UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
o
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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American Consumers, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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AMERICAN CONSUMERS, INC.
P.O. Box 2328
Fort Oglethorpe, Georgia 30742
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
October 8, 2009
TO THE SHAREHOLDERS OF
AMERICAN CONSUMERS, INC.:
The Annual Meeting of the Shareholders of American Consumers, Inc. (“ACI” or the “Company”), will be held on Thursday, October 8, 2009, at 3:00 p.m. (E.D.T.) at ACI’s General Office, 55 Hannah Way, Rossville, Georgia, for the following purposes:
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1)
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To receive reports of officers pertaining to the operations of the Company during the fiscal year ended May 30, 2009;
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2)
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To elect a Board of Directors consisting of six (6) members; and
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3)
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To consider and act upon any other business that may properly come before the meeting.
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Only holders of record of ACI’s Common Stock, $.10 par value, at the close of business on August 31, 2009 are entitled to notice of and to vote at the meeting or any adjournment thereof.
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AMERICAN CONSUMERS, INC.
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/s/ Michael A. Richardson
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Michael A. Richardson
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Chairman
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Dated: September 8, 2009
PLEASE READ THE ATTACHED MATERIAL CAREFULLY, THEN COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY TO THE COMPANY IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO THAT YOUR SHARES OF COMMON STOCK WILL BE REPRESENTED AT THE MEETING. IF YOU ATTEND THE MEETING, YOU
MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON, SHOULD YOU SO DESIRE.
AMERICAN CONSUMERS, INC.
P.O. Box 2328
Fort Oglethorpe, Georgia 30742
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
October 8, 2009
INFORMATION ABOUT PROXY AND ANNUAL MEETING
The enclosed proxy is solicited by American Consumers, Inc. (“ACI” or the “Company”), for use at the Annual Meeting of Shareholders to be held at ACI’s General Office, 55 Hannah Way, Rossville, Georgia, on Thursday, October 8, 2009 at 3:00 p.m. (E.D.T.) and at any
adjournment or adjournments thereof (the “Annual Meeting”). The proxy agents named in the enclosed proxy have been selected by the Board of Directors. The expense of solicitation of proxies will be borne by ACI. The proxy and this proxy statement are being mailed to shareholders on or about September 8, 2009. To obtain directions to be able to attend the meeting and vote in person, you may contact our Corporate Secretary, Reba S. Southern, by mail at our
corporate office address as set forth above. Oral requests should be made by calling Ms. Southern at (706) 861-3347 during regular business hours, Eastern Time.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on October 8, 2009:
The Company’s Notice of Annual Meeting and Proxy Statement for the Annual Meeting are also available at
https://www.sendd.com/EZProxy/?project_id=339
.
Shares represented at the meeting by properly executed proxies will be voted in accordance with the instructions indicated in the proxies unless such proxies have previously been revoked. If no instructions are indicated, such shares will be voted (i) to fix the number of directors
for the ensuing fiscal year at six (6) and to elect the Board of Directors’ six (6) nominees for director as set forth in this proxy statement and (ii) in the best judgment of the proxy agents, for such other matters as properly come before the Annual Meeting.
Any proxy given pursuant to this solicitation may be revoked at any time by the shareholder giving it, insofar as it has not been exercised, by delivering to the Secretary of the Company a written notice of revocation bearing a later date than the proxy, by submission of a later-dated, properly
executed proxy, or by revoking the proxy in person and voting at the Annual Meeting. Any shareholder of record who attends the Annual Meeting may personally announce his intention to vote the shares standing in his name as record holder and vote such shares, and for purposes of such vote, suspend any proxy (other than an irrevocable proxy) theretofore given by him. If your shares are held in street name and you wish to vote in person at the meeting, you will need to obtain a “legal
proxy” from the broker, bank or other nominee that holds your shares of record. Any written notice revoking a proxy should be sent to American Consumers, Inc., P.O. Box 2328, Fort Oglethorpe, Georgia 30742, Attention: Reba S. Southern, Secretary.
