[ ] | Preliminary Proxy Statement |
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[ ] | Definitive Additional Materials |
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1. | To elect |
2. | To consider and act upon ratification and approval of the selection of RSM US LLP as our independent registered public accounting firm for our |
3. |
To consider and act upon any other matters which may properly come before the meeting. |
The ratification and approval of the selection of the accounting firm of RSM US LLP as our independent registered public accounting firm for our 2021 fiscal year; and |
Name | Age | Position With our Company | Director Since | ||||||
NOMINEES | |||||||||
Class II: New term to expire at the annual meeting following our 2022 fiscal year | |||||||||
Christopher H. Atayan | 59 | Chief Executive Officer, Chairman, Director | 2004 | ||||||
Raymond F. Bentele | 82 | Director | 2002 | ||||||
DIRECTORS CONTINUING IN OFFICE | |||||||||
Class I: Term to expire at the annual meeting following our 2021 fiscal year | |||||||||
Jeremy W. Hobbs | 58 | Director | 2006 | ||||||
Stanley Mayer | 74 | Director | 2002 |
Name | Age | Position With our Company | Director Since |
NOMINEES | |||
Class III: New term to expire at the annual meeting following our 2023 fiscal year | |||
Andrew C. Plummer | 46 | President, Director | 2018 |
John R. Loyack | 57 | Director | 2003 |
Timothy R. Pestotnik | 60 | Director | 1998 |
DIRECTORS CONTINUING IN OFFICE | |||
Class I: Term to expire at the annual meeting following our 2021 fiscal year | |||
Jeremy W. Hobbs | 59 | Director | 2006 |
Stanley Mayer | 75 | Director | 2002 |
Class II: Term to expire at the annual meeting following our 2022 fiscal year | |||
Christopher H. Atayan | 60 | Chief Executive Officer, Chairman, Director | 2004 |
Raymond F. Bentele | 83 | Director | 2002 |
Class III: Term to expire at the annual meeting following our 2020 fiscal year | |||||||||
Andrew C. Plummer | 45 | President, Chief Financial Officer, Director | 2018 | ||||||
John R. Loyack | 56 | Director | 2003 | ||||||
Timothy R. Pestotnik | 59 | Director | 1998 |
each person known to us to own beneficially more than 5% of the aggregate number of the outstanding shares of our common stock; our chief executive officer, our principal financial officer and each of the other named executive officers; each of our directors and director nominees; and our executive officers and directors as a group. Each of the persons, or group of persons, in the table below has sole voting power and sole dispositive power as to all of the shares of our common stock shown as beneficially owned by them, except as otherwise indicated.
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DELINQUENT SECTION 16(a) Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than 10% of any class of equity securities of our company registered pursuant to Section 12 of the Exchange Act, to file with the SEC initial reports of ownership and reports of changes in ownership in such securities and other equity securities of our company. SEC regulations require directors, executive officers and greater than 10% stockholders to furnish our company with copies of all Section 16(a) reports they file. To our knowledge, based solely on review of the copies of such reports furnished to our company and written representations that no other reports were required, during our 8 CORPORATE GOVERNANCE AND BOARD MATTERS Board Leadership Structure and Role in Risk Oversight Our company is led by Christopher H. Atayan, who has served as our company's chief executive officer since October 2006 and as its chairman since January 2008. Our board of directors is comprised of Mr. Atayan and six other directors, including five directors who satisfy the independence requirements of the NYSE American. An independent director serves as chairman of each of our board's three standing committees – the audit committee, the compensation committee, and the nominating and corporate governance committee. Our bylaws provide that at any time in which the offices of our chairman and chief executive officer are held by the same person, our board of directors will appoint one independent member of our board to serve as the "lead director." Timothy R. Pestotnik currently serves as the lead director. The lead director will have such rights, duties and responsibilities as may be assigned to him by our board of directors. Our board leadership structure has been effective for our company. We believe that having a combined chief executive officer and chairman of the board, an independent chair for each of our board committees and an independent lead director provides the right form of leadership for our company. A combined chairman and chief executive officer role allows for more productive meetings. The chief executive officer is the individual selected by the board of directors to manage our company on a day to day basis, and his direct involvement in our business operations makes him best positioned to lead the board in productive strategic planning sessions and determine the time allocated to each agenda item in discussions of our company's short and long-term objectives. In addition to the leadership provided by our chairman and chief executive officer, we have strong oversight of company operations by experienced independent directors who chair each of our board's standing committees. Led by an independent lead director, our independent directors also regularly meet in executive session to review key decisions and discuss matters in a manner that is independent of the chief executive officer. Although it is management's job to assess and manage our company's exposure to risk, our audit committee takes a lead in establishing guidelines and policies that govern the process. In carrying out its responsibilities in this regard, our audit committee works closely with our chief financial officer. Our audit committee meets several times each year with our chief financial officer and other members of management and receives a comprehensive report on enterprise risk management, including management's assessment of risk exposures, and the processes in place to monitor and control such exposures. Our audit committee also receives updates between meetings from members of management