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 21, 2002
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 Thursday, March 21, 2002, at 9:00 a.m., Central Standard
Time, for the following purposes:
(1) To elect two directors for terms ending in 2005.
(2) To ratify the appointment of Deloitte & Touche LLP as independent
auditor for the Company for the fiscal year ending September 27,
2002.
(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 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 21, 2002 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
/s/ Michael D. James
------------------------------------
Michael D. James, Secretary
Omaha, Nebraska
February 14, 2002
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 21, 2002 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 14, 2002.
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 36.2% of the total shares outstanding as of
January 21, 2002, 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
21, 2002 (the "Record Date") will be entitled to vote at the Annual Meeting.
At the Record Date, there were 3,112,962 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 all present executive officers and directors of the
Company as a group and by each other person believed by the Company to
beneficially own more than 5% of the Company's Common Stock as of January
21, 2002.
Number of
Shares Percent
Beneficially of
Name Owned Class
------------------------ ------------ -------
DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------
William F. Wright, Director, Chairman of the Board 571,758 /1/ 18.07
Kathleen M. Evans, Director, President 185,036 /2/ 5.87
Michael D. James, Chief Financial Officer,
Secretary and Treasurer 13,000 /3/ *
Eric J. Hinkefent, President of Health Food
Associates, Inc. and Chamberlin Natural Foods, Inc. 2,200 /4/ *
Jerry Fleming, Director 23,100 /5/ *
J. Tony Howard, Director 177,446 /6/ 5.65
Allen D. Petersen, Director 259,238 /7/ 8.28
Timothy R. Pestotnik, Director 240,298 /8/ 7.70
William R. Hoppner, Director 101,265 /9/ 3.24
All executive officers and directors
as a group (9 persons) 1,346,243 40.77
OTHER STOCKHOLDERS
------------------
Mark A. Wright /10/ 170,182 5.47
Wendy M. Wright /11/ 328,252 10.54
Ane Patterson /12/ 160,784 5.16
------------------------
* Less than 1% of class.
/1/ Includes 31,750 shares of Common Stock held by AMCON Corporation, over
which Mr. Wright has voting and dispositive powers. Also includes options
to purchase 50,600 shares of Common Stock at an average exercise price of
$3.67 per share and 30,000 non-employee options held through AMCON
Corporation at an exercise price of $4.00 which may be exercised currently.
/2/ Includes options to purchase 38,500 shares of Common Stock at an average
exercise price of $3.41 per share which may be exercised currently.
/3/ Includes options to purchase 11,900 shares of Common Stock at an average
exercise price of $3.96 per share which may be exercised currently. Mr.
James also holds unvested options to acquire 9,100 shares of common stock at
an average exercise price of $6.43 per share.
/4/ Consists of options to purchase 2,200 shares of Common Stock at an
average exercise price of $7.61 per share which may be exercised currently.
Mr. Hinkefent also holds unvested options to acquire 3,300 shares of common
stock at an average exercise price of $7.61 per share.
/5/ Includes options to purchase 22,000 shares of Common Stock at an average
exercise price of $3.73 per share which may be exercised currently. Mr.
Fleming also holds unvested options to acquire 4,400 shares of stock at an
exercise price of $2.61 per share. Please note that as of October 1, 2001,
Mr. Fleming's employment with The Healthy Edge, Inc. was terminated, but he
still acts in a consulting capacity for the Company.
/6/ Includes options to purchase 29,700 shares of Common Stock at an average
exercise price of $3.68 per share which may be exercised currently.
/7/ Includes 227,098 shares of Common Stock held by the Lifeboat Foundation,
over which Mr. Petersen shares voting power as a director, 11,440 shares
held by the Draupnir Trust, over which Mr. Petersen has sole voting power as
sole trustee. Also includes options to purchase 18,700 shares of Common
Stock at an average exercise price of $4.30 per share which may be exercised
currently .
/8/ Includes 227,098 shares of Common Sock held by the Lifeboat Foundation,
over which Mr. Pestotnik shares voting power as a director, and options to
purchase 7,700 shares of Common Stock at an average exercise price of $6.72
per share which may be exercised currently.
