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Gaming Guru

Liz Benston

Removal of Aztar Committee Member Sought

18 October 2004

The AFL-CIO sent a notice to Aztar Corp. Friday calling on the company to remove an individual from three key board committees because of a potential conflict of interest.

The labor union federation's Office of Investment recommended the removal of Linda Faiss from Aztar's corporate governance and nominating committee, compensation and stock option committee and audit committee. Faiss is the wife of Robert Faiss, Aztar's gaming attorney of record, yet that relationship was never disclosed to shareholders, the AFL-CIO said.

That nondisclosure could be a violation of listing standards for New York Stock Exchange companies as approved by the Securities and Exchange Commission in 2003, the federation said.

"Director independence on these key committees is critical to the oversight function of the board," AFL-CIO Secretary-Treasurer Richard Trumka said. "Both the NYSE listing requirements and Aztar's own corporate governance guidelines specifically call for independent directors on all three key committees on which Ms. Faiss serves."

A spokesman for Aztar, which owns the Tropicana resorts in Las Vegas and Atlantic City, declined comment.

The AFL-CIO's Office of Investment initiates regular action against companies to lobby for director independence. The agency this year filed a shareholder proposal to remove General Electric Co. Director Kenneth Langone from the company's compensation committee. GE eventually removed Langone from the panel.

The Aztar notification is part of the Office of Investment's annual review of corporate boards and has nothing to do with a labor dispute between Aztar and AFL-CIO affiliate union UNITE HERE in Atlantic City, said Brandon Rees, research analyst for the Office of Investment.

The Office of Investment offers assistance to more than 1,000 union-sponsored pension plans with more than $400 billion in assets.