relating to risk oversight matters, and provides risk management reports to the full board of directors. In addition to our audit committee, our compensation committee considers the risks that may be implicated by our executive compensation programs. We believe that our directors provide effective oversight of the risk management function, especially through the work of the audit committee and the dialogue between the full board and our chief financial officer. Communication with the Board Our board of directors has established a process for stockholders to follow in sending communications to our board or its members. Stockholders who wish to communicate with our board or any of our directors, including the Chairman of the Board and the chairman of any committee of the board, may do so. Such communications must be addressed to our board or any such director in care of our corporate secretary, Charles J. Schmaderer, at AMCON Distributing Company, 7405 Irvington Road, Omaha, NE 68122. All such communications will be compiled by our corporate secretary and submitted to our board or the individual director, as applicable, on a periodic basis. Neither our board of directors nor a specific director is required to respond to a stockholder communication. To avoid selective disclosure, our board or the individual director may respond to a stockholder's communication only if the communication involves information which is not material or which is already public. In such case, our board of directors, as a whole, or the individual director, may respond, if at all: (i) directly, following consultation with our corporate secretary or other advisors or without additional consultation, as our board determines appropriate; (ii) indirectly through our corporate secretary or other designated officer, following consultation with our corporate secretary or other advisors or without additional consultation, as our board determines appropriate; or (iii) pursuant to such other means as our board determines appropriate from time to time. 9 If the communication involves material non-public information, our board of directors or the individual director will not provide a response to the stockholder concerning such information. Our company may, however, publicly provide information responsive to such communication if (following consultation with our advisors, as our board determines appropriate) our board determines disclosure is appropriate. In that case, the responsive information will be provided in compliance with SEC Regulation FD and other applicable laws and regulations. Consideration of Director Nominees In identifying and evaluating director nominees, the nominating and corporate governance committee of our board of directors may receive recommendations from management, from other directors and from stockholders, including may consider diversity in identifying director nominees, it did not do so with respect to the selection of the nominees for this annual meeting. The committee seeks to identify and recruit the best available candidates, without regard to race, color, religion, sex, ancestry, national origin or disability. Stockholders who wish the nominating and corporate governance committee to consider their recommendations for nominees for the position of director should submit their recommendations in writing to the nominating and corporate governance committee in care of our corporate secretary, Charles J. Schmaderer, at AMCON Distributing Company, 7405 Irvington Road, Omaha, NE 68122. All nominees, including those submitted by stockholders in accordance with these procedures, will be evaluated using generally the same methods and criteria described above, although those methods and criteria are not standardized and may vary from time to time. Stockholders also may submit director nominations to our company in accordance with the procedures described below under "Advance Notice of Stockholder Proposals." Committees of the Board Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee. There currently are no other standing committees of our board of directors. Members of the audit committee, compensation committee and nominating and corporate governance committee serve at the pleasure of our board of directors. Audit Committee. The audit committee of our board of directors currently is comprised of John R. Loyack, its chairman, Timothy R. Pestotnik and Stanley Mayer. Our board of directors has determined that all members of the audit committee are independent directors under the listing standards adopted by the NYSE American. In addition, our board of directors has determined that Mr. Loyack and Mr. Mayer each meets the SEC's definition of an "audit committee financial expert." The audit committee is responsible for reviewing our financial statements, audit reports, internal financial controls and the services performed by the independent registered public accounting firm, and for making recommendations with respect to those matters to our board of directors. A more complete description of the audit committee's functions is provided in its charter, a copy of which is available on our internet website (www.amcon.com) by clicking on "About Us" then "Investor Relations" and "Corporate Governance." The audit committee met Compensation Committee. The compensation committee of our board of directors currently is comprised of John R. Loyack, its chairman, Raymond F. Bentele and Stanley Mayer. Our board of directors has determined that all members of our compensation committee are independent under the NYSE American listing standards. The committee is responsible for reviewing and making recommendations to our board of directors with respect to compensation of executive officers and other compensation matters and awards. Our chief executive officer assists the committee from 10 time to time on a variety of compensation matters, including making recommendations for the appropriate salaries and bonuses of our executive officers (other than our chief executive officer). The committee has the authority to consult with management and to engage the services of outside advisors, experts and others to assist it in its efforts. A more complete description of the committee's functions is provided in its charter, a copy of which is available on