ARGOSY GAMING CO, DEF 14A, 1998-03-20

ARGOSY GAMING CO
DEF 14A, 1998-03-20
AMUSEMENT & RECREATION SERVICES

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<PAGE>
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12

ARGOSY GAMING COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]

ARGOSY GAMING COMPANY

------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 1998

------------------------

The Annual Meeting of Stockholders of Argosy Gaming Company ("Argosy" or the
"Company") will be held at the Argosy Casino Lawrenceburg, 777 Argosy Parkway,
Lawrenceburg, Indiana 47025 on Thursday, April 23, 1998, at 2:00 p.m., local
time, for the following purposes:

1. To elect three directors to hold office until the 2001 Annual Meeting of
Stockholders;

2. To consider and vote upon an amendment to the Company's Amended and
Restated Certificate of Incorporation; and

3. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.

The foregoing items are fully discussed in the Proxy Statement accompanying
this Notice. A copy of the Company's Annual Report is also enclosed.

The close of business on February 27, 1998 has been fixed as the record date
for the meeting. Only stockholders of record at that time are entitled to notice
of and to vote at the meeting and any adjournment or postponement thereof.

All stockholders are cordially invited to attend the meeting. However, to
assure your representation at the meeting, the Board of Directors of Argosy urge
you to date, execute and return promptly the enclosed proxy to give voting
instructions with respect to your shares of Common Stock. The return of the
proxy will not affect your right to vote in person if you do attend the meeting.

PATSY S. HUBBARD

SECRETARY

March 23, 1998
<PAGE>
ARGOSY GAMING COMPANY

219 PIASA STREET
ALTON, ILLINOIS 62002

------------------------

PROXY STATEMENT

------------------------

This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Argosy Gaming Company ("Argosy" or the
"Company") for use in voting at the Annual Meeting of Stockholders (the
"Meeting") to be held at the Argosy Casino Lawrenceburg, 777 Argosy Parkway,
Lawrenceburg, Indiana 47025 on Thursday, April 23, 1998, at 2:00 p.m. local
time, and at any postponement or adjournment thereof, for the purposes set forth
in the attached notice. This proxy statement, the attached notice and the
enclosed proxy are being sent to stockholders on or about March 23, 1998.

The Board of Directors does not intend to bring any matters before the
Meeting except those indicated in the notice. If any other matters properly come
before the Meeting, however, the persons named in the enclosed proxy, or their
duly constituted substitutes acting at the Meeting, will be authorized to vote
or otherwise act thereon in accordance with their judgment on such matters.

If proxies are properly dated, executed and returned, the shares they
represent will be voted at the Meeting in accordance with the instructions of
the stockholder. If no specific instructions are given, the shares will be voted
FOR the election of the three nominees for director set forth herein, FOR the
proposal to amend the Company's Amended and Restated Certificate of
Incorporation, and with respect to any other matter that may properly come
before the meeting, in the discretion of the persons voting the respective
proxies.

A stockholder giving a proxy has the power to revoke it at any time prior to
its exercise by voting in person at the meeting, by giving written notice to the
Secretary of the Company prior to the Meeting, or by giving a later dated proxy.

The solicitation of proxies from the stockholders is being made by the Board
of Directors and management of the Company and the cost of solicitation,
including the cost of preparing and making the Proxy Statement, the Proxy,
Notice of Annual Meeting and Annual Report is being paid for by the Company.

1
<PAGE>
RECORD DATE, REQUIRED VOTE,
OUTSTANDING SHARES AND HOLDINGS
OF CERTAIN STOCKHOLDERS

RECORD DATE AND OUTSTANDING SHARES

At the close of business on February 27, 1998, the record date fixed for the
determination of stockholders entitled to notice of and to vote at the Meeting,
there were outstanding 24,498,333 shares of the Company's common stock, par
value $0.01 per share, ("Common Stock"), the only class of voting securities
outstanding. Only the record holders of Common Stock as of the close of business
on February 27, 1998 will be entitled to vote. The presence at the Meeting, in
person or by proxy, of stockholders entitled to cast a majority of the votes
which all stockholders are entitled to cast will constitute a quorum. Each share
of Common Stock is entitled to one vote, without cumulation, on each matter to
be voted upon at the Meeting. See "Election of Directors."

In addition, there are outstanding $115,000,000 of the Company's Convertible
Subordinated Notes Due 2001 (the "Convertible Notes"), which are convertible
into Common Stock of the Company at any time prior to maturity at a conversion
price of $17.70 per share. Although no Convertible Notes have been converted
into Common Stock as of the record date, these securities represent an
additional 6,497,175 shares of Common Stock that may be outstanding in the
future.

REQUIRED VOTE

Only votes cast in person at the Meeting or by proxy received by the Company
before commencement of the Meeting will be counted at the Meeting. The election
of the nominees for directors and the amendment to the Amended and Restated
Certificate of Incorporation (the "Proposals") will become effective only upon
the affirmative vote of stockholders of the Company owning in the aggregate at
least a majority of the Company's outstanding shares of Common Stock present in
person and by proxy at the Meeting. Votes cast as abstentions will not be
counted as a vote for or against the Proposals, but will nevertheless have the
effect of increasing the total votes cast on the matter and thus increase the
number of votes necessary to effectuate the Proposals. So called "broker
non-votes" (brokers failing to vote by proxy shares of the Company's Common
Stock held in nominee name for customers) will not be counted at the Meeting.
The effect of such broker non-votes is to decrease the total votes cast on the
matter and thus decrease the number of votes necessary to effectuate the
Proposals. Executive officers and directors of the Company own shares, and
exercisable rights to acquire shares, representing an aggregate of 9,598,450
shares of Common Stock or 38.5% of the outstanding shares of Common Stock (See
"Security Ownership of Certain Beneficial Owners and Management"). Such officers
and directors have indicated an intention to the Company to vote in favor of the
Proposals.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of the close of business on February 27,
1998, certain information with respect to the beneficial ownership of Common
Stock and shares of Common Stock represented by the Convertible Notes
beneficially owned by (i) each director of the Company, (ii) the most highly
compensated executive officers of the Company (collectively, the "named
officers"), (iii) all executive officers and directors as a group and (iv) each
stockholder who is known to the Company to be the beneficial owner, as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the

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<PAGE>
"Exchange Act"), of more than 5% of the outstanding Common Stock. Each of the
persons listed below has sole voting and investment power with respect to such
shares, unless otherwise indicated.

<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK
REPRESENTED BY
CONVERTIBLE
NOTES
COMMON STOCK BENEFICIALLY PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED OWNED (A) OF CLASS
- ------------------------------------------- ------------------------- ---------------- ------------
<S> <C> <C> <C>
DIRECTORS AND NAMED OFFICERS:

William F. Cellini 1,846,456(b)(c)(d) 31,075 7.6%
219 Piasa Street
Alton, IL 62002

Edward F. Brennan 22,000(b) -- *

George L. Bristol 3,000(b) -- *

F. Lance Callis 1,540,778(b) 17,512 6.3
219 Piasa Street
Alton, IL 62002

Jimmy F. Gallagher 1,440,778(b) -- 5.9
219 Piasa Street
Alton, IL 62002

William J. McEnery 1,530,778(b) -- 6.2
219 Piasa Street
Alton, IL 62002

John B. Pratt, Sr. 1,327,124(b)(e) -- 5.4
219 Piasa Street
Alton, IL 62002

James B. Perry 100,000(f) -- *

James A. Gulbrandsen 40,000(g) -- *

John Pavone -- -- *

H. Steven Norton 39,999(b)(h) 8,192 *

Arnold Block 30,709(b) -- *

J. Thomas Long 1,440,001(b) -- *

Joseph G. Uram 111,300(b) 5,650 *

Daniel E. Evans 966(b) -- *

All directors and executive officers as a 9,536,021(b) 62,429 38.5
group (16 persons)

PRINCIPAL STOCKHOLDERS:

Kornitzer Capital Management, Inc. 165,400(i) 1,247,680 5.5
P.O. Box 918
Shawnee Mission, Kansas 66201

Dimensional Fund Advisors, Inc. 1,660,800(j) -- 6.8
1299 Ocean Ave. 11th Floor
Santa Monica, California 90401
</TABLE>

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<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK
REPRESENTED BY
CONVERTIBLE
NOTES
COMMON STOCK BENEFICIALLY PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED OWNED (A) OF CLASS
- ------------------------------------------- ------------------------- ---------------- ------------
<S> <C> <C> <C>
James S. Connors 2,291,667(k) -- 9.4
219 Piasa Street
Alton, Illinois 62002

Stephanie Pratt 1,124,125(e) -- 5.4
Box 104 Moro Road
Moro, IL 62067
</TABLE>

- ------------------------

* Less than 1%

(a) Shares of Common Stock represented by such person's ownership of Convertible
Notes, which are convertible into Common Stock of the Company at any time
prior to maturity at a conversion price of $17.70 per share.

