SCHEDULE 14A INFORMATION
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:
/ / Preliminary Proxy Statement
/ / Confidential; for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AMCON Distributing Company
------------------------------------------------
(Name of Registrant as Specified in its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
/1/ Title of each class of securities to which transaction applies:
/2/ Aggregate number of securities to which transaction applies:
/3/ Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
/4/ Proposed maximum aggregate value of transaction:
/5/ Total fee paid:
/ / Fee paid previously with preliminary materials:
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2)and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number or
the Form or Schedule and the date of its filing.
/1/ Amount Previously Paid:
/2/ Form, Schedule or Registration Statement No.:
/3/ Filing Party:
/4/ Date Filed:
AMCON DISTRIBUTING COMPANY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MARCH 9, 2001
The Annual Meeting of Stockholders of AMCON Distributing Company (the
"Company") will be held at the Embassy Suites Hotel, 555 South 10th Street,
Omaha, Nebraska on Friday, March 9, 2001, at 9:00 a.m., Central Standard Time,
for the following purposes:
(1) To elect three directors.
(2) To ratify the appointment of PricewaterhouseCoopers LLP as independent
auditor for the Company for the fiscal year ending September 28, 2001.
(3) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Enclosed herewith is a Proxy Statement setting forth information with respect
to the election of three directors and the ratification of the appointment of
the independent auditors of the Company.
Only stockholders holding shares of Common Stock of record at the close of
business on February 1, 2001 will be entitled to notice of, and to vote at,
the meeting.
Stockholders, whether or not they expect to be present at the meeting, are
requested to sign and date the enclosed proxy which is solicited on behalf of
the Board of Directors and return it promptly in the envelope enclosed for
that purpose. Any person giving a proxy has the power to revoke it at any
time, and stockholders who are present at the meeting may withdraw their
proxies and vote in person.
By Order of the Board of Directors
Michael D. James
---------------------------------------
Michael D. James, Secretary
Omaha, Nebraska
February 13, 2001
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER SOLICITATION FOR PROXIES TO ENSURE A QUORUM AT THE ANNUAL MEETING.
AMCON Distributing Company
10228 L Street
Omaha, Nebraska 68127
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
of
COMMON STOCK
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Stockholders of AMCON Distributing
Company (the "Company") to be held on March 9, 2001 at the time and place and
for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. The principal executive offices of the Company are at 10228 L
Street, Omaha, Nebraska 68127. This Proxy Statement and the proxy cards are
first being mailed to stockholders on or about February 13, 2001.
The accompanying proxy is solicited on behalf of the Board of Directors of the
Company and is revocable at any time before it is exercised by written notice
of termination given to the Secretary of the Company or by filing a later-
dated proxy with him. Furthermore, stockholders who are present at the Annual
Meeting may withdraw their proxies and vote in person. All shares of the
Company's Common Stock represented by properly executed and unrevoked proxies
will be voted by the Board of Directors of the Company in accordance with the
directions given therein. Where no instructions are indicated, proxies will
be voted "FOR" each of the proposals set forth in this Proxy Statement for
consideration at the Annual Meeting. In addition, the directors believe
outstanding shares held by executive officers and directors of the Company
will be voted "FOR" each such proposal. Such shares represent approximately
39.8% of the total shares outstanding as of February 1, 2001. Shares of
Common Stock entitled to vote and represented by properly executed, returned
and unrevoked proxies will be considered present at the meeting for purposes
of determining a quorum, including shares with respect to which votes are
withheld, abstentions are cast, or there are broker nonvotes.
VOTING SECURITIES AND BENEFICIAL OWNERSHIP
THEREOF BY PRINCIPAL STOCKHOLDERS,
DIRECTORS AND OFFICERS
Only holders of Common Stock of record at the close of business on February 1,
2001 (the "Record Date") will be entitled to vote at the Annual Meeting. At
the Record Date, there were 2,737,991 shares of Common Stock which were issued
and outstanding. Each share of Common Stock is entitled to one vote upon each
matter to be voted on at the Annual Meeting. Stockholders do not have the
right to cumulate votes in the election of directors.
The following table sets forth, as of the Record Date, the beneficial
ownership of the Company's Common Stock by each director and each nominee for
director, by each of the executive officers named in the Summary Compensation
Table, by each person believed by the Company to beneficially own more than 5%
of the Company's Common Stock and by all present executive officers and
directors of the Company as a group:
Number of
Shares Percent
Beneficially of
Name Owned Class
- ------------------------ ------------ -------
William F. Wright, Director, Chairman of the Board 505,008 /1/ 18.11%
Kathleen M. Evans, Director, President 185,036 /2/ 6.66
Jerry Fleming, Director, President of
Food For Health Co., Inc. 18,700 /3/ *
Michael D. James, Chief Financial Officer,
Secretary and Treasurer 9,240 /4/ *
J. Tony Howard, Director 177,446 /5/ 6.41
Allen D. Petersen, Director 259,238 /6/ 9.40
Timothy R. Pestotnik, Director 240,298 /7/ 8.75
William R. Hoppner, Director 100,265 /8/ 3.65
All executive officers and directors
as a group (8 persons) 1,268,133 43.48
Matthew F. Wright /9/ 151,650 5.54
Mark A. Wright /10/ 209,462 7.65
Wendy M. Wright /11/ 328,252 11.99
Ane Patterson /12/ 160,784 5.87
- --------------------------------
* Less than 1% of class.