our internet website (www.amcon.com) by clicking on "About Us" then "Investor Relations" and "Corporate Governance." Our compensation committee met four times during our Nominating and Corporate Governance Committee. The members of our nominating and corporate governance committee are Raymond F. Bentele, its chairman, John R. Loyack and Timothy R. Pestotnik, each of whom our board of directors has determined to be independent under the NYSE American listing standards. The committee is responsible for the director nomination process, including evaluating and recommending director nominees and committee and chair appointments. It also is responsible for various corporate governance matters, including the development of ethical conduct standards for our directors, officers and employees and an annual board assessment. A more complete description of the committee's functions is provided in its charter, a copy of which is available on our internet website (www.amcon.com) by clicking on "About Us" then "Investor Relations" and "Corporate Governance." The nominating and corporate governance committee met four times during our Meetings of the Board During our year. Our company's directors discharge their responsibilities throughout the year, not only at such board of directors and committee meetings, but through personal meetings and other communications with members of management and others regarding matters of interest and concern to our company. The independent non-management members of our board of directors regularly hold executive sessions without management present. At least one executive session per year is attended by only independent non-management directors. Our board of directors has chosen Timothy R. Pestotnik as the lead director for meetings of the independent non-management directors. Directors are encouraged by our company to attend our annual meeting of stockholders if their schedules permit, but our company does not otherwise have a policy regarding such attendance. All incumbent directors were present at the annual meeting of the stockholders held on December Code of Ethics Our board of directors has adopted a code of ethical conduct that applies to our executive officers, including our principal executive officer and our principal financial officer. This code of ethical conduct is available without charge to any person who requests it by writing to our corporate secretary, Charles J. Schmaderer, at AMCON Distributing Company, 7405 Irvington Road, Omaha, NE 68122. It also is available on our internet website (www.amcon.com) by clicking on "About Us" then "Investor Relations" and "Corporate Governance." Any substantive amendment to, or waiver from, a provision of this code that applies to our principal executive officer or principal financial officer will be disclosed on our internet website and, if required by rules of the SEC or the NYSE American, in reports we file with the SEC. Director Compensation Only outside (non-employee) members of our board of directors receive compensation for their service to our company as a director. Directors who are not employees of our company are paid according to the following annual scale:
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12 There is no payment of any meeting fees; however, all directors are reimbursed for their reasonable out of pocket expenses incurred in connection with their attendance at board and committee meetings. Non-employee directors are eligible to receive equity-based awards under our 2014 omnibus incentive plan or our 2018 omnibus incentive plan as described below under "Executive Compensation and Related Matters—Omnibus Incentive Plans." Non-employee directors also are eligible to receive awards of nonqualified stock options which entitle them to purchase shares of our common stock at an exercise price equal to the fair market value of the stock on the date of grant. Option grants and other equity-based awards may be recommended from time to time by our compensation committee, subject to approval by our board of directors. Compensation earned in our
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(2) No stock awards were made to any of the named directors for services provided in our 2020 fiscal year. As of September 30, 2020, the number of unvested restricted stock units and shares of restricted stock held by each named director was as follows: Mr. Bentele (134); Mr. Hobbs (134); Mr. Loyack (134); Mr. Mayer (134); and Mr. Pestotnik (134). EXECUTIVE COMPENSATION AND RELATED MATTERS Compensation Discussion and Analysis General The following compensation discussion and analysis explains how our compensation programs are designed and operate in practice with respect to each of the named executive officers listed in the summary compensation table appearing below. This discussion should be read in conjunction with the information appearing under the caption "Committees of the Board -- Compensation Committee," the summary compensation table, and the additional tabular and narrative disclosure that follows the summary compensation table. Compensation Philosophy and Objectives Our compensation program for executive officers is structured to achieve the following objectives: 12
Our compensation committee's process for determining compensation levels for executive officers differs depending upon the position of the individual being considered. For each executive officer other than our chief executive officer, the committee annually reviews each element of compensation described below in consultation with our chief executive officer. Our chief executive officer develops for the committee's consideration a proposed compensation package for each of these executive officers based on his subjective business judgment of the executive's past performance and of his or her expected future contributions to our company. Each executive's compensation package is modified as deemed appropriate by our compensation committee, and the final determination of the compensation package is made by the committee. With respect to our chief executive officer's compensation, our compensation committee meets in executive session. The committee develops a compensation package for our chief executive officer based on its subjective business judgment of his past