BOYD GAMING CORP, PRE 14A, 1996-10-11

BOYD GAMING CORP
PRE 14A, 1996-10-11
MISCELLANEOUS AMUSEMENT & RECREATION

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<PAGE> 1

SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only
/ / Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>

Boyd Gaming Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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

(2) Aggregate number of securities to which transaction applies:

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

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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

(4) Proposed maximum aggregate value of transaction:

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

(5) Total fee paid:

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

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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

(2) Form, Schedule or Registration Statement No.:

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

(3) Filing Party:

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

(4) Date Filed:

- --------------------------------------------------------------------------------
<PAGE> 2

BOYD GAMING CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD NOVEMBER 22, 1996

The Annual Meeting of Stockholders (the "Annual Meeting") of Boyd Gaming
Corporation, a Nevada corporation (the "Company"), will be held at the Sam's
Town Hotel & Gambling Hall, 1477 Casino Strip Boulevard, Robinsonville,
Mississippi 38664, on Friday, November 22, 1996, at 11:00 a.m. local time for
the following purposes:

1. To elect three Class II directors of the Company to serve until the 1999
Annual Meeting of Stockholders or until their successors are duly
elected and qualified;

2. To ratify the appointment of Deloitte & Touche LLP as the independent
auditors for the Company for the fiscal year ending June 30, 1997;

3. To approve the 1996 Stock Incentive Plan;

4. To increase the authorized number of directors to 15; and

5. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.

The foregoing items of business, including the nominees for directors, are
more fully described in the Proxy Statement which is attached and made a part of
this notice.

The Board of Directors has fixed the close of business on October 10, 1996
as the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournment or postponement thereof.

All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, sign, date and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope provided to ensure your
representation and the presence of a quorum at the Annual Meeting. If you send
in your proxy card and then decide to attend the Annual Meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the Proxy Statement.

By Order of the Board of Directors,

WILLIAM S. BOYD
Chairman of the Board
and Chief Executive Officer

Las Vegas, Nevada
October 15, 1996
<PAGE> 3

BOYD GAMING CORPORATION
2950 SOUTH INDUSTRIAL ROAD
LAS VEGAS, NEVADA 89109

PROXY STATEMENT

GENERAL

This Proxy Statement is furnished to stockholders of Boyd Gaming
Corporation, a Nevada corporation (the "Company"), in connection with the
solicitation by the Board of Directors of the Company (the "Board") of proxies
in the enclosed form for use in voting at the Annual Meeting of Stockholders
(the "Annual Meeting") of the Company to be held on Friday, November 22, 1996,
at 11:00 a.m., local time, at the Sam's Town Hotel & Gambling Hall, 1477 Casino
Strip Boulevard, Robinsonville, Mississippi 38664, and any adjournment or
postponement thereof. The shares represented by the proxies received, properly
marked, dated, executed and not revoked will be voted at the Annual Meeting.

These proxy solicitation materials are being mailed to stockholders on or
about October 15, 1996.

VOTING AND SOLICITATION

Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections. The Inspector of Elections will also determine
whether or not a quorum is present. The presence, in person or by proxy, of the
holders of a majority of the shares of Common Stock issued and outstanding is
necessary to constitute a quorum at the meeting. Shares represented at the
meeting in person or by proxy but not voted will nevertheless be counted for
purposes of determining the presence of a quorum. Accordingly, abstentions and
broker non-votes (shares as to which a broker or nominee has indicated that it
does not have discretionary authority to vote) on a particular matter, including
the election of directors, will be treated as shares that are present and
entitled to vote for purposes of determining the presence of a quorum but will
be treated as not voted for purposes of determining the decision of stockholders
with respect to such matter. Under the rules of the New York Stock Exchange (the
"Exchange"), certain matters submitted to a vote of stockholders are considered
by the Exchange to be "routine" items upon which brokerage firms may vote in
their discretion on behalf of their customers if such customers have not
furnished voting instructions within a specified period prior to the meeting. On
those matters which the Exchange determines to be "non-routine," brokerage firms
that have not received instructions from their customers would not have
discretion to vote. In the election of directors, the three nominees for Class
II directors who receive the greatest number of affirmative votes within that
class will be elected to the Board of Directors, without giving effect to
abstentions and broker non-votes. Ratification of the appointment of Deloitte &
Touche LLP as the Company's independent auditors for the fiscal year ending June
30, 1997, the approval of the 1996 Stock Incentive Plan and approval of the
increase in the authorized number of directors require the affirmative vote of a
majority of the shares present or represented at the meeting, assuming that a
quorum is present or represented at the meeting. An abstention or broker
non-vote will have the same effect as a vote cast against the applicable matter.
Holders of Common Stock are entitled to one vote for each share held on each
matter to be voted upon.

Proxies in the accompanying form that are properly executed, duly returned
to the Company and not revoked will be voted in accordance with the instructions
therein. IF NO INSTRUCTION IS GIVEN WITH RESPECT TO ANY PROPOSAL TO BE ACTED
UPON, THE PROXY WILL BE VOTED FOR THE ELECTION OF ALL OF THE NOMINEES NAMED IN
THIS PROXY STATEMENT AND IN FAVOR OF PROPOSALS 2, 3 AND 4. No matter currently
is expected to be considered at the Annual Meeting other than the proposals set
forth in the accompanying Notice of Annual Meeting, but if any other matters are
properly brought before the Annual Meeting for action, it is intended that the
persons named in the proxy and acting thereunder will vote in accordance with
their discretion on such matters.

The presence at the meeting of a stockholder will not revoke his or her
proxy. However, a proxy may be revoked at any time before it is voted by
delivering to the Company (Attention: Charles E. Huff, Secretary, at

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<PAGE> 4

the principal offices of the Company) a written notice of revocation or a duly
executed proxy bearing a later date.

The solicitation of proxies will be conducted by mail, and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy solicitation materials for the Annual Meeting and reimbursements
paid to brokerage firms and others for their expenses incurred in forwarding
such materials to beneficial owners of the Company's Common Stock. The Company
may conduct further solicitation personally, telephonically or by facsimile
through its officers, directors and employees, none of whom will receive
additional compensation for assisting with the solicitation.

RECORD DATE AND SHARES OUTSTANDING

The close of business on October 10, 1996 has been fixed as the record date
(the "Record Date") for determining the holders of shares of Common Stock of the
Company entitled to notice of and to vote at the Annual Meeting. As of the close
of business on the Record Date, the Company had 61,213,720 shares of Common
Stock outstanding. At the meeting each stockholder entitled to vote at the
meeting will be entitled to cast one vote in person or by proxy for each share
of Common Stock held by such stockholder.

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of August 30, 1996
regarding the beneficial ownership of the Common Stock as of the Record Date,
(i) by each person who is known by the Company to beneficially own more than 5%
of the Company's Common Stock, (ii) by each director and nominee, (iii) by each
executive officer of the Company named in the Summary Compensation Table
contained herein and (iv) by all directors and executive officers of the Company
as a group. Except as indicated, each person listed below has sole voting and
investment power with respect to the shares set forth opposite such person's
name.

<TABLE>
<CAPTION>
NAME(a) NUMBER PERCENTAGE
------------------------------------------------------------- ---------- ----------
<S> <C> <C>
William S. Boyd(b)........................................... 26,347,933 42.6%
Jimma L. Beam(c)............................................. 3,610,829 5.9
Marianne Boyd Johnson(d)..................................... 2,061,522 3.4
William R. Boyd(e)........................................... 2,049,239 3.4
Perry B. Whitt(f)............................................ 1,693,158 2.8
Robert L. Boughner(g)........................................ 572,203 *
Charles L. Ruthe(h).......................................... 482,121 *
Maunty C. Collins(i)......................................... 242,997 *
Ralph Purnell(j)............................................. 289,332 *
Warren L. Nelson(k).......................................... 59,500 *
Kenny C. Guinn(l)............................................ 7,750 *
Donald Snyder................................................ 200
All directors and executive officers as a group (16
persons)(m)................................................ 34,412,474 55.0
</TABLE>

- ---------------
* Represents less than 1%.

(a) The mailing address of all persons in the list set forth above is: 2950
South Industrial Road, Las Vegas, Nevada 89109.

(b) Includes 22,976,266 shares of Common Stock held by The William S. Boyd
Gaming Properties Trust, of which Mr. Boyd is trustee, and 2,800,000 shares
held by the William S. Boyd Family Partnership, of which a corporation owned
by Mr. Boyd is the sole general partner. Also includes 571,667 shares
issuable pursuant to options exercisable within 60 days.

(d) Includes 2,012,906 shares of Common Stock held by The Marianne E. Boyd
Gaming Properties Trust, of which Ms. Johnson is trustee, 1,000 shares held
by the Marianne E. Boyd Trust, of which Ms. Johnson is

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<PAGE> 5

trustee, and 19,488 shares held by educational trusts for Ms. Johnson's
nieces and nephews, of which Ms. Johnson is trustee. Ms. Johnson disclaims
beneficial ownership of the shares held by such educational trusts. Also
includes 26,167 shares issuable pursuant to options exercisable within 60
days.

(e) Includes 1,962,266 shares of Common Stock held by The William R. Boyd Gaming
Properties Trust, of which Mr. Boyd is trustee, 48,403 shares held in trust
for the benefit of Mr. Boyd's children, and 4,837 shares held in an
educational trust for Mr. Boyd's nephew, of which Mr. Boyd is trustee. Mr.
Boyd disclaims beneficial ownership of the shares held by such children's
and educational trusts. Also includes 26,167 shares issuable pursuant to
options exercisable within 60 days.

(f) Includes 1,688,658 shares of Common Stock held by the Whitt Family Trust, of
which Mr. Whitt and his wife are trustees. Also includes 4,500 shares
issuable pursuant to options exercisable within 60 days.

(g) Includes 408,870 shares of Common Stock held by the Robert L. Boughner
Investment Trust, of which Mr. Boughner is trustee. Also includes 163,333
shares issuable pursuant to options exercisable within 60 days.

