EXHIBIT 10.6
AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into this 10th day of
December, 2004, by and between AMCON Distributing Company, a Delaware
corporation (the "Company"), AMCON Corp., a Delaware corporation ("Old
AMCON"), and Xxxxxxx X. Xxxxxx, Chairman of the Board and Chief Executive
Officer 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, on May 12, 1989 Xx. Xxxxxx executed a collateral assignment in
favor of Old AMCON to authorize the insurer to repay the limited recourse
liability of Xx. Xxxxxx for the premiums paid for his benefit on the Split
Dollar Policy from (i) the death benefit of the Split Dollar Policy, (ii) the
cash surrender value of the Split Dollar Policy if the Split Dollar Policy is
terminated prior to his death, or (iii) the proceeds from any loan made under
the Split Dollar Policy that has not been repaid as of the date of Xx.
Xxxxxx'x death, as the case may be.
WHEREAS, the Company has paid the premiums on the Split Dollar Policy
during the period from the Spin-Off Dividend to October, 2002, and recorded
as an asset on its balance sheet, its limited recourse right to reimbursement
thereof;
WHEREAS, commencing in October 2002, the Company treated the full amount
of the premiums paid on the Split Dollar Policy as compensation to Xx.
Xxxxxx, he has been given a Form W-2 showing such amount as taxable
compensation and therefore the Company has no right to be repaid any of such
premiums that have been paid since October 2002; and
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 the Collateral Assignment by
Xx. Xxxxxx should therefore be replaced with a new Collateral Assignment
reflecting the Company as the assignee that is entitled to receive the
repayment of all premiums paid on the Split Dollar Policy prior to October
2002, 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, or
(iii) the proceeds from any loan made under the Split Dollar Policy that has
not been repaid as of the date of Xx. Xxxxxx'x death, as the case may be.
2. Xx. Xxxxxx acknowledges and agrees that the Company is entitled to
receive repayment of all premiums paid on the Split Dollar Policy prior to
October 2002 (the total amount of which is $574,852.50), 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 his death, or (iii)
the proceeds from any loan made under the Split Dollar Policy that has not
been repaid as of the date of Xx. Xxxxxx'x death, as the case may be (the
"Premium Repayment Liability"). Xx. Xxxxxx further agrees that he will
execute a new 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 his death, or
(iii) the proceeds from any loan made under the Split Dollar Policy that has
not been repaid as of the date of Xx. Xxxxxx'x death, as the case may be.
3. The Company acknowledges and agrees that Xx. Xxxxxx 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
new 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 his death, or (iii) the
proceeds from any loan made under the Split Dollar Policy that has not been
repaid as of the date of Xx. Xxxxxx'x 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 Xx. Xxxxxx and his heirs, executors,
administrators, assigns and the beneficiary or beneficiaries he 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
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Name: Xxxx Xxxxxx
Title: VP
AMCON DISTRIBUTING COMPANY
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Senior Vice President
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
