-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MSswPH5OwhKpxluhDFfRZS+XT5EtKDFMst4z0mnMYlooS7Kxs5draxO5mydh2ZJ8 U+k2TB2TgALvx0ki8ckWxw== 0001021771-96-000003.txt : 19961023 0001021771-96-000003.hdr.sgml : 19961022 ACCESSION NUMBER: 0001021771-96-000003 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19961021 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AZTAR CORP CENTRAL INDEX KEY: 0000852807 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 860636534 STATE OF INCORPORATION: DE FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-40819 FILM NUMBER: 96645661 BUSINESS ADDRESS: STREET 1: 2390 E CAMELBACK RD STE 400 CITY: PHOENIX STATE: AZ ZIP: 85016-3452 BUSINESS PHONE: 6023814100 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LIEBERMAN ADAM CENTRAL INDEX KEY: 0001017046 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 90 MERICK AVENUE CITY: EAST MEADOW STATE: NY ZIP: 11554 BUSINESS PHONE: 5162967000 MAIL ADDRESS: STREET 1: 90 MERRICK AVENUE CITY: EAST MEADOW STATE: NY ZIP: 11554 SC 13D 1 SCHEDULE 13D FOR ADAM LEIBERMAN, STERLING FOSTER UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 AZTAR CORPORATION (Name of Company) Common Stock, par value $.01 per share (Title of Class of Securities) 054802103 (CUSIP Number) Adam Lieberman c/o Sterling Foster Holding Corp. 125 Baylis Road, Melville, New York 11747 (516) 843-8000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 9, 1996 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. SCHEDULE 13D CUSIP No. 054802103 Page 2 of 12 Pages 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Adam Lieberman ###-##-#### 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ X ] (b) [ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS PF 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION United States NUMBER OF SHARES 7. SOLE VOTING POWER BENEFICIALLY OWNED 480,000 BY EACH REPORTING PERSON WITH 8. SHARED VOTING POWER 2,210,335 (see response to Item 5) 9. SOLE DISPOSITIVE POWER 480,000 10. SHARED DISPOSITIVE POWER 2,210,335 (see response to Item 5) 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,690,335 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.99% 14. TYPE OF REPORTING PERSON IN SCHEDULE 13D CUSIP No. 054802103 Page 3 of 12 Pages 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Sterling Foster Holding Corp. 11-3276688 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ X ] (b) [ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS OO (see response to Item 3) 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES 7. SOLE VOTING POWER BENEFICIALLY OWNED -0- BY EACH REPORTING PERSON WITH 8. SHARED VOTING POWER 1,560,335 (see response to Item 5) 9. SOLE DISPOSITIVE POWER -0- 10. SHARED DISPOSITIVE POWER 1,560,335 (see response to Item 5) 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,560,335 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.47% 14. TYPE OF REPORTING PERSON CO SCHEDULE 13D CUSIP No. 054802103 Page 4 of 12 Pages 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Sterling Foster & Co., Inc. 22-3270906 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ X ] (b) [ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS WC, 00 (see response to Item 3) 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES 7. SOLE VOTING POWER BENEFICIALLY OWNED -0- BY EACH REPORTING PERSON WITH 8. SHARED VOTING POWER 650,000 9. SOLE DISPOSITIVE POWER -0- 10. SHARED DISPOSITIVE POWER 650,000 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 650,000 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.45% 14. TYPE OF REPORTING PERSON CO Page 5 of 12 Pages Item 1. Security and Company The class of equity securities to which this statement relates is the common stock, par value $.01 per share (the "Common Stock"), of Aztar Corporation, a Delaware corporation (the "Company"). The address of the Company's principal executive offices is 2390 East Camelback Road, Suite 400, Phoenix, Arizona 85016. Item 2. Identity and Background This statement is being filed by Adam Lieberman ("Lieberman"), Sterling Foster Holding Corp., a Delaware corporation ("SFHC"), and Sterling Foster & Co., Inc., a Delaware corporation ("SFCI" and collectively with Lieberman and SFHC, the "Reporting Persons"). The principal occupation of Lieberman is President of each of SFHC and SFCI and his business address is 125 Baylis Road, Melville, New York 11747. Lieberman is a citizen of the United States. The principal business