(h) Includes 1,000 shares of Common Stock owned by the Donna A. Ruthe Revocable
Living Trust, of which Mr. Ruthe's wife is trustee. Also includes 163,333
shares of Common Stock which Mr. Ruthe has the right to acquire through the
exercise of options exercisable within 60 days.

(i) Includes 97,550 shares of Common Stock held by the Maunty C. Collins Trust,
of which Mr. Collins is trustee, and 1,708 shares owned by Mr. Collin's
wife. Also includes 100,000 shares of Common Stock issuable pursuant to
options exercisable within 60 days.

(j) Includes 9,000 shares of Common Stock owned by the Ralph W. Purnell
Irrevocable Trust. Also includes 115,000 shares issuable pursuant to options
exercisable within 60 days.

(k) Includes 4,500 shares of Common Stock issuable pursuant to options
exercisable within 60 days.

(l) Includes 2,750 shares of Common Stock issuable pursuant to options
exercisable within 60 days.

(m) Includes 1,390,093 shares of Common Stock issuable pursuant to options
exercisable within 60 days.

3
<PAGE> 6

PROPOSAL NO. 1

ELECTION OF DIRECTORS

In accordance with the Company's Restated Articles of Incorporation, the
Company's Board of Directors is divided into three classes, as nearly equal in
number as the then total number of directors, with the term of office of one
class expiring each year. At the Annual Meeting, the stockholders will elect
three Class II directors of the Company to serve until the 1999 Annual Meeting
of Stockholders or until their successors are duly elected and qualified, or
until any such director's earlier resignation or removal. At each following
annual meeting of stockholders, the successors to the class of directors whose
term is then expiring will be elected to hold office for a term expiring at the
third succeeding annual meeting. Vacancies on the Board of Directors and newly
created directorships will generally be filled by vote of a majority of the
directors then in office, and any directors so chosen will hold office until the
next election of the class for which such directors were chosen. The Board of
Directors has no reason to believe that any of its nominees will be unable or
unwilling to serve if elected to office and, to the knowledge of the Board of
Directors, each of its nominees intends to serve the entire term for which
election is sought. However, should either nominee of the Board of Directors
become unable or unwilling to accept nomination or election as a director of the
Company, the proxies solicited by management will be voted for such other person
as the Board may determine.

In voting for directors, each stockholder is entitled to cast one vote for
each candidate. Stockholders are not entitled to cumulate their votes for
members of the Board of Directors. The three nominees for Class II directors who
receive the greatest number of affirmative votes will be elected to the Board of
Directors.

The nominees for election as Class II directors are:

William R. Boyd
Warren L. Nelson
Donald Snyder

THE BOARD RECOMMENDS A VOTE FOR THE ELECTION
OF THE NOMINEES NAMED ABOVE

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<PAGE> 7

NOMINEES AND DIRECTORS

The names of the nominees and the continuing directors, their ages as of
the Record Date, and certain other information about them are set forth below:

<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION WITH COMPANY SINCE
- -------------------------------------- --- ------------------------------------------ --------
<S> <C> <C> <C>
MEMBERS OF THE BOARD WHOSE TERMS
EXPIRE IN 1998 (Class I)
William S. Boyd....................... 64 Chairman of the Board of Directors 1988
and Chief Executive Officer
Perry B. Whitt........................ 73 Vice Chairman of the Board of Directors 1988
Robert Boughner....................... 43 Executive Vice President, Chief Operating 1996
Officer and Director
MEMBERS OF THE BOARD WHOSE TERMS
EXPIRE IN 1996 (Class II)
William R. Boyd....................... 36 Vice President and Director 1992
Warren L. Nelson...................... 83 Director 1988
Donald Snyder......................... 49 Executive Vice President -- Chief 1996
Administrative Officer and Director
MEMBERS OF THE BOARD WHOSE TERMS
EXPIRE IN 1997 (Class III)
Kenny C. Guinn........................ 60 Director 1994
Marianne Boyd Johnson................. 37 Assistant Secretary and Director 1990
Charles L. Ruthe...................... 62 President and Director 1988
</TABLE>

NOMINEES

William R. Boyd has been a Vice President of the Company since December
1990 and a director since September 1992. From June 1987 until December 1990, he
was director of operations at the Fremont Hotel and Casino. From 1978 until
1987, he held various positions at the California Hotel and Casino and Sam's
Town Hotel and Gambling Hall.

Warren L. Nelson has served as a director of' the Company since its
inception and as a director of California Hotel and Casino from its inception
until 1994. For the last 29 years, he has been a co-owner of the Club Cal Neva,
a gaming facility in Reno, Nevada. Mr. Nelson has over 56 years experience in
the gaming industry. He is a Director of International Game Technology, a
manufacturer of slot machines.

Donald Snyder has been Executive Vice President and Chief Administrative
Officer since July 1996 and has served as a director of the Company since April
1996. Mr. Snyder led the efforts to develop the Fremont Street Experience
(FSELLC) from 1992 to July 1996, as it Chairman, President and Chief Executive
Officer. He continues as Chairman of FSELLC. Mr. Snyder worked for First
Interstate Bancorp (FIB) for 22 years, serving as Chairman and Chief Executive
Officer of First Interstate Bank of Nevada from 1987 through 1991. He was
involved in various entrepreneurial activities after leaving FIB, including
co-founding BankWest of Nevada; Strategic Associates, Inc.; Graphic Enterprises,
Inc.; and FSELLC. He continues to serve on several corporate and non-profit
boards.

CONTINUING DIRECTORS

William S. Boyd has served as a director of the Company since its inception
in June 1988 and as Chairman of the Board of Directors and Chief Executive
Officer since August 1988. A co-founder of California Hotel and Casino, the
predecessor of the Company and now one of its subsidiaries, Mr. Boyd has served
as a director and President of California Hotel and Casino since its inception
in 1973 and has also held several other offices with that company. Prior to
joining California Hotel and Casino, Mr. Boyd practiced law in Las Vegas for 15
years. Between 1970 and 1974 he also was Secretary and Treasurer and a member of
the Board of Directors of the Union Plaza Hotel and Casino.

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<PAGE> 8

Perry B. Whitt has served as a director of the Company since its inception
and Vice Chairman of the Board of Directors since August 1988. He also served as
a director of California Hotel and Casino from its inception until 1994, and has
also held several offices with California Hotel and Casino. Mr. Whitt has over
50 years experience in the gaming industry, much of it with the Boyd family. He
is also President of Utility Shareholders Association of Nevada and serves on
the Board of Directors of BankWest of Nevada.

Kenny C. Guinn has served as a director of the Company since January 1994.
He has served as Chairman of the Board of Southwest Gas Corporation
("Southwest") since May 1993 and Chairman of the Board of PriMerit Bank, a
subsidiary of Southwest ("PriMerit"), from 1987 to July 1996. From 1978 to May
1993, Mr. Guinn served in various other executive positions for Southwest and
PriMerit, including Chief Executive Officer of Southwest from 1988 to 1993 and
Chief Executive Officer of PriMerit until 1992. He served as Interim President
of the University of Nevada, Las Vegas from May 1994 until May 1995. Mr. Guinn
is also a director of Oasis Residential, Inc., Del Webb, Inc. and Norwest Bank
of Nevada.

Marianne Boyd Johnson has been Assistant Secretary of the Company since
September 1989 and a director since September 1990. From 1976 until September
1990, she held a variety of full and part-time sales and marketing positions
with the Company and California Hotel and Casino. Ms. Johnson serves on the
Board of Directors of BankWest of Nevada.

Charles L. Ruthe has served as a director of the Company since its
inception, President since August 1988 and Chief Operating Officer from August
1988 to April 1990. Mr. Ruthe is currently on a leave of absence from his
positions as President of the Company and as a director pending approval by the
Missouri Gaming Commission of Mr. Ruthe's gaming license application. He has
served as a director of California Hotel and Casino since its inception and has
also held several offices with that company. Mr. Ruthe is active in many Las
Vegas business and civic organizations. Mr. Ruthe is a director of Sierra Health
Services, Inc., a healthcare company. Mr. Ruthe is President of Boyd Development
Corporation, a wholly-owned subsidiary of the Company.

Robert L. Boughner has been Executive Vice President and Chief Operating
Officer of the Company since April 1990 and has served as a director since April
1996. From 1985 until April 1990, he served as Senior Vice President of
Administration of California Hotel and Casino and prior to that time he held
various management positions in the Company. Mr. Boughner is active in civic and
industry affairs, and serves on the Board of Directors of the Las Vegas
Convention and Visitors Authority, the Nevada Hotel and Motel Association and
the Nevada Restaurant Association.

COMPENSATION OF DIRECTORS

Each director who is not an employee of the Company currently receives an
annual fee of $25,000, meeting fees of $1,000 per board meeting attended and
$500 per committee meeting attended and related expenses for services as a
director. Employee and non-employee directors participate in the Directors'
Medical Reimbursement Plan, which covers medical expenses incurred by directors
and their spouses that are not covered by other medical plans. During fiscal
1996, Ms. Johnson and Messrs. William R. Boyd, William S. Boyd, Ruthe and Whitt
received reimbursement under this plan totaling $1,580, $1,206, $591, $3,266 and
$3,834, respectively. The Company also has a Directors' Non-Qualified Stock
Option Plan under which each non-employee director is entitled to receive an
option to purchase 5,000 shares of the Company's Common Stock at the time of the
Company's initial public offering in the case of non-employee directors serving
on the Board at such time or upon joining the Board in the case of non-employee
directors joining the Board after the Company's initial public offering. After
the initial grant described above, each director receives an additional option
to purchase 1,000 shares of the Company's Common Stock on the date of each
succeeding annual meeting of stockholders so long as the director has served on
the Board for the entire preceding year. Options are granted at fair market
value on the date of grant and vest over four years from the date of grant.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has an Audit Committee and a Compensation and Stock
Option Committee. The Board of Directors does not have a nominating committee or
a committee performing the functions of a

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<PAGE> 9

nominating committee. Although there are no formal procedures for stockholders
to recommend nominations, the Board of Directors will consider recommendations
from stockholders, which should be addressed to Charles E. Huff, Secretary, at
the principal offices of the Company.