/9/ Includes options to purchase 7,700 shares of Common Stock at an average
exercise price of $6.72 per share which may be exercised currently.
/10/ 11110 E. Beck Lane, Scottsdale, Arizona 85259. The number of shares
includes 3,070 shares over which Mr. Wright shares voting and investment
power with his spouse and minor children.
/11/ 3535 Lebon Drive, San Diego, California 92122.
/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. Messrs. Howard and Petersen have each
expressed an intention to serve, if elected, and the Board of Directors
knows of no reason why either of them might be unavailable to serve. If 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 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 Annual Meeting and entitled to
vote. Consequently, votes withheld and broker nonvotes with respect to the
election of directors will have no impact on the election of directors.
Proxies submitted pursuant to this solicitation will be voted, unless
specified otherwise, for the election of Messrs. Howard and Petersen. 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 57 President of Nebraska 1986 2002
Distributing Company
Allen D. Petersen 60 Chairman and Chief Executive 1993 2002
Officer of American Tool
Companies, Inc. /1/
DIRECTORS CONTINUING IN OFFICE
Kathleen M. Evans 54 President of the Company 1986 2003
Timothy R. Pestotnik 41 Attorney, Partner in the law 1998 2003
firm Luce, Forward, Hamilton
& Scripps, LLP
William F. Wright 59 Chairman of the Board /2/ 1986 2004
Jerry Fleming 64 Consultant /3/ 1997 2004
William R. Hoppner 51 Attorney, Of Counsel to the 1994 /4/ 2004
law firm Rehm and Bennett
P.C., Consultant
Information regarding other executive officers of the Company is found in
the Company's Form 10-K, which is available upon request.
------------------
/1/ Mr. Petersen is also a director of Gold Banc Corporation, Inc., a public
bank holding company.
/2/ Mr. Wright is also a director of Gold Banc Corporation, Inc., a public
bank holding company.
/3/ Mr. Fleming served as President of Food For Health Co., Inc., from 1992
through the end of fiscal year 2001. The Company acquired Food For Health
Co., Inc. in November 1997 and sold substantially all the assets of Food For
Health Co., Inc. in March 2001. Effective October 1, 2001, Mr. Fleming's
employment with the Company was terminated and he entered into a
four-year consulting agreement with the Company.
/4/ Mr. Hoppner resigned from the Board of Directors in October 1997 to
pursue political office and was reappointed to the Board of Directors
in December 1998.
The Board of Directors conducts its business through meetings of the
Board and actions taken by written consent in lieu of meetings and by
the actions of its committees. During the fiscal year ended September
28, 2001, the Board of Directors held 10 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 2001.
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 with
management and the auditors the adequacy of the Company's internal
accounting controls, reviewing with management and the auditors the
financial results prior to the filing of quarterly and annual reports,
and reviewing fees charged by the Company's independent auditors. The
Audit Committee is composed of Directors Hoppner, Pestotnik and
Petersen. The Audit Committee held 7 meetings during fiscal 2001.
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 held 2 meetings during fiscal 2001.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company are paid a fee of
$20,000 per year plus $500 for each board meeting (including committee
meetings) attended in person or by teleconference. In addition, all
directors are reimbursed for out-of-pocket expenses related to
attending board and committee meetings. These non-employee directors
may receive awards of nonqualified stock options which entitle them to
purchase shares of the Company's common stock at an exercise price
equal to the fair market value of the stock on the date of grant.
Option grants to non-employee directors are not issued under the
Company's 1994 Stock Option Plan. Such grants are determined on an
annual basis by the Chairman and President. During fiscal 2001, no
stock options were granted to non-employee directors.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the annual and
long-term compensation awarded to, earned by or paid by the Company to
its Chairman and the other three highest paid executive officers of the
Company ("Named Officers") for services rendered during fiscal 2001,
2000, and 1999. No other executive officers of the Company earned
salary and bonus in fiscal 2001 in excess of the disclosure threshold
established by federal securities laws.