(b) Amounts shown include 3,000 shares of Common Stock for William F. Cellini,
3,000 shares of Common Stock for Edward F. Brennan, 3,000 shares of Common
Stock for George L. Bristol, 3,000 shares of Common Stock for F. Lance
Callis, 3,000 shares of Common Stock for Jimmy F. Gallagher, 3,000 shares of
Common Stock for William J. McEnery, 3,000 shares of Common Stock for John
B. Pratt, Sr., 30,709 shares of Common Stock for Arnold Block, 28,799 shares
of Common Stock for H. Steven Norton, 366 shares of Common Stock for Daniel
E. Evans, 100,000 shares of Common Stock for Joseph G. Uram, 82,023 shares
of Common Stock for J. Thomas Long and 322,918 for all directors and
executive officers as a group represented by stock options exercisable
within 60 days of February 27, 1998.

(c) Includes 381,945 shares held in Trust for William F. Cellini, Jr., as
beneficiary with an independent third party as sole trustee and 381,944
shares held in Trust for William F. Cellini, Jr., as beneficiary, with
William F. Cellini, Jr. and William F. Cellini, father of William F.
Cellini, Jr., as co-trustees. Mr. William F. Cellini disclaims beneficial
ownership of the 381,945 shares of Common Stock held in the William F.
Cellini, Jr. Trust by an independent third party as sole trustee.

(d) Includes 381,945 shares held in Trust for Claudia Marie Cellini, as
beneficiary, with an independent third party as sole trustee and 381,944
shares held in Trust for Claudia Marie Cellini as beneficiary with Claudia
Marie Cellini and William F. Cellini, father of Claudia Marie Cellini, as
co-trustees. Mr. William F. Cellini disclaims beneficial ownership of the
381,945 shares of Common Stock held in the Claudia Marie Cellini Trust by an
independent third party as sole trustee.

(e) Includes 1,124,125 shares of Common Stock held by Mr. Pratt as Trustee
pursuant to a Voting Trust Agreement with Stephanie Pratt, his
sister-in-law, over which Mr. Pratt exercises sole voting power.

(f) Represents 100,000 shares of restricted Common Stock issued pursuant to an
Employment Agreement dated April 14, 1997 and governed by the terms of a
Restricted Stock Award Certificate and Deposit Agreement subject to
acceptance for listing on the New York Stock Exchange.

(g) Represents 40,000 shares of restricted Common Stock issued pursuant to an
Employment Agreement dated May 21, 1997 and governed by the terms of a
Restricted Stock Award Certificate and Deposit Agreement subject to
acceptance for listing on the New York Stock Exchange.

(h) Includes 2,400 shares of Common Stock held by Mr. Norton's six children. Mr.
Norton disclaims beneficial ownership to all shares owned by his children.

(i) According to a Schedule 13G filed with the Securities and Exchange
Commission under the Exchange Act, Kornitzer Capital Management, Inc. has
shared voting power with respect to such shares.

4
<PAGE>
(j) According to a Schedule 13G filed with the Securities and Exchange
Commission under the Exchange Act, Dimensional Fund Advisors, Inc. has sole
voting power with respect to such shares.

(k) From February 25, 1993 until September 8, 1994 Mr. James S. Connors was a
director of the Company.

------------------------

Section 16(b) of the Exchange Act requires the Company's executive officers
and directors and persons who own more than ten percent of a registered class of
the Company's equity securities (collectively, the "reporting persons") to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and to furnish the Company with copies of these reports. Based on the
Company's review of the copies of these reports received by it, and written
representations, if any, received from reporting persons with respect to such
filings, the Company believes that all filings required to be made by the
reporting persons for the period January 1, 1997 to December 31, 1997 were made
on a timely basis.

5
<PAGE>
ELECTION OF DIRECTORS

The Company has a classified Board of Directors consisting of three classes.
At each annual meeting of stockholders, directors are elected for a full term of
three years to succeed those directors whose terms are expiring.

At the Meeting, the stockholders will elect three directors to hold office,
subject to the provisions of the Company's By-laws, until the annual meeting of
stockholders in 2001 and until their successors shall have been duly elected and
qualified. Unless contrary instructions are given, the shares represented by the
enclosed proxy will be voted FOR the election of Messrs. F. Lance Callis, John
B. Pratt, Sr. and Edward F. Brennan, the nominees set forth below. Proxies
cannot be voted for a greater number of directors than the number of nominees
named. See "Record Date, Required Vote, Outstanding Shares and Holdings of
Certain Stockholders."

Messrs. Callis, Pratt and Brennan have consented to being named in this
proxy statement and to serve if elected. However, if any nominee at the time of
his election is unable or unwilling to serve or is otherwise unavailable for
election, and as a result another nominee is designated by the Board of
Directors, the persons named in the enclosed proxy, or their substitutes, will
have discretion and authority to vote or refrain from voting for such nominee in
accordance with their judgment.

Each director of the Company is currently required to be licensed to serve
as a director of the Company by the applicable gaming regulatory authorities in
Illinois, Missouri, Louisiana, Indiana and Iowa, and may be subject to similar
requirements in other jurisdictions in which the Company may conduct business.
The nominees have met these requirements in Illinois, Missouri, Louisiana,
Indiana and Iowa. However, should any director be found no longer suitable by
any regulatory authority having jurisdiction over the Company, that individual
shall become ineligible to serve on the Board of Directors and a majority of the
remaining directors may appoint a qualified replacement to serve as director for
the remaining term of the disqualified director.

As a result of the resignation of J. Thomas Long on January 13, 1997, a
vacancy exists on the Board of Directors. Mr. Long's term was set to expire at
the annual meeting of stockholders in 1999. Pursuant to the By-Laws of the
Company the vacancy may be filled for the remainder of the term by a majority of
the directors then in office.

The nominees for election as directors, together with certain information
about them, is contained below.

<TABLE>
<CAPTION>
DIRECTOR PRESENT POSITION WITH THE
NAME AGE SINCE COMPANY
- ---------------------------------- --- ----------- --------------------------------
<S> <C> <C> <C>
F. Lance Callis 62 1993 Director
John B. Pratt, Sr. 75 1993 Director
Edward F. Brennan 56 1995 Director
</TABLE>

F. LANCE CALLIS has been a partner with the law firm of Callis, Papa,
Jensen, Jackstadt & Halloran P.C. (formerly Pratt & Callis, P.C.), with offices
in St. Louis, Missouri and Granite City, Illinois, since 1986. Mr. Callis has
been a member of the Board of Directors of the Company since February 1993 and
is a member of its Compensation and Nominating Committees.

JOHN B. PRATT, SR. has practiced law in White Hall, Illinois as a sole
practitioner since 1986. He has been a member of the Board of Directors of the
Company since February 1993 and is a member of its Compensation and Audit
Committees.