The members of the Audit Committee are Kenny Guinn, Warren Nelson and Perry
Whitt. The Audit Committee held 3 meetings during the fiscal year ended June 30,
1996. The functions of the Audit Committee include reviewing and supervising the
financial controls of the Company, making recommendations to the Board of
Directors regarding the Company's auditors, reviewing the books and accounts of
the Company, meeting with the officers of the Company regarding the Company's
financial controls, acting upon recommendations of the auditors and taking such
further actions as the Audit Committee deems necessary to complete an audit of
the books and accounts of the Company.

The members of the Compensation and Stock Option Committee are Kenny Guinn,
Warren Nelson and Perry Whitt. The Compensation and Stock Option Committee held
1 meetings during the year ended June 30, 1996. The Compensation and Stock
Option Committee's functions include reviewing with management cash and other
compensation policies for employees, making recommendations to the Board of
Directors regarding compensation matters and determining compensation for the
Chief Executive Officer. In addition, the Compensation and Stock Option
Committee administers the Company's stock plans and, within the terms of the
respective stock plan, determines the terms and conditions of issuances
thereunder.

The Board of Directors held a total of 15 meetings during the fiscal year
ended June 30, 1996. During such fiscal year, each director attended over 75% of
the meetings of the Board and the committees of the Board on which he or she
served that were held during the period he or she served.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On August 9, 1996, the Company, through a wholly-owned subsidiary, entered
into an agreement to acquire a parcel of land in Reno, Nevada upon which it
intends to develop Sam's Town Reno. The acquisition was consummated on August
16, 1996. Pursuant to the terms of the purchase agreement, the Company paid $6.0
million for the 100 acre parcel. William S. Boyd, Chairman and Chief Executive
Officer of the Company and Warren L. Nelson, a director of the Company each owns
a 17.5% interest in the partnership from which the Company acquired the land.

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<PAGE> 10

EXECUTIVE COMPENSATION AND OTHER INFORMATION

The following table sets forth the cash compensation earned for services
performed for the Company during the three fiscal years in the period ended June
30, 1996 by the Company's Chief Executive Officer and each of its other four
most highly compensated executive officers (collectively, the "Named Executive
Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
------------------------------------ SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
FISCAL COMPENSATION OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) (#) ($)(2)
- ------------------------------- ------ --------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
William S. Boyd................ 1996 1,000,000 -- -- -- 7,865
Chairman and Chief 1995 1,000,000 574,137 -- 140,000 5,706
Executive Officer 1994 1,000,000 181,560 -- 525,000 7,020
Charles L. Ruthe............... 1996 525,000 31,500 -- -- 6,441
President 1995 425,000 122,910 -- 40,000 8,226
1994 400,000 120,000 52,532(3) 150,000 8,688
Robert L. Boughner............. 1996 500,000 30,000 -- -- 4,250
Executive Vice President and 1995 400,000 115,680 -- 40,000 5,706
Chief Operating Officer 1994 375,000 112,500 -- 150,000 7,020
Maunty C. Collins.............. 1996 375,000 22,500 -- -- 5,705
Senior Vice President -- 1995 275,000 79,530 -- 30,000 5,780
Director of Operations, 1994 200,000 60,000 -- 90,000 6,356
Central Region
Ralph Purnell.................. 1996 335,000 77,385 -- -- 6,650
Senior Vice President -- 1995 310,000 89,652 -- 30,000 5,445
Director of Operations, 1994 232,272 69,250 -- 105,000 15,208
Nevada Region
</TABLE>

- ---------------
(1) Except as set forth in the Summary Compensation Table, the incremental cost
to the Company of providing perquisites and other personal benefits during
the last three fiscal years did not exceed, as to any named executive
officer, the lesser of $50,000 or 10% of the total salary and bonus paid to
such executive officer for any such year and, accordingly, is omitted from
the table.

(2) Amounts represent the Company's Profit Sharing and 401(k) Plan
contributions, payment of term life insurance premiums and, in the case of
Mr. Ruthe (in each year), payments in connection with split dollar insurance
policies, and in the case of Mr. Purnell (in 1994) payments of $8,602 in
connection with a retirement arrangement. In fiscal 1995, the Company's
Profit Sharing and 401(k) Plan contributions were $2,853, $1,353, $2,853,
$2,853, and $2,853 for Messrs. Boyd, Ruthe, Boughner, Purnell and Collins,
respectively. In fiscal 1995, life insurance premium payments by the Company
for Messrs. Boyd, Ruthe (including split dollar insurance payments),
Boughner, Purnell and Collins were $2,853, $6,873, $2,853, $2,592 and
$2,627, respectively. In fiscal 1996, the Company's Profit Sharing and
401(K) Plan contributions were $3,000, $0, $3,000, $3,000 and $3,000 for
Messrs. Boyd, Ruthe, Boughner, Purnell and Collins, respectively. In fiscal
1996, life insurance premium payments by the Company for Messrs. Boyd, Ruthe
(including split-dollar life insurance payments), Boughner, Purnell and
Collins were $2,592, $7,456, $2,592, $2,592 and $2,592, respectively.

(3) Represents reimbursement under the Directors' Medical Reimbursement Plan of
expenses incurred by Mr. Ruthe's spouse.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

No stock options were granted to the named executive officers in fiscal
1996.

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<PAGE> 11

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES FISCAL YEAR-END(#) FISCAL YEAR-END($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE(2)
- ------------------------------------- ----------- -------------- ------------------ ------------------
<S> <C> <C> <C> <C>
William S. Boyd...................... 0 0 396,667/268,333 64,167/128,333
Charles L. Ruthe..................... 0 0 113,334/ 76,666 18,334/ 36,666
Robert L. Boughner................... 0 0 113,334/ 76,666 18,334/ 36,666
Ralph Purnell........................ 0 0 80,000/ 55,000 13,750/ 27,500
Maunty C. Collins.................... 0 0 70,000/ 30,000 13,750/ 27,500
</TABLE>

- ---------------
(1) Value realized is based on estimated fair market value of the Company's
Common Stock on the date of exercise less the exercise price.

(2) Value is based on the closing price of the Company's Common Stock on the New
York Stock Exchange on June 28, 1996 ($15.00), less the exercise price.

REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE ON EXECUTIVE COMPENSATION

Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities Exchange Act
of 1934 that might incorporate future filings, including this Proxy Statement,
in whole or in part, the following report and the Stock Performance Graph which
follows shall not be deemed to be incorporated by reference into any such
filings.

In June 1993, the Board of Directors established Compensation Committee and
the Stock Option Committee, which were combined into a single committee in
February 1995. The Compensation and Stock Option Committee reviews with
management cash and other compensation policies for employees, makes
recommendations to the Board of Directors regarding compensation matters and
determines (acting through a sub-committee) the compensation for the Chief
Executive Officer. In addition, the Compensation and Stock Option Committee
administers the Company's stock plans and, within the terms of the respective
stock plan, determines the terms and conditions of issuances thereunder. The
Chief Executive Officer, in consultation with the Compensation and Stock Option
Committee, establishes the compensation of the other executive officers of the
Company, including the named executive officers.

COMPENSATION POLICIES

The Compensation and Stock Option Committee's executive compensation
policies are designed to provide competitive levels of compensation that
integrate pay with the Company's annual objectives and long-term goals, reward
above-average corporate performance, recognize individual initiative and
achievements and assist the Company in attracting and retaining qualified
executives. Executive compensation is set at levels that the Compensation and
Stock Option Committee believes to be competitive with others in the Company's
industry, based on public information with respect to compensation paid by
leading casino hotel companies including, but not limited to, companies in the
peer group in the Stock Performance Graph contained herein. Companies are
selected for the purpose of comparing compensation practices on the basis of a
number of factors relative to the Company, such as their size and complexity,
the nature of their businesses, the regions in which they operate, the structure
of their compensation programs and the availability of compensation information.

9
<PAGE> 12

There are three primary elements in the Company's executive compensation
program:

- Base salary

- Bonus

- Stock options

The base salaries of the Company's executive officers are set at a level
which the Compensation and Stock Option Committee believes to be competitive
with base salaries paid by leading casino hotel companies including, but not
limited to, companies in the peer group in the Stock Performance Graph contained
herein. Individual base salaries are established based on an executive officers'
historical contribution and future importance to the Company and other
subjective factors, without assigning a specific weight to individual factors.

Bonuses are paid pursuant to an executive bonus plan in which certain
management personnel at the individual properties and at the corporate level
participate. The Chief Executive Officer does not participate in this plan.
Bonus awards are set as a percentage of base salary, with the specific
percentage determined by the person's position within the Company so that highly
compensated executives receive a relatively larger percentage of their total
compensation in bonuses dependent on performance. The award of bonuses is
dependent on the achievement of specified goals. The achievement of quantitative
goals at the department, property and corporate levels is the primary factor in
determining bonuses and such goals are tied to the achievement of specified
earnings and other performance targets.

The Company believes that a significant component of the compensation paid
to the Company's executives over the long term should be derived from stock
options. The Company strongly believes that stock ownership in the Company is a
valuable incentive to executives and that the grant of stock options to them
serves to align their interests with the interests of the stockholders as a
whole and encourages them to manage the Company in its best long-term interests.
The Compensation and Stock Option Committee determines whether to grant stock
options, as well as the amount of the grants, based on a person's position
within the Company.

