provide you
with certain severance benefits in the event your employment with the
Corporation terminated in a Qualifying Termination (as defined in the
Severance Agreement). In consideration of your valuable services to the
Corporation and in order to induce you to continue your employment with the
Corporation, the Corporation and you hereby agree to amend the Severance
Agreement by amending and restating clause ii) of Section 7.1 of the
Severance Agreement in its entirety, as follows:
"ii) in lieu of any further salary or other pay-
ments to you under any agreement for periods subsequent
to the Date of Termination, the Corporation shall pay
as severance pay to you, at the time specified in
Section 7.2, a lump sum severance payment (together
with the payments provided in Sections 7.1(iii) and
7.1(iv) below, the "Severance Payments") equal to 300%
of your base salary as in effect as of the Date of
Termination and 300% of the average of the annual
bonuses awarded to you pursuant to the Corporation's
performance bonus plan (the "Bonus Plan"), or
any successor bonus plan thereto, with respect to the
three (3) fiscal years (or your total years of
employment with the Corporation, if less than three
(3)) preceding the Date of Termination;"
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Corporation the enclosed copy of this
letter, which shall then constitute our agreement on this subject.
Sincerely,
AZTAR CORPORATION
By PAUL E. RUBELI
Paul E. Rubeli
Chairman of the Board, President and
Chief Executive Officer
Agreed to this of 24th day
of March 1998.
R. HADDOCK
Robert M. Haddock
Address: Robert M. Haddock
Executive Vice President and
Chief Financial Officer
c/o Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
AZTAR CORPORATION
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
February 25, 1998
Mr. Nelson W. Armstrong, Jr.
Vice President, Administration and
Secretary
Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Dear Mr. Armstrong:
By letter agreement dated July 6, 1995 (the "Severance
Agreement"), Aztar Corporation (the "Corporation") agreed to provide you
with certain severance benefits in the event your employment with the
Corporation terminated in a Qualifying Termination (as defined in the
Severance Agreement). In consideration of your valuable services to the
Corporation and in order to induce you to continue your employment with the
Corporation, the Corporation and you hereby agree to amend the Severance
Agreement by amending and restating clause ii) of Section 7.1 of the
Severance Agreement in its entirety, as follows:
"ii) in lieu of any further salary or other payments to you under
any agreement for periods subsequent to the Date of Termination, the
Corporation shall pay as severance pay to you, at the time specified
in Section 7.2, a lump sum severance payment (together with the
payments provided in Sections 7.1(iii) and 7.1(iv) below, the
"Severance Payments") equal to 200% of your base salary as in effect
as of the Date of Termination and 200% of the average of the annual
bonuses awarded to you pursuant to the Corporation's performance bonus
plan (the "Bonus Plan"), or any successor bonus plan thereto, with
respect to the three (3) fiscal years (or your total years of
employment with the Corporation, if less than three (3)) preceding the
Date of Termination;"
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Corporation the enclosed copy of this
letter, which shall then constitute our agreement on this subject.
Sincerely,
AZTAR CORPORATION
By PAUL E. RUBELI
Paul E. Rubeli
Chairman of the Board, President and
Chief Executive Officer
Agreed to this 24th day
of March 1998.
NELSON W. ARMSTRONG JR.
Nelson W. Armstrong, Jr.
Address: Nelson W. Armstrong, Jr.
Vice President, Administration and
Secretary
c/o Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
AZTAR CORPORATION
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
February 25, 1998
Mr. Meridith P. Sipek
Controller
Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Dear Mr. Sipek:
By letter agreement dated July 6, 1995 (the "Severance
Agreement"), Aztar Corporation (the "Corporation") agreed to provide you
with certain severance benefits in the event your employment with the
Corporation terminated in a Qualifying Termination (as defined in the
Severance Agreement). In consideration of your valuable services to the
Corporation and in order to induce you to continue your employment with the
Corporation, the Corporation and you hereby agree to amend the Severance
Agreement by amending and restating clause ii) of Section 7.1 of the
Severance Agreement in its entirety, as follows:
"ii) in lieu of any further salary or other payments to you under any
agreement for periods subsequent to the Date of Termination, the
Corporation shall pay as severance pay to you, at the time specified
in Section 7.2, a lump sum severance payment (together with the
payments provided in Sections 7.1(iii) and 7.1(iv) below, the
"Severance Payments") equal to 200% of your base salary as in effect
as of the Date of Termination and 200% of the average of the annual
bonuses awarded to you pursuant to the Corporation's performance bonus
plan (the "Bonus Plan"), or any successor bonus plan thereto, with
respect to the three (3) fiscal years (or your total years of
employment with the Corporation, if less than three (3)) preceding the
Date of Termination;"
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Corporation the enclosed copy of this
letter, which shall then constitute our agreement on this subject.
Sincerely,
AZTAR CORPORATION
By PAUL E. RUBELI
Paul E. Rubeli
Chairman of the Board, President and
Chief Executive Officer
Agreed to this 24th day
of March 1998.