EDWARD F. BRENNAN has been a principal in the law firm of Brennan, Jones &
Brennan (formerly Brennan, Cates & Constance) in Belleville, Illinois since
1987. He has been a member of the Board of Directors of the Company since
January 1995.

RECOMMENDATION

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF

EACH OF ITS NOMINEES TO SERVE ON THE COMPANY'S BOARD OF DIRECTORS.

6
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names and ages of the Company's directors
and executive officers.

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------- --- ---------------------------------------------------------------------
<S> <C> <C>

James B. Perry 48 President and Chief Executive Officer

William F. Cellini (a) 63 Chairman of the Board of Directors

George L. Bristol (b) 57 Director

Jimmy F. Gallagher (b) 69 Director

William J. McEnery (a) 55 Director

F. Lance Callis 62 Director

John B. Pratt, Sr. 75 Director

Edward F. Brennan 56 Director

Patsy S. Hubbard 53 Secretary

James A. Gulbrandsen 57 Vice President--Operations
</TABLE>

- ------------------------

(a) Messrs. Cellini and McEnery comprise a class of directors whose term expires
in 1999.

(b) Messrs. Gallagher and Bristol comprise a class of directors whose term
expires in 2000.

JAMES B. PERRY has been President and Chief Executive Officer of the Company
since April 21, 1997. From August 1996 to April 1997, Mr. Perry was President of
the Hospitality Group of Keating Building Group. From 1976 to August 1996, Mr.
Perry was employed by Aztar Corporation (the successor to Ramada) in numerous
positions, including President and General Manager of TropWorld Casino and
Entertainment Resort in Atlantic City, New Jersey.

WILLIAM F. CELLINI has been Chairman of the Company's Board of Directors
since February 1993. Mr. Cellini has served as Chief Executive Officer of New
Frontier Group, a real estate development, management and construction concern
with offices in Chicago and Springfield, Illinois since 1977. Mr. Cellini is a
member of the Nominating Committee of the Board of Directors.

GEORGE L. BRISTOL has been President of GLB, Inc., a consulting firm since
1977. He has been a member of the Board of Directors of the Company since
January 1995 and is a member of its Audit Committee. Mr. Bristol was the Acting
Chief Executive Officer of the Company from January 13, 1997 to April 20, 1997.

JIMMY F. GALLAGHER has been a director of the Company since February 1993
and is currently a member of its Nominating Committee and Audit Committee. Mr.
Gallagher retired from the gaming industry in March 1991. From March 1990 to
March 1991, he was Supervisor of Casino Games for the Park Hotel and Casino in
Las Vegas, Nevada.

WILLIAM J. MCENERY has served as the president of Gas City, Ltd., an
operator of gasoline stations and convenience stores in Illinois and Florida
headquartered in Frankfort, Illinois since 1965. Since 1982, Mr. McEnery has
served as the president of A.D. Connor, Inc., a petroleum products hauling
concern located in Frankfort, Illinois. Since 1975, Mr. McEnery has served as
president of Bell Valley Farms, Inc., an owner and operator of harness racing
training facilities located in Lockport, Illinois. Since 1992, Mr. McEnery has
been a Director and investor in the Empress Riverboat Casino Corporation, the
owner and operator of riverboat casino operation in Joliet, Illinois and is an
investor in a riverboat casino operation in Hammond, Indiana. Mr. McEnery has
been a member of the Company's Board of Directors since February 1993 and is a
member of its Compensation Committee.

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<PAGE>
F. LANCE CALLIS has been a partner with the law firm of Callis, Papa,
Jensen, Jackstadt & Halloran P.C. (formerly Pratt & Callis, P.C.), with offices
in St. Louis, Missouri and Granite City, Illinois, since 1986. Mr. Callis has
been a member of the Board of Directors of the Company since February 1993 and
is a member of its Compensation Committee and Nominating Committee.

PATSY S. HUBBARD has been employed by the Company since September 1991 and
currently serves as Secretary of the Company. From 1978 through 1991, Ms.
Hubbard was an Enrolled Agent/Paralegal at the law firm of Farrell & Long, P.C.,
Godfrey, Illinois. Prior to the initial public offering, Ms. Hubbard also served
as Assistant Corporate Secretary to one of the corporate partners of the
predecessor entity of the Company.

JAMES A. GULBRANDSEN has been Vice President--Casino Operations since June
1, 1997. From late 1996 to June 1997 Mr. Gulbrandsen was retired. From 1992 to
1996 Mr. Gulbrandsen was an owner/ operator of the Womack Casino in Cripple
Creek, Colorado.

COMPENSATION OF DIRECTORS

Directors who are not employees of the Company receive a fee of $25,000 per
annum plus $1,000 per board meeting and $900 per committee meeting. An
additional annual fee of $2,500 is paid to each committee chairman. Directors
who are employees of the Company do not receive additional compensation for
service as a director. In addition, pursuant to the 1993 Directors Stock Option
Plan ("Directors Option Plan") each non-employee director is granted as of the
date of their election a non-qualified stock option for 3,000 shares of Common
Stock exercisable 1,000 as of date of grant and 1,000 on the first and second
anniversaries of the date of grant. The option price for directors is the market
price of the Common Stock as of the date of grant. Since the inception of the
Directors Option Plan, options representing 27,000 shares of Common Stock have
been issued under the Plan, of which 21,000 are currently outstanding, 21,000
are exercisable and 6,000 have been forfeited as a result of director
resignations.

MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors has established permanent audit, compensation and
nominating committees. The membership of each of these committees is determined
from time to time by the Board of Directors and, to date, only outside directors
have served on these committees. The Audit Committee, which held four meetings
during 1997, consists of Messrs. Brennan, Pratt, Gallagher and Bristol. The
Compensation Committee, which held three meetings in 1997, consists of Messrs.
McEnery, Callis, Brennan and Pratt. The Nominating Committee, which held one
meeting in 1997, consists of Messrs. Callis, Cellini, Pratt, and Gallagher. The
Nominating Committee met in February 1998 to propose three nominees whose
election to the Company's Board of Directors is a subject of this proxy
statement.

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<PAGE>
The Audit Committee, subject to the requirements of the applicable state
gaming laws and regulatory authorities, appoints a firm of independent certified
public accountants to audit the books and accounts of the Company. In addition,
the Committee reviews and approves the scope and cost of all services (including
non-audit services) provided by the firm selected to conduct the audit. The
Committee also monitors the effectiveness of the audit effort and financial
reporting, and inquires into the adequacy of financial and operating controls.

The Compensation Committee reviews and approves salaries and other matters
relating to compensation of the senior officers of the Company, including the
administration of the Stock Option Plan. The Compensation Committee also
formulates the Company's compensation policies and recommends compensation
programs to the Board of Directors.

The Company's Board of Directors met 11 times during fiscal 1997. No member
of the Board of Directors participated in fewer than 75% of the aggregate of the
total number of meetings of the Board of Directors and the total number of
meetings held by all committees on which such director served.