COMPENSATION OF CHIEF EXECUTIVE OFFICER

In establishing the Chief Executive Officer's overall compensation, a
sub-committee of the Compensation and Stock Option Committee (the
"Sub-Committee") considered a number of factors, including the record of
leadership and service provided by the Chief Executive Officer since co-founding
California Hotel and Casino, the Company's predecessor and now one of its
subsidiaries, in 1973; the identification of the Company with the Chief
Executive Officer by the Company's employees, the financial community and the
general public; and the recognition by the Sub-Committee and others in the
gaming industry of the importance of his leadership, creativity and other
personal attributes to the Company's continued success. The Sub-Committee has
not found it practicable to, and has not attempted to, assign relative weights
to the specific factors considered in determining the Chief Executive Officer's
compensation. Consistent with the Company's overall executive compensation
program, the Chief Executive Officer's compensation is composed of base salary,
bonus and stock options. The Chief Executive Officer's base salary remained
unchanged, notwithstanding his substantial achievements during fiscal 1996.
Among the factors considered by the Sub-Committee in reaching this decision were
the reluctance of the Chief Executive Officer to receive, and of the
Sub-Committee to award, base salary that is not deductible for tax purposes, the
opportunity available to the Chief Executive Officer for additional incentive
compensation and the increase awarded to the Chief Executive Officer in July
1992. In fiscal 1996, the Chief Executive Officer was the only executive officer
who participated in the 1996 Executive Management Incentive Plan approved by the
Company's stockholders in 1995, which is described below.

The Chief Executive Officer was the only executive officer who participated
in the 1996 Executive Management Incentive Plan approved by the Company's
stockholders in 1995. The Management Incentive Plan provides for annual
incentive awards to certain of the Company's key executives who are "covered
employees" within the meaning of Section 162(m) of the Internal Revenue Code and
is administered by the

10
<PAGE> 13

Compensation and Stock Option Committee. In determining awards to be made under
the Management Incentive Plan, the Committee may approve a formula based on one
or more objective criteria to measure corporate performance. Performance
criteria must include one or more of the following: the Company's pre- or
after-tax earnings, revenue growth, operating income, operating cash flow,
return on net assets, return on stockholders' equity, return on assets, return
on capital, share price growth, stockholder returns, gross or net profit margin,
earnings per share, price per share and market share. The annual maximum amount
of cash compensation payable to a participant under the Management Incentive
Plan is $2,000,000 per year. No bonus was granted to Mr. Boyd for fiscal 1996,
because the established performance targets were not achieved.

POLICY REGARDING DEDUCTIBILITY OF COMPENSATION FOR TAX PURPOSES -- COMPLIANCE
WITH INTERNAL REVENUE CODE SECTION 162 (M)

Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to the Company's Chief Executive Officer or any of the other four most
highly compensated executive officers. Qualifying performance-based
compensation, such as the 1996 Executive Management Incentive Plan, will not be
subject to the deduction limit if certain requirements are met. The Company has
structured the performance-based portion of the compensation of its executive
officers in a manner that is designated to comply with the deductibility
limitations of Section 162(m).

COMPENSATION AND STOCK OPTION COMMITTEE

Kenny C. Guinn
Warren L. Nelson
Perry B. Whitt

COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Perry B. Whitt, a member of the Compensation and Stock Option Committee, is
a former executive officer of the Company and California Hotel and Casino.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file an initial report of ownership on
Form 3 and changes in ownership on Form 4 or 5 with the Securities and Exchange
Commission (the "Commission"). Such officers, directors and 10% stockholders are
also required by the Commission rules to furnish the Company with copies of all
Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for such persons, the Company believes that during fiscal 1996, all
Section 16(a) filing requirements applicable to its officers, directors and 10%
stockholders were complied with, except that .

11
<PAGE> 14

STOCK PERFORMANCE GRAPH

The performance graph below compares the cumulative total stockholder
return of the Company with the cumulative total return of a peer group
consisting of Aztar Corporation, Circus Circus Enterprises, Inc., Grand Casinos,
Inc., Mirage Resorts, Incorporated, The Promus Companies Incorporated, Showboat,
Inc. and Station Casinos, Inc. and the cumulative total return of the Standard &
Poor's 500 Stock Index ("S&P 500"). The performance graph assumes that $100 was
invested in the Company's initial public offering, on October 15, 1993, in
common stock of the selected peer group, and in the S&P 500. In accordance with
guidelines of the Securities and Exchange Commission, the stockholder return for
each company in the peer group index has been weighted on the basis of market
capitalization as of the beginning of the period. The Company paid no dividends
during the periods shown and the performances of the indexes is shown on a total
return (dividend reinvestment) basis. The stock price performance shown in this
graph is neither necessarily indicative of, nor intended to suggest, future
stock price performance.

COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG BOYD GAMING CORPORATION, A PEER GROUP AND THE S&P 500

<TABLE>
<CAPTION>
STANDARD &
MEASUREMENT PERIOD BOYD GAMING POOR'S 500
(FISCAL YEAR COVERED) CORPORATION STOCK INDEX PEER GROUP
<S> <C> <C> <C>
10/15/93 100 100 100
6/30/94 86.77 95.04 59.76
6/30/95 100.00 116.03 105.09
6/30/96 88.24 142.84 126.44
</TABLE>

12
<PAGE> 15

PROPOSAL NO. 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

Deloitte & Touche LLP has served as the independent auditors of the Company
and its predecessor, California Hotel and Casino, since 1981 and has been
appointed by the Board of Directors to continue as the independent auditors of
the Company for the fiscal year ending June 30, 1997. In the event that
ratification of this selection of auditors is not approved by a majority of the
shares of Common Stock voting at the Annual Meeting in person or by proxy, the
Board of Directors will review its future selection of auditors. A
representative of Deloitte & Touche LLP is expected to be present at the Annual
Meeting, will have an opportunity to make a statement and will be able to
respond to appropriate questions.

THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF DELOITTE
& TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE YEAR ENDING JUNE 30,
1997.

PROPOSAL NO. 3

APPROVAL OF THE
BOYD GAMING CORPORATION 1996
STOCK INCENTIVE PLAN

At the Annual Meeting, the Company's stockholders will be asked to vote on a
proposal to adopt the 1996 Stock Incentive Plan (the "Stock Incentive Plan").
The Stock Incentive Plan would authorize the issuance of up to 3,000,000 shares
of Common Stock. The essential features of the Stock Incentive Plan are
discussed below.

The Board of Directors has concluded that the number of shares authorized
and remaining available for issuance under the Company's existing stock option
plan will not be sufficient to achieve the Company's objectives. In addition,
the Board concluded that the Company should take advantages of changes to
applicable laws which allow the Company to adopt a more flexible incentive plan.
The Board has concluded that given the Company's current objectives, a new stock
incentive plan is in the best interests of the Company and its stockholders.

Purposes. The purposes of the Stock Incentive Plan are to attract and
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to employees and consultants of the Company and
its subsidiaries, and to promote the success of the Company's business.

Administration. With respect to grants of awards to employees who are also
officers or directors of the Company, the Stock Incentive Plan will be
administered by either the Board of Directors or a Committee (as applicable, the
"Administrator") designated by the Board. The Administrator will be constituted
so as to satisfy applicable laws and to permit grants and related transactions
for officers under the Plan to be exempt from Section 16(b) of the Exchange Act
and which, in the case of "covered employees," is intended to constitute
performance-based compensation and is made up solely of two or more "outside
directors" as such term is defined and Section 162(m) of the Internal Revenue
Code (the "Code"). With respect to grants of awards to employees or consultants
who are neither directors nor officers of the Company, the Administrator may
authorize any officer(s) to grant awards, provided all grants are ratified by
the Board within 6 months of the grant date. Subject to the provisions of the
Stock Incentive Plan, the Administrator has the final power to construe and
interpret the Plan and the awards granted under it, and to determine, among
other matters, the persons to whom stock awards will be granted and the number
of shares with respect to which awards shall be granted.

Performance Based Compensation. Section 162(m) of the Code limits to $1
million annually the deduction a public corporation may claim for compensation
paid to any of its top five executive officers, except in limited circumstances.
One such exception is for "performance based compensation," which is defined as
compensation paid solely on account of the attainment of one or more performance
goals, but only (1) if the goals are determined by a compensation committee of
the Board of Directors comprised of two or more

13
<PAGE> 16

outside directors, (2) the performance goals are disclosed to shareholders and
approved by a majority vote before the remuneration is paid, and (3) before the
remuneration is paid, the compensation committee certifies that the performance
goals and any other material terms were in fact satisfied.

Internal Revenue Service regulations provide that compensation attributable
to a stock option or stock appreciation right will be deemed to satisfy the
requirement that performance goals be preestablished if the grant of the award
is made by the compensation committee; the plan under which the award is granted
states the maximum number of shares with respect to which options or rights may
be granted during a specified period to any employee; and, under the terms of
the option or award, the amount of compensation the employee could receive is
based solely on an increase in the value of the stock after the date of the
grant or award. In the case of all other types of awards, the performance
criteria must be established within 90 days after the commencement of the period
of service to which the performance goal relates, and the performance goal must
be objective and capable of determination by a third party having knowledge of
the relevant facts.

The Plan includes features intended to permit the Administrator to grant
Awards to employees that will qualify as performance-based compensation. The
Plan limits the number of shares with respect to which incentive stock options,
non-qualified stock options, and stock appreciation rights may be granted in any
one fiscal year of the Company to any one participant to shares.

Types of Awards. Any type of arrangement to an employee or consultant that
is not inconsistent with the provisions of the Plan and that by its terms
involves or might involve the issuance of (i) shares of Common Stock of the
Company, (ii) an option, SAR or similar right with an exercise or conversion
privilege at a fixed or variable price related to the Common Stock or the
passage of time, the occurrence of one or more events, or the satisfaction of
performance criteria or other conditions, or (iii) any other security with the
value derived from the value of the Common Stock. Performance criteria may be
based on any one of, or combination of, an increase in share price, earnings per
share, total stockholder return, return on equity, return on assets, return on
investment, net operating income, cash flow, revenue, economic value added,
personal management objectives, or other measure of performance selected by the
Administrator.

In the case of stock options, each option will be either an incentive stock
option or a non-qualified stock option. If the aggregate fair market value of
shares subject to incentive stock options of an employee which become
exercisable for the first time by an individual during any calendar year under
any Company plan exceeds $100,000, such excess options will be treated as
non-qualified stock options. Incentive stock options may not be transferred, but
all other awards may be transferred in accordance with the terms of the grant.
The exercise price of any incentive stock option may not be less than 100% of
the fair market value per share on the date of grant (110% in the case of a
stockholder ("10% Holder") holding 10% or more of the voting power of the
Company's and its subsidiaries' stock). The exercise price of non-qualified
stock options may not be less than 85% of the fair market value on the date of
grant.