of SFHC is to function as a holding company and its address is 125 Baylis Road, Melville, New York 11747. The principal business of SFCI is investment banking and its address is 125 Baylis Road, Melville, New York 11747. Lieberman is the sole stockholder, director and officer of each of SFHC and SFCI. During the last five years, none of the Reporting Persons (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. The NASD filed a complaint on September 18, 1996 (the "Complaint") against Lieberman, SFCI and various individuals associated or formerly associated with SFCI (collectively, the "Respondents") alleging various violations of the Securities Exchange Act of 1934 and the NASD Rules of Fair Practice. The Complaint involves three companies whose initial public offerings were underwritten by SFCI. The Complaint alleges the use of fraudulent and manipulative devices in connection with the Page 6 of 12 Pages distribution and sale of securities of such companies; failure to comply with undertakings to submit various documents and information to the NASD's Corporate Financing Department for review and receipt of unfair and unreasonable underwriting compensation in connection with transactions involving securities held by stockholders of such companies; fraudulent sales practices and unauthorized transactions with customers of SFCI; inadequate supervision of the activities of sales representatives relating to the various alleged violations; and inadequate written supervisory procedures to prevent the allegedly violative conduct. The Respondents have not yet filed an answer to the Complaint; however, it is the intention of Lieberman and SFCI and, to the knowledge of the Reporting Persons, all other Respondents to deny all material allegations and alleged violations and to vigorously contest the proceeding. Item 3. Source and Amount of Funds The source and amount of funds or other consideration (excluding commissions) used or to be used by the Reporting Persons to purchase the shares of Common Stock reported in Item 5 below are as follows: Lieberman used his personal funds for the purchase of the 480,000 shares acquired and held by him as well as 400,000 additional shares acquired by him and subsequently contributed to the capital of SFCI. SFCI used its working capital for the purchase of 250,000 shares. SFHC will require financing in order to exercise the options discussed in Item 5. No such financing is currently in place, there are no arrangements to obtain such financing and no assurances can be given that any such financing will be available on commercially reasonable terms or otherwise. Item 4. Purpose of Transaction The purpose of the Reporting Persons' acquisition of beneficial ownership of the shares of Common Stock reported hereby, through their purchases and the Option Agreements referred to in Item 5 below, was for the Reporting Persons to acquire a stock position in the Company which could serve as a base for a possible attempt by the Reporting Persons to acquire control of the Company, Page 7 of 12 Pages should the Reporting Persons determine to attempt to do so. As of the date hereof, the Reporting Persons have not determined to attempt to acquire control of the Company. The Reporting Persons believe, based upon publicly available information, that the market value of the Company's securities does not fully reflect the inherent value of its various operating properties. The Reporting Persons may in the future determine to seek to acquire control of the Company. A determination by the Reporting Persons to seek to acquire control of the Company is dependent upon their ability to arrange for financing and is subject to a review of relevant factors including, without limitation, the Company's financial condition, business and prospects, other developments concerning the Company, current and anticipated future trading prices of the Common Stock, other opportunities available to the Reporting Persons, conditions in the securities markets and general economic and industry conditions, and other business or legal considerations applicable to the Reporting Persons or the Company. There can be no assurance that the Reporting Persons will in fact reach any such determination or, if they do reach such determination, the timing thereof. Currently, no financing has been arranged for any possible acquisition. The Reporting Persons may acquire additional shares of Common Stock in the open market or in