Summary Compensation Table
Long-Term Compensation
------------------------------------
Annual Compensation Awards Payouts
---------------------------------- ------------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
/1/ /2/ /3/ /4/
Restricted Securities
Name and Other Annual Stock Underlying LTIP All Other
Principal Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
Position Year ($) ($) ($) ($) (#) ($) ($)
------------ ---- ------- ------- ------------ ---------- ------------ ------- -------------
William F. Wright, 2001 378,560 113,568 - - - - 9,048
Chairman 2000 364,000 - - - - - 12,371
1999 350,000 275,000 - - 6,600 - 13,388
Kathleen M. Evans, 2001 297,440 90,000 - - - - 10,657
President 2000 286,000 286,000 - - - - 9,941
1999 275,000 275,000 - - 5,500 - 9,760
Jerry Fleming, 2001 208,000 - - - - - 396
President of 2000 208,000 - - - - - 396
The Healthy Edge, 1999 200,000 65,000 - - 4,400 - 396
Inc.
Michael D. James, 2001 145,000 25,000 - - - - 6,612
Secretary, 2000 130,000 30,000 - - 4,500 - 6,538
Treasurer and 1999 115,000 30,000 - - 6,600 - 4,823
Chief Financial
Officer
Eric J. Hinkefent, 2001 100,000 - - - - - 2.240
President of Health 2000 100,000 - - - - - 1,923
Food Associates, 1999 3,427 - - - 5,500 - 65
Inc. and Chamberlin
Natural Foods, Inc.
/5/
----------------------------------
/1/ No disclosure is required in this column pursuant to applicable
Securities and Exchange Commission Regulations, as the aggregate value of
items covered by this column does not exceed the lesser of $50,000 or 10% of
the annual salary and bonus shown for each respective executive officer
named.
/2/ Option grants for fiscal 1999 have been adjusted to reflect the special
10% stock dividend paid in February 2000.
/3/ The Company does not have a long-term incentive plan as defined in Item
402 of Regulation S-K under the Securities Exchange Act of 1934, as amended.
/4/ The amount for fiscal 2001 consists of contributions to the Company's
Profit Sharing Plan of $6,504, $9,546, $6,612 and $2,240 for Mr. Wright, Ms.
Evans, Mr. James and Mr. Hinkefent, respectively, and the value of life
insurance of $2,544, $1,111 and $396 for Mr. Wright, Ms. Evans and Mr.
Fleming, respectively.
/5/ Mr. Hinkefent became an executive officer of the Company during fiscal
2001. Mr. Hinkefent's reported salary for 1999 represents two weeks of
compensation as a result of the Company's acquisition of Health Food
Associates, Inc. on September 15, 1999.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
No options were granted during fiscal 2001 to the Named Officers listed in
the Summary Compensation Table.
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES
No options were exercised during fiscal 2001 by the Named Officers. The
following table sets forth certain information concerning the number of
unexercised options and the value of unexercised options at the end of
fiscal 2001 for the Named Officers. All options have been adjusted to
reflect the special 10% stock dividend paid in February 2000.
(a) (b) (c) (d) (e)
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/SARs at
Shares Options/SARs at Fiscal Year
Acquired Fiscal Year End(#) End($)
On Value Exercisable/ Exercisable/
Name Exercise(#) Realized ($) Unexercisable Unexercisable
----------------- ----------- ------------ ------------------ ---------------
William F. Wright -0- -0- 50,600/ 0 67,980/ 0
Kathleen M. Evans -0- -0- 38,500/ 0 59,610/ 0
Jerry Fleming -0- -0- 17,600/ 8,800 23,844/15,896
Michael D. James -0- -0- 10,360/10,640 14,819/ 5,564
Eric J. Hinkefent -0- -0- 2,200/ 3,300 0/ 0
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, and Kathleen M. Evans, President of the Company.
