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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 2, 1998
REGISTRATION NO. 333-58859
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________
ARGOSY GAMING COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 37-1304247
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
________________
219 PIASA STREET
ALTON, ILLINOIS 62002-6232
(618) 474-7500
(ADDRESS AND TELEPHONE NUMBER
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
________________
JAMES B. PERRY
ARGOSY GAMING COMPANY
219 PIASA STREET
ALTON, ILLINOIS 62002
(618) 474-7500
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
________________
COPY OF COMMUNICATIONS TO:
M. FINLEY MAXSON
WINSTON & STRAWN
35 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601
(312) 558-5600
________________
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ARGOSY GAMING COMPANY
COMMON STOCK
($.01 PAR VALUE)
This Prospectus relates to the offer and sale by certain persons
listed under "Selling Stockholders" (collectively, the "Selling Stockholders"),
of (i) up to 5,000,000 shares of Common Stock (collectively, the "Shares"), par
value $0.01 (the "Common Stock") of Argosy Gaming Company ("Argosy" or the
"Company"), issuable upon conversion of the Company's Series A Convertible
Preferred Stock (the "Preferred Shares") and upon exercise of the Company's
Warrants to Purchase Common Stock (the "Warrants"), and (ii) in accordance with
Rule 416 under the Securities Act of 1933, as amended (the "Securities Act"),
such presently indeterminate number of additional shares as may be issuable upon
or after conversion of the Preferred Shares or exercise of the Warrants based
upon fluctuations in the conversion price of the Preferred Shares and as a
result of stock splits, stock dividends and other similar transactions. All of
the Shares may be offered by the Selling Stockholders or by pledgees, donees,
transferrees or other successors in interest that receive Shares as a gift,
partnership distribution or other non-sale related transfer. See "Selling
Stockholders." The Shares are being registered by the Company pursuant to
registration rights granted to the Selling Stockholders.
The Selling Stockholders have not advised the Company of any
specific plans for the distribution of the Shares covered by this Prospectus.
It is anticipated, however, that the Shares will be offered and sold by the
Selling Stockholders from time to time in transactions on The New York Stock
Exchange, in privately negotiated transactions, or by a combination of such
methods of sale, at such fixed prices as may be negotiated from time to time,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders
may effect such transactions by selling the Shares to or through
broker-dealers and such broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the Selling Stockholders or the
purchasers of the Shares for whom such broker-dealers may act as agent or to
whom they sell as principal or both (which compensation to a particular
broker-dealer might be in excess of customary commissions). See "Plan of
Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders. The Company has agreed to bear certain
expenses in connection with the registration and sale of the Shares being
offered by the Selling Stockholders. The Company has agreed to indemnify the
Selling Stockholders against certain liabilities, including liabilities under
the Securities Act.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION
OF CERTAIN RISKS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY.
The Common Stock is listed on the New York Stock Exchange under the symbol
"AGY". On September 30, 1998, the last reported sale price of the Common Stock
on the New York Stock Exchange was $2 5/16 per share. See "Price Range of
Common Stock."
_________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
_________________
The date of this Prospectus is October 6, 1998.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR ANY AGENT, UNDERWRITER OR
DEALER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER, IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Certain
information, as of particular dates, concerning the Company's directors and
officers, their compensation, the principal holders of securities of the
Company and any material interests of such persons in transactions with the
Company is discussed in proxy statements of the Company distributed to
stockholders of the Company and filed with the Commission. Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549; and at the following regional
offices of the Commission: Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and Suite 1300, Seven World Trade
Center, New York, New York 10048. Copies of such materials may be obtained
from the Public Reference Branch of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Certain of these materials may
also be obtained via the Commission's website (http://www.sec.gov). In
addition, such reports, proxy statements and other information can be
inspected at the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005.
The Company has filed with the Commission in Washington, D.C., a
Registration Statement on Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered
hereby. This Prospectus does not contain all of the information set forth in
the Registration Statement and exhibits thereto, as permitted by the rules
and regulations of the Commission. For further information pertaining to the
Company and the securities offered hereby, reference is made to the
Registration Statement and the exhibits thereto, which may be examined
without charge at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies
thereof may be obtained from the Public Reference Branch of the Commission
upon payment at prescribed rates.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed by the Company with
the Commission are incorporated by reference in this Prospectus:
(a) the Company's Annual Report on Form 10-K and 10-K/A for the year
ended December 31, 1997;
(b) the Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1998;
(c) the Company's Quarterly Report on Form 10-Q and 10-Q/A for the
quarterly period ended June 30, 1998; and
(d) the Company's Current Reports on Form 8-K, dated March 18, 1998,
and on Form 8-K and 8-K/A, dated June 16, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of securities contemplated hereby shall be
deemed to be incorporated by reference in this Prospectus or any Prospectus
Supplement and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference or deemed to be
incorporated by reference in this Prospectus or any Prospectus Supplement shall
be deemed to be modified or superseded for all purposes of this Prospectus or
such Prospectus Supplement to the extent that a statement contained herein,
therein or in any subsequent filed document which also is incorporated or deemed
to be incorporated by reference herein or in such Prospectus Supplement modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus or any Prospectus Supplement.
The Company will provide without charge to each person to whom a copy
of this Prospectus has been delivered, upon the written or oral request of such
person, a copy of any and all of the documents referred to above which have been
or may be incorporated in this Prospectus by reference (other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
therein). Request for such copies should be directed to: Patsy S. Hubbard,
Corporate Secretary, Argosy Gaming Company, 219 Piasa Street, Alton, Illinois
62002; telephone number (618) 474-7500.
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THE COMPANY
Argosy Gaming Company ("Argosy" or the "Company") is a
multi-jurisdictional developer, owner and operator of riverboat casinos and
related entertainment facilities in the midwestern and southern United
States. The Company, through its subsidiaries, owns and operates the Alton
Belle Casino in Alton, Illinois, serving the St. Louis metropolitan market;
the Argosy Casino at Riverside in Riverside, Missouri, serving the Kansas
City metropolitan market; the Belle of Baton Rouge Casino in Baton Rouge,
Louisiana; and the Belle of Sioux City Casino in Sioux City, Iowa. The
Company manages, and has a 57.5% general partnership interest in, the Argosy
Casino Lawrenceburg in Lawrenceburg, Indiana, serving the Cincinnati
metropolitan market.
The Company was incorporated in Delaware in 1992. The Company's
principal executive offices are located at 219 Piasa Street, Alton, Illinois
62002, and its telephone number is (618) 474-7500.