A stock appreciation right will permit the holder of the right to elect to
surrender the right or a portion thereof that is then exercisable and receive,
in exchange therefor, Common Stock, cash, or a combination thereof. Such cash,
stock, or combination shall have an aggregate value equal to the excess of the
fair market value on the date of such election of one share of Common Stock over
the purchase price specified in such right multiplied by the number of shares
covered by such right or portion thereof which is so surrendered. A stock
appreciation right may be awarded separately or in conjunction with the award of
a stock option, in which case the exercise of the stock appreciation right will
correspondingly reduce the number of shares available under the option and the
exercise of the option will correspondingly reduce the number of shares to which
the stock appreciation right applies.

A stock appreciation right will be exercisable upon such additional terms
and conditions as may be prescribed by the Administrator in its sole discretion,
but in no event shall it be exercisable after the expiration of any related
stock option.

Restricted stock awards will consist of Common Stock transferred to
participants, without other payment therefor, as additional compensation for
their services to the Company or one of its subsidiaries. Restricted stock
awards will be subject to such terms and conditions as the Administrator
determines are appropriate.

14
<PAGE> 17

The Plan permits the grant of performance awards in the form of performance
units or performance shares. Performance units consist of monetary awards and
performance shares consist of Common Stock or awards denominated in Common
Stock, which may be earned in whole or in part if the Company achieves certain
goals established by the Administrator over a designated period of time. Payment
of an award earned may be in cash or in Common Stock, or in a combination of
both, and may be made when earned, or vested and deferred, as the Administrator
in its sole discretion determines. Deferred awards may earn interest on the
terms and at a rate determined by the Administrator.

The Administrator may accept any lawful consideration for shares issued
under the Stock Incentive Plan, including: (i) cash; (ii) check; (iii) delivery
of a promissory note with such recourse, interest, security and redemption
provisions as the Administrator deems appropriate; (iv) surrender of shares of
Common Stock (including the withholding of shares otherwise deliverable upon
exercise) with a fair market value equal to the aggregate exercise price; (v)
delivery of a properly executed exercise notice together with such other
documentation as the Administrator and the broker, if applicable, require to
effect an exercise of the award and delivery to the Company of the sale or loan
proceeds required to pay the exercise price; or (vi) any combination of the
foregoing.

The Administrator may establish programs to permit grantees to defer
receipt of consideration upon exercise of an award, satisfaction of performance
criteria, or other event that absent the election would entitle the grantee to
payment or receipt of shares or consideration. In addition, the Administrator
may establish one or more programs under the Plan to permit grantees to exchange
an award for one or more other types of awards.

No shares of Common Stock may be issued under the Stock Incentive Plan
until the grantee has made arrangements satisfactory to the Administrator for
the satisfaction of applicable federal, state and local income and employment
tax withholding obligations.

The term of each Award will be stated in the Award agreement, provided that
the term of an Incentive Stock Option may not exceed 10 years from the date of
grant or 5 years from the date of grant if the grantee is a 10% Holder.

Change of Control.

In the event of a Corporate Transaction (as described below), each
outstanding award terminates unless assumed by the successor. In the event of a
Change in Control (as described below), each outstanding award remains
exercisable until the expiration or sooner termination of the award person. A
"Corporate Transaction" means any of the following stockholder-approved
transactions to which the Company is a party: (i) a merger or consolidation in
which the Company is not the surviving entity (other than for change in
domicile); (ii) the sale, transfer or other disposition of all or substantially
all of the assets of the Company in connection with complete liquidation or
dissolution of the Company; or (iii) any reverse merger in which the Company is
the surviving entity, but in which the securities possessing more than 50% of
the total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such securities
immediately prior to such merger. A "Change in Control" means a change in
ownership or control of the Company effected through either of the following
transactions: (i) the direct or indirect acquisition of beneficial ownership of
securities with more than 50% of the total combined voting power of the
Company's outstanding securities pursuant to a tender or exchange offer made
directly to the Company's stockholders which a majority of the disinterested
directors did not recommend; or (ii) a change in the composition of the board
over 36 months or less such that the majority of Board members ceases, by reason
of one or more contested elections for Board membership, to be comprised of
individuals who have been Board members for at least 36 months or were elected
or nominated by such Board members.

In the event of a Subsidiary Disposition (as described below), each
outstanding award with respect to those grantees who are at the time engaged
primarily in service with the subsidiary corporation involved in such Subsidiary
Disposition will remain exercisable until the expiration or sooner termination
of the award term. A "Subsidiary Disposition" means the disposition by the
Company of its equity holdings in any subsidiary corporation effected by a
merger or consolidation involving that subsidiary, the sale of all or

15
<PAGE> 18

substantially all of the assets of that subsidiary, or the Company's sale or
distribution of substantially all of the outstanding capital stock of such
subsidiary corporation.

The portion of any incentive stock option accelerated under the Stock
Incentive Plan in connection with a Corporate Transaction, Change in Control or
Subsidiary Disposition remains exercisable as an incentive stock option under
the Code only to the extent the $100,000 limitation of Section 422(d) of the
Code is not exceeded. Any excess portion will be exercisable as a non-qualified
stock option.

In the event of a grantee's cessation of employment or service for any
reason, each award becomes fully vested and exercisable and is released from any
restrictions on transfer and repurchase or forfeiture rights of the shares,
unless otherwise provided in the award agreement.

Available Shares. The maximum aggregate number of shares of Common Stock
which may be issued under the Stock Incentive Plan is 3,000,000 shares.

Eligible Individuals. Awards other than incentive stock options, which may
only be granted to employees, may be granted to employees (including officers
and directors) and consultants of the Company or any parent, subsidiary or other
affiliate.

Amendment. The Board may amend the Stock Incentive Plan at any time and
for any reason, subject to certain restrictions on the ability to adversely
affect awards previously granted thereunder and to any legal requirement to
obtain stockholder approval.

Term. The Plan is effective from , the date of adoption by
the Board, for a term of 10 years unless sooner terminated.

FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE STOCK INCENTIVE PLAN

The following is a brief summary of the current United States federal
income tax rules generally applicable to the awards under the Stock Incentive
Plan.

Incentive Stock Options. There are generally no federal income tax
consequences to the optionee or the Company by reason of the grant or exercise
of an incentive stock option.

If an optionee holds stock for more than two years from the date on which
the option is granted and more than one year from the date on which the shares
are transferred to the optionee upon exercise of the option, any gain or loss on
a disposition of such stock will be long term capital gain or loss. Generally,
if the optionee disposes of the stock before the expiration of either of these
holding periods (a "disqualifying disposition"), at the time of disposition the
optionee will realize taxable ordinary income equal to the excess of the fair
market value on the date of exercise over the exercise price. If the optionee
disposes of the stock in a disqualifying disposition involving a sale or
exchange, however, the optionee will realize taxable ordinary income equal to
the optionee's actual gain, if any, on the sale or exchange. The optionee's
additional gain or any loss upon the disqualifying disposition will be a capital
gain or loss which will be long-term or short-term depending on whether the
stock was held for more than one year. Slightly different rules may apply to
optionees who acquire stock subject to certain repurchase options or who are
subject to Section 16(b) of the Exchange Act.

Upon exercise of an incentive stock option, the excess of the stock's fair
market value on the date of exercise over the option exercise price will
constitute an adjustment in calculating the optionee's alternative minimum tax
liability, if any.

To the extent the optionee recognizes ordinary income by reason of a
disqualifying disposition, the Company will be entitled (subject to the
requirement of reasonableness and perhaps, in the future, the satisfaction of a
withholding obligation) to a corresponding business expense deduction in the tax
year in which the disposition occurs.

Non-Qualified Stock Options. There generally are no tax consequences to
the optionee or the Company by reason of the grant of a non-qualified stock
option or stock appreciation right. Upon exercise of a non-qualified stock
option or stock appreciation right normally the optionee will recognize taxable
ordinary income equal to the excess of the stock's fair market value on the date
of exercise over the exercise price. Subject to

16
<PAGE> 19

the requirement of reasonableness and the satisfaction of any withholding
obligation, the Company will be entitled to a business expense deduction equal
to the taxable ordinary income realized by the holder. Upon disposition of
stock, the holder will recognize a capital gain or loss equal to the difference
between the selling price and the sum of the amount paid for such stock plus any
amount recognized as ordinary income upon exercise of the option. Such gain or
loss will be long or short-term depending on whether the stock was held for more
than one year. Slightly different rules may apply to optionees who acquire stock
subject to certain repurchase options or who are subject to Section 16(b) of the
Exchange Act.

Stock Grants, Restricted Stock Grants and Restricted Stock
Purchases. Generally, a recipient of stock under the Stock Incentive Plan would
recognize ordinary income equal to the difference between the market value of
the stock on the grant or purchase date and any amount paid or required to be
paid for the stock. If the stock is restricted and subject to vesting, then the
recipient of the stock would recognize ordinary income as the restrictions are
removed and the stock vests. On each vesting date, the recipient would recognize
ordinary income equal to the difference between the fair market value of the
shares of stock that have vested on such date and any amount paid or required to
be paid for the shares of stock. The recipient of the stock would not recognize
any income to the extent the rights to the stock have not vested. A recipient of
stock under the Stock Incentive Plan, however, may make an election under
Section 83(b) of the Code within 30 days of the stock award to be taxed at the
grant date at ordinary income rates on the difference between the fair market
value of the stock on the grant or purchase date and any amount paid by the
recipient for the stock. If a Section 83(b) election is made, the recipient will
not recognize income on subsequent vesting of the award. However, no loss or
deduction will be permitted the recipient if the restricted stock is forfeited.

Subject to the requirement of reasonableness and the satisfaction of any
withholding obligation, the Company will be entitled to a business expense
deduction equal to the taxable ordinary income realized by the recipient.