privately-negotiated transactions or enter into additional Option Agreements, but the Reporting Persons have no present intention of acquiring beneficial ownership of shares of Common Stock representing more than 9.9% of the number of shares of Common Stock outstanding. In addition, depending upon, among other things, the factors referred to above, the Reporting Persons may determine to dispose of all or a portion of their shares of Common Stock. Article TWELFTH of the Certificate of Incorporation of the Company ("Article TWELFTH") provides that, for so long as the Company or any of its subsidiaries holds any licenses or other regulatory approvals necessary for the lawful operation of gaming and related businesses (the "Gaming Licenses"), except as otherwise approved by the Board of Directors of the Company, no stockholder who (1) "Beneficially Owns" (as defined in Article NINTH of the Page 8 of 12 Pages Company's Certificate of Incorporation) 5% or more of the outstanding capital stock of the Company and has neither been qualified by nor obtained a waiver of qualification from each of the Gaming Authorities (as defined in Article TWELFTH) requiring qualification with respect to each Gaming License (an "Unqualified Stockholder") or (2) has been found unsuitable or disqualified with respect to any Gaming License by any Gaming Authority and such finding has not been reversed, vacated or superseded (a "Disqualified Stockholder"), shall be entitled to vote, directly or indirectly, any shares of capital stock Beneficially Owned by such stockholder on any matter, and no shares of capital stock Beneficially Owned by an Unqualified Stockholder or a Disqualified Stockholder shall be considered outstanding stock entitled to vote for any purpose. Article TWELFTH provides that, if a stockholder becomes a Disqualified Stockholder, then at any time after the date of such occurrence, the Company may call for redemption all or any part of the capital stock of the Company Beneficially Owned by such Disqualified Stockholder at a price per share equal to the average closing sale price of such stock on the New York Stock Exchange during the 20-day period immediately preceding the date that written notice of redemption is given to the Disqualified Stockholder. In addition, Article TWELFTH provides that all publicly-traded securities of the Company and any subsidiary are held subject to the condition that any stockholder who is found to be disqualified or unsuitable with respect to any Gaming License, which finding has not been reversed, vacated or superseded, must dispose of such securities within 10 days after the Company provides such stockholder with written notice to such effect. The Reporting Persons believe that, by virtue of their own holdings and SFHC's entry into the Option Agreements referred to in Item 5 below, the Reporting Persons "Beneficially Own" more than 5% of the Company's Common Stock for purposes of Article TWELFTH. Each such Option Agreement provides that it shall expire automatically in the event that SFHC* is found unsuitable or disqualified with respect to any Gaming License by any Gaming Authority. In such case, the * The Option Agreements state that they shall automatically expire in the event that the grantor of the option, as opposed to SFHC, the grantee, is so found unsuitable or disqualified. The Reporting Persons believe that it was the clear intent of the parties to the Option Agreements that such reference should have been to SFHC, the grantee. Page 9 of 12 Pages Reporting Persons would no longer "Beneficially Own" 5% or more of the Company's Common Stock for purposes of Article TWELFTH (provided that the Reporting Persons do not at such time Beneficially Own 5% or more of the Common Stock through other means). If and when required under applicable gaming laws and regulations, the Reporting Persons intend to make such filings and seek such approvals or waivers as may be necessary from the relevant Gaming Authorities with respect to the Reporting Persons' beneficial ownership of the Common Stock (including Common Stock subject to the Option Agreements). As of the date of this statement on Schedule 13D, the Reporting Persons have not made any such filings. Except as set forth above, the Reporting Persons have no present plans or proposals which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. However, the Reporting Persons intend to review their interest in the Company on a continuing basis and reserve