/1/ Includes options to purchase 50,600 shares of Common Stock at an average
exercise price of $3.67 per share which may be exercised currently.
/2/ Includes options to purchase 38,500 shares of Common Stock at an average
exercise price of $3.41 per share which may be exercised currently.
/3/ Includes options to purchase 17,600 shares of Common Stock at an average
exercise price of $4.01 per share which may be exercised currently. Mr.
Fleming also holds unvested options to acquire 8,800 shares of stock at an
exercise price of $2.61 per share.
/4/ Includes options to purchase 8,140 shares of Common Stock at an average
exercise price of $2.88 per share which may be exercised currently. Mr. James
also holds unvested options to acquire 12,860 shares of common stock at an
average exercise price of $6.14 per share.
/5/ Includes options to purchase 29,700 shares of Common Stock at an average
exercise price of $3.68 per share which may be exercised currently.
/6/ Includes 227,098 shares of Common Stock held by the Lifeboat Foundation,
over which Mr. Petersen shares voting power as a director, 11,440 shares held
by the Draupnir Trust, over which Mr. Petersen has sole voting power as sole
trustee, and options to purchase 18,700 shares of Common Stock at an average
exercise price of $4.30 per share which may be exercised currently.
/7/ Includes 227,098 shares of Common Sock held by the Lifeboat Foundation,
over which Mr. Pestotnik shares voting power as a director, and options to
purchase 7,700 shares of Common Stock at an average exercise price of $6.72
per share which may be exercised currently.
/8/ Includes options to purchase 7,700 shares of Common Stock at an average
exercise price of $6.72 per share which may be exercised currently.
/9/ 1840 Kings Highway, Lincoln, Nebraska 68502. The number of shares
includes 2,970 shares over which Mr. Wright shares voting and investment power
with his minor children.
/10/ 11110 E. Beck Lane, Scottsdale, Arizona 85259. The number of shares
includes 650 shares over which Mr. Wright shares voting and investment power
with his spouse and minor children.
/11/ 2600 West 6th Street, Lawrence, Kansas 66049.
/12/ 3055 St. Thomas Drive, Missoula, Montana 59803.
ELECTION OF DIRECTORS
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has nominated William F. Wright, Jerry Fleming, and
William R. Hoppner to serve three-year terms as directors. Proxies submitted
pursuant to this solicitation will be voted, unless specified otherwise, for
the election of Messrs. Wright, Fleming and Hoppner. Messrs. Wright, Fleming
and Hoppner have each expressed an intention to serve, if elected, and the
Board of Directors knows of no reason why any of them might be unavailable to
serve. If Mr. Wright, Mr. Fleming or Mr. Hoppner is unable to serve, the
shares represented by all valid proxies will be voted for the election of such
substitute nominee as the Board of Directors may recommend. There are no
arrangements or understandings between Mr. Wright, Mr. Fleming or Mr. Hoppner
and any other person pursuant to which they were selected as nominees. The
election of a director requires the affirmative vote of a plurality of the
shares present in person or represented by proxy at the Annual Meeting and
entitled to vote. Consequently, votes withheld and broker nonvotes with
respect to the election of directors will have no impact on the election of
directors. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
THE ELECTION OF MR. WRIGHT, MR. FLEMING AND MR. HOPPNER.
The table below sets forth certain information regarding the directors of the
Company. All members of, and nominees to, the Board of Directors have held
the positions with the companies (or their predecessors) set forth under
"Principal Occupation" for at least five years, unless otherwise indicated.
Principal Director Term To
Name Age Occupation Since Expire
- ------------------ --- ------------------------- -------- -------
NOMINEES
William F. Wright 58 Chairman of the Board /1/ 1986 2001
Jerry Fleming 63 President of Food For Health
Co., Inc. /2/ 1997 2001
William R. Hoppner 50 Attorney, Consultant /3/ 1994 2001
DIRECTORS CONTINUING IN OFFICE
J. Tony Howard 56 President of Nebraska
Distributing Company 1986 2002
Allen D. Petersen 59 Chairman and Chief Executive
Officer of American Tool
Companies, Inc. 1993 2002
Kathleen M. Evans 53 President of the Company 1986 2003
Timothy R. Pestotnik 40 Attorney, Partner in the
law firm Luce, Forward,
Hamilton & Scripps, LLP 1998 2003
Information regarding other executive officers of the Company is found in the
Company's Form 10-K, which is available upon request.
- ---------------------------
/1/ Mr. Wright has served as the Chairman and Chief Executive Officer of AMCON
Corporation (the former parent of the Company) since 1976 and as Chairman of
the Company and its predecessors since 1981. From 1968 to 1984, Mr. Wright
practiced corporate and securities law in Lincoln, Nebraska. Mr. Wright is a
graduate of the University of Nebraska and Duke University School of Law and
is a certified public accountant. Mr. Wright is also a director of Gold Banc
Corporation, Inc., a public bank holding company.
/2/ Food For Health Co., Inc. was acquired by the Company on November 10, 1997
and is a wholly owned subsidiary of the Company. Mr. Fleming has been
President of Food For Health Co., Inc. since 1992.
/3/ Mr. Hoppner is currently of counsel to the law firm of Rehm and Bennett
P.C., in Lincoln, NE. Mr. Hoppner acted as Executive Vice President of
International Transportation Specialists, Inc. from 1985-1995 and has served
as Chief of Staff to former U.S. Senator and Nebraska Governor Robert Kerrey
and former U.S. Senator and Nebraska Governor J. James Exon. Mr. Hoppner
resigned from the Board of Directors in October 1997 to pursue political
office and was reappointed to the Board of Directors in December 1998.
The Board of Directors conducts its business through meetings of the Board and
actions taken by written consent in lieu of meetings and by the actions of its
committees. During the fiscal year ended September 29, 2000, the Board of
Directors held eight meetings. All directors attended at least 75% of the
meetings of the Board of Directors and of the committees of the Board of
Directors on which they served during fiscal 2000.
The Board of Directors has established and assigned certain responsibilities
to an Audit Committee and a Compensation Committee. The Company does not have
a standing nominating committee. Nominations for directors are made by the
entire Board of Directors.
AUDIT COMMITTEE. The functions performed by the Audit Committee include
reviewing periodically with independent auditors the performance of the
services for which they are engaged, including reviewing the scope of the
annual audit and its results, reviewing the adequacy of the Company's internal
accounting controls with management and auditors, and reviewing fees charged
by the Company's independent auditors. The Audit Committee is composed of
Directors Hoppner, Pestotnik and Petersen. The Audit Committee held six
meeting(s) during fiscal 2000.
COMPENSATION COMMITTEE. The Compensation Committee reviews and approves
compensation policy, changes in salary levels, bonus payments and awards
pursuant to the Company's management incentive plans for executive officers
and outside directors. The Compensation Committee also administers the
Company's 1994 Stock Option Plan. The Compensation Committee consists of
Directors Hoppner and Howard. The Compensation Committee met one time during
fiscal 2000.
COMPENSATION OF DIRECTORS
For fiscal 2001, directors who are not employees of the Company will be paid
$20,000 plus $500 for each board meeting (including committee meetings)
attended in person or by teleconference, and may receive options to purchase
shares of the Company's common stock at an exercise price equal to the fair
market value of the stock on the date of grant. The amount of the option
grants are determined on an annual basis. In addition, all directors are
reimbursed for out-of-pocket expenses related to attending board and committee
meetings.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the annual and long-term
compensation awarded to, earned by or paid by the Company to its Chairman and
the other three highest paid executive officers of the Company for services
rendered during fiscal 2000, 1999, and 1998. No other executive officers of
the Company earned salary and bonus in fiscal 2000 in excess of the disclosure
threshold established by federal securities laws.
Summary Compensation Table
Long-Term Compensation
------------------------------------
Annual Compensation Awards Payouts
---------------------------------- ------------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
/1/ /2/ /3/ /4/
Restricted Securities
Name and Other Annual Stock Underlying LTIP All Other
Principal Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
Position Year ($) ($) ($) ($) (#) ($) ($)
- ------------ ---- ------- ------- ------------ ---------- ------------ ------- -------------
William F. Wright, 2000 364,000 - - - - -
12,371
Chairman 1999 350,000 275,000 - - 6,600 -
13,388
1998 346,100 100,000 - - 44,000 -
17,060
Kathleen M. Evans, 2000 286,000 286,000 - - - - 9,941
President 1999 275,000 275,000 - - 5,500 - 9,760
1998 274,000 150,000 - - 33,000 - 11,205
Jerry Fleming, 2000 208,000 - - - - - 396
President of 1999 200,000 65,000 - - 4,400 - 396
Food For Health 1998 153,100 /4/ 65,000 - - 22,000 - -
Co., Inc.
Michael D. James, 2000 130,000 30,000 - - 4,500 - 6,538
Secretary, 1999 115,000 30,000 - - 6,600 - 4,823
Treasurer and 1998 105,000 10,000 - - 7,700 - 4,538
Chief Financial
Officer
- ----------------------------------
/1/ No disclosure is required in this column pursuant to applicable Securities
and Exchange Commission Regulations, as the aggregate value of items covered
by this column does not exceed the lesser of $50,000 or 10% of the annual
salary and bonus shown for each respective executive officer named.
/2/ Option grants for fiscal 1999 and 1998 have been adjusted to reflect the
special 10% stock dividend paid in February 2000.
/3/ The Company does not have a long-term incentive plan as defined in
Item 402 of Regulation S-K under the Securities Exchange Act of 1934, as
amended.
/4/ The amount for fiscal 2000 consists of contributions to the Company's
Profit Sharing Plan of $9,195, $8,311 and $6,538 for Mr. Wright, Ms. Evans and
Mr. James, respectively, and the value of life insurance of $3,176, $1,180 and
$396 for Mr. Wright, Ms. Evans and Mr. Fleming, respectively.
/5/ Mr. Fleming's salary amount represents the actual amount paid during the
period from November 10, 1997 (the date Food For Health Co., Inc. was acquired
by the Company) through September 30, 1998.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Options were granted during fiscal 2000 to the executive officers listed in
the Summary Compensation Table (the "Named Officers") as summarized below:
Percent of Total
Number of Shares Options Granted Grant Date
Underlying to Employees In Exercise Expiration Present
Name Options Granted Fiscal Year Price Date /1/ Value /2/
- ----------------- ---------------- ---------------- -------- ------------- -----------
Michael D. James 4,500 13.68% $5.75 June 12, 2010 $3.19
- -----------------------
/1/ Options awarded to Mr. James are exercisable in 20% increments over a
five-year period and have an exercise price equal to the fair market value on
the date of grant.
/2/ In accordance with the Securities and Exchange Commission rules, grant
date present value is determined using the Black-Scholes option-pricing model.
The Black-Scholes model is a complicated mathematical formula widely used to
value exchange-traded options. However, stock options granted by the Company
are long-term, non-transferable and subject to vesting restrictions, while
exchange-traded options are short-term and can be exercised or sold
immediately in a liquid market. The Black-Scholes model relies on several key
assumptions to estimate the present value of options, including the volatility
of, and dividend yield on, the security underlying the option, the risk-free
rate of return on the date of grant and the term of the option. In
calculating the grant date present values set forth in the table, volatility
was based on the daily stock market quotations for the one-year period
preceding the grant date, yield was based on the annual dividend rate of $0.12
per share (the dividend rate in effect when the options were issued) and the
risk-free rate of return was fixed at the rate for a U.S. Treasury strip on
the date of grant. The following weighted average assumptions were used:
expected volatility of 52.01%; dividend yield of 2.0%; risk free interest rate
of 6.57%; and expected life of 10 years.
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES
No options were exercised during fiscal 2000 by the Named Officers. The
following table sets forth certain information concerning the number of
unexercised options and the value of unexercised options at the end of fiscal
2000 for the Named Officers. All options have been adjusted to reflect the
special 10% stock dividend paid in February 2000.
(a) (b) (c) (d) (e)
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/SARs at
Shares Options/SARs at Fiscal Year
Acquired Fiscal Year End(#) End($)
On Value Exercisable/ Exercisable/
Name Exercise(#) Realized ($) Unexercisable Unexercisable
- ----------------- ----------- ------------ ------------------ ---------------
William F. Wright -0- -0- 41,800/ 8,800 $88,176/$22,044
Kathleen M. Evans -0- -0- 31,900/ 6,600 73,032/ 18,258
Jerry Fleming -0- -0- 13,200/13,200 24,344/ 36,516
Michael D. James -0- -0- 6,600/14,400 17,106/ 12,781
LONG-TERM INCENTIVE PLANS AND OTHER MATTERS
The Company does not maintain a long-term incentive plan or pension plan (as
defined in Item 402 of SEC Regulation S-K) for the Named Officers and has not
repriced any options or SARs for any Named Officer during the last fiscal
year.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with William F. Wright, the
Chairman of the Board, Kathleen M. Evans, President of the Company, and Jerry
Fleming, President of Food For Health Co., Inc. Each such agreement has a
term expiring on December 31, 2002 and is automatically extended for one
additional year each December 31, unless either the Company or the executive
delivers a notice of non-extension at least 90 days prior to the scheduled
automatic renewal date. Each agreement provides for the payment of a base
salary in each year during the term thereof and provides that the executive
shall be eligible to receive a bonus based upon performance in an amount
determined by the Compensation Committee of the Board. Should the Board elect
to terminate the agreements upon such executive's disability or death, such
executive or his or her personal representative shall be entitled to receive
his or her base salary for a period of six months following the termination.
Should the Board elect to terminate the agreements for a reason other than
serious misconduct (as defined in the agreements), such executive shall be
entitled to receive a severance package equal to such executive's current base
salary plus his or her previous year's bonus. Each executive will also be
eligible to participate in the Company's 1994 Stock Option Plan and in other
employee benefit plans maintained by the Company, including health and life
insurance plans. Each agreement contains provisions under which the executive
has agreed to maintain the confidentiality of information concerning the
Company and its affairs and a covenant not to compete with the Company for a
period of one year after such executive's employment with the Company
terminates.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
THIS REPORT IS NOT DEEMED TO BE "SOLICITING MATERIAL" OR TO BE "FILED" WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR SUBJECT TO THE SEC'S
PROXY RULES OR TO THE LIABILITIES OF SECTION 18 OF THE SECURITIES EXCHANGE ACT
OF 1934 (THE "1934 ACT"), AND THIS REPORT SHALL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE INTO ANY PRIOR OR SUBSEQUENT FILINGS BY THE COMPANY
UNDER THE SECURITIES ACT OF 1933 OR THE 1934 ACT.
EXECUTIVE OFFICER COMPENSATION. The Company's Compensation Committee
(the "Committee") consists only of directors who are not officers or employees
of the Company. The Committee endeavors to establish total compensation
packages for each executive officer that fairly reflects the value of that
executive officer's services to the Company and that will permit the Company
to attract and retain high quality individuals in its key executive positions,
taking into consideration both the prevailing competitive job market and the
current size and expected growth of the Company.
Executive officer compensation contains three principal components: (i) a base
salary, (ii) a cash bonus and (iii) grants of options to purchase Common Stock
under the Company's 1994 Stock Option Plan. Mr. Wright's, Ms. Evans' and
Mr. Fleming's base salaries are set forth in their employment agreements and
are subject to annual increases as recommended by the Committee. The base
salaries of other officers are determined as a function of their prior base
salaries and the Committee's view of base salary levels for executive officers
with comparable positions and responsibilities in other companies and are not
a function of any specific performance criteria. The Committee periodically
compares base salaries paid to its executive officers with those paid by other
public companies engaged in similar industries and that generate revenues in
the same range as the Company. These companies are not necessarily the same
companies that are included in the peer group index (Standard & Poors
Distributors (Food and Health) 500 Index) used in the Performance Graph
included in this Proxy Statement. In general, the Committee determined that
the base salaries paid to the Company's executive officers fell within the
median range of base salaries paid by such comparable companies.
