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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 23, 1998
REGISTRATION NO. 333-58859
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
AMENDMENT NO. 2
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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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION BECOMES EFFECTIVE.
THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN
WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
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PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED SEPTEMBER 23, 1998
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 ________, 1998, the last reported sale price of the Common Stock
on the New York Stock Exchange was $______ per share. See "Price Range of
Common Stock."
_________________
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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 ____________, 1998.
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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 13 1/4% 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.
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
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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
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
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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 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
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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 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
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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 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
9
<PAGE>
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.
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.
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.
10
<PAGE>
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
</TABLE>
The last reported sale price for the Common Stock on ________, 1998
was $_____ 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. 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,
12
<PAGE>
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 NUMBER OF SHARES OF COMMON
STOCK BENEFICIALLY OWNED NUMBER OF SHARES OF COMMON STOCK BENEFICIALLY OWNED
NAME OF SELLING STOCKHOLDER AS OF ________, 199__(1)(2) STOCK OFFERED HEREBY(3) AFTER OFFERING (4)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AGR Halifax Fund, Ltd. _______________ _______________ 0
Heracles Fund _______________ _______________ 0
Leonardo, L.P. _______________ _______________ 0
Themis Partners L.P. _______________ _______________ 0
Ramius Fund, Ltd. _______________ _______________ 0
Raphael, L.P. _______________ _______________ 0
GAM Arbitrage
Investments, Inc. _______________ _______________ 0
AG Super Fund
International, L.P. _______________ _______________ 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 _____________,
199__ through the conversion or exercise of any security or other right.
(2) Beneficial ownership is determined as of ____________, 199__ and is based
upon a conversion price of the Preferred Shares equal to $___________
(which is the average of the five lowest closing bid prices of the Common
Stock for the 30 consecutive trading days ended ______________, 199__).
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 unpaid premium of 4% per annum divided by
(ii) the conversion price. The conversion price is the lesser of (a)
$______ 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
13
<PAGE>
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 ______________, 199__ (approximately ____________
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 ______________, 199___,
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) _______________ is the trading manager of each of [Name of Fund] and
consequently has voting control and investment discretion over securities
held by the Selling Stockholders. The ownership for each of the Selling
Stockholders does not include the ownership information for the other
Selling Stockholders. ______________ and each of the Selling Stockholders
disclaims beneficial ownership of the Shares held by the other Selling
Stockholders.
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.
14
<PAGE>
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 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.
15
<PAGE>
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.
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.
16
<PAGE>
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 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
17
<PAGE>
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.
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.
18
<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:
<TABLE>
<CAPTION>
<S> <C>
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
</TABLE>
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 of a director for any act or omission
occurring prior to the date when such provision becomes effective.
II-1
<PAGE>
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 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
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<PAGE>
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 22nd 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
</TABLE>
By: /s/ Dale R. Black
-----------------------------------
Dale R. Black
(Attorney-in-fact)
September 22, 1998
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