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 28, 2000
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 Tuesday, March 28, 2000, 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 29, 2000.
(3) To vote on the proposal to amend the Company's 1994 Stock Option Plan
(the "Plan") to increase the number of shares subject to the Plan.
(4) 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 the
independent auditors of the Company, and the amendment to the Company's Plan.
Only stockholders holding shares of Common Stock of record at the close of
business on January 28, 2000 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 29, 2000
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 28, 2000 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 29, 2000.
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
47.47% of the total shares outstanding as of January 28, 2000. 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 28,
2000 (the "Record Date") will be entitled to vote at the Annual Meeting. At
the Record Date, there were 2,487,503 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 572,009 /1/ 22.65%
Kathleen M. Evans, Director, President 162,215 /2/ 6.45
Jerry Fleming, Director, President of
Food For Health Co., Inc. 13,000 /3/ *
Michael D. James, Chief Financial Officer,
Secretary and Treasurer 5,800 /4/ *
J. Tony Howard, Director 157,315 /5/ 6.27
Allen D. Petersen, Director 231,853 /6/ 9.26
Timothy R. Pestotnik, Director 218,453 /7/ 8.76
William R. Hoppner, Director 91,150 /8/ 3.65
All executive officers and directors
as a group (8 persons) 1,245,342 47.47
Susan C. Wright /9/ 267,365 10.75
Matthew F. Wright /10/ 164,411 6.60
Mark A. Wright /11/ 202,811 8.15
Wendy M. Wright /12/ 298,411 12.00
Ane Patterson /13/ 146,168 5.88
</TABLE>
- --------------------------------
* Less than 1% of class.
/1/ Includes 267,365 shares over which Mr. Wright shares investment power with
Susan C. Wright and options to purchase 38,000 shares of Common Stock at an
average exercise price of $4.23 per share which may be exercised currently.
/2/ Includes options to purchase 29,000 shares of Common Stock at an average
exercise price of $3.93 per share which may be exercised currently.
/3/ Represents options to purchase 12,000 shares of common stock at an average
exercise price of $4.92 per share which may be exercised currently.
/4/ Includes options to purchase 4,800 shares of Common Stock at an average
exercise price of $2.35 per share which may be exercised currently.
/5/ Includes options to purchase 23,000 shares of Common Stock at an average
exercise price of $4.25 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, 10,400 shares held
by the Draupnir Trust, over which Mr. Petersen has sole voting power as sole
trustee, and options to purchase 15,000 shares of Common Stock at an average
exercise price of $4.98 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 7,000 shares of common stock at an average exercise price of $7.39
per share which may be exercised currently.
/8/ Includes options to purchase 7,000 shares of common stock at an exercise
price of $7.39 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 2,700 shares over which Mr. Wright shares voting and investment power
with his minor children.
/11/ 11110 E. Beck Lane, Scottsdale, Arizona 85259. The number of shares
includes 500 shares over which Mr. Wright shares voting and investment power
with his spouse and minor children.
/12/ 2511 West 31st Street, Lawrence, Kansas 66047
/13/ 3055 St. Thomas Drive, Missoula, Montana 59803.
ELECTION OF DIRECTORS
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has nominated Kathleen M. Evans and Timothy R.
Pestotnik to serve three-year terms as directors. Proxies submitted pursuant
to this solicitation will be voted, unless specified otherwise, for the
election of Ms. Evans and Mr. Pestotnik. Ms. Evans and Mr. Pestotnik have
each expressed an intention to serve, if elected, and the Board of Directors
knows of no reason why either of Ms. Evans or Mr. Pestotnik might be
unavailable to serve. If either of Ms. Evans or Mr. Pestonik 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 Ms. Evans or
Mr. Pestotnik 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 MS. EVANS AND MR. PESTOTNIK.
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
Kathleen M. Evans 52 President of the Company 1986 2000
Timothy R. Pestotnik 39 Attorney, Partner in the
law firm Luce Forward
Hamilton & Scripps 1998 2000
DIRECTORS CONTINUING IN OFFICE
William F. Wright 57 Chairman of the Board 1986 2001
Jerry Fleming 62 President of Food For Health
Co., Inc. /1/ 1997 2001
William R. Hoppner 49 Attorney, Consultant /2/ 1994 2001
J. Tony Howard 55 President of Nebraska
Distributing Company /3/ 1986 2002
Allen D. Petersen 58 Chairman and Chief Executive
Officer of American Tool
Companies, Inc. 1993 2002
Information regarding other executive officers of the Company is found in the
Company's Form 10-K, which is available upon request.