performance, of his leadership in establishing performance standards in the conduct of our company's business, and of his expected future contributions in directing the long-term success of our company and its businesses. For all executive officers, including our chief executive officer, the structure and level of executive compensation needed to promote the principles of our executive compensation program for each executive is determined by the committee by considering all elements of the compensation package in total, rather than any one component in isolation. This process is based on the committee's subjective business judgment. Finally, some components of the compensation packages for our named executive officers are determined in accordance with the agreements described below under the caption "Change of Control Agreements." Compensation Components As separately discussed below, the principal components of compensation for our executive officers currently are: 13 base salary; performance-based compensation; long-term equity incentive compensation; and perquisites and other personal benefits. Base For our Performance-Based Compensation.Performance bonus awards may be provided to our named executive officers and other employees, as determined by our compensation committee, with 50% of the bonus awards being made available based on the achievement of specified financial metrics and 50% of the bonus awards being made available based on the achievement of strategic objectives. With respect to the achievement of financial metrics upon which a bonus award is based, our company must reach a minimum threshold of 80% of budgeted pretax income, excluding impairment charges ("Pretax"). If this threshold is achieved, the executive will be eligible for a 50% payout of his or her targeted bonus. The executive will be eligible for increasing payouts of his or her targeted bonus, pro rated up to 100% of target, upon the achievement of increasing percentages of budgeted Pretax until 100% of our budgeted Pretax is met. If our Pretax exceeds budget, the executive will be eligible for up to 125% of his or her target bonus, pro rated based on the achievement of Pretax of up to 120% of budget. With respect to the achievement of strategic objectives upon which a bonus award is based, the executive is entitled to receive 100% of his or her targeted bonus if our compensation committee determines that the executive has made satisfactory progress toward the achievement of his or her strategic goals. In the discretion of the compensation committee, the executive is eligible for up to 125% of his or her targeted bonus for exceptional performance with respect to the strategic goals. The satisfaction of an executive's strategic goals is largely determined by the compensation committee based on its business judgment of the executive's performance. All executives have a common strategic goal, which is to work together as a team in furtherance of our company's strategic objectives. In addition, each executive has individualized short, medium and long-term goals. In the case of our chief executive officer, these goals include: Short Term Goals Developing and implementing our company's strategic plan Developing overall framework for our company's response to the coronavirus pandemic Developing and maintaining relationships within the financial community to ensure our company's access to capital, credit and insurance Setting the proper "tone at the top" reflecting our company's operation in a highly regulated environment and its existence as a publicly traded reporting company Providing executive leadership to deploy our assets in a balanced fashion, recognizing the need to maximize liquidity, generate cash flow and reinvest in the business Developing and implementing action plans for the restructuring of our company's retail assets 14 Developing and implementing a capital investment strategy to support growth Medium Term Goals
Initiating opportunities to repurchase shares of our capital stock when appropriate Ensuring our company's compliance with appropriate internal controls for financial reporting Implement the strategic plan to enhance our geographic footprint Developing and implementing strategies for the integration of companies that are acquired into the organization
Develop strategic objectives relating to information technology Develop long term plan for strategic investments Long Term Goals
Fostering a company-wide culture of growth Initiating a strategic posture in the Company's markets to facilitate opportunities for growth of the wholesale division capabilities through acquisitions For our Equity Incentives. We promote the long-term interests of our company and the alignment of our named executive officers' interests with those of our stockholders by providing meaningful equity ownership opportunities to our executives. Our equity compensation program also is designed to encourage our named executive officers to remain employed with us despite a competitive labor market. Because equity compensation awards typically vest over a period of several years, the value to recipients of any immediate increase in the price of our common stock following a grant will be attenuated. The periodic vesting provisions are in place to encourage the named executive officers to remain with our company. On October Our compensation committee has not yet determined whether to establish any equity incentive awards for our Perquisites and other Personal Benefits. Each of our executive officers is entitled to participate in our employee benefit plans that are made available to all of our employees on a non-discriminatory basis. These benefits consist of medical and group life insurance for which our company pays a portion of the premiums. Our company also makes matching contributions under our 401(k) profit sharing plan of up to 4% of each executive's compensation. Our company 15 generally does not provide special perquisites to our executive officers. Additional information concerning perquisites is provided in the tabular and narrative disclosure that follows the summary compensation table. Termination and Change in Control Arrangements As discussed below under the caption "Change of Control Agreements," we have entered into a change of control agreement with