During fiscal 2000, the Committee adopted an executive compensation plan which
established performance goals and criteria relating to the amounts of cash
bonuses paid to its executive officers in future years. Stock option awards
will continue to be determined on an annual basis. The bonus portion of Mr.
Wright's, Ms. Evans' and Mr. Fleming's compensation is paid based upon the
performance goals established by the Compensation Committee and approved by
the Board of Directors. In addition to bonuses paid in accordance with the
executive compensation plan, the Compensation Committee may award additional
bonus amounts on a discretionary basis if the Committee deems it to be
appropriate.
The bonus portion of other executive officer's compensation is paid on a
discretionary basis based upon the Committee's assessment of the executive's
individual performance and the overall performance of the Company during the
most recently completed fiscal year with respect to stockholder value, stock
price, sales growth and net income. In general, it has been the Company's
practice to award cash bonuses to the executive officers with respect to a
particular fiscal year in amounts consistent with cash bonuses awarded in
prior fiscal years as long as the Company achieves stock price, sales and net
income levels specified in the Company's budget for such fiscal year.
Because ownership of the Company's Common Stock serves to align the economic
interests of its executive officers with those of its stockholders, executive
officers who, in the opinion of the Committee, contribute to the growth,
development and financial success of the Company may be awarded options to
purchase Common Stock. Any grant of options to purchase Common Stock must be
made with an exercise price no less than the closing sale price of the Common
Stock on the date of grant. Therefore, the compensation value of these stock
options is directly related to the long-term performance of the Company as
measured by its future return to stockholders. The amount of stock option
awards granted to executive officers are also determined on a discretionary
basis by the Committee considering the same criteria used to award cash
bonuses.
COMPLIANCE WITH SECTION 162(M) OF THE INTERNAL REVENUE CODE. The current tax
law imposes an annual, individual limit of $1 million on the deductibility of
the Company's compensation payments to the Chairman and to the four most
highly compensated executive officers other than the Chairman. Specified
compensation is excluded for this purpose, including performance-based
compensation, provided that certain conditions are satisfied. The Committee
has determined to preserve, to the maximum extent practicable, the
deductibility of all compensation payments to the Company's executive
officers.
COMPENSATION OF CHAIRMAN. Mr. Wright's base salary is set by his employment
agreement and is subject to annual increases as recommended by the Committee.
It is the view of the Committee, based upon its periodic review of base
salaries paid to chief executive officers of similarly situated companies,
that Mr. Wright's base salary is reasonable and within the median range paid
by such other companies.
Mr. Wright was not awarded a cash bonus during fiscal 2000 and he was not
awarded any stock option grants as the performance criteria set forth in the
executive compensation plan were not met.
William R. Hoppner
J. Tony Howard
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
There are no compensation committee interlocks and no insider participation in
compensation decisions that are required to be reported under the rules and
regulations of the Securities Exchange Act of 1934.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
Prior to February 25, 1994, the Company was a subsidiary of AMCON Corporation,
which owned 87.5% of the issued and outstanding shares of the Company's Common
Stock. AMCON Corporation's principal asset is a subsidiary corporation that
is engaged in the beer distribution business in Eastern, Nebraska. William F.
Wright, Kathleen M. Evans, J. Tony Howard and Allen D. Petersen are officers,
directors or stockholders of AMCON Corporation. AMCON Corporation engages in
certain transactions with the Company, including the provision of offices and
administrative to the Company. The cost of the shared facilities are
apportioned between them based upon their respective usages thereof and on
terms no less favorable than would otherwise be available from unaffiliated
parties. The Company was charged $60,000, $60,000, and $60,000 by AMCON
Corporation during fiscal 2000, 1999, and 1998, respectively, as consideration
for such services, which is included in the Company's selling, general and
administrative expenses for those years.
The remaining interest in a condominium and furnishings and the related
mortgage loan was transferred to the Company from AMCON Corporation in 1992 as
partial settlement of intercompany balances. The condominium was sold in
fiscal 2000. Under a profit sharing agreement with AMCON Corporation,
$1,155,000, representing one-half of the net gain from the sale of the real
estate, was allocated and paid to AMCON Corporation.
REPORT OF THE AUDIT COMMITTEE
THIS REPORT IS NOT DEEMED TO BE "SOLICITING MATERIAL" OR TO BE "FILED" WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR SUBJECT TO THE SEC'S
PROXY RULES OR TO THE LIABILITIES OF SECTION 18 OF THE SECURITIES EXCHANGE ACT
OF 1934 (THE "1934 ACT"), AND THIS REPORT SHALL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE INTO ANY PRIOR OR SUBSEQUENT FILINGS BY THE COMPANY
UNDER THE SECURITIES ACT OF 1933 OR THE 1934 ACT.
The Audit Committee is comprised of William R. Hoppner, Timothy R. Pestotnik
and Allen D. Petersen, each of whom is an independent director of the Company
under the rules adopted by the American Stock Exchange. The Audit Committee
operates under a written charter which is attached as an exhibit to this Proxy
Statement.
