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 18, 1999
The Annual Meeting of Stockholders of AMCON Distributing Company (the
"Company") will be held at the Four Points Sheraton Hotel, 120th and L
Streets, Omaha, Nebraska on Thursday, March 18, 1999, at 9:00 a.m., Central
Standard Time, for the following purposes:
(1) To elect two directors.
(2) To ratify the appointment of PricewaterhouseCoopers LLP as
independent auditor for the Company for the fiscal year ending
September 24, 1999.
(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 two 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 January 29, 1999 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 22, 1999
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 18, 1999 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 8127. This Proxy Statement and the proxy cards are
first being mailed to stockholders on or about February 22, 1999.
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 43% of the total shares outstanding as of January 29, 1999.
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
January 29, 1999 (the "Record Date") will be entitled to vote at the Annual
Meeting. At the Record Date, there were 2,479,903 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 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:
<TABLE>
<CAPTION>
Number of
Shares Percent
Beneficially of
Name Owned Class
- ------------------------ ------------ -------
<S> <C> <C>
William F. Wright, Director, Chairman of the Board 560,469 /1/ 22.38%
Kathleen M. Evans, Director, President 141,915 /2/ 5.68
Jerry Fleming, Director, President of
Food For Health Co., Inc. 4,000 /3/ *
Michael D. James, Chief Financial Officer,
Secretary and Treasurer 4,400 /4/ *
J. Tony Howard, Director 140,915 /5/ 5.64
Allen D. Petersen, Director 217,453 /6/ 8.73
Timothy R. Pestotnik, Director 213,353 /7/ 8.59
William R. Hoppner, Director 78,750 /8/ 3.17
All executive officers and directors
as a group (8 persons) 1,154,802 44.96
Susan C. Wright /9/ 283,425 11.43
Matthew F. Wright /10/ 177,100 7.14
Mark A. Wright /11/ 276,411 11.15
Wendy M. Wright /9/ 298,211 12.03
Ane Patterson /12/ 146,168 5.89
</TABLE>
- -----------------------
* Less than 1% of class.
/1/ Includes 283,425 shares over which Mr. Wright shares investment power
with Susan C. Wright and options to purchase 24,000 shares of Common Stock at
an exercise price of $3.16 per share which may be exercised currently.
/2/ Includes options to purchase 18,000 shares of Common Stock at an
exercise price of $2.88 per share which may be exercised currently.
/3/ Represents options to purchase 4,000 shares of common stock at an
exercise price of $2.88 per share which may be exercised currently.
/4/ Includes options to purchase 3,400 shares of Common Stock at an average
exercise price of $2.14 per share which may be exercised currently.
/5/ Includes options to purchase 17,000 shares of Common Stock at an average
exercise price of $4.01 per share which may be exercised currently.
/6/ Includes 206,453 shares of common stock held by the Lifeboat Foundation,
over which Mr. Petersen shares voting power as a director, and options to
purchase 11,000 shares of Common Stock at an average exercise price of $4.64
per share which may be exercised currently.
/7/ Includes 206,453 shares of common stock held by the Lifeboat Foundation,
over which Mr. Pestotnik shares voting power as a director, and options to
purchase 5,000 shares of common stock at an exercise price of $6.75 per share
which may be exercised currently.
/8/ Includes options to purchase 5,000 shares of common stock at an exercise
price of $6.75 per share which may be exercised currently.
/9/ 3605 Calle Juego, Rancho Santa Fe, California 92067.
/10/ 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.
/11/ 530 Via De LaValle, Unit A, Solana Beach, California 92075.
/12/ 3055 St. Thomas Drive, Missoula, Montana 59803.
ELECTION OF DIRECTORS
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has nominated J. Tony Howard and Allen D.
Petersen to serve three-year terms as directors. Proxies submitted pursuant
to this solicitation will be voted, unless specified otherwise, for the
election of Mr. Howard and Mr. Petersen. Mr. Howard and Mr. Petersen have
each expressed an intention to serve, if elected, and the Board of Directors
knows of no reason why either of Mr. Howard or Mr. Petersen might be
unavailable to serve. If either of Mr. Howard or Mr. Petersen 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. Howard or
Mr. Petersen 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. HOWARD AND MR. PETERSEN.