- -----------------------
/1/ 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.
/2/ 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.
/3/ Nebraska Distributing Company is a wholly owned subsidiary of AMCON
Corporation, the former parent of the Company.
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 24, 1999, 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 1999.
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 Pestotnik and Petersen. The Audit Committee held one meeting during
fiscal 1999.
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 nine times
during fiscal 1999.
COMPENSATION OF DIRECTORS
For fiscal 2000, directors who are not employees of the Company will be paid
$10,000 plus $250 for each board meeting (including committee meetings)
attended in person or by teleconference, and receive options to purchase
shares of the Company's common stock at an exercise price equal to the fair
market value of the stock on the date of grant. The amount of the option
grants are determined on an annual basis. In addition, all directors are
reimbursed for out-of-pocket expenses related to attending board and committee
meetings.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the annual and long-term
compensation awarded to, earned by or paid by the Company to its Chairman and
the other three highest paid executive officers of the Company for services
rendered during fiscal 1999, 1998 and 1997. No other executive officers of
the Company earned salary and bonus in fiscal 1999 in excess of the disclosure
threshold established by federal securities laws.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------------------
Annual Compensation Awards Payouts
---------------------------------- ------------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
/1/ Restricted Securities /2/ /3/
Name and Other Annual Stock Underlying LTIP All Other
Principal Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
Position Year ($) ($) ($) ($) (#) ($) ($)
- ------------ ---- ------- ------- ------------ ---------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William F. Wright, 1999 350,000 275,000 - - 6,000 - 13,388
Chairman 1998 346,100 100,000 - - 40,000 - 17,060
1997 330,300 150,000 - - - - 8,001
Kathleen M. Evans, 1999 275,000 275,000 - - 5,000 - 9,760
President 1998 274,000 150,000 - - 30,000 - 11,205
1997 264,700 130,000 - - - - 8,266
Jerry Fleming, 1999 200,000 65,000 - - 4,000 - 396
President of 1998 153,100 /4/ 65,000 - - 20,000 - -
Food For Health
Co., Inc.
Michael D. James, 1999 115,000 30,000 - - 6,000 - 4,823
Chief Financial 1998 105,000 10,000 - - 7,000 - 4,538
Officer and 1997 95,000 7,500 - - - - 4,122
Treasurer
</TABLE>
- ----------------------------------
/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/ 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.
/3/ The amount for fiscal 1999 consists of contributions to the Company's
Profit Sharing Plan of $10,298, $8,605 and $4,823 for Mr. Wright, Ms. Evans
and Mr. James, respectively, and the value of life insurance of $3,090, $1,155
and $396 for Mr. Wright, Ms. Evans and Mr. Fleming, respectively.
/4/ 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 1999 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 6,000 5.71% $9.900 June 18, 2004 $4.47
Kathleen M. Evans 5,000 4.76 9.000 June 18, 2009 5.91
Jerry Fleming 4,000 3.81 9.000 June 18, 2009 5.91
Michael D. James 6,000 5.71 9.375 June 28, 2009 5.80
</TABLE>
/1/ All of the options awarded to Mr. Wright, Ms. Evans and Mr. Fleming are
exercisable on the grant date. Options awarded to Mr. 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 $0.08
per share (the dividend rate in effect when the options were issued) and the
risk-free rate of return was fixed at the rate for a U.S. Treasury strip on
the date of grant. The following weighted average assumptions were used:
expected volatility of 58.31%; dividend yield of 1.0%; risk free interest rate
of 5.68%; and expected life of 5 to 10 years.