Each such agreement has a term expiring on December 31, 2002 and is
automatically extended for one additional year each December 31, unless
either the Company or the executive delivers a notice of non-extension at
least 90 days prior to the scheduled automatic renewal date. Each agreement
provides for the payment of a base salary in each year during the term
thereof and provides that the executive shall be eligible to receive a bonus
based upon performance in an amount determined by the Compensation Committee
of the Board. Should the Board elect to terminate the agreements upon such
executive's disability or death, such executive or his or her personal
representative shall be entitled to receive his or her base salary for a
period of six months following the termination. Should the Board elect to
terminate the agreements for a reason other than serious misconduct (as
defined in the agreements), such executive shall be entitled to receive a
severance package equal to such executive's current base salary plus his or
her previous year's bonus. Each executive will also be eligible to
participate in the Company's 1994 Stock Option Plan and in other employee
benefit plans maintained by the Company, including health and life insurance
plans. Each agreement contains provisions under which the executive has
agreed to maintain the confidentiality of information concerning the Company
and its affairs and a covenant not to compete with the Company for a period
of one year after such executive's employment with the Company terminates.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
THIS REPORT IS NOT DEEMED TO BE "SOLICITING MATERIAL" OR TO BE "FILED" WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR SUBJECT TO THE SEC'S
PROXY RULES OR TO THE LIABILITIES OF SECTION 18 OF THE SECURITIES EXCHANGE
ACT OF 1934 (THE "1934 ACT"), AND THIS REPORT SHALL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE INTO ANY PRIOR OR SUBSEQUENT FILINGS BY THE
COMPANY UNDER THE SECURITIES ACT OF 1933 OR THE 1934 ACT.
EXECUTIVE OFFICER COMPENSATION. The Company's Compensation Committee (the
"Committee") consists only of directors who are not officers or employees of
the Company. The Committee endeavors to establish total compensation
packages for each executive officer that fairly reflects the value of that
executive officer's services to the Company and that will permit the Company
to attract and retain high quality individuals in its key executive
positions, taking into consideration both the prevailing competitive job
market and the current size and expected growth of the Company.
Executive officer compensation contains three principal components: (i) a
base salary, (ii) a cash bonus and (iii) grants of options to purchase
Common Stock under the Company's 1994 Stock Option Plan. Mr. Wright's and
Ms. Evans' base salaries are set forth in their employment agreements and
are subject to annual increases as recommended by the Committee. The base
salaries of other officers are determined as a function of their prior base
salaries and the Committee's view of base salary levels for executive
officers with comparable positions and responsibilities in other companies
and are not a function of any specific performance criteria. The Committee
periodically compares base salaries paid to its executive officers with
those paid by other public companies engaged in similar industries and that
generate revenues in the same range as the Company. These companies are not
necessarily the same companies that are included in the peer group index
(Standard & Poors Distributors (Food and Health) 500 Index) used in the
Performance Graph included in this Proxy Statement. In general, the
Committee determined that the base salaries paid to the Company's executive
officers fell within the median range of base salaries paid by such
comparable companies.
During fiscal 2000, the Committee adopted an executive compensation plan
which established performance goals and criteria relating to the amounts of
cash bonuses paid to its executive officers in future years. Stock option
awards will continue to be determined on an annual basis. The bonus portion
of Mr. Wright's and Ms. Evans' compensation is paid based upon the
performance goals established by the Compensation Committee and approved by
the Board of Directors. In addition to bonuses paid in accordance with the
executive compensation plan, the Compensation Committee may award additional
bonus amounts on a discretionary basis if the Committee deems it to be
appropriate.
The bonus portion of other executive officer's compensation is paid on a
discretionary basis based upon the Committee's assessment of the executive's
individual performance and the overall performance of the Company during the
most recently completed fiscal year with respect to stockholder value, stock
price, sales growth and net income. In general, it has been the Company's
practice to award cash bonuses to the executive officers with respect to a
particular fiscal year in amounts consistent with cash bonuses awarded in
prior fiscal years as long as the Company achieves stock price, sales and
net income levels specified in the Company's budget for such fiscal year.
Because ownership of the Company's Common Stock serves to align the economic
interests of its executive officers with those of its stockholders,
executive officers who, in the opinion of the Committee, contribute to the
growth, development and financial success of the Company may be awarded
options to purchase Common Stock. Any grant of options to purchase Common
Stock must be made with an exercise price no less than the closing sale
price of the Common Stock on the date of grant. Therefore, the compensation
value of these stock options is directly related to the long-term
performance of the Company as measured by its future return to stockholders.
The amount of stock option awards granted to executive officers are also
determined on a discretionary basis by the Committee considering the same
criteria used to award cash bonuses.