the right to change their plans or intentions at any time depending upon their evaluation of then existing circumstances including, without limitation, the factors referred to above. Item 5. Interest in Securities of the Company (a) and (b) The Reporting Persons beneficially own in the aggregate 2,690,335 shares of Common Stock as described further below, representing approximately 5.99% of the outstanding shares of Common Stock of the Company (based on information received from the Company to the effect that there were 44,928,419 shares outstanding at September 26, 1996). Of such amount, (i) Lieberman directly owns 480,000 shares (approximately 1.07%), (ii) SFCI directly owns 650,000 shares (approximately 1.45%), and (iii) SFHC has the right to acquire 1,560,335 shares (approximately 3.47%) at a price of $16.00 per share pursuant to Option Agreements (the "Option Agreements") entered into between SFHC and certain clients of SFCI (collectively, the "Grantors"). SFHC may exercise the related options (the "Options") (i) immediately, with respect to only such number of shares subject to the Options (the "Option Shares") as may be purchased without regard to any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and without prior approval by any Gaming Authority, and (ii) with respect to Page 10 of 12 Pages the remainder of the Option Shares, if any, on the date that (a) any applicable waiting period under the HSR Act shall have expired and (b) all required approvals from Gaming Authorities shall have been obtained. The Option Agreements and Options shall expire automatically upon the earlier of (i) 90 days from the dates of the respective Option Agreements (which dates range from September 26, 1996 to October 7, 1996, although the executed Option Agreements were received by SFHC between September 28, 1996 and October 14, 1996, as reflected on Schedule A attached hereto) or (ii) if applicable, a finding by any Gaming Authority that SFHC* is disqualified or unsuitable with respect to any Gaming License, as described in Item 4 above. In the event of an expiration as a result of (i) above, SFHC may seek to obtain an extension of the expiration date. Pursuant to the Option Agreements, among other things, (i) each Grantor has acknowledged that there is no assurance that SFHC will exercise such Option and (ii) each Grantor has the right at any time and from time to time to sell any or all of the shares subject to such Option in an open market transaction. The form of Option Agreement is attached hereto as Exhibit 1. The foregoing description is qualified in its entirety by reference to such form. With respect to the shares of Common Stock reported in this Item 5, (i) Lieberman has the sole power to vote or direct the vote, and sole power to dispose or direct the disposition, of 480,000 shares, (ii) Lieberman and SFCI share the power to vote or direct the vote, and share the power to dispose or direct the disposition, of 650,000 shares and (iii) in the event of the exercise of the Options in full, Leiberman and SFHC would share the power to vote or direct the vote, and would share the power to dispose or direct the disposition, of 1,560,335 shares. Except as set forth above, none of the Reporting Persons beneficially owns any shares of Common Stock of the Company. (c) Certain information concerning the transactions in the Common Stock effected during the past 60 days by the Reporting Persons is set forth on Schedule A hereto. Except as set forth on Schedule A, none of the Reporting Persons has engaged in any transactions in the Common Stock that were effected during the past 60 days. (d) Except for the Grantors with respect to the shares of Common Stock subject to the Options, no other person is known by the Reporting Persons to have the right to receive or the power to Page 11 of 12 Pages direct the receipt of dividends from, or the profits from the sale of, the shares of Common Stock beneficially owned by the Reporting Persons. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Company As set forth in Item 5, SFHC has entered into Option Agreements with certain persons. Except as set forth in Item 5 or described elsewhere in this statement on Schedule 13D, none of the Reporting Persons has any contracts, arrangements, understandings or relationships (legal or otherwise) with respect to any securities of the Company, including, but not limited to, transfer or voting of any of the securities, finder's fees, joint ventures, loan or option agreements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Item 7. Material To Be Filed as Exhibits Exhibit Number Title -------------- ----- 1 Form of Option Agreement Page 12 of 12 Pages SIGNATURES ---------- After reasonable inquiry and to the best knowledge and belief of each person or entity set forth below, each such person or entity certifies that the information set forth in this Statement is true, complete, and correct. Dated: October 21, 1996 /s/ Adam Lieberman Adam Lieberman STERLING FOSTER HOLDING CORP. By:/s/ Adam Lieberman Adam Lieberman, President STERLING FOSTER & CO., INC. By:/s/ Adam Lieberman Adam Lieberman, President SCHEDULE A ---------- Transactions in Common Stock Purchases and Sales During the 60 day period prior to the filing of this Schedule 13D, the following open market transactions in the shares of Common Stock of the Company were effected by SFCI on the New York Stock Exchange: Date of Nature of Number of Price Per Transaction Transaction Shares Share - ----------- ----------- ------ ----- 10/08/96 Purchase 5,800 $ 8.50 10/07/96 Sale 5,800 $ 8.625 10/04/96 Purchase 2,500 $11.25 10/04/96 Purchase 5,000 $12.75 10/04/96 Purchase 3,000 $ 9.875 10/04/96 Purchase 1,500 $11.125 10/04/96 Sale 5,000 $ 9.50 10/04/96 Sale 7,000 $ 8.625 10/03/96 Purchase 25,000 $ 8.875 10/02/96 Sale 1,000 $ 8.50 10/02/96 Purchase 990 $ 9.125 10/01/96 Purchase 10 $10.875 09/30/96 Sale 10,000 $ 8.625 09/27/96 Purchase 10,000 $13.50 09/27/96 Sale 1,300 $ 9.75 09/27/96 Sale 650 $ 9.75 09/27/96 Sale 170 $ 9.75 09/27/96 Purchase 2,300 $ 8.75 09/27/96 Purchase 25,000 $ 8.75 09/27/96 Purchase 25,000 $ 8.875 09/27/96 Purchase 25,000 $ 8.75 09/27/96 Purchase 25,000 $ 8.50 09/27/96 Purchase 25,000 $ 9.125 09/27/96 Purchase 50,000 $ 9.00 09/27/96 Purchase 50,000 $ 8.75 09/26/96 Purchase 820 $10.875 09/25/96 Sale 1,000 $10.875 09/24/96 Purchase 1,000 $11.00 09/24/96 Sale 1,500 $11.00 09/24/96 Purchase 500 $10.125 09/23/96 Purchase 500 $11.00 09/23/96 Purchase 1,000 $10.25 09/20/96 Purchase 1,000 $10.875 Date of Nature of Number of Price Per Transaction Transaction Shares Share - ----------- ----------- ------ ----- 09/20/96 Sale 375 $ 9.875 09/20/96 Sale 125 $10.875 09/20/96 Sale 2,000 $10.375 09/19/96 Purchase 200 $11.125 09/19/96 Purchase 500 $11.00 09/19/96 Sale 10,900 $10.50 09/18/96 Purchase 100 $10.875 09/18/96 Purchase 180 $10.875 09/18/96 Sale 280 $10.50 09/17/96 Purchase 200 $11.125 09/17/96 Purchase 10,000 $10.875 09/17/96 Sale 200 $11.00 09/12/96 Purchase 200 $10.875 08/29/96 Purchase 15,000 $13.00 08/29/96 Sale 15,000 $12.50 08/28/96 Sale 815 $11.00 08/27/96 Sale 1,185 $ 9.625 08/27/96 Purchase 1,500 $13.50 08/27/96 Sale 2,000 $13.625 08/27/96 Purchase 2,500 $13.625 08/23/96 Purchase 100 $10.00 08/23/96 Purchase 2,000 $12.00 08/23/96 Sale 100 $10.625 08/23/96 Sale 2,000 $10.625 Options During the period from September 28, 1996 through October 14, 1996, SFHC received executed Option Agreements providing for the grant to SFHC of Options to purchase the number of shares of Common Stock of the Company indicated below at an exercise price of $16.00 per share: Date of Receipt by SFHC Number of Shares of Option Agreement Subject to Option ------------------- ----------------- 10/14/96 80,000 10/10/96 117,100 10/10/96 10,000 10/09/96 10,000 10/09/96 10,000 10/09/96 303,735 10/08/96 11,240 10/08/96 10,000 10/08/96 10,000 10/07/96 20,000 10/05/96 10,000 10/05/96 20,000 10/05/96 10,000 Date of Receipt by SFHC Number of Shares of Option Agreement Subject to Option ------------------- ----------------- 10/05/96 10,000 10/05/96 20,000 10/05/96 10,000 10/05/96 10,000 10/05/96 11,800 10/05/96 12,600 10/05/96 19,000 10/04/96 20,000 10/04/96 10,000 10/04/96 10,000 10/04/96 20,000 10/04/96 20,000 10/04/96 10,000 10/04/96 12,000 10/04/96 20,000 10/04/96 10,000 10/04/96 20,000 10/04/96 12,000 10/03/96 12,000 10/03/96 30,000 10/03/96 10,000 10/03/96 10,000 10/03/96 10,000 10/02/96 13,000 10/02/96 10,000 10/02/96 10,000 10/02/96 10,000 10/02/96 45,000 10/02/96 20,000 10/02/96 35,000 10/01/96 35,000 10/01/96 14,000 10/01/96 10,000 10/01/96 11,000 10/01/96 22,000 10/01/96 24,000 10/01/96 20,000 10/01/96 23,000 10/01/96 10,000 10/01/96 20,000 10/01/96 10,000 10/01/96 20,000 10/01/96 40,000 09/30/96 37,910 Date of Receipt by SFHC Number of Shares of Option Agreement Subject to Option ------------------- ----------------- 09/28/96 75,000 09/28/96 82,000 09/28/96 10,000 09/28/96 10,000 ------ 