9
<PAGE>
EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth annual and long-term compensation for the
Company's Chief Executive Officer and four other most highly compensated
officers during 1996 (collectively, the "named executive officers"), as well as
certain other compensation information for the named executive officers during
the years indicated.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM COMPENSATION
(A)
ANNUAL COMPENSATION -------------------------
-------------------------------------- RESTRICTED
OTHER ANNUAL STOCK AWARDS STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (B) $ OPTIONS (#) COMPENSATION
- ---------------------------- --------- --------- --------- ---------------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
James B. Perry(c) .......... 1997 $ 276,475 -- -- $362,500(d) 226,000 $ 19,512(e)
President and Chief
Financial Officer
George L. Bristol(f) ....... 1997 $ 100,000 -- -- -- -- --

J. Thomas Long(g) .......... 1997 $ 753,846 -- -- -- -- $ 37,447(h)
1996 650,000 -- -- 388,215(h)
1995 600,000 150,000 -- 388,388(h)

James A. Gulbrandsen ....... 1997 $ 134,276 -- -- $135,000(i) 105,000 $ 40,786(j)
Vice President--Operations

John Pavone ................ 1997 $ 112,295 44,981 -- -- -- $ 6,110(k)
General Manager 1996 104,903 -- -- -- -- 5,187(k)
Sioux City 1995 106,642 25,000 -- -- -- 4,939(k)

H. Steven Norton(l) ........ 1997 $ 361,556 -- -- -- -- $ 4,750(k)
1996 361,556 -- -- 4,750(k)
1995 365,734 90,389 -- 4,620(k)

Arnold Block ............... 1997 $ 184,999 75,000 -- -- -- $ 18,419(m)
General Manager 1996 178,077 -- -- 19,153(m)
Argosy Casino 1995 134,039 30,490 -- 4,620(m)
Lawrenceburg

Joseph G. Uram(n) .......... 1997 $ 116,863 -- -- -- -- $ 119,192(o)
1996 206,600 -- -- 4,750(k)
1995 211,367 51,650 -- 4,620(k)

Daniel E. Evans(p) ......... 1997 $ 159,736 -- -- -- -- $ 4,750(k)
1996 159,509 -- -- 4,750(k)
1995 159,026 38,738 -- 4,620(k)
</TABLE>

- ------------------------------

(a) The Company does not have long-term incentive plans and has not granted
stock appreciation rights.

(b) For each person named, "Other Annual Compensation" is below the level where
disclosure would be required.

(d) Represents 100,000 shares of restricted Common Stock issued pursuant to an
Employment Agreement dated April 21, 1997 and governed by the terms of a
Restricted Stock Award Certificate and Deposit Agreement.

(e) All other compensation for 1997 includes a $15,574 reimbursement related to
moving and $3,938 of matching contributions to the Company's 401(k) Employee
Savings Plan.

(f) Mr. Bristol served as Acting Chief Executive Officer from January 13, 1997
through April 20, 1997.

(g) Mr. Long resigned as Chief Executive Officer, General Counsel and Vice
Chairman of the Board of Directors on January 13, 1997.

10
<PAGE>
(h) All other compensation for 1995 and 1996 includes installments in the amount
of $371,850 payable in connection with Mr. Long's retirement benefit. See
"Executive Compensation--Employment and Other Agreements." In 1995, 1996 and
1997, Mr. Long received benefits for life insurance premiums paid by the
Company in the amount of $11,918, $11,615 and $32,697, respectively. In
1995, 1996 and 1997 Mr. Long received matching contributions in the amount
of $4,620, $4,750 and $4,750 to the Company's 401(k) Employee Savings Plan.

(i) Represents 40,000 shares of restricted Common Stock issued pursuant to an
Employment Agreement dated May 21, 1997 and governed by the terms of a
Restricted Stock Award Certificate and Deposit Agreement.

(j) All other compensation for 1997 includes a $37,750 reimbursement related to
moving and $3,236 of matching contributions to the Company's 401(k) Employee
Savings Plan.

(k) Represents matching contributions to the Company's 401(k) Employee Savings
Plan.

(l) Mr. Norton ceased his employment with the Company on February 27, 1998.

(m) All other compensation for 1996 and 1997 includes $14,403 and $13,669,
respectively, of temporary living expenses. In 1996 and 1997 Mr. Block
received $4,750 of matching contributions to the Company's 401(k) Employee
Savings Plan.

(n) Mr. Uram resigned as Executive Vice President, Treasurer and Chief Financial
Officer on April 25, 1997.

(o) All other compensation for 1997 includes $115,219 payable as severance and
$3,973 of matching contribution to the Company's 401k Employee Savings Plan.

(p) The position of Executive Vice President--Sales and Marketing was eliminated
on February 4, 1997. Mr. Evans received compensation and benefits through
December 31, 1997, in accordance with his employment contract.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information concerning options granted by the
Company during the year ending December 31, 1997 to the named executive
officers.

<TABLE>
<CAPTION>
INDIVIDUAL % OF
NUMBER OF TOTAL OPTIONS GRANTS
SECURITIES GRANTED TO EXERCISE GRANT DATE
UNDERLYING EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE
NAME OPTIONS GRANTED FISCAL YEAR ($/SHARE) DATE (A)
- ---------------------------------- --------------- --------------- ------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
James B. Perry.................... 100,000 24% $3.625 4/21/07 $246,000
James B. Perry.................... 126,000 31% $3.4375 6/26/07 $288,540
James A. Gulbrandsen.............. 105,000 26% $3.375 6/1/07 $237,300
</TABLE>

- ------------------------

(a) The dollar amounts of grant date present value set forth in this column were
valued using the Black-Scholes model for valuing stock options, as provided
by the Securities and Exchange Commission's executive compensation
disclosure rules. Significant assumptions used to prepare this valuation
include: stock price volatility of 0.558, 0.554 and 0.548 for the 100,000
option grant, the 126,000 option grant and the 105,000 option grant,
respectively, (calculated using historical stock price volatility calculated
using consecutive monthly closing stock prices from the initial public
offering date (February 18, 1993) through the grant date of each option
granted), a risk-free rate of 6.80%, 6.59% and 6.59% for the 100,000 option
grant, the 126,000 option grant and the 105,000 option grant, respectively,
a dividend yield of 0% and an expected life of 8 years. No assurance can be
made that the amounts reflected will be achieved.

11
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table sets forth information concerning options exercised
during 1997 and presents the value of unexercised options held by the named
executive officers at fiscal year end.

<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES ACQUIRED OPTIONS AT FISCAL YEAR IN- THE-MONEY OPTIONS
ON EXERCISE VALUE END (#) EXERCISABLE/ AT FISCAL YEAR END (B)
NAME (#)(A) REALIZED ($) UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---------------------------------------- --------------- ------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
James B. Perry.......................... -- -- 0/226,000 $ 0
James A. Gulbrandsen.................... -- -- 0/105,000 6,562
John Pavone............................. -- -- 0/0 0
J. Thomas Long (c)...................... -- -- 382,023/200,000 0
H. Steven Norton (d).................... -- -- 158,799.5/100,000 0
Joseph G. Uram.......................... -- -- 126,713/150,000 0
Daniel E. Evans (e)..................... -- -- 90,366.9/60,000 0
Arnold Block............................ -- -- 30,709/20,000 0
George L. Bristol (f)................... -- -- 3,000/3,000 0
</TABLE>

- ------------------------

(a) No options were exercised by the named executive officers during 1997.

(b) The last reported sale price of the Common Stock on the New York Stock
Exchange on December 31, 1997 was $3.4375.

(d) Mr. Norton ceased his employment with the Company on February 27, 1998.

(e) The position of Executive Vice President--Sales and Marketing was eliminated
on February 4, 1997.

(f) Mr. Bristol served as acting Chief Executive Officer of the Company from
January 13, 1997 to April 21, 1997.

EMPLOYMENT AND OTHER AGREEMENTS

Mr. James B. Perry entered into a three year employment agreement on April
21, 1997 pursuant to which Mr. Perry agreed to serve as President and Chief
Executive Officer of the Company. Under the terms of the agreement, Mr. Perry is
to be paid $400,000 annually. In addition, Mr. Perry received a commitment from
the Company to issue to him 300,000 options when such options become available
under the Company's 1993 Employee Stock Option Plan. Further, Mr. Perry was
issued 100,000 shares of restricted Common Stock of the Company to be held in
escrow with 40% of such shares released from escrow after 18 months provided Mr.
Perry is still employed by the Company and the remainder released from escrow at
the end of the three year employment agreement term provided Mr. Perry is still
employed by the Company. The non-competition provision of the agreement
restricts Mr. Perry from engaging in competition in any jurisdictions where the
Company maintains gaming facilities (including managed properties) for a period
of 12 months following resignation or termination.

Mr. George L. Bristol, who served as Acting Chief Executive Officer from
January 13, 1997 to April 21, 1997, received compensation equal to $40,000 per
month for such period.