Mr. Atayan. This agreement provides that, upon certain termination of employment events, including termination events following a change of control of our company, Mr. Atayan may be entitled to receive specified severance benefits. These benefits are discussed in more detail under the caption "Change of Control Agreements." The provisions in this agreements regarding severance benefits are designed, among other things, to provide for stability and continuity of management in the event of any actual or threatened change in control, to encourage the executive to remain in service after a change in control and ensure that the executive is able to devote his entire attention to maximizing stockholder value in the event of a change in control. Our compensation committee has determined that the amounts payable under the agreement are necessary to achieve those objectives. Policy Regarding Tax Deduction for Compensation Under Internal Revenue Code Section 162(m) Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation in excess of $1 million paid for any fiscal year to the chief executive officer and the four other most highly compensated executive officers. Our compensation committee and our board of directors reserve the authority to award non-deductible compensation in circumstances they consider appropriate. Stockholder Advisory Approval of Executive Compensation At the annual meeting of the stockholders held on December Summary Compensation Table The following summary compensation table summarizes the compensation paid or accrued by our company in the fiscal years indicated with respect to our three executive officers for our
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Grants of Plan Based Awards No plan based awards were granted to our named executive officers for our
Option Exercises and Stock Vesting The following table sets forth information with respect to each named executive officer concerning the exercise of options, and acquisition of shares on vesting, during our
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Outstanding Equity Awards at Fiscal Year End The following table sets forth information with respect to each named executive officer concerning equity awards held as of September 30,
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Equity Compensation Plan Information The following equity compensation plan information summarizes plans and securities approved and not approved by security holders as of September 30,
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Omnibus Incentive Plans We have adopted three omnibus incentive plans or "Incentive Plans" to encourage employees of our company, its affiliates and subsidiaries to acquire or increase a proprietary and vested interest in the growth and performance of our company, which Incentive Plans are referred to as the "2007 Plan," the "2014 Plan" and the "2018 Plan, respectively." The Incentive Plans also were designed to assist our company in attracting and retaining employees and non-employee directors by providing them with the opportunity to participate in the success and profitability of our company. Equity-based awards also are intended to further align the interests of award recipients and with the interests of our stockholders. Eligible Participants. The eligible participants in the Incentive Plans are all employees of our company, its affiliates and its subsidiaries, including employees who are officers or members of our board of directors, and members of our board who are not employees of our company. Currently, there are approximately Plan Administration. Each Incentive Plan may be administered by our board of directors or a committee consisting of two or more directors, as our board may determine. Currently, our compensation committee administers each Incentive Plan and has the sole discretion to administer and interpret each Incentive Plan and determine who will be granted awards under each Incentive Plan, the size and types of awards, the terms and conditions of awards, and the circumstances under which awards may be canceled, forfeited or suspended. The administrator of the applicable Incentive Plan may modify and amend such Incentive Plan and appoint agents for the proper administration of such Incentive Plan and, with the consent of an award holder, amend an outstanding award agreement under each Incentive Plan. The administrator of the applicable Incentive Plan also may amend an outstanding award agreement under the 2014 Plan or the 2018 Plan without the consent of an award holder if (i) the administrator determines that such amendment does not materially adversely affect the rights of the award holder, (ii) is necessary or advisable to carry out the purposes of the award as a result of a new or modified law or (iii) to the extent the award agreement specifically permits the amendment without the award holder's consent. Shares Subject to the Incentive Plans. The Incentive Plans collectively permitted the issuance of up to 285,000 shares of our common stock pursuant to awards granted under the Incentive Plans, of which 150,000 shares were issuable 19 under the 2007 Plan, 75,000 shares were issuable under the 2014 Plan and 60,000 shares were issuable under the 2018 Plan. Awards may be made under the Incentive Plans as stock options, restricted stock awards, restricted stock units, performance share awards, as well as awards such as stock appreciation rights, performance units, performance shares, bonus share and dividend share awards payable in the form of common stock or cash. If shares are issued pursuant to an award that was substituted in replacement of stock or stock-based awards held by current and former employees or non-employee directors of another business that is, or whose stock is, acquired by us or an affiliate in connection with a corporate transaction, those shares would not count against the authorized limit of shares available for issuance under the The shares issued under the Incentive Plans may consist, in whole or in part, of authorized and unissued shares or treasury shares, and to the extent any award under any Incentive Plan is exercised, terminates, expires or is forfeited without payment being made in the form of common stock, the shares subject to such award that were not issued will again be