COMPLIANCE WITH SECTION 162(M) OF THE INTERNAL REVENUE CODE. The current
tax law imposes an annual, individual limit of $1 million on the
deductibility of the Company's compensation payments to the Chairman and to
the four most highly compensated executive officers other than the Chairman.
Specified compensation is excluded for this purpose, including
performance-based compensation, provided that certain conditions are
satisfied. The Committee has determined to preserve, to the maximum extent
practicable, the deductibility of all compensation payments to the Company's
executive officers.
COMPENSATION OF CHAIRMAN. Mr. Wright's base salary is set by his employment
agreement and is subject to annual increases as recommended by the
Committee. It is the view of the Committee, based upon its periodic review
of base salaries paid to chief executive officers of similarly situated
companies, that Mr. Wright's base salary is reasonable and within the median
range paid by such other companies. Based on the performance criteria set
forth in the executive compensation plan, Mr. Wright was awarded a cash
bonus equal to 30% of his base salary (or $113,568) during fiscal 2001. No
stock option grants were awarded.
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.
William R. Hoppner
J. Tony Howard
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
Prior to February 25, 1994, the Company was a subsidiary of AMCON
Corporation, which owned 87.5% of the issued and outstanding shares of the
Company's Common Stock. AMCON Corporation's principal asset is a subsidiary
corporation that is engaged in the beer distribution business in eastern
Nebraska. William F. Wright, Kathleen M. Evans, J. Tony Howard and Allen D.
Petersen are officers, directors or stockholders of AMCON Corporation.
AMCON Corporation engages in certain transactions with the Company,
including the provision of offices and administrative services 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
2001, 2000, and 1999, respectively, as consideration for such services,
which is included in the Company's selling, general and administrative
expenses for those years.
During fiscal 2001, the Company contracted with William R. Hoppner, one of
its outside directors, for consulting services in connection with its retail
health food operations during fiscal year 2001. The amount paid for
consulting services during fiscal 2001 was $150,000, plus reimbursement of
expenses. Mr. Hoppner is currently providing consulting services to the
Company on a month-by-month basis and receives a fee of $7,500 per month.
Effective October 1, 2001, Jerry Fleming's employment with the Company was
terminated and Mr. Fleming entered a four-year consulting agreement with the
Company at the rate of $104,000 per year.
REPORT OF THE AUDIT COMMITTEE
THIS REPORT IS NOT DEEMED TO BE "SOLICITING MATERIAL" OR TO BE "FILED" WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR SUBJECT TO THE SEC'S
PROXY RULES OR TO THE LIABILITIES OF SECTION 18 OF THE SECURITIES EXCHANGE
ACT OF 1934 (THE "1934 ACT"), AND THIS REPORT SHALL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE INTO ANY PRIOR OR SUBSEQUENT FILINGS BY THE
COMPANY UNDER THE SECURITIES ACT OF 1933 OR THE 1934 ACT.
The Audit Committee operates under a written charter and is comprised of
William R. Hoppner, Timothy R. Pestotnik and Allen D. Petersen, each of whom
was an independent director of the Company under the rules adopted by the
American Stock Exchange (the "AMEX Rules") during fiscal 2001. However, due
to his consulting arrangement with the Company which began in fiscal 2001,
Mr. Hoppner is no longer considered to be an independent director of the
Company under the AMEX Rules. In accordance with the AMEX Rules and based
on the short-term nature of the consulting arrangement and the substantial
value Mr. Hoppner adds to the Audit Committee, the Board of Directors has
determined that it is in the best interests of the Company for Mr. Hoppner
to remain on the Audit Committee until his successor can be appointed. The
Board of Directors is currently considering potential candidates who could
serve on the Audit Committee.
The Company's management is responsible for the preparation of the Company's
financial statements and for maintaining an adequate system of internal
controls and processes for that purpose. Deloitte & Touche LLP ("D&T") acts
as the Company's independent auditors and they are responsible for
conducting an independent audit of the Company's annual financial statements
in accordance with auditing standards generally accepted in the United
States of America and issuing a report on the results of their audit. The
Audit Committee is responsible for providing independent, objective
oversight of both of these processes.
