EXHIBIT 10.7
AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into this 15th day of December,
2004, by and between AMCON Distributing Company, a Delaware corporation (the
"Company"), AMCON Corp., a Delaware corporation ("Old AMCON"), and Xxxxxxxx
X. Xxxxx, President of the Company and Old AMCON.
WHEREAS, the Board of Directors of Old AMCON authorized the declaration of
a dividend of all of the stock of the Company to its stockholders (the "Spin-
Off Dividend") at a meeting held on February 11, 1994 which was effected on
February 25, 1994;
WHEREAS, all of the assets of Old AMCON, except for a Coors beer
distributorship and related assets, were assigned to the Company prior to the
Spin-Off Dividend, which assignment was intended to include the limited
recourse right of Old AMCON to be repaid the premium it had paid prior to the
Spin-Off;
WHEREAS, the Company has paid all of the premiums on the Split Dollar
Policy during the period from and after the Spin-Off Dividend, and recorded
as an asset on its balance sheet its limited recourse right to reimbursement
thereof;
WHEREAS, the parties desire to enter into this Agreement in order to
establish a written record that more clearly sets forth their understanding
and prior agreements and actions;
NOW, THEREFORE, the parties hereto agree as follows:
1. Old AMCON acknowledges and agrees that all of its rights and interests
in the Split Dollar Policy were assigned to the Company in connection with
the Spin-Off Dividend and that any Collateral Assignment should reflect the
Company as the assignee that is entitled to receive the repayment of all
premiums paid on the Split Dollar Policy, which repayment right is limited to
recourse to be paid from (i) the death benefit under the Split Dollar Policy,
(ii) the cash surrender value under the Split Dollar Policy if the Split
Dollar Policy is terminated prior to her death, or (iii) the proceeds from
any loan made under the Split Dollar Policy that has not been repaid as of
the date of Xxx. Xxxxx' death, as the case may be.
2. Xxx. Xxxxx acknowledges and agrees that the Company is entitled to
receive repayment of all premiums paid on the Split Dollar Policy (the total
amount of which is $75,352.98), which repayment right is limited to recourse
to be paid from (i) death benefit payable under the Split Dollar Policy, (ii)
the cash surrender value of the Split Dollar Policy if the Split Dollar
Policy is terminated prior to her death, or (iii) the proceeds from any loan
made under the Split Dollar Policy that has not been repaid as of the date of
Xxx. Xxxxx' death, as the case may be (the "Premium Repayment Liability").
Xxx. Xxxxx further agrees that she will execute a Collateral Assignment
reflecting the right of the Company to receive the Premium Repayment
Liability from (i) the death benefit payable under the Split Dollar Policy,
(ii) the cash surrender value of the Split Dollar Policy if the Split Dollar
Policy is terminated prior to her death, or (iii) the proceeds from any loan
made under the Split Dollar Policy that has not been repaid as of the date of
Xxx. Xxxxx' death, as the case may be.
3. The Company acknowledges and agrees that Xxx. Xxxxx is the sole owner of
the Split Dollar Policy and has all rights and benefits thereunder, including
the right to designate and change the designation of the beneficiary or
beneficiaries under the Split Dollar Policy, except for the Collateral
Assignment which recognizes the right of the Company to receive payment of
the Premium Repayment Liability, which repayment is limited to recourse to be
paid from (i) the death benefit payable under the Split Dollar Policy, (ii)
the cash surrender value of the Split Dollar Policy if the Split Dollar
Policy is terminated prior to her death, or (iii) the proceeds from any loan
made under the Split Dollar Policy that has not been repaid as of the date of
Xxx. Xxxxx' death, as the case may be.
4. This Agreement shall bind and inure to the benefit of the Company and
its successors and assigns, and to Xxx. Xxxxx and her heirs, executors,
administrators, assigns and the beneficiary or beneficiaries she last
designates under the Split Dollar Policy.
5. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Nebraska, without giving effect to its conflicts-of-
laws provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
the day and year first above written.
AMCON CORP.
By: /s/ Xxxx Xxxxxx
----------------------------
Name: Xxxx Xxxxxx
Title: Vice President
AMCON DISTRIBUTING COMPANY
By: /s/Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X.Xxxxx
Title: VP & CFO
/s/ Xxxxxxxx X. Xxxxx
------------------------
Xxxxxxxx X. Xxxxx