RISK FACTORS
SUBSTANTIAL INDEBTEDNESS
At March 31, 1998, the Company's total long-term indebtedness was
approximately $443.6 million (including current maturities), its total
stockholders' equity was approximately $30.2 million and its total
capitalization was approximately $473.8 million. The Company's debt to equity
ratio has increased from 1.7 to 1.0 at December 31, 1995 to 13.7 to 1.0 at
December 31, 1997 due to the issuance in June 1996 of $235 million principal
amount of its 131/4% First Mortgage Notes due 2004 (the "Notes") and the losses
incurred by the Company in 1996 and 1997. See "History of Net Losses." The
ability of the Company to meet its debt service requirements and to engage in
various significant corporate transactions that may be important to its business
will be dependent upon future operating performance, which is subject to
financial, economic, competitive, regulatory and other factors affecting the
Company, many of which are beyond the Company's control. These inherent
uncertainties are compounded as a result of the limited history of the riverboat
gaming industry. Since a substantial portion of its cash flow from operations
must be dedicated to debt service (approximately $70 million in 1998), there can
be no assurance that the Company's cash flow from operations will be sufficient
to meet its debt service requirements and other obligations or to repay its
indebtedness at maturity. If the Company is unable to generate sufficient cash
flow, it could be required to adopt one or more alternatives, such as reducing
or delaying planned capital expenditures, selling assets, restructuring debt or
obtaining additional capital. However, the Company's ability to raise funds by
selling assets is greatly restricted by the Indenture, dated June 5, 1996 (the
"Indenture"), under which the Notes were issued. The Company's ability to incur
additional indebtedness is restricted by the Indenture until such times as the
Company achieves an interest coverage ratio, as defined, of 2.0 to 1.0. The
Company's ability to effect equity offerings is dependent on the Company's
results of operations and market conditions. There can be no assurance that any
of such alternatives will be feasible on satisfactory terms, and resorting to
alternative sources of funds could impair the Company's competitive position and
reduce its future cash flow.
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HISTORY OF NET LOSSES
The Company incurred net losses of $24.8 million and $40.2 million
for the years ended December 31, 1996 and 1997, respectively, and $13.3
million and $2.3 million for the six months ended June 30, 1997 and 1998,
respectively. These net losses resulted primarily from the incurrence of
interest expense during the period when the Lawrenceburg Casino was under
construction. The Company had income from operations of $6.5 million in 1997
and $35.0 million during the six months ended June 30, 1998. During the
three months ended June 30, 1998 the Company had income from operations of
$19.4 million and net income of $.2 million. On June 30, 1998 the Company
had total stockholders' equity of $30.2 million, net of a retained deficit of
$41.9 million.
The Company's return to positive net income for the three months
ended June 30, 1998 was a result of the net income derived by the Company
from the Lawrenceburg Casino, which moved from a temporary site to its
permanent site in December 1997 and became fully operational in June 1998
when the hotel was fully opened. The Company's ability to maintain positive
net income in the future and to meet its operating and debt service
requirements are substantially dependent upon the continued success of the
Lawrenceburg Casino. The Lawrenceburg Casino operations could be adversely
affected by numerous factors including, increased competition, change in
gaming or taxation regulations, adoption of gaming in the State of Ohio or
natural disasters, including flooding along the Ohio River, which would have
a material adverse effect on the financial position and results of operations
of the Company.
The Company's results of operations for the six and three months
ended June 30, 1998 were also favorably impacted by improved performance in
Alton and Sioux City due to focused marketing efforts and opening
efficiencies. However, the Company's results of operations were adversely
affected by increased competition at Riverside and by a market decline in
Baton Rouge due to increased competition from other gaming operations in
nearby locations. Under the terms of the development agreement with the City
of Baton Rouge, the Company is required to pay a head tax of $2.50 per
passenger until such time as the Company commences construction on a hotel
near the Company's facility. Once construction commences on the hotel, the
head tax ceases and the Company will save approximately $3.5 million
annually. The Company is in negotiations with several developers pertaining
to the construction of a hotel. While the Company believes it will structure
an agreement for the development of the hotel, no assurance can be given as
to the timing of the development of a hotel or as to the required financial
commitment of the Company with respect to the development of a hotel. The
Company's ability to recover the carrying amount of the long-lived assets of
its Baton Rouge operations is dependent on several things, including
achieving anticipated operating results, the competitive environment and the
hotel development, which would stop the $2.50 incremental head tax. If the
Company is unable to develop the hotel or if the Company's operating results
do not improve through cost efficiencies or following the elimination of
video poker at competing outlets, the Company could take a charge amounting
to a substantial portion of the $115 million of Baton Rouge investment.
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COMPETITION
The casino gaming industry is characterized by intense competition
from a large number of participants, including riverboat casinos, dockside
casinos, land-based casinos, video lottery and poker machines in locations
other than casinos, Native American gaming and other forms of gaming in the
United States. Gaming industry competition is particularly intense in each
of the markets where the Company operates. Historically, the Company has
been an early entrant in each of its markets; however, as its competitors
have opened properties in these markets, the Company's operating results in
these markets have been negatively affected. The Company expects that many
of its competitors will have more gaming industry experience, will be larger
and will have significantly greater financial and other resources than the
Company. In addition, certain of its direct competitors may have superior
facilities and or operating conditions in terms of (i) dockside versus
cruising riverboat gaming, (ii) the amenities offered by the competing casino
and its related support and entertainment facilities, (iii) convenient
parking facilities, (iv) ease of accessibility to the casino site, and (v)
favorable tax or regulatory factors. Given these factors, substantial
increased competition could have a material adverse effect on the Company's
operations.
The Company's Alton Casino faces competition from four other
riverboat casino facilities currently operating in the St. Louis area and
expects the level of competition to remain intense in the future. The most
recent casino complex to open includes two independently owned facilities,
each of which operate two dockside vessels. This casino complex, which
increased gaming capacity in St. Louis by approximately 50%, opened in March
of 1997. This increased competition has contributed to the decrease in
operating income reported by the Company for Alton from $28.8 million in 1994
to $7.5 million in 1997. The Company's Riverside Casino faces competition
from three casino companies in the Kansas City area that offer dockside
gaming, two of which offer two gaming vessels each. This increased
competition has contributed to the decrease in operating income reported by
the Company for Riverside from $22 million in 1995 to $2.5 million in 1997.
Until July 1998 there was an additional competitor in the Kansas City market
which recently closed its facility. The Company's Baton Rouge Casino faces
competition from one casino located in downtown Baton Rouge, a nearby Native
American casino and multiple casinos throughout Louisiana. This increased
competition has contributed to the decrease in operating income reported by
the Company for Baton Rouge from $2.9 million in 1995 to a loss of $4.1
million in 1997. Currently, the Company faces competition in Sioux City,
Iowa from two land-based Native American casinos, slot machines at a
pari-mutual race track in Council Bluffs, Iowa and two riverboat casinos in
the Council Bluffs, Iowa/Omaha, Nebraska market. The Indiana Partnership
faces competition from one other riverboat casino in the Cincinnati market,
which opened in October 1996. There could be further competition in any
market which the Company operates as a result of legislative changes or other
events. The Company expects each market in which it participates, both
current and prospective, to be highly competitive.