available for distribution under such Incentive Plan. In addition, if a stock appreciation right is settled in shares, only the number of shares of common stock delivered in settlement of it will count against the applicable Incentive Plan's share issuance limit, regardless of the original number of the underlying shares of common stock. If any shares subject to an award are withheld or applied as payment in connection with the exercise of an award (including the withholding of shares on the exercise of a stock appreciation right that is settled in shares) or, except for shares of restricted stock, the withholding or payment of taxes related thereto, those shares will continue be available for grant under the applicable Incentive Plan and will not count against the authorized limit. With respect to awards, each Incentive Plan places limits on the maximum amount of shares that may be granted in any one year under such Incentive Plan. No participant may receive awards under the 2007 Plan, the 2014 Plan or the 2018 Plan that cover in the aggregate more than 75,000 shares, 35,000 or 20,000 shares, respectively, in any one year. For purposes of Code Section 162(m), this limit applies to any stock options or stock appreciation rights that would be granted to a single participant in a single calendar year. This limit also is subject to adjustment for changes in our company's capital structure. As of November Stock Options. Both incentive stock options and nonqualified stock options may be granted under the Incentive Plans. The per-share exercise price of an option is set by the administrator of the applicable Incentive Plan and generally may not be less than the fair market value of a share of our common stock on the date of grant. Options granted under each Incentive Plan are exercisable at the times and on the terms established by the administrator of such Incentive Plan. The maximum term of an option is ten years from the date of grant. The aggregate fair market value (as of the grant date) of common stock with respect to which incentive stock options are exercisable for the first time by a participant during any calendar year (under any Incentive Plan or under any other plan of our company or its affiliates which qualifies as an incentive stock option plan under Code Section 422) may not exceed $100,000. To the extent such fair market value exceeds $100,000 during any calendar year, amounts in excess of $100,000 are treated as nonqualified stock options. Stock Appreciation Rights. A stock appreciation right or "SAR" is the right to receive payment of an amount equal to the excess of the fair market value of a share of common stock on the date of exercise of the stock appreciation right over the grant price of the stock appreciation right. The administrator of each Incentive Plan has complete discretion to determine the number of SARs granted to any participant and the terms and conditions pertaining to such SARs. Restricted Stock and Restricted Stock Unit Grants. Each Incentive Plan permits the grant of restricted stock or restricted stock unit awards. Restricted stock and restricted stock units may be issued or transferred for consideration or for no consideration, as determined by the administrator of the applicable Incentive Plan. The administrator of each Incentive Plan may establish conditions under which restrictions on shares of restricted stock or restricted stock units lapse over a period of time or according to such other criteria as the administrator deems appropriate, including the achievement of specific performance goals. 20 Performance Unit and Performance Shares. Each Incentive Plan permits the grant of performance units and performance share awards which are bonuses payable in cash, common stock or a combination thereof. Each performance unit and performance share will represent the right of the participant to receive an amount based on the value of the performance unit/share, if performance goals established by the administrator of the applicable Incentive Plan are met. A performance unit will have a value based on such measurements or criteria as the administrator determines. A performance share will have a value equal to the fair market value of a share of our common stock. When an award of these are granted, the administrator of the applicable Incentive Plan will establish a performance period during which performance will be measured. At the end of each performance period, the administrator will determine to what extent the performance goals and other conditions of the performance units/shares are met. Bonus Shares and Deferred Shares. Each Incentive Plan permits the grant of shares to participants from time-to-time as a bonus. Such shares may be paid on a current basis or may be deferred and paid in the future. Our board of directors or the administrator of the applicable Incentive Plan may impose such conditions or restrictions on any such deferred shares as it may deem advisable, including time-vesting restrictions and deferred payment features. Restrictions on Transfer. Awards under each Incentive Plan generally are not transferable by the recipient other than by will or the laws of descent and distribution and generally are exercisable, during the recipient's lifetime, only by the recipient. Any amounts payable or shares issuable pursuant to an award generally will be paid only to the recipient or the recipient's beneficiary or representative. Changes in Capital or Corporate Structure. If, without the receipt of consideration by our company, there is any change in the number or kind of shares of our common stock outstanding by reason of a stock dividend or any other distribution upon the shares payable in stock, or through a stock split, subdivision, consolidation, combination, reclassification or recapitalization, the maximum number of shares of our common stock available for grants, the maximum number of shares of our common stock that any individual participating in an Incentive Plan may be granted in any year, and the number of shares covered by outstanding grants may be appropriately adjusted to reflect any increase or decrease in the number of issued shares of our common stock to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under such grants. Any fractional shares resulting from