MERIDITH P. SIPEK
Meridith P. Sipek
Address: Meridith P. Sipek
Controller
c/o Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
AZTAR CORPORATION
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
February 25, 1998
Mr. Joe Cole
Vice President, Corporate Communications
Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Dear Mr. Cole:
By letter agreement dated July 6, 1995 (the "Severance
Agreement"), Aztar Corporation (the "Corporation") agreed to provide you
with certain severance benefits in the event your employment with the
Corporation terminated in a Qualifying Termination (as defined in the
Severance Agreement). In consideration of your valuable services to the
Corporation and in order to induce you to continue your employment with the
Corporation, the Corporation and you hereby agree to amend the Severance
Agreement by amending and restating clause ii) of Section 7.1 of the
Severance Agreement in its entirety, as follows:
"ii) in lieu of any further salary or other payments to you under any
agreement for periods subsequent to the Date of Termination, the
Corporation shall pay as severance pay to you, at the time specified
in Section 7.2, a lump sum severance payment (together with the
payments provided in Sections 7.1(iii) and 7.1(iv) below, the
"Severance Payments") equal to 200% of your base salary as in effect
as of the Date of Termination and 200% of the average of the annual
bonuses awarded to you pursuant to the Corporation's performance bonus
plan (the "Bonus Plan"), or any successor bonus plan thereto, with
respect to the three (3) fiscal years (or your total years of
employment with the Corporation, if less than three (3)) preceding the
Date of Termination;"
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Corporation the enclosed copy of this
letter, which shall then constitute our agreement on this subject.
Sincerely,
AZTAR CORPORATION
By PAUL E. RUBELI
Paul E. Rubeli
Chairman of the Board, President and
Chief Executive Officer
Agreed to this 24th day
of March 1998.
JOE COLE
Joe Cole
Address: Joe Cole
Vice President, Corporate Communications
c/o Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
AZTAR CORPORATION
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
February 25, 1998
Mr. Neil A. Ciarfalia
Treasurer
Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Dear Mr. Ciarfalia:
By letter agreement dated July 6, 1995 (the "Severance
Agreement"), Aztar Corporation (the "Corporation") agreed to provide you
with certain severance benefits in the event your employment with the
Corporation is terminated after a Change in Control by you for Good Reason
or by the Corporation other than for Cause of Disability (as each of such
capitalized terms are defined in the Severance Agreement). In
consideration of your valuable services to the Corporation and in order to
induce you to continue your employment with the Corporation, the
Corporation and you hereby agree to amend the Severance Agreement by
amending and restating clause (b) of Section 4(iii) of the Severance
Agreement in its entirety, as follows:
"(b) in lieu of any further salary or other payments to
you under any agreement for periods subsequent to the Date of
Termination, the Corporation shall pay as severance pay to you, at the
time specified in Section 4(v), a lump sum severance payment (together
with the payments provided in Sections 4(iii)(c) and (d) below, the
"Severance Payments") equal to 200% of your annual salary as in effect
as of the Date of Termination or immediately prior to the Change in
Control, whichever is greater, and 200% of the average of the annual
bonuses awarded to you pursuant to the Corporation's bonus plan for
executive officers, or any successor bonus plan thereto, with respect
to the three (3) fiscal years (or your total years of employment with
the Corporation, if less than three (3)) preceding the Date of
Termination;"
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Corporation the enclosed copy of this
letter, which shall then constitute our agreement on this subject.
Sincerely,
AZTAR CORPORATION
By PAUL E. RUBELI
Paul E. Rubeli
Chairman of the Board, President and
Chief Executive Officer
Agreed to this 24th day
of March 1998.
NEIL CIARFALIA
Neil A. Ciarfalia
Address: Treasurer
Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet at April 2, 1998 and the Consolidated Statement of
Operations for the year-to-date period ended April 2, 1998 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> APR-2-1998
<CASH> 31,532
<SECURITIES> 0
<RECEIVABLES> 56,103
<ALLOWANCES> 18,961
<INVENTORY> 6,362
<CURRENT-ASSETS> 96,272
<PP&E> 1,180,710
<DEPRECIATION> 283,779
<TOTAL-ASSETS> 1,063,440
<CURRENT-LIABILITIES> 103,461
<BONDS> 484,447
6,733
0
<COMMON> 491
<OTHER-SE> 444,044
<TOTAL-LIABILITY-AND-EQUITY> 1,063,440
<SALES> 13,047
<TOTAL-REVENUES> 196,825
<CGS> 13,089
<TOTAL-COSTS> 102,820
<OTHER-EXPENSES> 8,868
<LOSS-PROVISION> 2,992
<INTEREST-EXPENSE> 15,136
<INCOME-PRETAX> 2,146
<INCOME-TAX> 403
<INCOME-CONTINUING> 618
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 618
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