GAMING REGULATION
LICENSING AND REGULATION BY GAMING AND LOCAL AUTHORITIES. The
ownership and operation of casino gaming facilities are subject to extensive
state and local regulation. The states of Illinois, Missouri, Louisiana,
Iowa and Indiana and the applicable local authorities require licenses,
findings of suitability, registrations, permits and approvals to be held by
the Company and
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its subsidiaries as well as the officers and directors of the Company and its
subsidiaries. The Illinois Gaming Board, the Missouri Gaming Commission, the
Louisiana Gaming Control Board, the Iowa Racing and Gaming Commission and the
Indiana Gaming Commission (herein collectively referred to as "Applicable
Gaming Commissions") may, among other things, limit, condition, suspend, fail
to renew or revoke a license or approval to own an equity interest in the
Company or any of its subsidiaries, for any cause deemed reasonable by such
licensing authority. The suspension, failure to renew or revocation of any
of the Company's licenses or the levy on the Company of substantial fines or
forfeiture of assets would have a material adverse effect on the business of
the Company. In certain circumstances, the Applicable Gaming Commissions have
the authority to approve certain distributions from subsidiaries to the
Company.
To date, the Company has obtained all governmental licenses,
registrations, permits and approvals necessary for the operation of its
current gaming activities. However, gaming licenses and related approvals
are deemed to be privileges under Illinois, Missouri, Louisiana, Iowa and
Indiana law, and no assurances can be given that any new licenses, permits
and approvals that may be required in the future will be given or that
existing ones will not be revoked or fail to be renewed. In addition, the
loss of a license in one jurisdiction could trigger the loss of a license or
effect the Company's eligibility for a license in another jurisdiction.
The approval of the Applicable Gaming Commissions is required for any
material debt or equity financing. No assurance can be given that the Company
will obtain the required approvals for future financings.
RISK OF ADVERSE CHANGES IN LAWS AND REGULATIONS. Regulations with
respect to the conduct of gaming activities and the obligations of gaming
companies in any jurisdiction in which the Company has gaming operations are
subject to change and could impose additional operating, financial or other
burdens on the conduct of the Company's business. Moreover, legislation to
prohibit or limit gaming may be introduced in the future in states where gaming
has been legalized. The enactment of any such legislation or regulatory changes
in jurisdictions where the Company operates gaming facilities could have a
material adverse effect on the Company.
RISK OF LEGALIZATION OF GAMING JURISDICTIONS ADJACENT TO THE
COMPANY'S OPERATIONS. Casino gaming is currently prohibited in several
jurisdictions adjacent to Missouri, Iowa and Indiana. As a result, residents
of these jurisdictions, principally Kansas, Nebraska, Ohio and Kentucky,
comprise a significant portion of the patrons of the Company's casinos in
Riverside, Missouri, Sioux City, Iowa and Lawrenceburg, Indiana. The
legalization of casino gaming in Kansas would have a material adverse effect
on the Company's Riverside casino because residents of Kansas comprise a
significant target market. The legalization of casino gaming in Ohio or
Kentucky would have a material adverse effect on the Company's Lawrenceburg
Casino because a substantial portion of the Lawrenceburg Casino's customers
are residents of Ohio and Kentucky.
GAMING TAXATION AND FEES. The Company believes that the prospect of
significant additional tax revenue is one of the primary reasons why new
jurisdictions have legalized gaming. As a result, gaming operators are
typically subject to significant taxes and fees in addition to normal federal
and state corporate income taxes. Such taxes and fees are subject to increase
at any time. The Company pays substantial taxes and fees with respect to its
operations and will likely incur
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similar burdens in any other jurisdiction in which its conducts gaming
operations in the future. Any material increase, or the adoption of
additional taxes or fees, could have a material adverse effect on the
Company's future financial results.
CERTAIN RISKS UNDER THE LAWRENCEBURG CASINO PARTNERSHIP AGREEMENT
The Lawrenceburg Casino partnership agreement provides that the
Company's wholly-owned subsidiary, The Indiana Gaming Company, can be removed
as general partner of the partnership by the limited partners under certain
limited circumstances, including: (i) a material breach (after notice and
expiration of applicable cure periods) of certain material provisions of the
partnership agreement dealing with such things as distributions to partners
or the failure to obtain the required consent of the limited partners for
certain major decisions; (ii) conviction of embezzlement or fraud; (iii)
certain bankruptcy events; (iv) if The Indiana Gaming Company's partnership
interest is less than 40% due to sales or dilution for failure to pay
required capital; (v) a final unappealable judgment against The Indiana
Gaming Company in excess of $25 million which is uninsured and remains
unsatisfied, unreleased or unstayed for 180 days; (vi) certain acts
constituting "gross mismanagement;" (vii) if The Indiana Gaming Company fails
to fund project costs in excess of $215 million (after expiration of
applicable notice and cure periods); and (viii) if the Trustee under the
Indenture were to foreclose on the Company's pledge of its partnership
interest in the partnership. Upon removal as general partner, the general
partnership interest of The Indiana Gaming Company becomes a "special limited
partner" interest with rights to partner distributions but only limited
voting rights on partnership matters. Also, if the reason for the removal is
an event described in clause (i), (ii), (iii), (v), (vi) or (viii) above, the
limited partners may acquire all, but not less than all, of The Indiana
Gaming Company's interest for the fair market value thereof determined by an
appraisal process.
The Lawrenceburg partnership agreement provides that: (i) after the
third anniversary date of commencement of operations at the Lawrenceburg
Casino (December 10, 1999), each limited partner has the right to sell its
interest to the other partners (pro rata in accordance with their respective
percentage interests) or (ii) at any time after a deadlock by the parties
with respect to significant items in any annual operating budget of the
partnership for budget year 1999 and thereafter, any partner has a right to
sell its interest to the other partners (the limited partner pursuant to
clause (i) and the partner desiring to sell pursuant to clause (ii) are
hereinafter referred to as a "Selling Partner" and the non-selling partners
are hereinafter referred to as the "Non-Selling Partners"). The partnership
agreement provides that after the Selling Partner gives notice of its intent
to sell, the Selling Partner and Non-Selling Partners shall have 60 days to
attempt in good faith to agree to a purchase price. If within such period of
time no such agreement is reached, then the Selling Partner's interest shall
be appraised pursuant to an appraisal process to determine the fair market
value thereof. After the fair market value of the Selling Partner's interest
is determined by the appraisal process, the Non-Selling Partners have 60 days
to reject such sale at that price, and if the Non-Selling Partners decline to
purchase the interest of the Selling Partner at the appraisal price, then the
general partner is to solicit bids and sell all of the assets of the
Partnership within twelve months to the highest bidder and Indiana Gaming
L.P. will be dissolved. No assurances can be given that The Indiana Gaming
Company, if it is a Non-Selling Partner, will have or will be able to obtain
sufficient funds to acquire any Selling Partner's interest in the
circumstances provided for above or that The Indiana Gaming Company will
choose to make such purchase and therefore the
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assets of the partnership would have to be sold to the highest bidder as
provided above. In addition, the partnership agreement provides all partners
with a right of first refusal on transfers of partnership interest. A
foreclosure by the Trustee under the Indenture on the Company's pledge of its
partnership interest shall be deemed a transfer giving rise to a right of
first refusal.