Mr. J. Thomas Long entered into an amended three-year employment agreement
with the Company in August 1994 pursuant to which Mr. Long agreed to continue to
serve as Chief Executive Officer and General Counsel. Under the agreement for
the period from January 1, 1997 to December 31, 1997 Mr. Long was paid $700,000.
In addition to the base salary, Mr. Long was entitled to participate in the
Company's performance bonus program for senior managers during the term of the
employment agreement. The annual performance bonus was subject to achieving
certain performance related criteria

12
<PAGE>
established by the Compensation Committee each year and limited to a maximum of
50% of an employee's base salary. Under his original employment contract that
was entered into in 1992, Mr. Long became entitled to receive a gross retirement
benefit equal to $1,859,250, in addition to his base salary, which vested upon
execution of the original employment contract and was payable in five equal
annual installments of $371,850, the last payment of which was made in September
of 1996. The non-competition provisions of the agreement restrict Mr. Long from
engaging in the gaming industry within a 100 miles radius of any of the
Company's gaming facilities during the term of employment and for one year
thereafter.

Mr. Long resigned as Chief Executive Officer, General Counsel and Vice
Chairman of the Board on January 13, 1997. See "Certain
Transactions"--Consulting Agreement--J. Thomas Long.

Pursuant to an informal arrangement, Mr. Norton served as President and
Chief Operating Officer through April 1997 and thereafter served as Executive
Vice President of the Company for an initial annual base salary of $350,000 in
fiscal 1994 with annual increases equal to increases in the consumer price
index, plus participation in all performance bonus, stock option and other
benefit plans generally available to senior managers of the Company. Mr. Norton
ceased his employment with the Company on February 27, 1998.

Mr. James A. Gulbrandsen entered into a three year employment agreement on
June 1, 1997 pursuant to which Mr. Gulbrandsen agreed to serve as Vice President
of Operations of the Company. Under the terms of the agreement, Mr. Gulbrandsen
is to be paid $225,000 annually. In addition, Mr. Gulbrandsen received 105,000
stock options. Further, Mr. Gulbrandsen was issued 40,000 shares of restricted
Common Stock of the Company to be held in escrow with 40% of such shares
released from escrow after 18 months, provided Mr. Gulbrandsen is still employed
by the Company and the remainder released from escrow at the end of the three
year employment agreement term, provided Mr. Gulbrandsen is still employed by
the Company. The non-competition provision of the agreement restricts Mr.
Gulbrandsen from engaging in competition in any jurisdiction where the Company
maintains gaming facilities (including managed properties) for a period of 12
months following resignation or termination.

13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION

No member of the Compensation Committee of the Company was, during the year
ended December 31, 1997, an officer, former officer or employee of the Company
or any of its subsidiaries. No executive officer of the Company served as a
member of (i) the compensation committee of another entity in which one of the
executive officers of such entity served on the Company's Compensation
Committee, (ii) the Board of Directors of another entity in which one of the
executive officers of such entity served on the Company's Compensation
Committee, or (iii) the compensation committee of another entity in which one of
the executive officers of such entity served as a member of the Company's Board
of Directors, during the year ended December 31, 1997.

REPORT OF COMPENSATION COMMITTEE

NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS OR FUTURE FILINGS UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934 THAT MIGHT INCORPORATE THIS PROXY STATEMENT OR FUTURE
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, IN WHOLE OR IN PART, THE
FOLLOWING REPORT AND PERFORMANCE GRAPH SHALL NOT BE DEEMED TO BE INCORPORATED BY
REFERENCE INTO ANY SUCH FILINGS.

INTRODUCTION

The Compensation Committee of the Board of Directors is responsible for
recommending executive compensation programs to the Board of Directors and for
making all compensation decisions with respect to the senior managers of the
Company. As of the end of 1997, the Compensation Committee was comprised of the
following directors: F. Lance Callis, William J. McEnery, Edward F. Brennan and
John B. Pratt, Sr.

EXECUTIVE COMPENSATION POLICY

The Compensation Committee endeavors to ensure that the compensation program
for the senior management team of the Company is effective in attracting and
retaining key executives responsible for the success of the Company and is
tailored to promote the long-term interests of the Company and its shareholders.
To that end, the Company's executive compensation program is principally
comprised of two elements, base salary and long-term incentive compensation in
the form of restricted stock grants and non-qualified stock options.

The Compensation Committee takes into account various qualitative and
quantitative indicators of corporate and individual performance in determining
the level and composition of compensation for the Company's officers. In
particular, the Compensation Committee considers several financial performance
measures, including asset, revenue and earnings per share growth. The Committee
also considers achievements that, while difficult to quantify, are important to
the Company's long-term success. The Compensation Committee also seeks to create
a mutuality of interest between the senior management team and the Company's
stockholders by making restricted stock grants to attract key executives and by
increasing the officer's ownership of the Company's Common Stock through the
Stock Option Plan.

In July 1994, the Compensation Committee adopted a comprehensive executive
compensation program designed to attract and retain qualified management
employees and incentivize the Company's executive officers. At the time of the
adoption of this plan, the Company had undertaken an aggressive expansion
program involving the development of three new riverboat casinos in Riverside,
Missouri, Baton Rouge, Louisiana and Sioux City, Iowa, as well as the active
pursuit of a riverboat casino license in Lawrenceburg, Indiana. The base
salaries of certain of the named executive officers for the Company's last
completed fiscal year were initially set pursuant to employment agreements
entered into and arrangements agreed to in 1994. The Compensation Committee also
made significant stock option grants to certain of the named executive officers
in July 1994 and August 1995 to recognize the efforts that were required of

14
<PAGE>
such officers in implementing the Company's expansion program. In April 1997,
the Compensation Committee revised its 1994 executive compensation program by
adding the granting of restricted stock in order to attract key senior managers.
In light of the financial performance of the Company in 1997, other than the
grant of stock options and restricted stock attributable to the hiring of new
senior managers and executive officers, the Compensation Committee awarded no
bonuses or restricted stock and granted no stock options for fiscal year 1997.

BASE SALARY

Salary levels for the Company's senior management team are significantly
influenced by the need to attract and retain management employees with
experience and expertise. In each case, consideration is given both to personal
factors, such as the individual's experience, and the responsibility associated
with his or her position and work performance, and to external factors, such as
salaries paid to similarly situated officers by comparable companies in the
gaming industry. With regard to the latter, the Compensation Committee
recognizes that the Company competes with numerous other companies for a limited
pool of experienced and skilled personnel. Therefore, it is critical that the
Company provide base salaries, incentive compensation and benefits that are
competitive in the casino industry. With respect to the personal factors, the
Compensation Committee makes salary decisions in a structured annual review with
input from the Chief Executive Officer. This annual review considers the
decision-making responsibilities of each position as well as the experience and
work performance of each executive. The Committee views work performance as the
single most important measurement factor. The Committee has enlisted the
assistance of outside compensation consultants to assist in its annual review.

ANNUAL BONUS

The Compensation Committee established in July 1994 a performance bonus
plan, whereby the Company's officers have the potential to earn up to 50% of
their base salary if certain bonus criteria adopted by the Compensation
Committee are met. No performance bonuses were granted in 1997. The bonus plan
is intended to compensate officers to the full extent of potential annual
incentive compensation as and when the Company realizes the goals and objectives
established by the bonus criteria adopted by the Compensation Committee. The
Compensation Committee intends to revise the bonus plan for fiscal year 1998 in
order to achieve a greater mutuality of interest between senior management and
the Company's Stockholders and to reward senior management dependent on the
Company's stock performance.

STOCK OPTIONS

The Compensation Committee believe that the Company's financial performance
should be an important factor in the total compensation of the Company's senior
managers. Accordingly, the grant of non-qualified stock options is a major
component of overall executive compensation for the Company. The Compensation
Committee believes that the granting of stock options encourages the Company's
officers to pursue long-term goals and objectives that promote shareholder
value. In addition, in light of the entrepreneurial opportunities available to
individual executives in the dockside and riverboat casino industry, the Company
believes that providing an equity stake in the Company is vital in attracting
and retaining key executives.