1,568,385** ========= ** Of such aggregate number of shares initially subject to the Options, a total of 8,050 shares were sold by the owners of the shares and, pursuant to the terms of the Option Agreements, are no longer subject to the Options. EX-1 2 FORM OF OPTION AGREEMENT Exhibit 1 FORM OF OPTION AGREEMENT OPTION AGREEMENT, dated as of ________________, 1996, between ("Grantor"), and Sterling Foster Holding Corp. a Delaware corporation ("Grantee"). WHEREAS, Grantor is the sole record and beneficial owner of _________ shares of common stock, par value $0.01 per share (the "Common Stock") of Aztar Corporation, a Delaware corporation (the "Company") set forth opposite the signature of Grantor at the end of this Option Agreement (the "Option Shares"); and WHEREAS, Grantee desires to acquire an option to purchase the Option Shares and Grantor desires to grant to Grantee an option to purchase the Option Shares, in each case, on the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, Grantor and Grantee hereby agree as follows: 1. Grant of Option. Grantor hereby grants to Grantee an irrevocable option (the "Option") to purchase the Option Shares at a price per share equal to $16.00 (the "Price Per Share"). The product of the number of the Option Shares and the Price Per Share is the "Purchase Price." In the event of any increase or decrease or other change in the Common Stock by reason of any stock dividend, split-up, recapitalization, combination, or other change in the Common Stock affecting all stockholders of the Company on a pro rata basis (a "Pro Rata Transaction"), the number of Option Shares subject to this Option Agreement and the Price Per Share shall be adjusted appropriately. 2. Commencement Date. The period during which Grantee may exercise the Option shall commence (the "Commencement Date") (i) immediately, with respect to only such number of Option Shares as may be purchased without regard to any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and without prior approval by any Gaming Authority (as defined below), and (ii) with respect to the remainder of the Option Shares, if any, on the date that (a) any applicable waiting period under the HSR Act shall have expired and (b) all required approvals from Gaming Authorities shall have been obtained. 3 . Expiration Time. This Option Agreement and the Option shall expire automatically upon the earlier of (i) 5:00 P.M. (New York City time) on the 90th day after the date hereof, or (ii) if applicable, a finding by any Gaming Authority (as defined in Article TWELFTH of the Company's Certificate of Incorporation) that Grantor is disqualified or unsuitable with respect to any "Gaming License" (as defined in Article TWELFTH of the Company's Certificate of Incorporation) (such earlier time is referred to herein as the "Expiration Time"); provided, however, that paragraph 9 hereof shall survive termination of this Option Agreement. 4. Exercise of Option. The Option may be exercised by Grantee, at any time on or after the Commencement Date and prior to the Expiration Time, by 24 hours written notice given to Grantor (the "Notice of Closing"), specifying the date and time when the closing (the "Closing") of the sale of the Option Shares shall take place. The Option may be exercised only with respect to all of the Option Shares, except that it may be exercised with respect to such number of Option Shares as may be purchased without (x) regard to any applicable waiting period under the HSR Act during such waiting period and (y) prior approval by any Gaming Authority, in which event the Option shall be exercised with respect to all of the remaining Option Shares as promptly as practicable after the expiration of such waiting period to the extent permitted by law and the receipt of all required approvals from Gaming Authorities. The Closing or Closings shall be held at Grantee's offices at 125 Baylis Road, Melville, New York, or at any other place mutually acceptable to Grantor and Grantee. 5. Closing. At any Closing, (x) Grantee shall deliver to Grantor a certified or bank cashier's check payable to the order of Grantor and in the amount of the Purchase Price (or portion thereof in the event the Option is exercised with respect to less than all of the Option Shares) and (y) the Grantor shall deliver to Grantee the certificates, free of any legend or restrictive language that would preclude the sale of any of the Option Shares pursuant to this Option, representing the Option Shares, duly endorsed in blank or accompanied by separate instruments of assignment duly executed in blank, with signatures guaranteed by a commercial bank, trust company or registered broker-dealer, and with all necessary stock transfer tax stamps attached (the "Certificates"). 