LOSS OF A RIVERBOAT OR DOCKSIDE FACILITY FROM SERVICE; FLOODING
The Company's revenues are generated primarily by its gaming
operations conducted on riverboat casinos, which are supplemented by dockside
entertainment and support facilities. A riverboat or dockside facility could
be lost from service for a variety of reasons, including casualty, forces of
nature, mechanical failure or extended or extraordinary maintenance or
inspection. In addition, U.S. Coast Guard regulations require a hull
inspection for all riverboats at five-year intervals. To comply with the
inspection requirement, which could take a substantial amount of time, the
riverboats must be taken to a U.S. Coast Guard approved dry docking facility.
The Belle of Sioux City riverboat was removed from service on April 13, 1996
for such a hull inspection. The riverboat arrived at an approved dry docking
facility on April 16, 1996, passed its inspection and returned to service on
May 9, 1996. No interruption in gaming operations occurred in Sioux City as
a result of the hull inspection process, as the Company temporarily
transferred gaming operations to the original Alton Belle prior to removing
the Belle of Sioux City from service. In 1998 the Alton Belle Casino II
completed its hull inspection without any disruption of service. The Belle
of Baton Rouge and Argosy Casino in Riverside riverboats are due for this
inspection in mid-1999.
The severe flooding which occurred along the Mississippi River in
metropolitan St. Louis during the summer of 1993 caused the Company to
experience decreased attendance and increased operating expenses. The
Company again experience flooding in May 1995 at both the Alton, Illinois and
Riverside, Missouri sites; however, the flooding did not result in any
significant decrease in attendance or increase in expenses at either site.
All of the Company's riverboat casino sites are vulnerable to the risk of
future flooding. Any flood or other severe weather condition that might
occur in the future could adversely affect attendance and increase expenses,
and could lead to the loss of use of a riverboat or dockside facility for an
extended period. In addition, a significant portion of the Company's
land-based assets are not covered by flood insurance for any loss of damage
they might sustain by flooding and the Company does not currently have any
business interruption insurance. The loss of any riverboat from service, the
inability to use a dockside facility or the loss of parking or land-based
facilities could have a material adverse effect on the Company's financial
results.
PENDING INTERNAL REVENUE SERVICE AUDIT
On November, 1, 1994, the Company received a Notice of the
beginning of an Administrative Proceeding from the Internal Revenue Service
("IRS") for the 1992 and 1993 tax years of Metro Entertainment & Tourism,
Inc. ("Metro"). Metro was merged with and into the Company immediately prior
to its initial public offering in February 1993. Metro and J. Connors Group,
Inc. ("Connors") were the partners of Alton Riverboat Gambling Partnership
("ARGP") which until the Company's initial public offering owned and operated
the Alton, Illinois riverboat casino. The IRS has proposed certain
adjustments with respect to the Company for its 1993 tax year
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in a 30-day letter. The IRS has also proposed adjustments for ARGP that flow
through to Metro in a 60-day letter. Finally, on March 16, 1998 the IRS
issued a 60-day letter to Metro for its tax years ending December 1992 and
February 1993. The principal issues raised by the IRS in the Metro 60-day
letter involve the status of Metro as an S Corporation and the deductibility
of the $8.5 million accommodation fee paid to William McEnery in 1992 and
1993. The total federal tax liability asserted by the IRS against the
Company resulting from these proposed adjustments is approximately $11.0
million including interest through June 30, 1998 but excluding penalties, if
any. On May 12, 1998, the Company filed a protest to these proposed
adjustments to the Appeals Office of the IRS and is vigorously contesting
these proposed adjustments. While the Company believes the predecessor
entity has legal authority for its position that it is not subject to federal
and certain state income taxes because it met the S Corporation requirements,
no assurances can be given that its position will be upheld. This contingent
tax liability could have a material adverse effect on the Company's results
of operations, financial position and cash flows. No provision has been made
for this contingency in the Company's consolidated financial statements.
SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS
The Company has granted registration rights to the holders of the
Preferred Shares and the Warrants with respect to all of the shares of Common
Stock issuable upon their conversion or exercise, as the case may be. On June
16, 1998, using the assumptions set forth below, the 800 Preferred Shares issued
on that date were convertible into a total of 2,469,135 shares of Common Stock
and the 800 Warrants issued on that date were exercisable to purchase a total of
292,612 shares of Common Stock. The Preferred Shares are convertible at the
lower of the fixed conversion price and the floating conversion price. The
fixed conversion price and the warrant exercise price are subject to adjustment
to prevent dilution and may be reset downward 270 days after issuance depending
on market conditions. The fixed conversion price is also subject to adjustment
upon the occurrence of certain events. The floating conversion price is
determined by market prices during a period immediately preceding conversion.
Thus, due to the indeterminate nature of the floating conversion price and the
possibility of adjustments to the fixed conversion price and the warrant
exercise price, the number of shares of Common Stock referred to above as being
issuable is illustrative and may not set forth the total number of shares
actually issued upon conversion of the Preferred Shares and the exercise of the
Warrants, in full. Those numbers are based on an assumed floating conversion
price of $3.24 per share and a fixed conversion price and a warrant exercise
price of $3.89 per share. See Note (2) to "Selling Stockholders" for a recent
floating conversion price.
Subject to fulfillment of certain terms and conditions, the holders
of the Preferred Shares have the right to purchase, and the Company has the
right to require the holders of the Preferred Shares to purchase, up to an
additional 800 Preferred Shares and 800 Warrants in the aggregate. The fixed
conversion price for those Preferred Shares and the exercise price for those
Warrants would be determined at the time of their issuance; however, the
Company believes that it is likely that the total number of shares of Common
Stock issuable upon their conversion or exercise, as the case may be, would
not be less than is the case with the 800 Preferred Shares and 800 Warrants
outstanding on June 16, 1998.
10
<PAGE>
By exercising their registration rights, converting the Preferred
Shares into Common Stock and purchasing Common Stock upon exercise of the
Warrants, the holders of the Preferred Shares and Warrants can cause a large
number of shares of Common Stock to be registered and become freely tradeable
without restrictions under the Securities Act of 1933. Such sales may have an
adverse effect on the market price of the Common Stock and could impair the
Company's ability to raise additional capital.
In addition, future sales of shares by existing stockholders could
adversely affect the prevailing market price of the Common Stock. Substantially
all of the 24,498,333 shares of Common Stock outstanding as of February 27,
1998 were freely tradeable in the public market, of which 10,012,181 shares held
by affiliates of the Company were eligible for immediate sale in the public
market subject to volume and other restrictions of Rule 144; however, certain of
those affiliates have registration rights with respect to a total of 9,928,681
of such shares of Common Stock which, if exercised, would permit those shares to
be sold without the volume and other restrictions of Rule 144.