The Company's management is responsible for the preparation of the Company's
financial statements and for maintaining an adequate system of internal
controls and processes for that purpose. PricewaterhouseCoopers LLP ("PwC")
acts as the Company's independent auditors and they are responsible for
conducting an independent audit of the Company's annual financial statements
in accordance with generally accepted auditing standards and issuing a report
on the results of their audit. The Audit Committee is responsible for
providing independent, objective oversight of both of these processes.
The Audit Committee has reviewed and discussed the audited financial
statements for the year ended September 29, 2000 with management of the
Company and with representatives of PwC. As a result of these discussions,
the Audit Committee believes that the Company maintains an effective system of
accounting controls that allows it to prepare financial statements that fairly
present the Company's financial position and results of its operations. Our
discussions with PwC also included the matters required by Statement on
Auditing Standard No. 61 (Communications with Audit Committees).
In addition, the Audit Committee reviewed the independence of PwC. We
received disclosures and a letter from PwC regarding its independence as
required by Independent Standards Board Standards No. 1 and discussed this
information with PwC.
Based on the foregoing, the Audit Committee has recommended to the full Board
of Directors that the audited financial statements of the Company for the year
ended September 29, 2000 be included in the Company's annual report on Form
10-K to be filed with the Securities and Exchange Commission.
William R. Hoppner
Timothy R. Pestotnik
Allen D. Petersen
COMPANY PERFORMANCE
THE GRAPH IS NOT DEEMED TO BE "SOLICITING MATERIAL" OR TO BE "FILED" WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR SUBJECT TO THE SEC'S PROXY
RULES OR TO THE LIABILITIES OF SECTION 18 OF THE SECURITIES EXCHANGE ACT OF
1934 (THE "1934 ACT"), AND THE GRAPH SHALL NOT BE DEEMED TO BE INCORPORATED BY
REFERENCE INTO ANY PRIOR OR SUBSEQUENT FILING BY THE COMPANY UNDER THE
SECURITIES ACT OF 1933 OR THE 1934 ACT.
The following graph and table set forth certain information comparing the
cumulative total return from a $100 investment in the Company and in the
stocks making up the American Stock Exchange Composite Total Return Index, the
NASDAQ Composite Total Return Index, and the Standard & Poors Distributors
(Food & Health) 500 Index on September 29, 1995 through September 29, 2000
(the end of the Company's fiscal 2000). The Company is showing the return of
both the American Stock Exchange Total Return Index and the NASDAQ Composite
Total Return Index because the Common Stock was listed on the NASDAQ SmallCap
Market until December 30, 1999. After that date, the Common Stock was listed
on the American Stock Exchange. In future periods, the Company will no longer
compare its total return to the NASDAQ Composite Total Return Index.
[GRAPH OMITTED]
9/29/95 9/27/96 9/26/97 9/25/98 9/24/99 9/29/00
------- ------- ------- ------- ------- -------
AMCON Distributing Company 100 54.17 108.33 204.17 260.42 179.33
American Stock Exchange
Total Return Index 100 101.86 127.94 119.90 154.71 191.17
Nasdaq Composite
Total Return Index 100 118.68 162.92 165.50 270.38 358.96
S&P Distributors
(Food and Health) 500 Index 100 112.38 140.41 189.98 199.90 272.38
RATIFICATION OF APPOINTMENT OF AUDITOR
PricewaterhouseCoopers LLP, who have been auditors for the Company since 1994,
has been appointed by the Board of Directors as auditors for the Company and
its subsidiaries for fiscal 2001. This appointment is being presented to the
stockholders for ratification. The ratification of the appointment of auditor
requires the affirmative vote of the holders of a majority of the shares
present in person or represented by proxy at the Annual Meeting and entitled
to vote. Abstentions and broker nonvotes will not be considered shares
entitled to vote with respect to ratification of the appointment and will not
be counted as votes for or against the ratification.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S
AUDITORS FOR FISCAL 2001.
Representatives of PricewaterhouseCoopers LLP are expected to be present at
the Annual Meeting and will be provided an opportunity to make a statement and
to respond to appropriate inquiries from stockholders.
SUBMISSION OF STOCKHOLDER PROPOSALS
Pursuant to the Company's Bylaws, stockholder proposals submitted for
presentation at the Annual Meeting must be received by the Secretary of the
Company at its home office no later than February 20, 2001. Such proposals
should set forth (i) a brief description of the business desired to be brought
before the annual meeting and the reason for conducting such business at the
annual meeting, (ii) the name and address of the stockholder proposing such
business, (iii) the number of shares of the Company's Common Stock
beneficially owned by such stockholder and (iv) any material interest of such
stockholder in such business. Pursuant to the Company's Bylaws, nominations
for directors may be submitted by stockholders by delivery of such nominations
in writing to the Secretary of the Company by February 20, 2001. Only
stockholders of record as of the Record Date are entitled to bring business
before the Annual Meeting or make nominations for directors.
In order to be included in the Company's proxy statement relating to its 2002
annual meeting, stockholder proposals must be submitted by October 16, 2001 to
the Secretary of the Company at its home office. The inclusion of any such
proposal in such proxy material shall be subject to the requirements of the
proxy rules adopted under the Securities Exchange Act of 1934, as amended.
OTHER MATTERS
Management does not now intend to bring before the Annual Meeting any matters
other than those disclosed in the Notice of Annual Meeting of Stockholders,
and it does not know of any business which persons, other than the management,
intend to present at the meeting. The enclosed proxy for the Annual Meeting
confers discretionary authority on the Board of Directors to vote on any
matter proposed by shareholders for consideration at the Annual Meeting if the
Company does not receive written notice of the matter on or before February
20, 2001.
The Company will bear the cost of soliciting proxies. To the extent
necessary, proxies may be solicited by directors, officers and employees of
the Company in person, by telephone or through other forms of communication,
but such persons will not receive any additional compensation for such
solicitation. The Company will reimburse brokerage firms, banks and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them
in sending proxy materials to the beneficial owners of the Company's shares.
In addition to solicitation by mail, the Company will supply banks, brokers,
dealers and other custodian nominees and fiduciaries with proxy materials to
enable them to send a copy of such materials by mail to each beneficial owner
of shares of the Company's Common Stock which they hold of record and will,
upon request, reimburse them for their reasonable expenses in so doing.
The Company's Annual Report, including financial statements, is being mailed,
together with this Proxy Statement, to all stockholders entitled to vote at
the Annual Meeting. However, such Annual Report is not to be considered part
of this proxy solicitation material. IN ADDITION, ANY STOCKHOLDER WHO WISHES
TO RECEIVE A COPY OF THE FORM 10-K FILED BY THE COMPANY WITH THE SECURITIES
AND EXCHANGE COMMISSION MAY OBTAIN A COPY WITHOUT CHARGE BY WRITING TO THE
COMPANY. Requests should be directed to Mr. Michael D. James at the Company's
principal executive office.
By Order of the Board of Directors
Michael D. James
-----------------------------------
Michael D. James, Secretary
Omaha, Nebraska
February 13, 2001
Exhibit A
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OF AMCON DISTRIBUTING COMPANY
I. AUDIT COMMITTEE PURPOSE
The Audit Committee is appointed by the Board of Directors to assist the Board
in fulfilling its oversight responsibilities. The Audit Committee's primary
duties and responsibilities are to:
o Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
o Monitor the independence and performance of the Company's independent
auditors.
o Provide an avenue of communication among the independent auditors,
management, and the Board of Directors.
The Audit Committee has the authority to conduct any investigation appropriate
to fulfilling its responsibilities, and it has direct access to the
independent auditors as well as anyone in the organization. The Audit
Committee has the ability to retain, at the Company's expense, independent
special legal, accounting, or other consultants or experts it deems necessary
in the performance of its duties.
II. AUDIT COMMITTEE COMPOSITION AND MEETINGS
Audit Committee members shall meet the requirements of the American Stock
Exchange LLC. The Audit Committee shall be comprised of three or more
directors as determined by the Board, each of whom shall be independent (as
defined in Section 121(A) of the AMEX's listing standards) directors who are
not officers of the Company and are, in the view of the Board, free from any
relationship that would interfere with the exercise of his or her independent
judgment. All members of the Committee shall have a basic understanding of
finance and accounting and be able to read and understand fundamental
financial statements, and at least one member of the Committee shall have
accounting or related financial management expertise.
If the Company's Board of Directors, under exceptional and limited
circumstances, determines in accordance with the requirements of
Section 121(B)(b)(ii) of the AMEX's listing standards, as may be modified or
supplemented, to appoint one director to the audit committee who is not
independent, the Audit Committee shall disclose the nature of the relationship
that makes that individual not independent and the reasons for the Board's
determination in the Company's Annual Proxy Statement.
Audit Committee members shall be appointed by the Board on recommendation of
the Chairman of the Board. If an Audit Committee Chair is not designated or
present, the members of the Committee may designate a Chair by majority vote
of the Committee membership.
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. The Audit Committee Chair shall prepare and/or approve
an agenda in advance of each meeting. The Committee should meet privately in
executive session at least annually with management and the independent
auditors, and as a committee to discuss any matters that the Committee or each
of these groups believe should be discussed. In addition, the Committee, or
at least its Chair, should communicate with management and the independent
auditors quarterly to review the Company's financial statements and
significant findings based upon the auditors' review procedures.
III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
Review Procedures
- -----------------
1. Review and reassess the adequacy of this Charter as least annually.
Submit the charter to the Board of Directors for approval and have the
document published at least every three years in accordance with SEC
regulations.
2. Review the Company's annual audited financial statements prior to filing
or distribution. Review should include discussion with management and
independent auditors of significant issues regarding accounting principles,
practices, and judgments. [Item 306(a)(1) of Regulation S-K]
3. In consultation with management and the independent auditors, consider the
integrity of the Company's financial reporting processes and controls.
Discuss significant financial risk exposures and the steps management has
taken to monitor, control, and report such exposures. Review significant
findings prepared by the independent auditors together with management's
responses.
4. Review with financial management and the independent auditors the
Company's quarterly financial results prior to the release of earnings and/or
the Company's quarterly financial statements prior to filing or distribution.
Discuss any significant changes to the Company's accounting principles and any
items required to be communicated by the independent auditors in accordance
with Statement on Auditing Standards ("SAS") 61, as may be modified or
supplemented (see item 11). [Item 306(a)(2) of Regulation S-K] The Chair of
the Committee may represent the entire Audit Committee for purposes of this
review.
Independent Auditors
- --------------------
5. The independent auditors are ultimately accountable to the Audit Committee
and the Board of Directors. The Audit Committee shall review the
independence, performance and effectiveness of the auditors and annually
recommend to the Board of Directors the appointment of the independent
auditors or approve any discharge of auditors when circumstances warrant.
6. Approve the fees and other significant compensation to be paid to the
independent auditors.
7. Consider results of the independent accountant's last peer review,
litigation status, and disciplinary actions, if any.
8. On an annual basis, the Committee will ensure a formal statement
delineating all relationships between the auditors and the Company is received
as required by Independence Standards Board ("ISB") Standard No. 1, as may be
modified or supplemented, and will review and discuss with the independent
auditors all significant relationships they have with the Company that could
impair the auditors' independence. [Item 306(a)(3) of Regulation S-K]
9. Review the independent auditors' audit plan discuss scope, staffing,
locations, reliance upon management, and internal audit and general audit
approach.
10. Meet with the independent auditors and financial management of the
Company to review the scope of the proposed external audit for the current
year. The external audit scope shall include a requirement that the
independent auditors inform the Audit Committee of any significant changes in
the independent accountant's original audit plan and that the outside
accountants conduct a SAS 71 Interim Financial Review prior to the Company's
filing of each quarterly report to shareholders (Form 10-Q).
11. Prior to releasing the year-end earnings, discuss the results of the
audit with the independent auditors. Discuss certain matters required to be
communicated to audit committees in accordance with AICPA SAS 61.
12. Consider the independent auditors' judgments about the quality,
appropriateness and accuracy of the Company's accounting principles as applied
in its financial reporting.
13. Review with management and the independent auditors at the completion of
the annual examination:
a. Any related significant findings and recommendations of the
independent auditors and internal audits together with management's responses
thereto.
b. Any significant changes required in the independent auditors' audit
plan, any serious difficulties or disputes with management encountered during
the course of the audit and their resolution, and other matters related to the
conduct of the audit which are to be communicated to the committees under
generally accepted auditing standards.
Legal Compliance
- ----------------
14. On at least an annual basis, review with the Company's counsel any legal
or regulatory matters that could have a significant impact on the
organization's financial statements, the Company's compliance with applicable
laws and regulations, and inquiries received from regulators or governmental
agencies.
15. Inquire of management and the independent auditors about significant
risks or exposures that exist and assess the steps management has taken to
minimize such risks and exposures to the companies.
16. Review policies and procedures with respect to officers' expense accounts
and perquisites, including their use of corporate assets and consider the
results of any review of this area by Internal Audits.
Other Audit Committee Responsibilities
- --------------------------------------
17. Annually prepare a report to shareholders as required by the Securities
and Exchange Commission (the "SEC"). The report should be included in the
Company's annual proxy statement. [Item 306 of Regulation S-K and
Item 7(e)(3) of Schedule 14A]
Such report shall state whether, based on the review required by the SEC, the
Audit Committee recommended to the Board that the financial statements be
included in annual reports filed with the SEC for the respective fiscal year.
[Item 306(a)(4) of Regulation S-K]
18. Perform any other activities consistent with this Charter, the Company's
by-laws, and governing law, as the Committee or the Board deems necessary or
appropriate.
19. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
REVOCABLE PROXY
AMCON DISTRIBUTING COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AMCON
DISTRIBUTING COMPANY FOR USE ONLY AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON FRIDAY, MARCH 9, 2001 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby authorizes the Board of Directors of AMCON Distributing
Company (the "Company"), or any successors in their respective positions, as
proxy, with full powers of substitution, to represent the undersigned at the
Annual Meeting of Stockholders of the Company to be held at the Embassy Suites
Hotel, 555 South 10th Street, Omaha, Nebraska, on Friday, March 9, 2001, at
9:00 a.m., Central Standard Time, and at any adjournment of said meeting, and
thereat to act with respect to all votes that the undersigned would be
entitled to cast, if then personally present, in accordance with the
instructions below and on the reverse hereof.
1. ELECTION OF DIRECTORS.
/ / FOR the nominees listed below for the term to expire in 2003
William F. Wright Jerry Fleming William R. Hoppner
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, mark "FOR" and cross out such nominee's name.)
/ / WITHHOLD AUTHORITY to vote for all nominees listed above
2. AUDITORS. Ratification of the appointment of PricewaterhouseCoopers LLP
as independent auditors for fiscal 2001.
/ / FOR / / AGAINST / / ABSTAIN
3. To vote, in its discretion, upon any other business that may properly
come before the Annual Meeting or any adjournment thereof. Management is not
aware of any other matters which should come before the Annual Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ELECTION OF THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTORS
AND FOR THE RATIFICATION OF THE APPOINTMENT OF AUDITORS.
(continued and to be signed on the reverse hereof)
This proxy is revocable and the undersigned may revoke it at any time prior to
the Annual Meeting by giving written notice of such revocation to the
Secretary of the Company. Should the undersigned be present and want to vote
in person at the Annual Meeting, or at any adjournment thereof, the
undersigned may revoke this proxy by giving written notice of such revocation
to the Secretary of the Company on a form provided at the meeting. The
undersigned hereby acknowledges receipt of a Notice of Annual Meeting of
Stockholders of the Company called for March 9, 2001 and the Proxy Statement
for the Annual Meeting prior to the signing of this proxy.
Dated: , 2001.
--------------
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(Signature)
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(Signature if held jointly)
Please sign exactly as name appears on
this proxy. When shares are held by
joint tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give your full title. If a
corporation, please sign in full
corporate name by authorized officer.
If a partnership, please sign in
partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.