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES
No options were exercised during fiscal 1999 by the Named Officers. The
following table sets forth certain information concerning the number of
unexercised options and the value of unexercised options at the end of fiscal
1999 for the Named Officers.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/SARs at
Shares Options/SARs at Fiscal Year
Acquired Fiscal Year End(#) End($)
On Value Exercisable/ Exercisable/
Name Exercise(#) Realized ($) Unexercisable Unexercisable
- ----------------- ----------- ------------ ------------------ ---------------
<S> <C> <C> <C> <C>
William F. Wright -0- -0- 30,000/16,000 $111,600/$74,400
Kathleen M. Evans -0- -0- 23,000/12,000 88,875/ 59,250
Jerry Fleming -0- -0- 8,000/16,000 19,750/ 79,000
Michael D. James -0- -0- 3,400/11,600 19,288/ 27,650
</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, 2001. 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 Stock Option Plan
(described under "Amendment to 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
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 upon 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 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.
During fiscal 1999, 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.
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 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.
The amount of the cash bonus paid to Mr. Wright and the number of stock
options awarded to Mr. Wright during the fiscal year were determined on a
discretionary basis by the Committee based upon 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 1999, the
Committee considered the amount of the bonus paid to Mr. Wright with respect
to fiscal 1998 and also the fact that the Company well exceeded its budgeted
sales and net income targets during fiscal 1999. The Committee also
considered the fact that during the past five years under Mr. Wright's
leadership, the Company has achieved a 350% increase in earnings and increased
revenues of 127%. These increases represent compounded annual rates of growth
of 43.0% and 20.6%, 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 upon cigarettes and tobacco
products. In that regard, Mr. Wright led the Company's acquisitions of U.S.
Health Distributors, Inc., a distributor of health and natural food products
located in Melbourne, Florida; Chamberlin's Natural Foods, Inc., a chain of
seven health and natural food retail stores located in and around Orlando,
Florida; and Health Food Associates, Inc., a chain of six health and natural
food retail stores located in Kansas, Missouri, Nebraska and Oklahoma. 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.
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 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 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 1999, 1998 and 1997,
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 1999.
[GRAPH OMITTED]
<TABLE>
<CAPTION>
8/04/95 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
AMCON Distributing Company 100 92.31 50.00 100.00 188.46 240.38
Nasdaq Composite Total
Return Index 100 106.33 126.18 173.26 176.19 286.12
S&P Distributors
(Food and Health)-500 Index 100 93.86 105.48 131.79 178.31 111.85
</TABLE>
RATIFICATION OF APPOINTMENT OF AUDITOR
PricewaterhouseCoopers LLP, 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 2000. 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 2000.
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.
AMENDMENT TO 1994 STOCK OPTION PLAN
The Board of Directors has adopted an amendment to the Company's 1994 Stock
Option Plan (the "Plan") which, subject to shareholder approval, will increase
the number of shares that may be issued under the Plan from 300,000 to
550,000.
The Company adopted the 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 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 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 upon which it is
granted. The Plan provides (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 maximum 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. The number of
shares subject to the 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 amendment would increase the maximum number of shares of Common Stock
which may be issued pursuant to options under the Plan from 300,000 to
550,000. In all other respects, the Plan will operate in the same manner as
it does currently. The Company has issued options under the Plan to acquire a
total of 267,000 shares of common stock. Some options have expired, leaving
40,300 options available for all future awards. The Board of Directors
believes that it is in the best interest of the Company to use awards of stock
options in order to attract and retain qualified employees at all levels of
the organization and to align the interest of the Company's employees with
those of its shareholders. The Board of Directors believes that the increase
in the number of available options is justified at this time to ensure that a
sufficient number of options are available under the Plan as they are needed
in the future. The amendment does not alter the considerations of the
Compensation Committee with respect to grants under the Plan. Because the
awards of options are completely within the discretion of the Compensation
Committee, it is not possible to determine at this time the awards that may be
made to officers or key employees.
The approval of the amendment 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
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 7, 2000. 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 7, 2000. 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, 2000 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 7,
2000.
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 29, 2000
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 TUESDAY, MARCH 28, 2000 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 Tuesday, March 28, 2000, 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
Kathleen M. Evans Timothy R. Pestotnik
(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 1999.
/ / FOR / / AGAINST / / ABSTAIN
3. AMEND 1994 STOCK OPTION PLAN. Adoption of the amendment to the
Company's 1994 Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
4. 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, AND FOR THE AMENDMENT OF
THE 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 28, 2000 and the Proxy Statement
for the Annual Meeting prior to the signing of this proxy.
Dated: , 2000.
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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.