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
J. Tony Howard 54 President of Nebraska 1986 1999
Distributing Company /1/
Allen D. Petersen 57 Chairman and Chief Executive 1993 1999
Officer of American Tool
Companies
DIRECTORS CONTINUING IN OFFICE
Kathleen M. Evans 51 President of the Company 1986 2000
Timothy R. Pestotnik 38 Attorney, Partner in the law 1998 2000
firm Luce Forward Hamilton
& Scripps
William F. Wright 56 Chairman of the Board 1986 2001
Jerry Fleming 61 President of Food For Health 1997 2001
Co., Inc./2/
William R. Hoppner 48 Attorney, Consultant/3/ 1994 2001
- ------------------------
/1/ Nebraska Distributing Company is a wholly owned subsidiary of AMCON
Corporation, the former parent of the 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 acted as Executive Vice President of International
Transportation Specialists, Inc. from 1985-1995 and has served as Chief of
Staff to U.S. Senator and former 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.
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 25, 1998,
the Board of Directors held seven 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 1998.
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 Howard and Pestotnik. The Audit Committee held one
meeting during fiscal 1998.
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
Directors Petersen and Howard. The Compensation Committee met five times
during fiscal 1998.
COMPENSATION OF DIRECTORS
For fiscal 1999, directors who are not employees of the Company will be
paid $10,000 plus $250 for each board meeting (including committee meetings)
attended in person or by teleconference, and receive options to purchase
5,000 shares of the Company's common stock at an exercise price equal to the
fair market value of the stock on the date of grant. In addition, all
directors are reimbursed for out-of-pocket expenses related to attending
board and committee meetings.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the annual and
long-term compensation awarded to, earned by or paid by the Company to its
Chairman and the other three highest paid executive officers of the Company
for services rendered during fiscal 1998, 1997 and 1996. No other executive
officers or other employees of the Company earned salary and bonus in fiscal
1998 in excess of the disclosure threshold established by federal securities
laws.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------------------
Annual Compensation Awards Payouts
---------------------------------- ------------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
/2/ Restricted Securities /3/
Name and Other Annual Stock Underlying LTIP All Other
Principal Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
Position Year ($) ($) ($) ($) (#) ($) ($)
- ------------ ---- ------- ------- ------------ ---------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William F. Wright, 1998 346,100 100,000 - - 40,000 - 17,060 /4/
Chairman 1997 330,300 150,000 - - - - 8,001
1996 314,600 75,000 - - - - 6,061
Kathleen M. Evans, 1998 274,000 150,000 /1/ - - 30,000 - 11,205 /4/
President 1997 264,700 130,000 - - - - 8,266
1996 240,900 50,000 - - - - 8,038
Jerry Fleming, 1998 153,100 /5/ 65,000 - - 20,000 - -
President of
Food For Health
Co., Inc.
Michael D. James, 1998 105,000 10,000 - - 7,000 - 4,538 /4/
Chief Financial 1997 95,000 7,500 - - - - 4,122
Officer and 1996 85,000 7,500 - - 2,000 - 3,497
Treasurer
</TABLE>
/1/ Reported 1998 bonus for Ms. Evans includes $50,000 with respect to
fiscal 1997 that was paid in fiscal 1998 after the date of the Company's
proxy statement relating to its previous annual meeting of stockholders.
/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 1998 consists of contributions to the
Company's Profit Sharing Plan of $14,092, $10,065 and $4,538 for Mr. Wright,
Ms. Evans and Mr. James, respectively, and the value of split-dollar life
insurance of $2,968 for Mr. Wright and $1,141 for Ms. Evans.
/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 1998 to the executive officers listed
in the Summary Compensation Table (the "Named Officers") as summarized below:
<TABLE>
<CAPTION>
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/
- ----------------- ---------------- ---------------- -------- ------------- -----------
<S> <C> <C> <C> <C> <C>
William F. Wright 40,000 28.57% $3.1625 Nov. 10, 2002 $1.38
Kathleen M. Evans 30,000 21.43 2.875 Nov. 10, 2007 1.71
Jerry Fleming 20,000 14.29 2.875 Nov. 10, 2007 1.71
Michael D. James 7,000 5.00 2.875 Nov. 10, 2007 1.71
</TABLE>
/1/ Forty percent of the options awarded to Mr. Wright and Ms. Evans are
exercisable on the grant date with the balance exercisable ratably over a
three-year period. Options awarded to Messrs. Fleming and James are
exercisable in 20% increments over a five-year period. The exercise price of
Mr. Wright's options represent 110% of the fair market value on the date of
grant. The exercise price of the remaining options is 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
$0.08 per share (the dividend rate in effect shortly after the options were
issued) and the risk-free rate of return was fixed at the rate for a U.S.