6. Representations and Warranties. Grantor hereby represents and warrants to Grantee that: (a) Grantor is legally competent and has the power and authority to execute, deliver and perform this Option Agreement and to consummate the transactions contemplated hereby. This Option Agreement has been duly executed and delivered by Grantor, constitutes a valid and binding obligation of Grantor, enforceable against Grantor in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization and other laws affecting creditors rights generally, and does not conflict with any agreement or instrument to which Grantor is a party or by which Grantor or Grantor's assets are bound, or any Law, regulation, judgment, order or decree to which Grantor is subject. (b) Grantor is, and until the Closing or Closings will be, the sole record and beneficial owner of the Option Shares, with sole power to vote and to dispose of the Option Shares. The Option Shares are. and until the Closing or Closings will be, owned by Grantor free and clear of all security interests. Liens, claims, encumbrances, restrictions on transfer, proxies and voting and other agreements, other than pursuant to this Option Agreement. (c) At each Closing, Grantee will acquire from Grantor full valid and marketable title to the Option Shares (by delivery of the Certificates by Grantor to Grantee), free and clear of all security interests, liens, claims, encumbrances, restrictions on transfer, proxies and voting and other agreements. (d) Grantor has not taken any of the actions set forth in paragraph 7(a)(ii) hereof at any time following commencement of discussions between Grantor and Grantee and/or their respective representatives regarding Grantor's entry into this Option Agreement. (e) Grantor acknowledges that Grantee is not acting as a broker, dealer or agent for Grantor in connection with the transactions contemplated by this Option Agreement and Grantee is not responsible to Grantor for providing the protections afforded under any federal or state securities laws or advice of any kind, including legal, tax and investment, in relation to the transactions contemplated by this Option Agreement. (f) At each Closing, all representations and warranties of Grantor will be accurate as of such time as though such representations and warranties were then made by Grantor. 7. Covenants Grantor hereby covenants and agrees that: (a) Neither Grantor nor any of its "affiliates" or "associates" (as such terms are defined under the Securities Exchange Act of 1934, as amended) shall, without the prior written consent of Grantee, directly or indirectly: (i) sell, assign, pledge, grant any option or proxy with respect to, or otherwise transfer or dispose of or encumber any of, or enter into any voting or other agreements with respect to, the Option Shares, or deposit the Option Shares in a voting trust, or take or permit any action which would or might result in any of the foregoing or otherwise prevent or disable Grantor from performing its obligations hereunder; PROVIDED, HOWEVER, THAT GRANTOR AND ITS AFFILIATES AND ASSOCIATES MAY AT ANY TIME AND FROM TIME TO TIME SELL ANY OR ALL OF THE OPTION SHARES IN AN OPEN MARKET TRANSACTION; or (ii) acquire or seek to acquire, by purchase or otherwise, any shares of Common Stock or any right or option to acquire, or securities convertible into or exchangeable for, any shares of Common Stock (except upon a Pro Rata Transaction) until Grantee notifies Grantor in writing that this paragraph 7(a)(ii) no longer applies. (b) Within one business day following the sale of Option Shares in an OPEN MARKET transaction in accordance with Section 7(a)(i), Grantor shall provide written notice of such sale (including the number of Option Shares sold and the selling price) to Grantee. For purposes of this Option Agreement, a "business day" is any day on which the New York Stock Exchange is open for business. 