Upon disposition of stock, the recipient will recognize a capital gain or
loss equal to the difference between the selling price and the sum of the amount
paid for such stock plus any amount recognized as ordinary income. Such gain or
loss will be long or short term depending on whether the stock was held for more
than one year.

Other Tax Consequences. The foregoing discussion is not a complete
description of the federal income tax aspects of stock awards under the Stock
Incentive Plan. In addition, administrative and judicial interpretations of the
application of the federal income tax laws are subject to change. Furthermore,
no information is given with respect to state or local taxes that may be
applicable or any stock awards other than options. Participants in the Stock
Incentive Plan who are residents or are employed in a country other than the
United States may be subject to taxation in accordance with the tax laws of that
particular country in addition to or in lieu of United States federal income
taxes.

NEW PLAN BENEFITS

Because stock awards under the Stock Incentive Plan are discretionary, the
benefits to be received under the stock incentive plan by any director, officer
or employee of the Company cannot presently be determined.

The matter is being submitted to the stockholders for approval by the
affirmative vote of the holders of record of a majority of the shares
represented and voting, in person or by proxy, at the Annual Meeting.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE ADOPTION OF THE STOCK
INCENTIVE PLAN AND UNANIMOUSLY RECOMMENDS THAT HOLDERS OF SHARES OF COMMON STOCK
VOTE "FOR" APPROVAL OF THE FOLLOWING RESOLUTION WHICH WILL BE PRESENTED TO THE
MEETING:

RESOLVED, that the stockholders of Boyd Gaming Corporation hereby approve
the 1996 Stock Incentive Plan.

The persons designated in the enclosed proxy will vote your shares FOR
approval unless instructions to the contrary are indicated in the enclosed
proxy.

17
<PAGE> 20

PROPOSAL NO. 4

APPROVAL OF THE
INCREASE IN AUTHORIZED
NUMBER OF DIRECTORS TO 15

The Company's Articles of Incorporation currently provide that the Board of
Directors may consist of not less than five nor more than nine directors, as
established from time to time by the Board. The Board believes it to be in the
Company's best interest to increase the maximum number of authorized directors
to 15. The Board intends to seek qualified, nonaffiliated persons to increase
the diversity and experience of the Company's Board.

This matter is being submitted to the stockholders for approval by the
affirmative vote of the holders of record of a majority of the shares
represented and voting in person or by proxy at the Annual Meeting.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE AMENDMENT OF THE
COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE MAXIMUM NUMBER OF DIRECTORS
AUTHORIZED TO 15 AND RECOMMENDS THAT HOLDERS OF SHARES OF COMMON STOCK VOTE
"FOR" APPROVAL OF THE FOLLOWING RESOLUTION:

RESOLVED, that Article VIII, Section A of the Articles of Incorporation of
the Corporation, as restated and filed with the Secretary of State for the
State of Nevada on March 17, 1994, shall be further amended and restated in
its entirety to read as follows:

A. Number of Directors

The number of directors of the corporation shall not be less than
five (5) nor more than fifteen (15) until changed by amendment of the
Articles of Incorporation. The exact number of members constituting
the Board of Directors shall be fixed from time to time by the Board
of Directors pursuant to a resolution adopted by a majority of the
total number of authorized directors.

The person designated in the enclosed proxy will vote your shares FOR
approval unless instructions to the contrary are indicated in the
enclosed proxy.

STOCKHOLDER PROPOSALS

Stockholders may submit proposals on matters appropriate for stockholder
action at subsequent annual meetings of the Company consistent with Rule 14a-8
promulgated under the Exchange Act. Proposals of stockholders intended to be
presented at the Company's 1997 Annual Meeting of Stockholders must be received
by the Company (Attention: Charles E. Huff, Secretary, at the principal offices
of the Company), no later than July 25, 1997, for inclusion in the Board's proxy
statement and form of proxy for that meeting.

OTHER MATTERS

The Board of Directors currently knows of no other business which will be
presented to the Annual Meeting. If any other business is properly brought
before the Annual Meeting, it is intended that proxies in the enclosed form will
be voted in respect thereof as the proxy holders deem advisable.

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A FORM OF PROXY IS ENCLOSED FOR YOUR USE. PLEASE MARK, DATE, SIGN AND
PROMPTLY RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE. IT IS IMPORTANT THAT
THE PROXIES BE RETURNED PROMPTLY AND THAT YOUR SHARES BE REPRESENTED.

By Order of the Board of Directors,

WILLIAM S. BOYD
Chairman of the Board
and Chief Executive Officer

October 15, 1996
Las Vegas, Nevada

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BOYD GAMING CORPORATION

1996 STOCK INCENTIVE PLAN

1. Purposes of the Plan. The purposes of this Stock Incentive Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business.

2. Definitions. As used herein, the following definitions shall apply:

(a) "Administrator" means the Board or any of the Committees appointed
to administer the Plan.

(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

(c) "Applicable Laws" means the legal requirements relating to the
administration of stock incentive plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws,
the Code, the rules of any applicable stock exchange or national market
system, and the rules of any foreign jurisdiction applicable to Awards
granted to residents therein.

(d) "Award" means the grant of an Option, SAR, Dividend Equivalent
Right, Restricted Stock, Performance Unit, Performance Share, or other
right or benefit under the Plan.

(e) "Award Agreement" means the written agreement evidencing the grant
of an Award executed by the Company and the Grantee, including any
amendments thereto.

(f) "Board" means the Board of Directors of the Company.

(g) "Boyd Family" means William S. Boyd, any direct descendant or
spouse of such person, or any direct descendant of such spouse, and any
trust or other estate in which each person who has a beneficial interest,
directly or indirectly through one or more intermediaries in capital stock
of the Company is one of the foregoing persons. The members of the Boyd
Family shall be deemed to beneficially own any capital stock of a
corporation held by any other corporation (the "parent corporation" so long
as the members of the Boyd Family beneficially own, directly or indirectly
through one or more intermediates, in the aggregate 50% or more of the
total voting power of the capital stock of the parent corporation.

(h) "Change in Control" means a change in ownership or control of the
Company effected through either of the following transactions:

(i) the direct or indirect acquisition by any person or related
group of persons (other than an acquisition from or by the Company, by a
Company-sponsored employee benefit plan, by a person that directly or
indirectly controls, is controlled by, or is under common control with,
the Company or a Permitted Holder) of beneficial ownership (within the
meaning of Rule 13d-3 of the Exchange Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities pursuant to a tender or exchange offer
made directly to the Company's stockholders which a majority of the
Continuing Directors who are not Affiliates or Associates of the offeror
do not recommend such stockholders accept, or

(ii) a change in the composition of the Board over a period of
thirty-six (36) months or less such that a majority of the Board members
(rounded up to the next whole number) ceases, by reason of one or more
contested elections for Board membership, to be comprised of individuals
who are Continuing Directors.

(i) "Code" means the Internal Revenue Code of 1986, as amended.

(j) "Committee" means any committee appointed by the Board to
administer the Plan.

(k) "Common Stock" means the common stock of the Company.

(l) "Company" means Boyd Gaming Corporation, a Nevada corporation.

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(m) "Consultant" means any person who is engaged by the Company or any
Parent or Subsidiary to render consulting or advisory services as an
independent contractor and is compensated for such services.

(n) "Continuing Directors" means members of the Board who either (i)
have been Board members continuously for a period of at least thirty-six
(36) months or (ii) have been Board members for less than thirty-six (36)
months and were elected or nominated for election as Board members by at
least a majority of the Board members described in clause (i) who were
still in office at the time such election or nomination was approved by the
Board.

(o) "Continuous Status as an Employee or Consultant" means that the
employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case of
(i) any leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. A leave of absence approved by the Company
shall include sick leave, military leave, or any other personal leave
approved by an authorized representative of the Company. For purposes of
Incentive Stock Options, no such leave may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute or
contract.

(p) "Corporate Transaction" means any of the following
stockholder-approved transactions to which the Company is a party:

(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated;

(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital
stock of the Company's subsidiary corporations) in connection with the
complete liquidation or dissolution of the Company; or

(iii) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%)
of the total combined voting power of the Company's outstanding
securities are transferred to a person or persons different from those
who held such securities immediately prior to such merger.

(q) "Covered Employee" means an Employee who is a "covered employee"
under Section 162(m)(3) of the Code.

(r) "Director" means a member of the Board.

(s) "Dividend Equivalent Right" means a right entitling the Grantee to
compensation measured by dividends paid with respect to Common Stock.

(t) "Employee" means any person, including an Officer or Director, who
is an employee of the Company or any Parent or Subsidiary of the Company
for purposes of Section 422 of the Code. The payment of a director's fee by
the Company shall not be sufficient to constitute "employment" by the
Company.

(u) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

(v) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

(i) Where there exists a public market for the Common Stock, the
Fair Market Value shall be (A) the closing sales price for a Share for
the last market trading day prior to the time of the determination (or,
if no sales were reported on that date, on the last trading date on
which sales were reported) on the New York Stock Exchange or such other
stock exchange determined by the Administrator to be the primary market
for the Common Stock or (B) if the Common Stock is not traded on such an
exchange, the Nasdaq National Market or (C) if the Common Stock is not
traded on any such exchange or national market system, the average of
the closing bid and asked prices of a

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<PAGE> 24

Share on the Nasdaq Small Cap Market for the day prior to the time of
the determination (or, if no such prices were reported on that date, on
the last date on which such prices were reported), in each case, as
reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

(ii) In the absence of an established market of the type described
in (i), above, for the Common Stock, the Fair Market Value thereof shall
be determined by the Administrator in good faith.

(w) "Grantee" means an Employee or Consultant who receives an Award
under the Plan.

(x) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

(y) "Non-Qualified Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

(z) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

(aa) "Option" means a stock option granted pursuant to the Plan.

(bb) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

(cc) "Performance -- Based Compensation" means compensation qualifying
as "performance-based compensation" under Section 162(m) of the Code.

(dd) "Performance Shares" means Shares or an award denominated in
Shares which may be earned in whole or in part upon attainment of
performance criteria established by the Administrator.