EXCHANGE LISTING
The Company has been advised by the New York Stock Exchange ("NYSE")
that it does not currently meet the NYSE's requirements for continued listing.
Specifically, the Company does not meet the NYSE's net tangible asset
requirement of at least $12 million or the requirement that it have a three (3)
year average net income of at least $600,000. The Company has met with the
staff of the NYSE and presented the Company's plan for complying with the NYSE's
requirements for continued listing. On September 11, 1998 the Company was
informed by the NYSE that the Company will continue to be listed on the NYSE,
but that the NYSE will review on a quarterly basis the Company's progress with
the plan submitted by the Company to comply with the NYSE continued listing
criteria. In the event the NYSE decides to de-list the Company, the Company
intends to apply for listing on the American Stock Exchange ("ASE") or the
NASDAQ National Market ("NASDAQ"); however, the Company does not currently meet
all of the listing requirements of either the ASE or NASDAQ. No assurance can
be given that the Company will continue to be listed on the NYSE or that, if the
Company is de-listed from the NYSE, the Company will be listed on either the ASE
or NASDAQ. In the event the Company is unable to list its Common Stock on ASE
or NASDAQ, quotations for the Common Stock would most likely occur through the
over-the-counter "pink sheets" which would limit the marketability of the Common
Stock. Further, the failure of the Common Stock to trade on a national exchange
or market would (a) give the holders of the Preferred Shares the right, subject
to limitations set forth in the Certificate of Designations for such shares, to
require that Company to redeem the Preferred Shares and (b) likely result in a
default by the Company under its Convertible Notes and First Mortgage Notes
which would have a material adverse effect on the Company.
11
<PAGE>
PRICE RANGE OF COMMON STOCK
The Common Stock is listed and traded on the New York Stock
Exchange. The following table sets forth the high and low prices of the
Common Stock for each full quarterly period for the Company's two most recent
fiscal years and the current fiscal year.
<TABLE>
<CAPTION>
SALES PRICE
LOW HIGH
<S> <C> <C>
CALENDAR 1996
First Quarter $6-11/16 $9-1/4
Second Quarter 7 8-3/4
Third Quarter 4-1/4 7-3/4
Fourth Quarter 4-1/2 7-1/8
CALENDAR 1997
First Quarter $3-3/8 $5-1/4
Second Quarter 2-3/4 4
Third Quarter 2-15/16 5-3/4
Fourth Quarter 3-1/16 5-5/8
CALENDAR 1998
First Quarter $3-1/4 $4-1/2
Second Quarter 2-3/4 4-1/8
Third Quarter 2-1/16 3-3/16
</TABLE>
The last reported sale price for the Common Stock on September 30, 1998 was
$2-5/16 per share.
SELLING STOCKHOLDERS
The shares of Common Stock offered by this Prospectus (i) are issuable
to the holders of the Preferred Shares upon conversion thereof, if converted,
and to the holders of the Warrants upon exercise thereof, if exercised, and (ii)
are offered for the account of the Selling Stockholders.
12
<PAGE>
The Preferred Shares and/or the Warrants may be transferred or assigned by
the holders thereof between the date of this Prospectus and the date of
conversion, if converted, or the date of exercise, if exercised. In
addition, the number of shares of Common Stock issuable to the holders of the
Preferred Shares upon conversion will be determined based upon the applicable
conversion price at the time of conversion and the number of shares of Common
Stock issuable to the holders of the Warrants upon exercise will be
determined based upon the applicable exercise price at the time of exercise.
The Company has agreed to register a specified number of Shares for
resale by the Selling Stockholders. The number of Shares shown in the
following table as being beneficially owned by the Selling Stockholders does
not include such presently indeterminate number of additional shares of
Common Stock as may be issuable upon conversion of the Preferred Shares based
upon fluctuations in the conversion price of the Preferred Shares, but which
shares are, in accordance with Rule 416 under the Securities Act, included in
the Registration Statement of which this Prospectus forms a part.
The Shares covered by this Prospectus may be offered from time to time
by the Selling Stockholders named below:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF COMMON
STOCK BENEFICIALLY OWNED NUMBER OF SHARES OF COMMON
AS OF SEPTEMBER 25, NUMBER OF SHARES OF COMMON STOCK BENEFICIALLY OWNED
NAME OF SELLING STOCKHOLDER 1998(1)(2) STOCK OFFERED HEREBY(3) AFTER OFFERING (4)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AGR Halifax Fund, Ltd.(13) 1,608,259 (5) 1,875,000 0
Heracles Fund (14) 799,130 (6) 937,500 0
Leonardo, L.P. (15) 750,521 (7) 875,000 0
Themis Partners L.P. (14) 536,087 (8) 625,000 0
Ramius Fund, Ltd. (13) 321,652 (9) 375,000 0
Raphael, L.P. (15) 107,217(10) 125,000 0
GAM Arbitrage
Investments, Inc. (15) 80,414(11) 93,750 0
AG Super Fund
International, L.P. (15) 80,414(12) 93,750 0
</TABLE>
________________
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities and includes any securities
which the person has the right to acquire within 60 days of September 25,
1998 through the conversion or exercise of any security or other right.
(2) Beneficial ownership is determined as of September 25, 1998 and is based
upon a conversion price of the Preferred Shares equal to $2.025 (which is
the average of the five lowest closing bid prices of the Common Stock for
the 30 consecutive trading days ended September 25, 1998). The actual
number of shares of Common Stock issuable upon conversion of the Preferred
Shares is that number of shares of Common Stock equal to the quotient of
(i) the aggregate stated value of the Preferred Shares ($10,000 per share),
plus any accrued and
13
<PAGE>
unpaid premium of 4% per annum divided by (ii) the conversion price. The
conversion price is the lesser of (a) $3.89 per share, or (ii) the market
price of the Common Stock, where the market price is the average of the
five lowest closing bid prices for the Common Stock for the 30 consecutive
trading days immediately preceding such date of determination. No holder
of Preferred Shares or Warrants is entitled to convert or exercise such
securities to the extent that the shares to be received by such holders
upon such conversion or exercise would cause such holders in the aggregate
to beneficially own more than 4.99% of the Common Stock of the Company
(other than shares deemed to be beneficially owned through ownership of the
Preferred Shares), except upon 61 days prior notice to the Company. In
addition, pursuant to the rules of The New York Stock Exchange, in the
absence of stockholder approval, the aggregate number of shares issuable to
the Selling Stockholders upon the conversion of the Preferred Shares may
not exceed 19.99% of the outstanding Common Stock as of June 16, 1998
(approximately 4,897,216 shares). Unless such stockholder approval is
obtained, none of the Selling Stockholders will be able to acquire more
than its proportionate share of such maximum amount. The Company may be
required to redeem any Preferred Shares which may not be converted because
of such limitation.
