Exhibit 1
FORM OF OPTION AGREEMENT
OPTION AGREEMENT, dated as of ________________, 1996, between
("Grantor"), and Xxxxxxxx Xxxxxx 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 Xxxx-Xxxxx-Xxxxxx 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 000 Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx, 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: Xxxxxxxx Xxxxxx Holding Corp.
000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Name:
Title:
