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:
/X/ Preliminary Proxy Statement
/ / Confidential; for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / 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 19, 1998
The Annual Meeting of Stockholders of AMCON Distributing Company (the
"Company") will be held at [LOCATION] Omaha, Nebraska on Thursday, March 19,
1998, at 9:00 a.m., Central Standard Time, for the following purposes:
(1) To elect two directors.
(2) To ratify the appointment of Coopers & Lybrand L.L.P. as
independent auditor for the Company for the fiscal year ending September 26,
1998.
(3) To vote on the proposal to amend the Company's Restated Certificate
of Incorporation to increase the number of authorized shares of Common Stock.
(4) To vote on the proposal to amend the Company's 1994 Stock Option
Plan (the "Stock Option Plan") so that awards under the Plan will comply with
the requirements of Section 162(m) of the Internal Revenue Code of 1986, as
amended.
(5) 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 two directors, the ratification of the appointment
of independent auditors, the proposed amendment to the Restated Certificate of
Incorporation and the proposed amendment to the Stock Option Plan.
Only stockholders holding shares of Common Stock of record at the close
of business on January 30, 1998 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, Secretary
Omaha, Nebraska
February 23, 1998
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 19, 1998 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 23, 1998.
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 with
him a later-dated proxy. 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 shares held by executive officers and directors of the Company will be
voted "FOR" each such proposal. Such shares represent approximately 42% of
the total shares outstanding as of January 30, 1998. 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 the
January 30, 1998 (the "Record Date") will be entitled to vote at the Annual
Meeting. At the Record Date, there were 2,449,903 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 directors and the nominees 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:
<TABLE>
<CAPTION>
Number of Shares Percent of
Name Beneficially Owned Class
- --------------------------------- ------------------ ----------
<S> <C> <C>
William F. Wright, Director, Chairman of the Board and
Chief Corporate Officer 567,469 /1/ 23.02
Kathleen M. Evans, Director, President and
Chief Executive Officer 135,915 /2/ 5.52
Michael D. James, Chief Financial Officer,
Secretary and Treasurer 3,000 /3/ *
J. Tony Howard, Director 131,915 /4/ 5.37
Allen D. Petersen, Director 210,453 /5/ 8.56
Jerry Fleming, Director 0 *
All executive officers and directors as a group (6 persons) 1,048,752 42.08
Susan C. Wright /6/ 298,425 12.18
Matthew F. Wright /7/ 224,911 9.18
Mark A. Wright /8/ 287,211 11.72
Wendy M. Wright /6/ 298,211 12.17
Ane Patterson /9/ 146,168 5.97
</TABLE>
- ------------------------
* Less than 1% of class.
/1/ Includes 298,425 shares over which Mr. Wright shares investment power
with Susan C. Wright and options to purchase 16,000 shares of Common Stock at
an exercise price of $2.88 per share which may be exercised currently.
/2/ Includes options to purchase 12,000 shares of Common Stock at an exercise
price of $2.88 per share which may be exercised currently.
/3/ Includes options to purchase 2,000 shares of Common Stock at an exercise
price of $1.63 per share which may be exercised currently.
/4/ Includes options to purchase 8,000 shares of Common Stock at an exercise
price of $2.88 per share which may be exercised currently.
/5/ Includes 206,453 shares held by the Lifeboat Foundation, of which Mr.
Petersen is a director, and options to purchase 4,000 shares of Common Stock
at an exercise price of $2.88 per share which may be exercised currently.
/6/ 15375 Via Simpatico, Rancho Santa Fe, California 92067.
/7/ 1840 Kings Highway, Lincoln, Nebraska 68502. The number of shares
includes 50,000 shares over which Mr. Wright shares voting and investment
power with his spouse.
/8/ 530 Via De LaValle, Unit A, Solana Beach, California 92075.
/9/ 3055 St. Thomas Drive, Missoula, Montana 59803.
ELECTION OF DIRECTORS
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has nominated William F. Wright and Jerry Fleming
to serve three-year terms as directors. Proxies submitted pursuant to this
solicitation will be voted, unless specified otherwise, for the election of
Mr. Wright and Mr. Fleming. Mr. Wright and Mr. Fleming have each expressed an
intention to serve, if elected, and the Board of Directors knows of no reason
why either of Mr. Wright or Mr. Fleming might be unavailable to serve. If
either of Mr. Wright or Mr. Fleming 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 either of Mr. Wright or Mr. Fleming 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 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 AND MR. FLEMING.
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 55 Chairman and Chief Corporate 1986 1998
Officer of the Company
Jerry Fleming 60 President and Chief Executive 1997 1998
Officer of Food For Health,
Inc. /1/
DIRECTORS CONTINUING IN OFFICE
J. Tony Howard 53 President of Nebraska 1986 1999
Distributing Company /2/
Allen D. Petersen 56 Chairman and Chief Executive 1993 1999
Officer of American Tool
Companies
Kathleen M. Evans 50 President and Chief Executive 1986 2000
Officer of the Company
- -------------------------
/1/ Food For Health, Inc. was acquired by the Company on November 10,
1997 and is a wholly owned subsidiary of the Company. Mr. Fleming has been
President and Chief Executive Officer of Food For Health, Inc. since 1992.
/2/ Nebraska Distributing Company is a wholly owned subsidiary of AMCON
Corporation, the former parent of the Company.
Information regarding other executive officers of the Company is found in the
Company's Form 10-K, which is available upon request.
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 26, 1997,
the Board of Directors held one meeting at which all directors were present.
The Board of Directors has established and assigned certain
responsibilities to an Audit Committee and a Compensation Committee.
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 Wright, Petersen and Howard. The Audit Committee did not meet
during fiscal 1997, but met in October 1997.
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 consisted of
Director Petersen and William R. Hoppner until October 16, 1997, when Mr.
Hoppner resigned from the Board to pursue political office. J. Tony Howard
was appointed to a position on the Compensation Committee at that time. The
Compensation Committee met two times during fiscal 1997.
COMPENSATION OF DIRECTORS
For fiscal 1998, directors who are not employees of the Company will be
paid $10,000 annually, plus $250 for each board meeting (including committee
meetings) attended in person or by teleconference. In addition, all directors
are reimbursed for out-of-pocket expenses related to attending board and
committee meetings.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the annual and
long-term compensation awarded to, earned by or paid by the Company to its
Chief Corporate Officer and the other three highest paid executive officers of
the Company for services rendered during fiscal 1997, 1996 and 1995. No other
executive officers or other employees of the Company earned salary and bonus
in fiscal 1997 in excess of the disclosure threshold established by federal
securities laws.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------------------
Annual Compensation Awards Payouts
-------------------------------- ------------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
/2/ Restricted Securities /3/
Name and /1/ Other Annual Stock Underlying LTIP All Other
Principal Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
Position Year ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William F. Wright 1997 330,300 150,000 - - - - 8,001 /4/
Chairman and Chier 1996 314,600 75,000 - - - - 6,061
Corporate Officer 1995 300,000 - - - - - 10,275
Kathleen M. Evans, 1997 264,700 130,000 - - - - 8,266 /4/
President and 1996 240,900 50,000 - - - - 8,038
Chief Executive 1995 219,000 - - - - - 8,932
Officer
Michael D. James, 1997 95,000 7,500 - - - - 4,122 /4/
Chief Financial 1996 85,000 7,500 - - 2,000 - 3,497
Officer and 1995 80,000 7,500 - - - - 861
Treasurer
J. Tony Howard, 1997 - - - - - - 100,000 /5/
Executive Vice 1996 - - - - - - 100,000 /5/
President and 1995 - - - - - - 100,000 /5/
Secretary
</TABLE>
/1/ Reported 1997 bonus for Mr. Wright consists of $75,000 paid in
fiscal 1997 with respect to fiscal 1996 and $75,000 paid in fiscal 1998 with
respect to fiscal 1997. Reported 1997 bonus for Ms. Evans consists of $65,000
paid in fiscal 1997 with respect to fiscal 1996 and $65,000 paid in fiscal
1998 with respect to fiscal 1997. Bonuses paid to Mr. Wright and Ms. Evans
with respect to fiscal 1996 were paid after the date of the Company's proxy
statement relating to its previous annual meeting of stockholders. Reported
1996 bonuses were paid in fiscal 1996 with respect to fiscal 1995.
/2/ 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.
/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 1997 consists of contributions to the
Company's Profit Sharing Plan of $6,256, $8,045 and $4,122 for Mr. Wright, Ms.
Evans and Mr. James, respectively, and the value of split-dollar life
insurance of $1,755 and $221 for Mr. Wright and Ms. Evans, respectively.
/5/ Mr. Howard's salary during each fiscal year was paid by Nebraska
Distributing Company ("NDC"), a subsidiary of the former parent of the
Company. Pursuant to a consulting agreement, the Company reimbursed NDC for
the portion of Mr. Howard's salary set forth in the above table. Mr. Howard
resigned as Executive Vice President and Secretary of the Company on November
10, 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
No options were granted during fiscal 1997 to the executive officers
listed in the Summary Compensation Table (the "Named Officers").
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES
No options were exercised during fiscal 1997 by the Named Officers. The
following table sets forth certain information concerning the number of
unexercised options and the value of unexercised options at the end of fiscal
1997 for the Named Officers.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/SARs at
Options/SARs at Fiscal Year
Fiscal Year End(#) End($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise(#) Value Realized($) Unexercisable Unexercisable
- ---------------- --------------- ----------------- ------------------ ---------------
<S> <C> <C> <C> <C>
William F. Wright -0- -0- 0/0 0/0
Kathleen M. Evans -0- -0- 0/0 0/0
Michael D. James -0- -0- 2,000/0 $3,250/0
J. Tony Howard -0- -0- 0/0 0/0
</TABLE>
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 employment agreements which the Company entered into with William F.
Wright, the Chairman of the Board and Chief Corporate Officer and with
Kathleen M. Evans, the President and Chief Executive Officer, have expired.
The Company is currently in the process of negotiating employment agreements
with Mr. Wright, Ms. Evans and with Jerry Fleming, the President and Chief
Executive Officer of Food For Health, Inc., a wholly owned subsidiary of the
Company.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The 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 the report 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.
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 Stock Option Plan. Both Mr. Wright's and Ms. Evans' base
salaries are set forth in their employment agreements. 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.
The bonus portion of each executive officer's compensation is paid on a
discretionary basis by the Committee based on its assessment of the
executive's individual performance and the overall performance of the Company
during the most recently completed fiscal year with respect to sales growth
and net income. However, the Committee has not established any specific
measures of individual performance or target levels of sales growth or net
income which must be achieved in order for cash bonuses to be paid. In
general, it has been the Committee'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 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 shareholders,
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 equal to the closing 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. After the end of fiscal 1997, the Committee awarded stock options to
certain of its executive officers. The amount of the awards were subjectively
determined after the Committee's review of the Company's financial performance
during fiscal 1997. The Committee also considered the efforts of such
executive officers in connection with two acquisitions completed by the
Company after the end of fiscal 1997.
It is the intention of the Committee to develop an executive compensation
plan which will establish more definite performance goals and criteria
relating to the amounts of cash bonuses and stock options awards paid to its
executive officers in future years. The Committee expects to adopt such a
plan during fiscal 1998.
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 Chief Corporate Officer and to
the four most highly compensated executive officers other than the Chief
Corporate Officer. 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 CHIEF CORPORATE OFFICER. Mr. Wright's base salary is set
by his employment agreement which was entered into prior to the formation of
the Compensation Committee. However, it is the view of the Committee, based
on 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.
The amount of the cash bonus paid to Mr. Wright and the number of stock
options awarded to Mr. Wright during any fiscal year are determined on a
discretionary basis by the Committee based on its assessment of his individual
performance and the overall performance of the Company during the year. With
respect to the cash bonus paid to Mr. Wright for fiscal 1997, the Committee
considered the amount of the bonus paid to Mr. Wright with respect to fiscal
1996 and also the fact that the Company achieved its budgeted sales and net
income targets during fiscal 1997. The Committee also considered the fact
that during the past five years under Mr. Wright's leadership, the Company has
achieved a 603.1% increase in earnings and increased revenues 50.7%. These
increases represent compounded annual rates of growth of 44.9% and 7.7%,
respectively. The Company has become one of the larger distributors of
consumer products in the Great Plains and Rocky Mountain regions and has been
able to compete successfully in a period during which there has been
significant consolidation and increased competition in the distribution
industry. Through acquisitions of smaller distributors, the Company has
gained entry into a number of new territories and, as a result, has been able
to use the trend toward consolidation to aid it in its strategy of developing
new customers within its present distribution area and expanding into
contiguous areas. Mr. Wright has also been instrumental in the Company's
efforts to broaden its product line in order to lessen its historical
dependence on cigarettes and tobacco products. In that regard, Mr. Wright led
the Company's recent acquisition of Food for Health, Inc., a distributor of
health food products located in Phoenix, Arizona, which generated sales of $37
million during its last fiscal year. The Committee considered all of these
accomplishments, along with his demonstrated leadership of and guidance to
management and significant contributions to the overall performance of the
Company, and believes that the cash bonus and stock option awards paid to Mr.
Wright fairly reflect his value to the Company.
Allen D. Petersen
J. Tony Howard
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
William F. Wright serves on the board of directors of American Tool
Companies of which Allen D. Petersen serves as the President and Chief
Executive Officer. There are no other 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
In January 1995, the Company made an advance of $125,000 to William F.
Wright, Chairman of the Board, Chief Corporate Officer and a principal
shareholder of the Company. This advance was recorded as a note receivable,
bearing interest at 9.0% and was originally due on September 30, 1996 and was
later extended to September 30, 1997. The balance of the note receivable,
plus accrued interest thereon, was paid in full on December19, 1997.
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 other principal asset is a
subsidiary corporation that is engaged in the beer distribution business in
Omaha, Nebraska. As a condition to obtaining an additional distribution
franchise with a major U.S. beer brewery, AMCON Corporation agreed to divest
its interest in the Company. Therefore, on February 25, 1994, AMCON
Corporation distributed its shares of the Company's Common Stock to the
shareholders of AMCON Corporation who, as a result, became shareholders of the
Company. William F. Wright, Kathleen M. Evans, J. Tony Howard and Allen D.
Petersen are officers, directors or shareholders of AMCON Corporation. AMCON
Corporation engages in certain transactions with the Company, including the
provision of offices and administrative services by AMCON Corporation to the
Company. The cost of the shared facilities are apportioned between them based
on 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 1997, 1996
and 1995, respectively, as consideration for such services, which is included
in the Company's selling, general and administrative expenses for those years.
COMPANY PERFORMANCE
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 two comparative stock indices on August 4, 1995, the date the
Company's Common Stock commenced trading, through the end of the Company's
fiscal 1997.
[GRAPH OMITTED]
8/04/95 9/30/95 9/30/96 9/30/97
------- ------- ------- -------
AMCON Distributing Company 100 92.31 50.00 100.00
Nasdaq Composite Total
Return Index 100 104.37 123.85 170.01
S&P Distributors
(Food and Health)-500 Index 100 93.86 105.48 131.79
RATIFICATION OF APPOINTMENT OF AUDITOR
Coopers & Lybrand L.L.P., who has been auditor for the Company since
1994, has been appointed by the Board of Directors as auditors for the Company
and its subsidiaries for fiscal 1998. 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 meeting and entitled
to vote. Abstentions will have the same effect as a vote against
ratification. 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 COOPERS & LYBRAND L.L.P. AS THE COMPANY'S
AUDITORS FOR FISCAL 1998.
Representatives of Coopers & Lybrand L.L.P. 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.