(ee) "Performance Units" means an award which may be earned in whole
or in part upon attainment of performance criteria established by the
Administrator and which may be settled for cash, Shares or other securities
or a combination of cash, Shares or other securities as established by the
Administrator.

(ff) "Permitted Holders" means the Boyd Family and any group (as such
term is used in Section 13(d) and 14(d) of the Exchange Act) comprised
solely of members of the Boyd Family.

(gg) "Plan" means this 1997 Stock Incentive Plan.

(hh) "Restricted Stock" means Shares issued under the Plan to the
Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture
provisions, and other terms and conditions as established by the
Administrator.

(ii) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act
or any successor thereto.

(jj) "SAR" means a stock appreciation right entitling the Grantee to
Shares or cash compensation, as established by the Administrator, measured
by appreciation in the value of Common Stock.

(kk) "Share" means a share of the Common Stock.

(ll) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

(mm) "Subsidiary Disposition" means the disposition by the Company of
its equity holdings in any subsidiary corporation effected by a merger or
consolidation involving that subsidiary corporation, the sale of all or
substantially all of the assets of that subsidiary corporation or the
Company's sale or distribution of substantially all of the outstanding
capital stock of such subsidiary corporation.

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3. Stock Subject to the Plan.

(a) Subject to the provisions of Section 10, below, the maximum aggregate
number of Shares which may be issued pursuant to all Awards (including Incentive
Stock Options) is 3,000,000 Shares. The Shares to be issued pursuant to Awards
may be authorized, but unissued, or reacquired Common Stock.

(b) If an Award expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Award exchange program, or
if any unissued Shares are retained by the Company upon exercise of an Award in
order to satisfy the exercise price for such Award or any withholding taxes due
with respect to such Award, such unissued or retained Shares shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). Shares that actually have been issued under the Plan pursuant to an
Award shall not be returned to the Plan and shall not become available for
future distribution under the Plan, except that if unvested Shares are
forfeited, or repurchased by the Company at their original purchase price, such
Shares shall become available for future grant under the Plan.

4. Administration of the Plan.

(a) Plan Administrator.

(i) Administration with Respect to Officers. With respect to grants
of Awards to Employees who are also Officers or Directors of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee
designated by the Board, which Committee shall be constituted in such a
manner as to satisfy the Applicable Laws and to permit such grants and
related transactions under the Plan to be exempt from Section 16(b) of the
Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee
shall continue to serve in its designated capacity until otherwise directed
by the Board.

(ii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Awards to Employees or Consultants
who are neither Directors nor Officers of the Company, the Plan shall be
administered by (A) the Board or (B) a Committee designated by the Board,
which Committee shall be constituted in such a manner as to satisfy the
Applicable Laws. Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. The Board
may authorize one or more Officers to grant such Awards and may limit such
authority by requiring that such Awards must be reported to and ratified by
the Board or a Committee within six (6) months of the grant date, and if so
ratified, shall be effective as of the grant date.

(iii) Administration With Respect to Covered
Employees. Notwithstanding the foregoing, grants of Awards to any Covered
Employee intended to qualify as Performance-Based Compensation shall be
made only by a Committee (or subcommittee of a Committee) which is
comprised solely of two or more Directors eligible to serve on a committee
making Awards qualifying as Performance-Based Compensation. In the case of
such Awards granted to Covered Employees, references to the "Administrator"
or to a "Committee" shall be deemed to be references to such Committee or
subcommittee.

(iv) Administration Errors. In the event an Award is granted in a
manner inconsistent with the provisions of this subsection (a), such Award
shall be presumptively valid as of its grant date to the extent permitted
by the Applicable Laws.

(b) Powers of the Administrator. Subject to Applicable Laws and the
provisions of the Plan (including any other powers given to the Administrator
hereunder), and except as otherwise provided by the Board, the Administrator
shall have the authority, in its discretion:

(i) to select the Employees and Consultants to whom Awards may be
granted from time to time hereunder;

(ii) to determine whether and to what extent Awards are granted
hereunder;

(iii) to determine the number of Shares or the amount of other
consideration to be covered by each Award granted hereunder;

(iv) to approve forms of Award Agreement for use under the Plan;

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<PAGE> 26

(v) to determine the terms and conditions of any Award granted
hereunder;

(vi) to amend the terms of any outstanding Award granted under the
Plan, including a reduction in the exercise price (or base amount on which
appreciation is measured) of any Award to reflect a reduction in the Fair
Market Value of the Common Stock since the grant date of the Award,
provided that any amendment that would adversely affect the Grantee's
rights under an outstanding Award shall not be made without the Grantee's
written consent;

(vii) to construe and interpret the terms of the Plan and Awards
granted pursuant to the Plan;

(viii) to establish additional terms, conditions, rules or procedures
to accommodate the rules or laws of applicable foreign jurisdictions and to
afford Grantees favorable treatment under such laws; provided, however,
that no Award shall be granted under any such additional terms, conditions,
rules or procedures with terms or conditions which are inconsistent with
the provisions of the Plan; and

(ix) to take such other action, not inconsistent with the terms of the
Plan, as the Administrator deems appropriate.

(c) Effect of Administrator's Decision. All decisions, determinations and
interpretations of the Administrator shall be conclusive and binding on all
persons.

5. Eligibility. Awards other than Incentive Stock Options may be granted
to Employees and Consultants. Incentive Stock Options may be granted only to
Employees. An Employee or Consultant who has been granted an Award may, if
otherwise eligible, be granted additional Awards. Awards may be granted to such
Employees of the Company and its subsidiaries who are residing in foreign
jurisdictions as the Administrator may determine from time to time.

6. Terms and Conditions of Awards.

(a) Type of Awards. The Administrator is authorized under the Plan to
award any type of arrangement to an Employee or Consultant that is not
inconsistent with the provisions of the Plan and that by its terms involves or
might involve the issuance of (i) Shares, (ii) an Option, a SAR or similar right
with an exercise or conversion privilege at a fixed or variable price related to
the Common Stock and/or the passage of time, the occurrence of one or more
events, or the satisfaction of performance criteria or other conditions, or
(iii) any other security with the value derived from the value of the Common
Stock. Such awards include, without limitation, Options, SARs, sales or bonuses
of Restricted Stock, Dividend Equivalent Rights, Performance Units or
Performance Shares, and an Award may consist of one such security or benefit, or
two or more of them in any combination or alternative.

(b) Designation of Award. Each Award shall be designated in the Award
Agreement. In the case of an Option, the Option shall be designated as either an
Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of Shares
subject to Options designated as Incentive Stock Options which become
exercisable for the first time by a Grantee during any calendar year (under all
plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess
Options, to the extent of the Shares covered thereby in excess of the foregoing
limitation, shall be treated as Non-Qualified Stock Options. For this purpose,
Incentive Stock Options shall be taken into account in the order in which they
were granted, and the Fair Market Value of the Shares shall be determined as of
the date the Option with respect to such Shares is granted.

(c) Conditions of Award. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator may be based on any one of, or
combination of, increase in share price, earnings per share, total stockholder
return, return on equity, return on assets, return on investment, net operating
income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the Administrator.
Partial achievement

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<PAGE> 27

of the specified criteria may result in a payment or vesting corresponding to
the degree of achievement as specified in the Award Agreement.

(d) Deferral of Award Payment. The Administrator may establish one or more
programs under the Plan to permit selected Grantees the opportunity to elect to
defer receipt of consideration upon exercise of an Award, satisfaction of
performance criteria, or other event that absent the election would entitle the
Grantee to payment or receipt of Shares or other consideration under an Award.
The Administrator may establish the election procedures, the timing of such
elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts or Shares so deferred, and such other terms,
conditions, rules and procedures that the Administrator deems advisable for the
administration of any such deferral program.

(e) Award Exchange Programs. The Administrator may establish one or more
programs under the Plan to permit selected Grantees to exchange an Award under
the Plan for one or more other types of Awards under the Plan on such terms and
conditions as established by the Administrator from time to time.

(f) Individual Option and SAR Limit. The maximum number of Shares with
respect to which Options and SARs may be granted to any Employee in any fiscal
year of the Company shall be ( ) Shares. The foregoing limitation shall
be adjusted proportionately in connection with any change in the Company's
capitalization pursuant to Section 10, below. To the extent required by Section
162(m) of the Code or the regulations thereunder, in applying the foregoing
limitation with respect to an Employee, if any Option or SAR is canceled, the
canceled Option or SAR shall continue to count against the maximum number of
Shares with respect to which Options and SARs may be granted to the Employee.
For this purpose, the repricing of an Option (or in the case of a SAR, the base
amount on which the stock appreciation is calculated is reduced to reflect a
reduction in the Fair Market Value of the Common Stock) shall be treated as the
cancellation of the existing Option or SAR and the grant of a new Option or SAR.

(g) Term of Award. The term of each Award shall be the term stated in the
Award Agreement, provided, however, that the term of an Incentive Stock Option
shall be no more than ten (10) years from the date of grant thereof. However, in
the case of an Incentive Stock Option granted to a Grantee who, at the time the
Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Incentive Stock Option shall be five (5) years from the date of
grant thereof or such shorter term as may be provided in the Award Agreement.

(h) Transferability of Awards. Incentive Stock Options may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Grantee, only by the Grantee. Other Awards shall be
transferable to the extent provided in the Award Agreement.

(i) Time of Granting Awards. The date of grant of an Award shall for all
purposes be the date on which the Administrator makes the determination to grant
such Award, or such other date as is determined by the Administrator. Notice of
the grant determination shall be given to each Employee, Director or Consultant
to whom an Award is so granted within a reasonable time after the date of such
grant.

7. Award Exercise or Purchase Price, Consideration, Taxes and Reload
Options.

(a) Exercise or Purchase Price. The exercise or purchase price, if any,
for an Award shall be as follows:

(i) In the case of an Incentive Stock Option:

(A) granted to an Employee who, at the time of the grant of such
Incentive Stock Option owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be not less
than one hundred ten percent (110%) of the Fair Market Value per Share
on the date of grant.