The total of targeted or projected values of individual stock option grants
at the date of grant is set by the Compensation Committee considering market
practices for similar positions in similar industries and similar business
situations. Although no stock options were granted in 1997, the Compensation
Committee adopted a program to reprice current options and correspondingly
reduce the number granted to certain senior managers. This program will be
completed in the first quarter of 1998.

15
<PAGE>
RESTRICTED STOCK

The Compensation Committee believes that the Company's financial performance
should be an important factor in the total compensation of the Company's senior
managers and that the Company's senior managers should have a portion of their
total compensation paid in stock, to give the senior managers a long-term stake
in the business and to align the senior managers' interests with those of the
Company's stockholders. These grants which have been made to attract qualified
senior managers, align the senior managers' interests with the stockholders
interests as the size of the senior managers' reward is dependent on the
Company's stock performance. Awards have been granted with a vesting schedule of
40% after 18 months, provided the senior manager is still employed by the
Company and the remainder after three years, provided the senior manager is
still employed by the Company.

CHIEF EXECUTIVE OFFICER COMPENSATION

Based upon the assessment of the criteria outlined above, the Compensation
Committee also established the compensation levels of the Company's Chief
Executive Officer, James B. Perry, and entered into an employment agreement in
April 1997. Under the terms of such agreement, Mr. Perry, who also serves as
President of the Company, was granted an annual base salary of $400,000. In
addition, Mr. Perry was also entitled to participate in the Company's incentive
stock option programs and was granted restricted Common Stock. Consistent with
the Compensation Committee's overall policies, Mr. Long was not granted stock
options in 1996. Mr. Long resigned his positions with the Company on January 13,
1997.

Mr. Bristol, a director of the Company, served as the Acting Chief Executive
Officer for January 13, 1997 to April 21, 1997 and received a fee of $40,000 for
each month of service.

DEDUCTIBILITY OF COMPENSATION

For taxable years beginning January 1, 1994, Section 162(m) of the Internal
Revenue Code of 1986 generally limits to $1,000,000 per person the Company's
federal income tax deduction for compensation paid in any year to its Chief
Executive Officer and each of its four other highest paid executive officers to
the extent such compensation is not "performance based" within the meaning of
Section 162(m). The Compensation Committee believes that options granted under
the Stock Option Plan meet the requirements for performance based deductible
compensation. Under certain circumstances, compensation paid to an executive
officer of the Company could exceed the qualifying compensation limit for
deductibility under Section 162(m). The Compensation Committee will consider
ways to preserve the deductibility of compensation payments and benefits in
light of the limitation on deductibility under Section 162(m), while retaining
the discretion necessary to ensure executive officers are compensated in a
manner consistent with its compensation objectives.

This report is submitted by F. Lance Callis, William J. McEnery, Edward F.
Brennan and John B. Pratt, Sr., being all of the members of the Compensation
Committee.

F. LANCE CALLIS
WILLIAM J. MCENERY
EDWARD F. BRENNAN
JOHN B. PRATT, SR.

16
<PAGE>
PERFORMANCE GRAPH

The following graph sets forth the cumulative total stockholder return from
February 18, 1993 through December 31, 1997, assuming reinvestment of dividends,
of the Company, the NASDAQ Broad Market and the NASDAQ Amusement and Recreation
Services Index (the "Peer Group Index") which the Company considers to be its
peer industry group. The graph assumes an investment of $100 on February 18,
1993 in each of the Common Stock, the stocks comprising the NASDAQ Broad Market,
and the stocks comprising the Peer Group Index.

COMPARISON OF TOTAL CUMULATIVE RETURN* AMONG ARGOSY GAMING CO.,

NASDAQ STOCK MARKET INDEX (U.S. COMPANIES), AND A PEER GROUP OF NASDAQ

STOCKS (SIC 7900-7999 -- AMUSEMENT AND RECREATION SERVICES -- U.S. COMPANIES)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ARGOSY NASDAQ STOCK MARKET NASDAQ 79XX
<S> <C> <C> <C>
2/18/93 $100.00 $100.00 $100.00
12/31/93 $96.80 $117.30 $150.50
12/31/94 $61.70 $114.70 $88.90
12/31/95 $39.60 $162.20 $70.60
12/31/96 $24.00 $199.50 $66.40
12/31/97 $17.90 $244.90 $80.60
</TABLE>

- ------------------------

* ASSUMES $100 INVESTMENT IN THE COMMON STOCK OF ARGOSY GAMING CO., NASDAQ
STOCK MARKET INDEX (U.S. COMPANIES), AND PEER GROUP NASDAQ STOCKS (SIC
7900-7999 U.S. COMPANIES), DERIVED FROM COMPOUNDED DAILY RETURNS WITH
DIVIDEND REINVESTMENT ON THE EXDATE.

17
<PAGE>
MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock trades on the New York Stock Exchange under the
symbol AGY. On February 27, 1998, the Common Stock was held by 1012 stockholders
of record. The following table sets forth the high and low sales prices per
share of Common Stock, as reported by the New York Stock Exchange and Nasdaq,
for the periods indicated. These quotations and sales prices do not include
retail mark-ups, mark-downs or commissions.
<TABLE>
<CAPTION>
PRICE RANGE OF
COMMON STOCK
-------------------
YEAR ENDING DECEMBER 31, 1996 HIGH LOW
- ------------------------------ ------- ---------
<S> <C> <C>
1st Quarter (Nasdaq).......... $ 9 1/4 $ 6 11/16
2nd Quarter (Nasdaq).......... 8 3/4 7
3rd Quarter (NYSE listed on
July 5, 1996)................ 7 3/4 4 1/4
4th Quarter (NYSE)............ 7 1/8 4 1/2

PRICE RANGE OF
COMMON STOCK
-------------------
YEAR ENDING DECEMBER 31, 1997 HIGH LOW
- ------------------------------ ------- ---------
<S> <C> <C>
1st Quarter................... $ 5 1/4 $ 3 3/8
2nd Quarter................... 4 2 3/4
3rd Quarter................... 5 3/4 2 15/16
4th Quarter................... 5 5/8 3 1/16
</TABLE>

On March 13, 1998, the reported last sales price for the Common Stock was
$3 5/8.

Since the Company's initial public offering in February 1993, the Company
has not declared or paid any cash dividends or distributions on its capital
stock. Although the Company currently intends to retain its earnings to finance
future growth and therefore has no present intention of paying dividends, this
policy will be reviewed quarterly by the Company's Board of Directors in light
of, among other things, its results of operations, capital requirements, any
restrictions imposed by applicable gaming regulations and restrictions imposed
by the Company's indentures and loan documents.

CERTAIN TRANSACTIONS

ARRANGEMENT WITH L. THOMAS LAKIN IN CONNECTION WITH GAMING OPPORTUNITIES IN ST.
LOUIS

Since January 1991, Mr. L. Thomas Lakin, a director of the Company until
July 1993, expended significant amounts of personal time on the Company's behalf
developing a proposed St. Louis gaming opportunity. In recognition of such
services, the Company in January 1993 entered into an agreement with Mr. Lakin
pursuant to which he will be entitled to $1 million if a proposed St. Louis
casino venture is successfully completed. To be entitled to payment the St.
Louis gaming facility must commence gaming operations. When earned, the Company
will pay Mr. Lakin such amount in twenty quarterly installments with interest
thereon from the date a payment is earned at 7% per annum. The agreement also
provided for a similar compensation arrangement under which Mr. Lakin would have
been paid $2 million if the Company was successful in pursuing a potential
gaming opportunity in Lake Pontchartrain/New Orleans. The Company was informed
on June 23, 1993 by the Louisiana Gaming Commission that it was not selected
from among the group of potential operators pursuing gaming sites in Lake
Pontchartrain/New Orleans. The Company currently has no plans to further pursue
gaming opportunities in Lake Pontchartrain/New Orleans and St. Louis.