8. Rights in Option Shares. On and after any Closing, Grantee shall be entitled to all the rights of beneficial ownership of the Option Shares purchased at such Closing, including, without limitation, the right to exercise any and all voting rights pertaining to such Option Shares at any meeting of stockholders of the Company held at or after such Closing and to receive any and all dividends and other distributions with respect to such Option Shares, the record date for which is at or after such Closing. In furtherance of the foregoing, Grantor agrees to deliver to Grantee, promptly upon receipt by Grantor, any dividend or other distribution with respect to Common Stock, received by Grantor on or after any Closing with respect to the Option Shares purchased at such Closing, the record date for which is at or after such Closing. 9. Confidentiality. Without the prior written consent of Grantee, Grantor shall not (i) disclose to any person or entity any information in any way related directly or indirectly to this Option Agreement, the terms hereof, or any other information relating to Grantee's plans or intentions, including, without limitation, the fact that Grantor has been approached by Grantee or its representatives and any negotiation or discussion with respect thereto, or (ii) utilize in any manner any of such information. 10. Miscellaneous. (a) Binding Effect. This Option Agreement may not be assigned by either party, except that Grantee may assign this Option Agreement to one of its affiliates. This Option Agreement shall inure to the benefit of, and be binding upon, the parties and their respective heirs, personal representatives, successors and permitted assigns. (b) Expenses. Each party will pay its own expenses in connection with this Option Agreement and the transactions contemplated hereby. Grantor shall pay all stock transfer and other taxes in connection with the sale of the Option Shares to Grantee. (c) Specific Performance. Grantor acknowledges that the Option Shares are unique and that Grantee will not have an adequate remedy at law if Grantor fails to perform any of its obligations hereunder, and Grantor agrees that Grantee will have the right, in addition to other rights and remedies that may be available to Grantee, to specific performance or equitable relief by way of injunction if Grantor shall fail to perform any of its obligations hereunder. (d) Amendments. This Option Agreement may not be modified, amended, altered or supplemented in any way except upon the execution and delivery of a written agreement by the parties hereto. (e) Further Assurances. Grantor will, upon the reasonable request by Grantee, execute and deliver any additional documents or instruments necessary or desirable to complete the sale, conveyance, transfer and assignment of the Option Shares, and the consummation of the other transactions contemplated by this Option Agreement. (f) Survival. The warranties, representations, covenants and agreements made pursuant to this Option Agreement will survive the Closing and continue irrespective of any investigation made by or on behalf of either party. (g) Notices. All notices, requests, consents and other communications hereunder shall be given in writing and shall be deemed to have been duly given if personally delivered or sent by certified or registered mail, return receipt requested, with postage prepaid, to the addresses for the parties set forth below, or at such other addresses as the parties may designate by written notice in the manner aforesaid. All such notices, requests, consents and other communications shall be deemed to have been received if personally delivered at the time and on the date of delivery thereof or, if mailed, on the third day following the date of mailing. (h) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York, without giving effect to its conflict of law provisions. (i) Entire Agreement. This Option Agreement constitutes the complete, final and exclusive agreement between the parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. (j) Counterparts. This Agreement may be executed in counterparts, each of which shall be original, but all of which shall constitute one and the same instrument. (k) No Assurances. GRANTOR UNDERSTANDS THAT THERE IS NO ASSURANCE THAT GRANTEE WILL EXERCISE THE OPTION AND THAT GRANTOR MAY SELL THE OPTION SHARES AT ANY TIME IN THE OPEN MARKET AS PROVIDED IN SECTION 7 HEREOF. IN WITNESS WHEREOF, the undersigned have caused this Option Agreement to be duly executed on the day and year first above written. GRANTOR: Number of Option Shares: Name: Title: GRANTEE: Sterling Foster Holding Corp. 125 Baylis Road Melville, NY 11747 Name: Title: -----END PRIVACY-ENHANCED MESSAGE-----