The Audit Committee has reviewed and discussed the audited financial
statements for the year ended September 28, 2001 with management of the
Company and with representatives of D&T. As a result of these discussions,
the Audit Committee believes that the Company maintains an effective system
of accounting controls that allows it to prepare financial statements that
fairly present the Company's financial position and results of its
operations. Our discussions with D&T also included the matters required by
the Statement on Auditing Standards No. 61 (Communications with Audit
Committees).
In addition, the Audit Committee reviewed the independence of D&T. We
received disclosures and a letter from D&T regarding its independence as
required by Independence Standard Board Standard No. 1 and discussed this
information with D&T.
Based on the foregoing, the Audit Committee recommended to the full Board of
Directors that the audited financial statements of the Company for the year
ended September 28, 2001 be included in the Company's Annual Report on Form
10-K filed with the Securities and Exchange Commission.
William R. Hoppner
Timothy R. Pestotnik
Allen D. Petersen
COMPANY PERFORMANCE
THE GRAPH IS NOT DEEMED TO BE "SOLICITING MATERIAL" OR TO BE "FILED" WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR SUBJECT TO THE SEC'S
PROXY RULES OR TO THE LIABILITIES OF SECTION 18 OF THE SECURITIES EXCHANGE
ACT OF 1934 (THE "1934 ACT"), AND THE GRAPH SHALL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE INTO ANY PRIOR OR SUBSEQUENT FILING BY THE COMPANY
UNDER THE SECURITIES ACT OF 1933 OR THE 1934 ACT.
The following graph and table set forth certain information comparing the
cumulative total return from a $100 investment in the Company and in the
stocks making up the American Stock Exchange Composite Total Return Index
and the Standard & Poors Distributors (Food & Health) 500 Index on September
27, 1996 through September 28, 2001 (the end of the Company's fiscal 2001).
[GRAPH OMITTED]
9/29/95 9/27/96 9/26/97 9/25/98 9/24/99 9/29/00
------- ------- ------- ------- ------- -------
AMCON Distributing Company 100 200.00 376.92 480.77 331.08 272.00
American Stock Exchange
Total Return Index 100 125.61 117.74 151.76 187.95 137.16
S&P Distributors
(Food and Health) 500 Index 100 124.94 169.05 105.01 143.09 176.48
RATIFICATION OF APPOINTMENT OF AUDITOR
Deloitte & Touche LLP ("D&T") has been appointed by the Board of Directors
as auditors for the Company and its subsidiaries for fiscal 2002. This
appointment is being presented to the stockholders for ratification. The
ratification of the appointment of auditor requires the affirmative vote of
the holders of a majority of the shares present in person or represented by
proxy at the Annual Meeting and entitled to vote. Abstentions and broker
nonvotes will not be considered shares entitled to vote with respect to
ratification of the appointment and will not be counted as votes for or
against the ratification.
On September 4, 2001, the Company's Board of Directors, upon recommendation
from the Company's Audit Committee, approved a change in the Company's
independent accountants for the fiscal year ended September 28, 2001 from
PricewaterhouseCoopers LLP to D&T. The change was due to the closure of the
PricewaterhouseCoopers offices in Omaha and Lincoln, Nebraska. The reports
of PricewaterhouseCoopers for the fiscal years ended September 29, 2000 and
September 24, 1999 contained no adverse opinion, disclaimer of opinion or
qualification or modification as to uncertainty, audit scope or accounting
principles. During the fiscal years ended September 29, 2000 and September
24, 1999, and the interim period from September 30, 2000 through September
4, 2001, there were no disagreements between the Company and
PricewaterhouseCoopers on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of PricewaterhouseCoopers,
would have caused it to make reference to the subject matter of the
disagreement in connection with its reports on the financial statements for
such years. No reportable event as described in paragraph (a) (1) (v) of
Item 304 of Regulation S-K has occurred within the Company's fiscal years
ended September 29, 2000 and September 24, 1999, or the period from
September 30, 2000 through September 4, 2001.