(3) Represents the allocation among the Selling Stockholders of 5,000,000
shares of Common Stock potentially issuable as of September 25, 1998, upon
conversion and exercise of the 800 Preferred Shares and related Warrants
held by the Selling Stockholders which the Company is registering pursuant
to the Registration Rights Agreement between the Company and the Selling
Stockholders. The number of shares of Common Stock registered pursuant to
the Registration Statement on behalf of the Selling Stockholders holding
Preferred Shares and Warrants and the number of Shares offered hereby by
such holders have been determined by agreement between the Company and such
Selling Stockholders. Because the number of Shares that will ultimately be
issued upon conversion of the Preferred Shares or exercise of the Warrants
is dependent, subject to certain limitations, upon the average of certain
closing bid prices of the Common Stock prior to conversion, as described in
footnote (2) above, and certain antidilution adjustments, such number of
shares (and therefore the number of shares offered hereby) cannot be
determined at this time. The number of shares being offered by the Selling
Stockholders holding the Preferred Stock, in accordance with Rule 416 under
the Securities Act, also includes such presently indeterminate number of
additional shares as may be issuable upon conversion of the Preferred
Shares, based upon fluctuations in the conversion price of the Preferred
Shares and future antidilution adjustments in accordance with the terms of
the Certificate of Designation for the Preferred Shares and the Warrants.
(4) Gives effect to the conversion of all of the Preferred Shares and exercise
of all of the Warrants and sale of the shares of Common Stock upon such
conversion or exercise.
(5) Consists of (i)1,498,529 shares of Common Stock issuable upon conversion of
Preferred Shares, and (ii) 109,730 shares of Common Stock issuable upon
exercise of the related Warrant, each calculated as of September 25, 1998.
(6) Consists of (i) 744,265 shares of Common Stock issuable upon conversion of
Preferred Shares, and (ii) 54,865 shares of Common Stock issuable upon
exercise of the related Warrant, each calculated as of September 25, 1998.
(7) Consists of (i) 699,314 shares of Common Stock issuable upon conversion of
Preferred Shares, and (ii) 51,207 shares of Common Stock issuable upon
exercise of the related Warrant, each calculated as of September 25, 1998.
(8) Consists of (i) 499,510 shares of Common Stock issuable upon conversion of
Preferred Shares, and (ii) 36,577 shares of Common Stock issuable upon
exercise of the related Warrant, each calculated as of September 25, 1998.
(9) Consists of (i) 299,706 shares of Common Stock issuable upon conversion of
Preferred Shares, and (ii) 21,946 shares of Common Stock issuable upon
exercise of the related Warrant, each calculated as of September 25, 1998.
14
<PAGE>
(10) Consists of (i) 99,902 shares of Common Stock issuable upon conversion of
Preferred Shares, and (ii) 7,315 shares of Common Stock issuable upon
exercise of the related Warrant, each calculated as of September 25, 1998.
(11) Consists of (i) 74,927 shares of Common Stock issuable upon conversion of
Preferred Shares, and (ii) 5,487 shares of Common Stock issuable upon
exercise of the related Warrant, each calculated as of September 25, 1998.
(12) Consists of (i) 74,927 shares of Common Stock issuable upon conversion of
Preferred Shares, and (ii) 5,487 shares of Common Stock issuable upon
exercise of the related Warrant, each calculated as of September 25, 1998.
(13) AG Ramius Partners, LLC ("AG Ramius") is the Investment Adviser to AGR
Halifax Fund, Ltd. and Ramius Fund, Ltd. (collectively, the "AG Ramius
Entities") and consequently has voting control and investment discretion
over securities held by the AG Ramius Entities. The ownership for each of
the AG Ramius Entities does not include the ownership information for the
other AG Ramius Entities. AG Ramius and each of the AG Ramius Entities
disclaims beneficial ownership of the shares held by the other AG Ramius
Entities.
(14) Promethean Investment Group L.L.C. ("Promethean") is the general partner
of Themis Partners L.P. and the investment advisor for Heracles Fund
(collectively, the "Promethean Entities") and consequently has voting
control and investment discretion over securities held by the Promethean
Entities. The ownership for each of the Promethean Entities does not
include the ownership information for the other Promethean Entities.
Promethean and each of the Promethean Entities disclaims beneficial
ownership of the shares held by the other Promethean Entities.
(15) Angelo, Gordon & Co., L.P. ("Angelo Gordon") is a general partner of
Leonardo, L.P., AG Super Fund International, L.P. and Raphael, L.P., and is
Investment Advisor of GAM Arbitrage Investments, Inc. (collectively, the
"Angelo Gordon Entities") and consequently has voting control and
investment discretion over securities held by the Angelo Gordon Entities.
The ownership for each of the Angelo Gordon Entities does not include the
ownership information for the other Angelo Gordon Entities. Angelo Gordon
and each of the Angelo Gordon Entities disclaims beneficial ownership of
the shares held by the other Angelo Gordon Entities.
DESCRIPTION OF CAPITAL STOCK
The Company's Certificate of Incorporation authorizes the issuance of
60,000,000 shares of Common Stock par value $.01 per share, of which 24,498,333
shares were outstanding on June 30, 1998; 10,000,000 shares of preferred stock,
par value $.01 per share, of which 800 shares were outstanding on June 30, 1998;
and 85 shares of redeemable common stock, par value $.01 per share, of which
none is outstanding as of the date of this Prospectus.
COMMON STOCK
Holders of the Common Stock are entitled to one vote for each share held of
record, in person or by proxy, at all meetings of the stockholders and on all
propositions before such meetings. The Common Stock does not have cumulative
voting rights in the election of directors. Holders of the Common Stock have no
preemptive, subscription, redemption or conversion rights. All outstanding
shares of Common Stock are fully paid and nonassessable. Holders of Common
Stock
15
<PAGE>
are entitled to such dividends as may be declared by the Board of Directors
out of funds legally available therefor. In the event of liquidation,
dissolution or winding up of the affairs of the Company, the assets remaining
after provision for payment of creditors and after distribution in full of
the preferential amount to be distributed to the holders of shares of any
preferred stock are distributable pro rata among holders of Common Stock.
The transfer agent and registrar of the Common Stock is The Harris Trust
and Savings Bank, P. O. Box A3504, Chicago, Illinois 60690-9502.
PREFERRED STOCK
The Board of Directors of the Company is authorized, without further
stockholder action, to divide any or all shares of the authorized Preferred
Stock into one or more series and to fix and determine the designations,
preferences and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereon, of any series so
established, including voting powers, dividend rights, liquidation
preferences, redemption rights and conversion privileges.
The Board of Directors has designated 1,600 of shares of Preferred Stock
as Series A Convertible Preferred Stock (the "Series A Shares"). As of June
30, 1998, 800 Series A Shares were outstanding. Following is a description
of certain provisions of the Certificate of Designations, Preferences and
Rights of Series A Convertible Preferred Stock of Argosy Gaming Company (the
"Certificate of Designations").
STATED VALUE - The stated value of the Series A Shares is $10,000 per share.
DIVIDENDS - The Series A Shares do not bear any dividends, however they do have
a premium rate of 4% per annum, payable in cash or in kind at the time of
conversion or redemption.