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors of the Company has adopted, and is recommending to
the stockholders that they approve, an amendment to Section 1 of ARTICLE IV of
the Company's Restated Certificate of Incorporation (the "Proposed Amendment")
that will increase the total number of authorized shares of Common Stock from
5,000,000 to 15,000,000. The proposed amendment will not increase or
otherwise affect the number of authorized shares of the Company's Preferred
Stock. The text of Section 1 of ARTICLE IV as it is proposed to be amended is
set forth in Exhibit A to this Proxy Statement.
There are presently 2,449,903 shares of the Company's Common Stock which
are issued and outstanding. Accordingly, there are only 2,550,097 shares of
Common Stock which remain authorized for issuance by the Company. The Board
of Directors believes it would be in the best interest of the Company and its
stockholders to increase the authorized number of shares of Common Stock so
that there will be an additional number of authorized shares of Common Stock
available for future issuance by the Company without further stockholder
approval. The Company may desire to issue additional shares of Common Stock
for a variety of corporate purposes. For example, the Board of Directors may
determine that it is in the best interest of the stockholders to maintain the
trading price of the Common Stock within a particular range and, therefore,
may wish to declare a stock split or stock dividend from time to time. The
current number of remaining authorized but unissued shares of Common Stock
would not be sufficient to allow a stock split of the Company's Common Stock.
In addition, the Company may desire to issue additional shares of Common Stock
in order to raise additional equity capital or in connection with future
acquisitions of other companies. Further, from time to time, additional
authorized but unissued Common Stock may be issued to employees or employee
benefit plans.
The additional Common Stock authorized by the Proposed Amendment could be
issued at any time in the Board's discretion for any proper corporate
purposes, without further stockholder action, unless required by law or any
rules or regulations to which the Company is subject, including those of the
NASDAQ Stock Market. The Company's Board of Directors and management have no
plans or agreements for the issuance of additional shares of Common Stock at
this time, other than pursuant to existing employee benefit plans. It is the
intention of the Board of Directors and management to hold authorized and
unissued Common Stock in reserve for such corporate needs as may develop.
However, it is the opinion of the Board of Directors that such an amendment
should not be postponed until a specific situation arises that requires
additional authorized Common Stock, because the time and expense incident to
obtaining stockholder approval at that time might disadvantage the Company by
depriving it of the flexibility which could be important in facilitating
effective use of the Common Stock.
The authorization of additional authorized shares of Common Stock may
have a potential anti-takeover effect if, for example, additional shares were
issued in order to dilute the stock ownership of persons seeking to obtain
control of the Company. However, the Board knows of no effort by any party to
accumulate Common Stock or to otherwise seek to obtain control over the
Company and the Board of Directors has no present plans to use additional
shares that would be authorized by the Proposed Amendment to inhibit a hostile
takeover attempt. Therefore, the Company does not consider the Proposed
Amendment to be part of an anti-takeover strategy.
The Proposed Amendment may only be adopted by the affirmative vote of the
holders of a majority of the issued and outstanding shares of the Common Stock
entitled to vote. As a result, abstentions and broker nonvotes will have the
same effect as a vote against the proposal. Proxies submitted pursuant to
this solicitation will be voted in favor of the Proposed Amendment, unless
specified otherwise.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
PROPOSAL TO AMEND THE COMPANY'S RESTATED ARTICLES OF INCORPORATION TO INCREASE
THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK OF THE COMPANY.
AMENDMENTS TO 1994 STOCK OPTION PLAN
The Board of Directors has adopted certain amendments to the Company's
1994 Stock Option Plan which will enable awards of stock options made under
the Plan to qualify as "performance-based compensation" not subject to the
limitations on deductibility of executive compensation provided for in
Section 162(m) of the Internal Revenue Code of 1986, as amended ("Section
162(m)"). Section 162(m) imposes an annual, individual limit of $1 million on
the deductibility of a company's compensation payments to its chief executive
officer and to the four most highly compensated executive officers other than
the chief executive officer (the "Named Executive Officers").