such adjustment will be rounded up to the nearest whole share. The purchase or exercise price payable by any plan participant with respect to any award also will be adjusted upon the occurrence of any of the events referred to above so that there will be no change in the aggregate price payable by such participant. Adjustments determined by the administrator of the applicable Incentive Plan are final, binding and conclusive. If our company undergoes a "change of control," as that term is defined in the applicable Incentive Plan, each option, share of restricted stock and other grant held by a non-employee director will, without regard to any vesting schedule, restriction or performance target, automatically become fully exercisable or payable, as the case may be, as of the date of the change of control. Change of Control Agreements On December 29, 2006, we entered into a change of control agreement with Christopher H. Atayan, our Chief Executive Officer. Such agreement is referred to in this section as an "Agreement." The initial term of the Agreement extended for two years until December 31, 2008. Beginning on December 31, 2007 and each December 31 following, the Agreement term automatically extends for one additional year unless we give the officer notice by September 30 of that year. In addition, if a change in control (as that term is defined in the Agreement) occurs during the term of the Agreement, the term of the Agreement will continue for a period of 24 months after the month in which such change in control occurred. The Agreement requires Mr. Atayan to remain in our employ for a period of six months after a change in control, unless involuntarily terminated by us other than for cause (as that term is defined in the Agreement) or terminated by the officer for good reason (as that term is defined in the Agreement). If a change of control event occurs and the term of the Agreement has not expired, we will owe the applicable officer the following: If employment is terminated by our company for cause or by the officer other than for good reason, we will pay the officer his or her full base salary through the date of termination plus all other amounts to which the officer is then entitled under any of our compensation or benefit plans. If employment terminates by reason of death, benefits will be determined in accordance with our retirement, survivor's benefits, insurance and other applicable programs and plans then in effect. If employment is terminated by our company (other than for cause or disability) or by the officer for good reason, the officer will be entitled to the following benefits:
The following table shows the potential payments upon certain events, including termination of employment before and after a change of control of our company, for each of the named executive officers if the termination and change of control had occurred on September 30,
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Mr. Atayan's annual base salary rate in effect immediately prior to termination of employment, and the average of the actual bonus awarded to Mr. Atayan, if any, for the three years immediately preceding termination of employment. This amount (subject to pro rata reduction to the extent that Mr. Atayan is age 65 or over during the three years immediately following the termination of employment) would be payable in a lump sum on the first day following the six month anniversary of the date of employment termination.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS Our company's policy is that all transactions between us and our officers, directors and/or five percent stockholders will be on terms no more favorable to those related parties than the terms provided to independent third parties. INDEPENDENT AUDITOR FEES AND SERVICES Independent Auditor Fees and Services The following table presents fees for professional audit services rendered by our independent registered public accounting firm for the audit of our annual financial statements for our
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In making its determination regarding the independence of RSM US LLP, our audit committee considered whether the provision of the services for which we incurred the "Audit-Related Fees," "Tax Fees," and "All Other Fees" was compatible with maintaining such independence. Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services Pursuant to its charter, the audit committee of our board of directors is responsible for reviewing and approving, in advance, any audit and any permissible non-audit engagement or relationship between our company and its independent auditor. Our engagement of RSM US LLP to conduct the audit of our company for our 23 The audit committee of our board of directors has adopted the following guidelines regarding the engagement of our independent registered public accounting firm to perform services for our company: The audit committee will pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for our company by its independent registered public accounting firm, subject to the exceptions for non-audit services described in Section 10A(i)(1)(B) of the Securities Exchange Act of 1934 which must be approved by the audit committee prior to the completion of the audit. AUDIT COMMITTEE REPORT The audit committee of our board of directors currently is composed of three members of our board of directors, all of whom meet the independence requirements of the SEC and the NYSE American. The audit committee operates under a written charter adopted by our board of directors, and assists the board in fulfilling its responsibilities with respect to accounting and financial reporting practices and the scope and expense of audit and related services provided by our independent registered public accounting firm. The audit committee also selects our company's independent registered public accounting firm, which selection is then submitted to our stockholders for ratification. Management is responsible for our company's internal controls and the financial reporting process. Our independent registered public accounting firm, RSM US LLP, is responsible for performing an independent audit of our company's consolidated financial statements and issuing an opinion on the conformity of those audited consolidated