VOTING - The holders of the Series A Shares have no voting rights except as
required by law or upon any proposal to change any of the powers, preferences
and rights of the Series A Shares.
REDEMPTION - The Company may redeem all Series A Shares which are outstanding
seven years after the date of original issue at their stated value plus accrued
premium. Each holder of Series A Shares has the right, subject to limitations
set forth in that Certificate of Designations, to require the Company to redeem
all or a portion of such holder's Series A Shares upon the happening of certain
extraordinary events at a price per share equal to the greater of (i) 120% of
stated value plus accrued premium or (ii) the product of the conversion rate at
such time and the closing bid price per share of Common Stock at such time. The
Company has the right, subject to the satisfaction of conditions set forth in
the Certificate of Designations, to redeem any or all Series A Shares at any
time at a price per share equal to the product of the conversion rate at such
time and the closing bid price per share of Common Stock at such time.
LIQUIDATION - The preference of the Series A Shares over the Common Stock in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company is the stated value of such shares plus accrued premium.
16
<PAGE>
SINKING FUND - None
CONVERSION - The Series A Shares are convertible into shares of Common Stock
at a price per share equal to the lesser of (i) 120% of the average closing
bid prices for the Common Stock for the five trading days immediately
preceding the original issuance date thereof (the "Fixed Conversion Price")
or (ii) 100% of the average of the five lowest consecutive closing bid prices
during the period of 30 consecutive trading days immediately preceding
conversion (the "Floating Conversion Price"). The Series A Shares are
convertible at any time at the Fixed Conversion Price. The Series A Shares
are not convertible at the Floating Conversion Price during the period of 120
days following the original issuance date. Thereafter, they are convertible
in increasing increments up to 211 days following the original issuance date
at which time they become fully convertible. The Company has the right,
subject to the satisfaction of conditions set forth in the Certificate of
Designations, to require the conversion of any or all Series A Shares at any
time at a price per share equal to the lesser of the Fixed Conversion Price
or the Floating Conversion Price. The conversion rate for each Series A Share
is determined by dividing (i) its stated value plus accrued premium by (ii)
the applicable conversion price. To protect against dilution, the Fixed
Conversion Price is subject to adjustment in certain events, including stock
dividends, stock splits and the issuance of Common Stock for cash at less
than the Fixed Conversion Price then in effect. The Fixed Conversion Price is
subject to adjustment upon the happening of certain extraordinary events or
the failure or inability of the Company to take certain action or in the
event that closing bid prices for the Common Stock during specified periods
ending 270 days following the original issuance date of such Shares is less
than the Fixed Conversion Price. If the Company issues a convertible
security with a variable price which uses a formula different from the one
used to calculate the Floating Conversion Price, the Floating Conversion
Price then in effect may be replaced by the other formulation.
DESCRIPTION OF WARRANTS
The Warrants may be exercised at any time. The number of shares of
Common Stock purchasable upon exercise is determined by the warrant value as
of the date of issuance of the Warrant and the exercise price in effect from
time to time. The warrant value is determined as of the applicable issuance
date using the Black-Scholes valuation method. The initial exercise price is
based upon 120% of the average closing bid prices for the Common Stock for
the five trading days immediately preceding the applicable issuance date.
Thereafter, the exercise price is subject to adjustment to prevent dilution
and may be reset 270 days after the applicable issuance date if closing bid
prices for the Common Stock on specified dates are lower than the initial
exercise price. The Warrants expire five years from the applicable issuance
date.
PLAN OF DISTRIBUTION
The Common Stock offered by this Prospectus is being offered on
behalf of the Selling Stockholders. Such Common Stock may be sold or
distributed from time to time by the Selling Stockholders, or by donees or
transferees of, or other successors in interest to, the Selling Stockholders,
directly to one or more purchasers or through brokers, dealers or
underwriters who may act solely as agents or may acquire such Common Stock as
principals, at market prices
17
<PAGE>
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed. The
sale of the Common Stock offered hereby may be effected in one or more of the
following methods: (i) ordinary brokers' transactions; (ii) transactions
involving cross or block trades or otherwise on The New York Stock Exchange;
(iii) purchases by brokers, dealers or underwriters as principal and resale
by such purchasers for their own accounts pursuant to this Prospectus; (iv)
"at the market" to or through market makers or into an existing market for
the Common Stock; (v) in other ways not involving market makers or
established trading markets, including direct sales to purchasers or sales
effected through agents; (vi) through transactions in options, swaps or other
derivatives (whether exchange-listed or otherwise); (vii) in privately
negotiated transactions; (viii) to cover short sales; or (ix) any combination
of the foregoing.
From time to time, one or more of the Selling Stockholders may
pledge, hypothecate or grant a security interest in some or all of the Shares
owned by them, and the pledgees, secured parties or persons to whom such
securities have been hypothecated shall, upon foreclosure in the event of
default, be deemed to be Selling Stockholders hereunder. The number of
Selling Stockholders' Shares beneficially owned by those Selling Stockholders
who so transfer, pledge, donate or assign Selling Stockholders' Shares will
decrease as and when they take such actions. The plan of distribution for
Selling Stockholders' Shares sold hereunder will otherwise remain unchanged,
except that the transferees, pledgees, donees or other successors will be
Selling Stockholders hereunder. In addition, a Selling Stockholder may, from
time to time, sell short the Common Stock, and in such instances, this
Prospectus may be delivered in connection with such short sales and the
Shares offered hereby may be used to cover such short sales.
A Selling Stockholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the Common
Stock in the course of hedging the positions they assume with such Selling
Stockholder, including, without limitation, in connection with distributions
of the Common Stock by such broker-dealers. A Selling Stockholder may also
enter into option or other transactions with broker-dealers that involve the
delivery of the Shares to the broker-dealers, who may then resell or
otherwise transfer such Shares. A Selling Stockholder may also loan or
pledge the Shares to a broker-dealer and the broker-dealer may sell the
Shares so loaned or upon a default may sell or otherwise transfer the pledged
Shares.
Brokers, dealers, underwriters or agents participating in the
distribution of the Shares as agents may receive compensation in the form of
commissions, discounts or concessions from the Selling Stockholders and/or
purchasers of the Common Stock for whom such broker-dealers may act as agent,
or to whom they may sell as principal, or both (which compensation as to a
particular broker-dealer may be less than or in excess of customary
commissions). The Selling Stockholders and any broker-dealers who act in
connection with the sale of the Shares hereunder may be deemed to be
"Underwriters" within the meaning of the Securities Act, and any commissions
they receive and proceeds of any sale of the Shares may be deemed to be
underwriting discounts and commissions under the Securities Act. Neither the
Company nor any Selling Stockholders can presently estimate the amount of
such compensation. The Company knows of no existing arrangements between any
Selling Stockholders, any other stockholder, broker, dealer, underwriter or
agent relating to the sale or distribution of the Shares.
