EXHIBIT 10.13
AMCON DISTRIBUTING COMPANY
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT ("Agreement"), is made and entered as of December
12,
2006 (the "Granting Date"), by and between AMCON Distributing
Company,
a Delaware corporation (the "Company"), and Christopher H. Atayan
(the
"Optionee").
RECITALS
A. The Optionee is the
Chief Executive Officer of the Company and the
Company wants to grant the Optionee options to purchase shares
of
common stock of the Company (the "Common Stock") with respect to
the
Optionee's employment with the Company in order to more fully
align
the interests of the Optionee with the interests of the
Company's
stockholders as well as provide additional incentive for the
Optionee
to promote the success of its business through sharing in the
future
growth of such business.
B. The Compensation
Committee of the Board of Directors of the
Company (the "Compensation Committee") has granted the Optionee
an
option to purchase shares of Common Stock on the terms and
conditions
set forth in this Agreement, which option is subject to and
contingent
upon obtaining the stockholder approval contemplated by Section
1
hereof at the next Annual Meeting of Stockholders, and if such
stockholder approval is not obtained, this option shall
automatically
terminate.
C. This Agreement is
granted to the Optionee, and the shares issuable
upon exercise of the option shall be issued, in reliance on the
exemption from registration provided by Section 4(2) of the
Securities
Act of 1933, as amended (the "Securities Act") and Regulation D
thereunder.
AGREEMENT
In consideration of the mutual promises and covenants herein
contained
and other good and valuable consideration, the receipt and
sufficiency
of which are hereby acknowledged, the parties hereto do hereby
agree
as follows:
1. GRANT OF
OPTION.
(a) The Company hereby
grants to the Optionee as a matter of separate
inducement in connection with the Optionee's employment, but not
in
lieu of any salary or other compensation for the Optionee's
services,
the option (the "Option") to purchase from the Company, at the
times
and on the terms and conditions hereinafter set forth, all or part
of
an aggregate of 25,000 shares of Common Stock at the purchase price
of
$18.00 per share, which represents the closing trading price of
the
Company's Common Stock on the American Stock Exchange ("AMEX") on
the
day immediately prior to the Granting Date. Notwithstanding any other
provision of this Agreement, in order to satisfy the requirements
of
Section 711 of the AMEX Company Guide, the Option granted under
this
Agreement shall be automatically terminated in the event that it
is
submitted for approval by the holders of a majority of the shares
of
common stock of the Company voting (the "Requisite Stockholder
Approval") at the next Annual Meeting of Stockholders of the
Company
that is held after the date hereof and the Requisite
Stockholder
Approval is not obtained at such meeting.
(b) Exercises of this
Option may be honored by issuing authorized and
unissued shares of Common Stock or, at the election of the Company,
by
transferring shares of Common Stock which may at the time be held
by
the Company as treasury shares.
(c) The Option granted
hereunder is a non-qualified stock option and
is not an incentive stock option within the meaning of Section 422
of
the Internal Revenue Code of 1986, as amended, from time to time
(the
"Code").
2. TERMS OF OPTION.
The Option granted
hereunder may be exercised
from time to time by the Optionee by giving written notice of
exercise
to the Company specifying the number of shares to be purchased, and
by
payment of the purchase price therefor by either (i) cash or check
to
the order of the Company, or (ii) shares of stock of the
Company
having a fair market value equal to the purchase price on the
exercise
date, subject, however, to the following restrictions:
(a) Notwithstanding
any provision of this Agreement to the contrary,
the Option may not be exercised after the tenth anniversary of
the
date of this Agreement (the "Expiration Date").
(b) Subject to
Sections 7 of this Agreement, the Option is
exercisable only in the following maximum amounts: (i) no portion
of
this Option may be exercised before the first anniversary of
the
Granting Date, (ii) up to one-third of this Option (8,333.33
shares)
may be exercised after the first anniversary of the Granting
Date,
(iii) up to two-thirds of this Option (16,666.66 shares) may be
exercised after the second anniversary of the Granting Date and
(vi)
all of this Option may be exercised after the third anniversary of
the
Granting Date.
Notwithstanding the above sentence, but subject to
Section 7 of this Agreement, if there is a Change of Control of
the
Company and the surviving, continuing, successor or purchasing
corporation, partnership, limited liability company,
association,
trust, or other entity does not agree to assume the Option or
replace
the Option with an option, then this Option will become fully
exercisable. For
purposes of this Section 2(b), a "Change of Control"
means any of the following:
(i) the making of a
tender or exchange offer by any person or entity
or group of associated persons or entities (within the meaning
of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934
(the "Exchange Act")) (a "Person") (other than the Company or
its
subsidiaries) for shares of Common Stock pursuant to which
purchases
are made of securities representing at least fifty percent (50%)
of
the total combined voting power of the then issued and
outstanding
voting stock of the Company;
(ii) the merger or
consolidation of the Company with, or the sale or
disposition of all or substantially all of the assets of the
Company
to, any Person other than (A) a merger or consolidation which
would
result in the voting stock of the Company outstanding
immediately
prior thereto continuing to represent (either by remaining
outstanding
or by being converted into voting stock of the surviving or
parent
entity) fifty percent (50%) or more of the total combined voting
power
of the voting stock of the Company or such surviving or parent
entity
outstanding immediately after such merger or consolidation; or (B)
a
merger or consolidation effected to implement a recapitalization
of
the Company (or similar transaction) in which no Person is or
becomes
the beneficial owner, directly or indirectly (as determined under
Rule
13d-3 promulgated under the Securities Exchange Act of 1934),
of
securities representi