Treasury strip on the date of grant. The following weighted average
assumptions were used: expected volatility of 60.30%; dividend yield of 1.8%;
risk free interest rate of 5.90%; and expected life of 5 to 10 years.
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES
No options were exercised during fiscal 1998 by the Named Officers. The
following table sets forth certain information concerning the number of
unexercised options and the value of unexercised options at the end of fiscal
1998 for the Named Officers.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/SARs at
Shares Options/SARs at Fiscal Year
Acquired Fiscal Year End(#) End($)
On Value Exercisable/ Exercisable/
Name Exercise(#) Realized ($) Unexercisable Unexercisable
- ----------------- ----------- ------------ ------------------ ---------------
<S> <C> <C> <C> <C>
William F. Wright -0- -0- 16,000/24,000 $47,400/$71,100
Kathleen M. Evans -0- -0- 12,000/18,000 39,000/ 58,500
Jerry Fleming -0- -0- 0/20,000 0/ 65,000
Michael D. James -0- -0- 2,000/ 7,000 9,000/ 22,750
</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 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, 1999 and provides that such
executives will devote all or substantially all of their full business time
and attention to the business and affairs of the Company. 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 on 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 Stock Option Plan (described below) 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
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. Mr. Wright's, Ms. Evans' and Mr.
Fleming's 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. 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 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 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.
The Committee is in the final stages of developing 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 1999.
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. 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 1998, the
Committee considered the amount of the bonus paid to Mr. Wright with respect
to fiscal 1997 and also the fact that the Company achieved its budgeted sales
and net income targets during fiscal 1998. The Committee also considered the
fact that during the past five years under Mr. Wright's leadership, the
Company has achieved 364% increase in earnings and increased revenues 95.5%.
These increases represent compounded annual rates of growth of 36.8% and
18.2%, respectively. The Company has become one of the larger distributors
of consumer products in the Great Plains, Rocky Mountain and Southwest
regions of the United States 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 Co., Inc., a distributor of health food products located in Phoenix,
Arizona, which generated sales of $31 million from November 10, 1997 through
the end of the Company's most recent fiscal year-end. 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 March of 1998, the Company refinanced its revolving credit facility
with a LaSalle National Bank. As a condition to such refinancing, LaSalle
required a personal guarantee of the loan by William F. Wright, Chairman of
the Board, and a principal stockholder of the Company. As compensation for
this guarantee, the Company paid Mr. Wright a fee of $135,000 during fiscal
1998.
In January 1995, the Company made an advance of $125,000 to William F.
Wright. This advance was recorded as a note receivable, bearing interest at
9.0% per annum, and was repaid in full on December 19, 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. 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 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 1998, 1997 and 1996, 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 1998.
[GRAPH OMITTED]
8/04/95 9/30/95 9/30/96 9/30/97 9/30/98
------- ------- ------- ------- -------
AMCON Distributing Company 100 92.31 50.00 100.00 188.46
Nasdaq Composite Total
Return Index 100 104.37 123.85 170.01 173.69
S&P Distributors
(Food and Health)-500 Index 100 93.86 105.48 131.79 178.31
RATIFICATION OF APPOINTMENT OF AUDITOR
PricewaterhouseCoopers LLP (formerly 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 1999.
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 PRICEWATERHOUSECOOPERS LLP AS THE
COMPANY'S AUDITORS FOR FISCAL 1999.
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 March 1, 1999. 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 March 1, 1999.
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 26,
1999 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 March 1, 1999.
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 22, 1999
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 THURSDAY, MARCH 18, 1999 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 Four Points Sheraton Hotel, 120th and L Streets, Omaha, Nebraska, on
Thursday, March 18, 1999, 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 2002
(except as marked to the contrary below)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
J. Tony Howard Allen D. Petersen
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, cross out such nominee's name.
2. AUDITORS. Ratification of the appointment of PricewaterhouseCoopers
LLP as independent auditors for fiscal 1999.
/ / 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 18, 1999 and the Proxy Statement
for the Annual Meeting prior to the signing of this proxy.
Dated: , 1999.
-----------------------
-----------------------------------
(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.