financial statements with U.S. generally accepted accounting principles. The audit committee's responsibility is to monitor and oversee these processes and to report to our board of directors on its findings. In this context, the audit committee has met and held discussions with management and the independent registered public accounting firm. Management represented to the audit committee that our company's September 30, Our company's independent registered public accounting firm also provided to the audit committee the written disclosures and letter required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, and the audit committee discussed with the independent registered public accounting firm that firm's independence. The audit committee has considered whether the services provided under other non-audit services are compatible with maintaining the independence of RSM US LLP. The members of the audit committee are not professionally engaged in the practice of auditing or accounting. Members of the audit committee rely without independent verification on the information provided to them and on the representations made by management and the independent accountants. Accordingly, the audit committee's oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the audit committee's considerations and discussions referred to above do not assure that the audit of our company's financial statements have been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with U.S. generally accepted accounting principles, or that our company's auditors are in fact "independent." Based upon the audit committee's discussion with management and the independent registered public accounting firm, and the audit committee's review of the representation of management and the report of the independent registered public accounting firm to the audit committee, the audit committee recommended that our board of directors include the audited consolidated financial statements in our company's annual report on Form 10-K for the fiscal year ended September 30, The Audit Committee
STOCKHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING It is anticipated that next year's annual meeting of stockholders will be held on December If the stockholder proposal is intended for inclusion in our proxy materials for that meeting pursuant to SEC Rule 14a-8, our company must receive the proposal no later than July 20, 2021. Such proposal must also comply with the other requirements of the proxy solicitation rules of the SEC. If the stockholder proposal is to be presented without inclusion in our proxy materials for that meeting, our bylaws require that our company receive notice of the proposal no later than November 16, 2021. In addition, the stockholder must comply with the other advance notice provisions of our company's bylaws. See "Advance Notice of Stockholder Proposals" below. If the stockholder is to make a nomination for that meeting, our bylaws require that our company receive notice of the proposed nominee no later than November 16, 2021. In addition, the stockholder must comply with the other advance notice provisions of our company's bylaws. See "Advance Notice of Stockholder Proposals" below. Proxies solicited in connection with next year's annual meeting of stockholders will confer on the appointed proxies discretionary voting authority to vote on stockholder proposals that are not presented for inclusion in the proxy materials unless the proposing stockholder notifies our company by November ADVANCE NOTICE OF STOCKHOLDER PROPOSALS Under our bylaws, any stockholder wishing to submit a proposal for presentation at an annual meeting may do so by complying with its provisions, including providing written notice to our corporate secretary of the proposal within the specified time period. Any nominations, other than those made by or on behalf of our board of directors, and any proposal by any stockholder to transact any business at an annual or special stockholders' meeting, must be made by written notice mailed by certified mail to our corporate secretary. In the case of an annual meeting of stockholders, such notice must be received by our corporate secretary no later than 35 days prior to the date of the annual meeting; except that if less than 35 days' notice of the annual meeting is given to the stockholders, such notice must be received by our corporate secretary not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. In the case of a special meeting of stockholders, the stockholder's written notice of proposed business or nomination must be received by our corporate secretary not later than the close of business on the tenth day following the day on which (i) notice of the date of the special meeting was mailed or (ii) public disclosure of the date of the special meeting was made, whichever occurs first. A stockholder's proposal to transact any business at an annual or special stockholders' meeting 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 25 pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended, and the rules under such section. Only stockholders of record as of the record date for the annual meeting are entitled to bring business before the annual meeting or make nominations for directors. We urge you to examine our bylaws for the advance notice provisions, including a complete listing of the information required to be included in any such notice. You may request a copy of our bylaws by contacting our corporate secretary, Charles J. Schmaderer, at AMCON Distributing Company, 7405 Irvington Road, Omaha, NE 68122, Attention: Secretary.
Omaha, Nebraska November 26
ANNUAL MEETING OF THE STOCKHOLDERS OF AMCON DISTRIBUTING COMPANY DECEMBER The undersigned (whose signature appears on the reverse side) hereby appoints Christopher H. Atayan and Andrew C. Plummer, and each of them, jointly and severally, the agents and proxies of the undersigned, each with full power of substitution to attend the Annual Meeting of the Stockholders of AMCON Distributing Company (the The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement for the Meeting. Our board of directors recommends that you vote PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD IN THE ENCLOSED POST-PAID ENVELOPE
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