AGREEMENT WITH H. STEVEN NORTON IN CONNECTION WITH GAMING OPPORTUNITIES IN
INDIANA

Prior to joining the Company in January 1993 to serve as President, Mr. H.
Steven Norton advised the Company that he had been pursuing gaming opportunities
in Indiana, and two other jurisdictions (each a "Potential Venture" and
collectively "Potential Ventures"). As of the date hereof, of such jurisdictions
only Indiana has adopted legislation approving gaming. As part of his employment
arrangement with the

18
<PAGE>
Company, the Company and Mr. Norton agreed that Mr. Norton may pursue the
Potential Ventures provided he devotes full time and attention to his duties as
an employee of the Company. With respect to the Potential Ventures other than
Indiana, Mr. Norton has granted to the Company the right of first refusal to
participate in such Potential Ventures, subject to the condition that Mr. Norton
and the Company agree on a satisfactory financial arrangement that may include
Mr. Norton having an equity interest in such Potential Venture together with the
Company and other third parties. If the Company elects not to pursue any of the
Potential Ventures, Mr. Norton may individually pursue such venture, subject to
his obligation to devote his full time to the business of the Company, and the
Company may in such case elect to terminate his employment with the Company.
With respect to the Potential Venture in Indiana, Indiana Gaming Company
("Indiana Gaming"), a wholly owned subsidiary of the Company, as General Partner
has entered into an agreement of limited partnership with Centaur, Inc.
("Centaur"), Conseco Entertainment, L.L.C. ("Conseco") and RJ Investments, Inc.
("RJ"), as limited partners, and opened a riverboat gaming facility in
Lawrenceburg, Indiana. Pursuant to the agreement, Indiana Gaming will own 57.5%
of the Indiana joint venture, Centaur will own 9.5% (of which Mr. Norton will
have a 25% equity interest), and Conseco and RJ will own the remainder. With
respect to the other Potential Ventures, if the Company pursues a Potential
Venture it shall reimburse Mr. Norton for his expenses in connection therewith
incurred during his employment with the Company. Mr. Norton ceased his
employment with the Company on February 27, 1998.

MATTERS RELATING TO H. STEVEN NORTON.

H. STEVEN NORTON V. JOHN T. CONNORS, ET AL.

In September, 1993, H. Steven Norton, who was then the President of the
Company, filed a cause of action against John T. Connors, a significant
shareholder of the Company and a former officer of J. Connors Group Inc., a
predecessor entity of the Company ("JCG"), seeking $50 million in damages. Mr.
Norton alleged that Mr. Connors failed to fulfill his promise made in the summer
of 1991 to establish a partnership with Mr. Norton in which each would have an
equal 50% interest in JCG, which had a 25% partnership interest in the Company's
predecessor entity that owned the Alton Belle Casino. As a result of the
reorganization effected immediately prior to its initial public offering, the
Company succeeded to all the rights, properties and assets, and assumed all the
liabilities, of all of its predecessor entities, including JCG. Subsequent to
the filing of the lawsuit, Mr. Connors advised the Company that his dealings
with Mr. Norton, which are the subject of the litigation, were in his capacity
as an officer of JCG, and that the Company should assume the defense and
reimburse Mr. Connors for the approximately $130,000 spent to date on legal
fees, and that any liability resulting from the litigation was assumed by the
Company as a result of Company's reorganization. The Company responded to Mr.
Connors that it believed that his actions and dealings with Mr. Norton were
solely in his individual capacity as a shareholder of JCG, and the Company
declined to assume the defense or reimburse him for previously incurred legal
fees, and the Company denied that it has any liability with respect to such
matter. If, however, JCG were to have been found liable to Mr. Norton as a
result of the actions of Mr. Connors, then the Company could under certain
circumstances be liable to Mr. Norton for any damages awarded against JCG.

In April 1995, Messrs. Norton and Connors agreed to voluntarily dismiss the
lawsuit without prejudice. However, on May 22, 1996 Mr. Norton refiled the suit
against Mr. Connors and is again seeking $50 million in damages. The Company
believes that Mr. Connors will again seek to cause the Company to indemnify and
reimburse him from liability thereunder. Therefore, there can be no assurance
that the lawsuit will not lead to events having a material adverse effect on the
Company.

OTHER MATTERS

Mr. Norton's employment with the Company ended on February 27, 1998. Prior
to the termination of his employment, Mr. Norton asserted that he was entitled
to additional compensation from the Company relating to his efforts relating to
the Lawrenceburg, Indiana casino. The Company's position is that it has no
obligation to Mr. Norton relating to the Lawrenceburg, Indiana casino. The
Company expects that if no agreement is reached with respect to Mr. Norton's
Lawrenceburg claim and other severance related

19
<PAGE>
claims, Mr. Norton will commence a cause of action against the Company, which
the Company will vigorously defend.

CONSULTING AGREEMENT -- J THOMAS LONG

In consideration for rendering consulting services to the Company, Mr. Long
received for the period ending December 31, 1997 the amounts otherwise payable
to Mr. Long under his employment agreement and for the period commencing January
1, 1998 and ending December 31, 1999 Mr. Long shall receive a consulting fee of
$175,000 per year.

ACTING CHIEF EXECUTIVE OFFICER -- GEORGE L. BRISTOL

Mr. Bristol, a director of the Company, served as the Acting Chief Executive
Officer of the Company for which he received a fee of $40,000 for each month of
service from January 13, 1997 through April 20, 1997.

INDEMNIFICATION AGREEMENTS

The Company has entered into an indemnification agreement with each of its
directors and executive officers to provide them with the maximum
indemnification allowed under the Company's Certificate of Incorporation,
By-Laws and applicable law.

PROPOSAL TO AMEND THE COMPANY'S
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

The Illinois Gaming Commission has required that the Company amend its
Amended and Restated Certificate of Incorporation ("Certificate") to add a new
Article Eleventh. The effect of the amendment will be to subject any instrument
evidencing a beneficial ownership or creditor interest in the Company to
repurchase by the Company upon certain events. Generally those events involve
the failure of a holder of any such security to comply with certain requirements
of the rules and regulations of any jurisdiction in which the Company does
business. The requirement to comply with the rules and regulations is generally
a condition of the Company's license to operate in such jurisdiction. The full
text of the proposed Article Eleventh of the Certificate is set forth below.

Eleventh (a) If any person (as hereinafter defined) that beneficially
owns Securities (as hereinafter defined) of the Corporation (i) is requested
or required pursuant to any Gaming Regulation (as hereinafter defined) to
appear before, or submit to the jurisdiction of, or provide information to,
any Gaming Authority (as hereinafter defined) and either refuses to do so or
otherwise fails to comply with such request or requirement within a
reasonable period of time or (ii) is determined or shall have been
determined by any Gaming Authority not to be suitable or qualified with
respect to the beneficial ownership of Securities of the Corporation, each
such person by owning Securities in the Corporation hereby agrees to sell to
the Corporation and the Corporation shall have the absolute right in its
sole discretion to repurchase, any or all of the Securities of the
Corporation beneficially owned by such person at a price determined pursuant
to Section (c) hereof. The operation of this Article Eleventh shall not be
stayed by an appeal from a determination of any Gaming Authority.