The Company did not consult with D&T during the fiscal years ended September
29, 2000 and September 24, 1999, or during the interim period from September
30, 2000 through September 4, 2001, on any matter which was the subject of
any disagreement or any reportable event as defined in Regulation S-K Item
304 (a) (1) (iv) and Regulation S-K Item 304 (a) (1) (v), respectively, or
on the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on the Company's financial statements, relating to which either a
written report was provided to the Company or oral advice was provided that
D&T concluded was an important factor considered by the Company in reaching
a decision as to any accounting, auditing, or financial reporting issue.
AUDIT FEES
D&T billed the Company a total $78,000 in fees for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year ended September 28, 2001. D&T was not retained by the Company
to review the financial statements included in the Company's Quarterly
Reports on Form 10-Q filed with the SEC during that year.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
D&T did not perform any professional services for the Company during the
fiscal year ended September 28, 2001, either directly or indirectly, in
connection with the operation, or supervising the operation, of the
Company's information system or managing our local area network, or
designing or implementing a hardware or software system that aggregates
source date underlying the Company's financial statements or that generates
information that is significant to the Company's financial statements taken
as a whole. Accordingly, no fees were paid to D&T during fiscal 2001 for
these types of services.
ALL OTHER FEES
D&T billed the Company $7,500 for services rendered to the Company, other
than the services described above under "Audit Fees" and "Financial
Information Systems Design and Implementation Fees," for the fiscal year
ended September 28, 2001, including audit related services of $6,000 and
non-audit services of $1,500. Audit related services generally include fees
for the audits of the Company's employee benefit plans.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
AUDITORS FOR FISCAL 2002.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting and will be provided an opportunity to make a statement and
to respond to appropriate inquiries from stockholders.
SUBMISSION OF STOCKHOLDER PROPOSALS
Pursuant to the Company's Bylaws, stockholder proposals submitted for
presentation at the Annual Meeting must be received by the Secretary of the
Company at its home office no later than February 21, 2002. Such proposals
should set forth (i) a brief description of the business desired to be
brought before the annual meeting and the reason for conducting such
business at the annual meeting, (ii) the name and address of the stockholder
proposing such business, (iii) the number of shares of the Company's Common
Stock beneficially owned by such stockholder and (iv) any material interest
of such stockholder in such business. Pursuant to the Company's Bylaws,
nominations for directors may be submitted by stockholders by delivery of
such nominations in writing to the Secretary of the Company by February 21,
2002. 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 (i.e. 2003), stockholder proposals must be submitted by
October 16, 2002 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 December 30, 2001.
The Company will bear the cost of soliciting proxies. To the extent
necessary, proxies may be solicited by directors, officers and employees of
the Company in person, by telephone or through other forms of communication,
but such persons will not receive any additional compensation for such
solicitation. The Company will reimburse brokerage firms, banks and other
custodians, nominees and fiduciaries for reasonable expenses incurred by
them in sending proxy materials to the beneficial owners of the Company's
shares. In addition to solicitation by mail, the Company will supply banks,
brokers, dealers and other custodian nominees and fiduciaries with proxy
materials to enable them to send a copy of such materials by mail to each
beneficial owner of shares of the Company's Common Stock which they hold of
record and will, upon request, reimburse them for their reasonable expenses
in so doing.
The Company's Annual Report, including financial statements, is being
mailed, together with this Proxy Statement, to all stockholders entitled to
vote at the Annual Meeting. However, such Annual Report is not to be
considered part of this proxy solicitation material. IN ADDITION, ANY
STOCKHOLDER WHO WISHES TO RECEIVE A COPY OF THE FORM 10-K FILED BY THE
COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION MAY OBTAIN A COPY
WITHOUT CHARGE BY WRITING TO THE COMPANY. Requests should be directed to
Mr. Michael D. James at the Company's principal executive office.
By Order of the Board of Directors
/s/ Michael D. James
-----------------------------------
Michael D. James, Secretary
Omaha, Nebraska
February 14, 2002
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 21, 2002 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
Thursday, March 21, 2002, 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 2005
J. Tony Howard Allen D. Petersen
(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 Deloitte & Touche LLP as
independent auditors for fiscal 2002.
/ / 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 21, 2002 and the
Proxy Statement for the Annual Meeting prior to the signing of this proxy.
Dated: , 2002.
--------------
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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.