The Company adopted the 1994 Stock Option Plan (the "Stock Option Plan")
in June 1994 in order to retain and attract qualified officers and key
employees and to align the interests of such persons with those of the Company
and its shareholders by providing for the grant of options to purchase the
Company's Common Stock which may be either incentive stock options that are
qualified under Section 422 of the Internal Revenue Code of 1986 or
non-qualified stock options. The Stock Option Plan is administered by the
Compensation Committee of the Board of Directors, which has exclusive
authority to determine the employees of the Company who will receive options
to purchase Common Stock, the type and number of options to be granted, the
timing of such grants, when such options may be exercised and the exercise
price thereof. In no event may the exercise price of an option be less than
the fair market value of the Company's Common Stock on the date of a grant,
and no option may be exercised more than 10 years after the date on which it
is granted.
The maximum number of shares of Common Stock which may be issued pursuant
to options under the Stock Option Plan is 300,000. The number of shares
subject to the Stock Option Plan and to options granted thereunder will be
adjusted as appropriate to reflect any stock dividend, stock split,
recapitalization or similar event or any merger, consolidation or
reorganization of the Company.
The proposed amendments to the Plan provide (i) that each member of the
Compensation Committee which administers the Plan must be an "outside
director" as defined in the regulations under Section 162(m) and (ii) that the
total number of shares for which options may be granted to any individual who
is a Named Executive Officer during a given fiscal year is 50,000 shares. In
all other respects, the Plan will operate in the same manner as it does
currently. The proposed amendments will not increase the total number of
shares for which options may be granted under the Plan or the exercise price
for such options.
The approval of the amendments to the Plan requires the affirmative vote
of the holders of a majority of the shares present in person or represented by
proxy at the meeting and entitled to vote. Abstentions will have the same
effect as a vote against approval. Broker nonvotes will not be considered
shares entitled to vote with respect to approval of the adoption of the Plan
and will not be counted as votes for or against the approval of the Plan. THE
BOARD RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE 1994 STOCK OPTION PLAN.
SUBMISSION OF STOCKHOLDER PROPOSALS
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 March 2, 1998. 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. Nominations for
directors may be submitted by stockholders by delivery of such nominations in
writing to the Secretary of the Company by March 2, 1998. 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
next annual meeting, stockholder proposals must be submitted by October 9,
1998 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. Should any other matters
requiring a vote of the stockholders arise, the proxies in the enclosed form
confer upon the person or persons entitled to vote the shares represented by
such proxies discretionary authority to vote the same in respect of any such
other matter in accordance with their best judgment.
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 23, 1998
EXHIBIT A
As amended, Section 1 of ARTICLE IV of the Company's Restated Certificate
of Incorporation will read, in its entirety, as follows:
ARTICLE IV
Section 1. The total number of shares of capital stock which the
Corporation shall have the authority to issue is 16,000,000, consisting of
(a)15,000,000 shares of Common Stock, par value $.01 per share, and
(b)1,000,000 shares of Preferred Stock, par value $.01 per share.
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 MARCH 19, 1998 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
[LOCATION] Omaha, Nebraska, on Thursday, March 19, 1998, 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 2001
(except as marked to the contrary below)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
William F. Wright Jerry Fleming
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, cross out such nominee's name.)
2. AUDITORS. Ratification of the appointment of Coopers & Lybrand L.L.P.
as independent auditors for fiscal 1998.
/ / FOR / / AGAINST / / ABSTAIN
3. AMEND RESTATED CERTIFICATE OF INCORPORATION. Amend Restated
Certificate of Incorporation to increase authorized shares of Common Stock.
/ / FOR / / AGAINST / / ABSTAIN
4. AMEND 1994 STOCK OPTION PLAN. Amend 1994 Stock Option Plan to comply
with section 162(m) of Internal Revenue Code.
/ / FOR / / AGAINST / / ABSTAIN
5. 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,
FOR THE RATIFICATION OF THE APPOINTMENT OF AUDITORS, FOR THE PROPOSAL TO AMEND
THE RESTATED CERTIFICATE OF INCORPORATION AND FOR THE PROPOSAL TO AMEND THE
1994 STOCK OPTION PLAN.
(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 19, 1998 and the Proxy Statement
for the Annual Meeting prior to the signing of this proxy.
Dated: , 1998.
----------------------
---------------------------------
(Signature)
---------------------------------
(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.