(b) If the Corporation intends to repurchase Securities beneficially
owned by any person referred to in clause (i) or (ii) of Section (a) hereof,
it shall notify the person in writing of such intention, specifying the
Securities to be repurchased, the date, time and place when such repurchase
will be consummated (the "Repurchase Date"), which date in no event will be
earlier than three business days after the date of such notice and the price
at which such Securities will be repurchased (it being sufficient for
purposes of this Article Eleventh for the Corporation to indicate generally
that the price will be determined in accordance with Section (c) hereof). If
the Corporation gives the notice provided for by the preceding sentence (the
"Repurchase Notice"), such notice shall be deemed to constitute a binding
agreement on the part of the Corporation to repurchase, and on the part of
the person notified to sell, the Securities referred to in such Repurchase
Notice in accordance with this Article Eleventh. Following the Repurchase
Notice date, no dividends or interest or other

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remuneration, as the case may be, will be payable on and no voting rights or
other right conferred by such Security will be available to the holders of
any Securities covered by such Repurchase Notice. If, following such
Repurchase Date, any Securities with respect to which a Repurchase Notice
has been given have not been duly delivered by the holder thereof for
repurchase by the Corporation, the Corporation shall deposit in escrow or
otherwise hold in trust for the benefit of such holder an amount equal to
the aggregate Market Price (as hereinafter defined) of the Securities to be
repurchased. No interest shall be paid on or accrue with respect to any
amount so deposited or held.

(c)(i)the price at which the Corporation shall repurchase such
Securities as are covered by the Repurchase Notice shall be the Market
Price.

(ii) The Corporation shall have the option in its sole discretion of
designating which Securities of the Securities beneficially owned by any
person referred to in clause (i) or (ii) of Section (a) hereof are subject
to the Repurchase Notice, and for purposes hereof, it shall be sufficient
for the Corporation to indicate generally that Securities shall be
repurchased based on the order in which they were purchased or based on the
reverse of such order.

(iii) Any person to whom a Repurchase Notice is given pursuant to the
provision of this Article shall have the burden of establishing to the
satisfaction of the Corporation the dates on which and prices at which such
person acquired the Securities subject to such Repurchase Notice.

(d) For purposes of this Article Eleventh:

1. A "person" shall mean any individual, firm, corporation or other
entity.

2. "Securities" or a "Security" shall mean any instrument evidencing a
direct or indirect beneficial ownership or creditor interest in the
Corporation, including, but not limited to, stock, common and
preferred; bonds; mortgages; debentures; security agreements; notes;
warrants; options and rights.

3. A person shall be a "beneficial owner" of any Securities:

(i) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly; or

(ii) which such person or any of its Affiliates or Associates has (a)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise, or (b) the right to vote
pursuant to any agreement, arrangement or understanding; or

(iii) which are beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any Securities.

4. "Affiliate" or "Associate" shall have the respective meaning ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on March 8,
1985.

5. A "Gaming Regulation" shall mean any statute, rule, regulation,
order, ordinance or interpretation of a Gaming Authority.

6. A "Gaming Authority" shall mean any government, court, or
governmental, administrative or regulatory agency or authority,
Federal, state, local or foreign, which regulates or otherwise
asserts jurisdiction over gaming operations or facilities conducted
by the Corporation or any of its subsidiaries or Affiliates.

7. "Market Price" shall mean the lesser of (i) the price at which the
beneficial owner acquired the Securities or (ii) the last sale price
on the New York Stock Exchange on the date of the Repurchase Notice,
or, if such Securities are not listed on such exchange, on the
principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such Securities are listed,
or, if such Securities are not listed on any such exchange, the
average of the closing bid quotations with respect to a Security on
the Nasdaq Stock Market

21
<PAGE>
or any system then in use, or if no such quotations are available,
the fair market value on the date in question of a Security as
determined by the Board of Directors in good faith.

(e) A majority of the Directors of the Corporation shall have the power
and duty to determine for the purposes of this Article Eleventh on the basis
of information known to them after reasonable inquiry, whether clause (i) or
(ii) of Section (a) hereof applies to any person who beneficially owns
Securities of the Corporation such that the Corporation shall have the right
to repurchase Securities held by such person pursuant to this Article
Eleventh.

RECOMMENDATION

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.

STOCKHOLDER PROPOSALS

Stockholder's proposals intended to be presented at the 1999 Annual Meeting
of Stockholders of the Company must be received in writing by the Company no
later than November 24, 1998 and no earlier than October 25, 1998, for inclusion
in the Company's proxy statement and proxy card relating to the 1999 Annual
Meeting.

INDEPENDENT PUBLIC ACCOUNTANTS

The Company has been advised that a representative of Ernst & Young, its
independent auditors, will be present at the Annual Meeting, will be available
to respond to appropriate questions, and will be given an opportunity to make a
statement if he or she so desires.

OTHER MATTERS

The Company knows of no other matters to be submitted to the stockholders at
the Annual Meeting. If any other matters properly come before the Annual
Meeting, it is the intention of the person named in the enclosed form of proxy
to vote the shares they represent in accordance with the judgments of the
persons voting the proxies.

The Annual Report of the Company for the year ending December 31, 1997, was
mailed to stockholders together with this Proxy Statement.

UPON WRITTEN REQUEST BY ANY STOCKHOLDER ENTITLED TO VOTE AT THE 1998 ANNUAL
MEETING, THE COMPANY WILL FURNISH THAT PERSON WITHOUT CHARGE A COPY OF THE FORM
10-K ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1997 THAT IS REQUIRED TO BE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES. IF THE PERSON REQUESTING THE REPORT WAS NOT A
STOCKHOLDER OF RECORD ON FEBRUARY 27, 1998, THE REQUEST MUST CONTAIN A GOOD
FAITH REPRESENTATION THAT THE PERSON MAKING THE REQUEST WAS A BENEFICIAL OWNER
OF COMPANY'S COMMON STOCK AT THE CLOSE OF BUSINESS ON THAT DATE. REQUESTS SHOULD
BE ADDRESSED TO PATSY S. HUBBARD, ARGOSY GAMING COMPANY, 219 PIASA STREET,
ALTON, ILLINOIS 62002.

By Order of the Board of Directors
PATSY S. HUBBARD
SECRETARY

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<PAGE>

ARGOSY GAMING COMPANY

1998 PROXY

PLEASE MARK IN OVAL IN THE FOLLOWING MANNER USING DARK PEN ONLY.

1. Election of Directors
Nominees: F. Lance Callis, John B. Pratt, Sr. and Edward F. Brennan.

For All Withheld All For All Except
/ / / / / /

Nominee(s) written below

- ----------------------------------------------

A vote FOR Item 1 is recommended by the Board of Directors.

Proposals

2. Proposal to Amend the Company's Amended and Restated Certificate of
Incorporation

For Against Abstain
/ / / / / /

A vote FOR Item 2 is recommended by the Board of Directors.

3. In their discretion, the proxies are authorized to vote upon any other
business as may properly come before the meeting.

For Against Abstain
/ / / / / /

A vote FOR Item 3 is recommended by the Board of Directors.

Mark here if you plan to attend the meeting. / /

Please sign this proxy and return it promptly whether or not you expect to
attend the meeting. You may nevertheless vote in person if you attend. Please
sign exactly as your name appears herein. Give full title if an Attorney,
Executor, Administrator, Trustee, Guardian, etc. For an account in the name
of two or more persons, each should sign, or if one signs, he should attach
evidence of his authority.

Dated:_______________________, 1998

- -----------------------------------
Signature

THIS PROXY WILL BE VOTED IN ACCORDANCE WITH SPECIFICATION MADE. IF NO CHOICES
ARE INDICATED, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2 AND 3.

<PAGE>

PROXY PROXY

ARGOSY GAMING COMPANY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS, APRIL 23, 1998

The undersigned hereby appoints James B. Perry and Dale R. Black, and each of
them, attorneys and proxies, with the power of substitution in each of them,
to vote for and on behalf of the undersigned at the Annual Meeting of
Shareholders of the Corporation to be held on April 23, 1998, and at any
adjournment thereof, upon matters properly coming before the meeting, as set
forth in the related Notice of Meeting and Proxy Statement, both of which
have been received by the undersigned. Without otherwise limiting the general
authorization given hereby, said attorneys and proxies are instructed to vote
as follows:

YOUR VOTE IS IMPORTANT! PLEASE MARK, SIGN AND DATE THIS PROXY ON THE
REVERSE SIDE AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.