(B) granted to any Employee other than an Employee described in the
preceding paragraph, the per Share exercise price shall be not less than
one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.

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<PAGE> 28

(ii) In the case of a Non-Qualified Stock Option, the per Share
exercise price shall be not less than eighty-five percent (85%) of the Fair
Market Value per Share on the date of grant unless otherwise determined by
the Administrator.

(iii) In the case of Awards intended to qualify as Performance-Based
Compensation, the exercise or purchase price, if any, shall be not less
than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.

(iv) In the case of other Awards, such price as is determined by the
Administrator.

(b) Consideration. Subject to Applicable Laws, the consideration to be
paid for the Shares to be issued upon exercise or purchase of an Award including
the method of payment, shall be determined by the Administrator (and, in the
case of an Incentive Stock Option, shall be determined at the time of grant). In
addition to any other types of consideration the Administrator may determine,
the Administrator is authorized to accept as consideration for Shares issued
under the Plan the following:

(i) cash;

(ii) check;

(iii) delivery of Grantee's promissory note with such recourse,
interest, security, and redemption provisions as the Administrator
determines as appropriate;

(iv) surrender of Shares (including withholding of Shares otherwise
deliverable upon exercise of the Award) which have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares
as to which said Award shall be exercised (but only to the extent that such
exercise of the Award would not result in an accounting compensation charge
with respect to the Shares used to pay the exercise price unless otherwise
determined by the Administrator);

(v) delivery of a properly executed exercise notice together with such
other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Award and delivery to the
Company of the sale or loan proceeds required to pay the exercise price; or

(vi) any combination of the foregoing methods of payment.

(c) Taxes. No Shares shall be delivered under the Plan to any Grantee or
other person until such Grantee or other person has made arrangements acceptable
to the Administrator for the satisfaction of any foreign, federal, state, or
local income and employment tax withholding obligations, including, without
limitation, obligations incident to the receipt of Shares or the disqualifying
disposition of Shares received on exercise of an Incentive Stock Option. Upon
exercise of an Award, the Company shall withhold or collect from Grantee an
amount sufficient to satisfy such tax obligations.

(d) Reload Options. In the event the exercise price or tax withholding of
an Option is satisfied by the Company or the Grantee's employer withholding
Shares otherwise deliverable to the Grantee, the Administrator may issue the
Grantee an additional Option, with terms identical to the Award Agreement under
which the Option was exercised, but at an exercise price as determined by the
Administrator in accordance with the Plan.

8. Exercise of Award.

(a) Procedure for Exercise; Rights as a Stockholder.

(i) Any Award granted hereunder shall be exercisable at such times and
under such conditions as determined by the Administrator under the terms of
the Plan and specified in the Award Agreement.

(ii) An Award shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of
the Award by the person entitled to exercise the Award and full payment for
the Shares with respect to which the Award is exercised has been received
by the Company. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right

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<PAGE> 29

to vote or receive dividends or any other rights as a stockholder shall
exist with respect to Shares subject to an Award, notwithstanding the
exercise of an Option or other Award. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Award. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued, except as
provided in the Award Agreement or Section 10, below.

(b) Exercise of Award Following Termination of Employment, Director or
Consulting Relationship.

(i) An Award may not be exercised after the termination date of such
Award set forth in the Award Agreement and may be exercised following the
termination of a Grantee's Continuous Status as an Employee or Consultant
only to the extent provided in the Award Agreement.

(ii) Where the Award Agreement permits a Grantee to exercise an Award
following the termination of the Grantee's Continuous Status as an Employee
or Consultant for a specified period, the Award shall terminate to the
extent not exercised on the last day of the specified period or the last
day of the original term of the Award, whichever occurs first.

(iii) Any Award designated as an Incentive Stock Option to the extent
not exercised within the time permitted by law for the exercise of
Incentive Stock Options following the termination of a Grantee's Continuous
Status as an Employee shall convert automatically to a Non-Qualified Stock
Option and thereafter shall be exercisable as such to the extent
exercisable by its terms for the period specified in the Award Agreement.

(c) Buyout Provisions. The Administrator may at any time offer to buy out
for a payment in cash or Shares, an Award previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Grantee at the time that such offer is made.

9. Conditions Upon Issuance of Shares.

(a) Shares shall not be issued pursuant to the exercise of an Award unless
the exercise of such Award and the issuance and delivery of such Shares pursuant
thereto shall comply with all Applicable Laws, and shall be further subject to
the approval of counsel for the Company with respect to such compliance.

(b) As a condition to the exercise of an Award, the Company may require the
person exercising such Award to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any Applicable
Laws.

10. Adjustments Upon Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of Shares covered by each
outstanding Award, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Awards have yet been granted or which
have been returned to the Plan, as well as the price per share of Common Stock
covered by each such outstanding Award, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other similar event resulting in
an increase or decrease in the number of issued shares of Common Stock. Except
as expressly provided herein, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason hereof shall be made with respect to, the
number or price of Shares subject to an Award.

11. Corporate Transactions/Changes in Control/Subsidiary Dispositions.

(a) In the event of a Corporate Transaction, each Award which is at the
time outstanding under the Plan shall terminate unless assumed by the successor
company or its Parent.

(b) In the event of a Change in Control (other than a Change in Control
which also is a Corporate Transaction), each Award which is at the time
outstanding under the Plan shall remain so exercisable until the expiration or
sooner termination of the applicable Award term.

8
<PAGE> 30

(c) In the event of a Subsidiary Disposition, each Award with respect to
those Grantees who are at the time engaged primarily in Continuous Service as an
Employee or Consultant with the subsidiary corporation involved in such
Subsidiary Disposition which is at the time outstanding under the Plan shall
remain so exercisable until the expiration or sooner termination of the Award
term.

(d) The portion of any Incentive Stock Option accelerated under this
Section 11 in connection with a Corporate Transaction, Change in Control or
Subsidiary Disposition shall remain exercisable as an Incentive Stock Option
under the Code only to the extent the $100,000 dollar limitation of Section
422(d) of the Code is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated excess portion of such Option shall be exercisable as
a Non-Qualified Stock Option.

12. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by the stockholders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner
terminated.

13. Amendment, Suspension or Termination of the Plan.

(a) The Board may at any time amend, suspend or terminate the Plan. To the
extent necessary to comply with Applicable Laws, the Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a degree
as required.

(b) No Award may be granted during any suspension of the Plan or after
termination of the Plan.

(c) Any amendment, suspension or termination of the Plan shall not affect
Awards already granted, and such Awards shall remain in full force and effect as
if the Plan had not been amended, suspended or terminated, unless mutually
agreed otherwise between the Grantee and the Administrator, which agreement must
be in writing and signed by the Grantee and the Company.

14. Reservation of Shares.

(a) The Company, during the term of the Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

(b) The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

15. No Effect on Terms of Employment. The Plan shall not confer upon any
Grantee any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with his or her
right or the Company's right to terminate his or her employment or consulting
relationship at any time, with or without cause.

16. Stockholder Approval. The grant of Incentive Stock Options under the
Plan shall be subject to approval by the stockholders of the Company within
twelve (12) months before or after the date the Plan is adopted. Such
stockholder approval shall be obtained in the degree and manner required under
Applicable Laws. The Administrator may grant Incentive Stock Options under the
Plan prior to approval by the stockholders, but until such approval is obtained,
no such Incentive Stock Option shall be exercisable. In the event that
stockholder approval is not obtained within the twelve (12) month period
provided above, all Incentive Stock Options previously granted under the Plan
shall terminate.

9
<PAGE> 31
PROXY

BOYD GAMING CORPORATION

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON NOVEMBER 22, 1996

The undersigned hereby appoints William S. Boyd and William R. Boyd,
(collectively, the "Proxies"), or either of them, each with the power of
substitution, to represent and vote the shares of the undersigned, with all the
powers which the undersigned would possess if personally present, at the Annual
Meeting of Stockholders (the "Annual Meeting") of Boyd Gaming Corporation, a
Nevada corporation (the "Company"), to be held on Friday, November 22, 1996, at
11:00 a.m. local time, at the Sam's Town Hotel & Gambling Hall, 1477 Casino
Strip Boulevard, Robinsonville, Mississippi 38664 and at any adjournments or
postponements thereof. SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED AS
DIRECTED BY THE STOCKHOLDER. IF NO SUCH DIRECTIONS ARE INDICATED, THE PROXIES
WILL HAVE AUTHORITY TO VOTE FOR THE ELECTION OF THE NOMINEES LISTED BELOW, FOR
PROPOSALS 2, 3 AND 4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.

The Board of Directors recommends a vote FOR the election of
Directors and FOR Proposals 2, 3 and 4.

SEE REVERSE SIDE: IF YOU WISH TO VOTE IN ACCORDANCE WITH THE
BOARD OF DIRECTORS' RECOMMENDATIONS, JUST SIGN AND DATE ON THE
REVERSE SIDE. YOU NEED NOT MARK ANY BOXES.

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<PAGE> 32
Please mark your votes
as indicated in this
example. /X/

1. Election of Directors:

(INSTRUCTIONS: To withhold authority to vote for either nominee, print that
nominee's name in the space below.)

_________________________________________________________________________

FOR WITHHOLD
the nominees listed AUTHORITY
below. (except as marked to vote for nominees
to the contrary below) listed below.
/ / / /

Class I: William R. Boyd, Warren L. Nelson and Donald Snyder

2. To ratify the appointment of Deloitte & Touche LLP as the independent
auditors for the Company for the fiscal year ending June 30, 1997.

FOR AGAINST ABSTAIN
/ / / / / /

3. To approve the 1996 Stock Incentive Plan.

FOR AGAINST ABSTAIN
/ / / / / /

4. To approve the amendment to the Articles of Incorporation to increase the
authorized number of directors to 15.

FOR AGAINST ABSTAIN
/ / / / / /

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
REPLY ENVELOPE.

(Signature)______________ (Signature, if jointly held)__________DATE:_____, 1996

Please sign exactly as your name appears herein. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name by
President or other authorized person. If a partnership, please sign in full
partnership name by authorized person.

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