18
<PAGE>
The Company will pay substantially all of the expenses incident to
the registration, offering and sale of the Shares to the public other than
commissions or discounts of underwriters, broker-dealers or agents. The
Company has also agreed to indemnify the Selling Stockholders and certain
related persons against certain liabilities, including liabilities under the
Securities Act.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company, the Company has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in
the Securities Act and is therefore, unenforceable.
The Company has advised the Selling Stockholders that during such
time as they may be engaged in a distribution of the Shares included herein
they are required to comply with Regulation M promulgated under the Exchange
Act. With certain exceptions, Regulation M precludes any Selling
Stockholder, any affiliated purchasers, and any broker-dealer or other person
who participates in such distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase, any security which is
the subject of the distribution until the entire distribution is complete.
Regulation M also prohibits any bids or purchases made in order to stabilize
the price of a security in connection with the distribution of that security.
All of the foregoing may affect the marketability of the Shares.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby and certain
legal matters will be passed upon for the Company by Winston & Strawn, Chicago,
Illinois.
EXPERTS
The consolidated financial statements of Argosy Gaming Company
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1997, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated by reference
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The financial statements of Jazz Enterprises, Inc. for the year ended
February 28, 1995 included in the Company's Annual Report (Form 10-K) for the
year ended December 31, 1997 have been audited by Grant Thornton LLP,
independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
19
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting discounts and
commissions, are estimated to be:
SEC Filing fee. . . . . . . . . . . . . . . . . . . . . . . . . $ 4,720
NYSE Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,500
Printing and Engraving. . . . . . . . . . . . . . . . . . . . . 5,000
Accounting Fees . . . . . . . . . . . . . . . . . . . . . . . . 18,000
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . 35,000
Blue Sky Fees and Expenses. . . . . . . . . . . . . . . . . . . 300
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 480
_______
Total . . . . . . . . . . . . . . . . . $81,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
(the "GCL") permits a corporation to indemnify its directors and officers
against expenses (including attorney's fees), judgments, fines and amounts
paid in settlements actually and reasonably incurred by them in connection
with any action, suit or proceeding brought by third parties, if such
directors or officers acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the corporation
and, with respect to any criminal action or proceeding, had no reason to
believe their conduct was unlawful. In a derivative action, i.e., one by or
in the right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors and officers in
connection with the defense or settlement of an action or suit, and only with
respect to a matter as to which they shall have acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interest
of the corporation, except that no indemnification shall be made if such
person shall have been adjudged liable to the corporation, unless and only to
the extent that the court in which the action or suit was brought shall
determine upon application that the defendant officers or directors are
reasonably entitled to indemnity for such expenses despite such adjudication
of liability.
Section 102(b)(7) of the GCL provides that a corporation may
eliminate or limit the personal liability of a director to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the GCL or (iv) for any transaction from
which the director derived an improper personal benefit. No such provision
shall eliminate or limit the liability
II-1
<PAGE>
of a director for any act or omission occurring prior to the date when such
provision becomes effective.
Article Eighth of the Company's Certificate of Incorporation and
Article VIII of the Company's By-laws provide that the Company shall indemnify
its directors and officers to the fullest extent permitted by law. Article
Seventh of Company's Certificate of Incorporation provides that no director
shall be personally liable for any breach of fiduciary duty; however, such
provision does not eliminate liability as otherwise provided in the GCL.
The Company has purchased insurance which insures (subject to certain
terms and conditions, exclusions and deductibles) the Company against certain
costs which the Company might be required to pay by way of indemnification to
its directors or officers under its Certificate of Incorporation or By-laws,
indemnification agreements or otherwise and protects individual directors and
officers from certain losses for which they might not be indemnified by the
Company.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- -----------
<S> <C>
4.1 Securities Purchase Agreement dated as of June 12, 1998 (1)
5.1 Opinion of Winston & Strawn
23.1 Consent of Ernst & Young LLP
23.2 Consent of Winston & Strawn (see Exhibit 5.1)
23.3 Consent of Grant Thornton LLP
24.1 Powers of Attorney (included on signature page of this
Registration Statement)
</TABLE>
___________________
(1) Filed as Exhibit 4.17 to Registrant's Current Report on Form 8-K,
dated June 16, 1998, and incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
The Company hereby undertakes (1) to file, during any period in which
offers or sales are being made, a post-effective amendment to this Registration
Statement: (i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933; (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement; provided, however, that paragraphs 1(i) and 1(ii) do not
apply if this Registration Statement is on Form S-3, Form S-8 or Form F-3 and
the information required to be included in a post-effective amendment by those
II-2
<PAGE>
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement; and (iii) to
include any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change to
such information in this Registration Statement; (2) that, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement,
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; (3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering; and (4) that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement, relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the provisions described under
Item 15 above or otherwise, the Company has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted against the Company by such director,
officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Alton, State of
Illinois on this 30th day of September, 1998.
ARGOSY GAMING COMPANY
By: /s/ Dale R. Black
-------------------------
Dale R. Black
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------- ----- ----
<S> <C> <C>
James B. Perry Principal Executive Officer
Dale R. Black Principal Financial Officer
and Principal Accounting
Officer
William F. Cellini Director
George L. Bristol Director
Edward F. Brennan Director
Felix Lance Callis Director
Jimmy F. Gallagher Director
William J. McEnery Director
John B. Pratt, Sr. Director
By: /s/ Dale R. Black
--------------------------
Dale R. Black
(Attorney-in-fact)
September 30, 1998
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- -----------------------
<S> <C> <C>
1.1 Securities Purchase Agreement dated as
of June 12, 1998 (incorporated by reference) . . . .
5.1 Opinion of Winston & Strawn . . . . . . . . . . . . . Filed Previously
23.1 Consent of Ernst & Young LLP . . . . . . . . . . . . Filed Electronically
23.2 Consent of Winston & Strawn (See Exhibit 5.1) . . . .
23.3 Consent of Grant Thornton LLP . . . . . . . . . . . . Filed Electronically
24.1 Powers of Attorney (included on signature
page of this Registration Statement) . . . . . . . .
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 3 to the Registration Statement (Form S-3) and related Prospectus
of Argosy Gaming Company for the registration of its common stock and to the
incorporation by reference therein of our reports dated February 13, 1998, with
respect to the consolidated financial statements of Argosy Gaming Company
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1997 and the related financial statement schedules included
therein, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Chicago, Illinois
September 29, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have issued our report dated July 10, 1995, accompanying the
financial statements of Jazz Enterprises, Inc. included in the Argosy Gaming
Company Annual Report (Form 10-K) for the year ended December 31, 1997. We
hereby consent to the incorporation by reference of said report in the
Registration Statement of Argosy Gaming Company on Amendment No. 3 to S-3 (file
No. 333-58859). We consent to the use of the aforementioned report in the
Registration Statement, and to the use of our name as it appears under the
caption "Experts."
Grant Thornton LLP
Reno, Nevada
September 29, 1998