PROPOSALS OF SECURITY HOLDERS FOR 2010 ANNUAL MEETING
In accordance with current rules of the Securities and Exchange Commission, any shareholder wishing to submit a proposal for inclusion in the Company’s Proxy Materials must submit the proposal to ACI at its General Office, 55 Hannah Way, Rossville, Georgia 30741, at least one hundred twenty
(120) days in advance of the date corresponding with the date of the prior year’s proxy statement. To submit proposals for inclusion in the Company’s Proxy Materials for the Annual Meeting of Shareholders in 2010,
shareholder proposals must be received by the Company not later than May 11, 2010. A shareholder who intends to present a proposal at the Annual Meeting of Shareholders in 2010, other than pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, must provide the Company with notice of such intention by at least July 25,
2010 or the designated proxy holders will have discretionary voting authority at the 2010 Annual Meeting with respect to any such proposal without the matter having been discussed in the Company’s proxy materials.
RECORD DATE, VOTE REQUIRED AND RELATED MATTERS
Holders of record of ACI’s Common Stock, $.10 par value (the “Common Stock”), at the close of business on August 31, 2009, will be entitled to notice of and to vote at the Annual Meeting. The number of shares of outstanding Common Stock entitled to vote as of August
31, 2009, was 766,352 shares having one vote each on all matters properly brought before the meeting, exercisable in person or by properly executed proxy. Cumulative voting is not permitted.
A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum. If a quorum is present, the affirmative vote of a plurality of the shares represented at the meeting and entitled to vote shall be the vote necessary to elect a director. Shares
represented at the meeting by properly executed proxies that reflect abstentions or represent “broker non-votes” (indications by brokers that they do not have discretionary authority to vote on a particular matter with respect to such shares) will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Abstentions and broker non-votes, however, do not constitute a vote “for” or “against” any matter and thus
will be disregarded in the calculation of a plurality or of “votes cast.” Accordingly, abstentions and broker non-votes will have no effect on the outcome of the election of directors at the Annual Meeting, assuming the presence of a quorum.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information as to each person known to ACI to be the beneficial owner of more than five percent (5%) of its outstanding Common Stock and the amount and nature of such beneficial ownership by all directors and officers of ACI as a group, as of August
31, 2009.
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Title of Class
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Name and Address of
Beneficial Owner
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Amount and Nature of
Beneficial Ownership
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Percent of
Class
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Common Stock
$.10 par value
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ZBR, Inc. (2)
P.O. Box 2328
Fort Oglethorpe, GA 30742
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484,000(2)
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63.16%
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Common Stock
$.10 par value
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Michael A. Richardson (3)
P.O. Box 1230
LaFayette, GA 30728
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488,455(2)(4)(5)
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63.74%
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Common Stock
$.10 par value
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Diana K. Richardson (3)
P.O. Box 1230
LaFayette, GA 30728
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488,675(4)(5)
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63.77%
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Common Stock
$.10 par value
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All Directors & Officers
As a group (7 persons)
P.O. Box 2328
Fort Oglethorpe, GA 30742
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496,157
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64.74%
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Notes to Principal Shareholders Ownership Table
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(1) A person is deemed to be the “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or direct the voting of such security, or “investment power,” which includes the power to dispose
of or to direct the disposition of such security, or if, under certain circumstances, a person has the right to acquire either voting power or investment power over such security through the exercise of an option or other contractual right. More than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he has no personal economic interest or which he may not vote. Except as otherwise noted,
all shares included in the table are owned by the persons specified with sole voting and sole investment power.
(2) ZBR, Inc. (“ZBR”) is a closely held corporation of which Michael A. Richardson and Diana K. Richardson are officers and directors. ZBR owns 484,000 shares of Common Stock. Paul R. Cook, Executive Vice President and Treasurer of the Company,
holds a 15% equity interest in ZBR but does not possess any voting or investment power with respect to shares of the Company’s Common Stock held by ZBR.
(3) Diana K. Richardson is the wife of Michael A. Richardson. Thomas L. Richardson, a director of ACI, is the uncle of Michael A. Richardson.
(4) This includes 484,000 shares owned by ZBR as to which (s)he exercises shared voting and investment power. See note (2).
(5) This includes 4,455 shares jointly owned by Michael A. Richardson and Diana K. Richardson as to which they exercise shared voting and investment power.
ELECTION OF DIRECTORS
Under ACI’s By-Laws, not less than three (3) nor more than twenty-five (25) directors may be elected at the Annual Meeting. The Company’s Board of Directors recommends that the number of directors which shall constitute the Board of Directors be fixed at six (6) for the
ensuing fiscal year and that the six (6) nominees listed below be elected to serve for a term of one year or until their successors have been duly elected and qualified. The Board of Directors does not have a nominating committee. A description of the policies followed by the full Board of Directors in selecting director nominees is presented below under the heading “Director Nomination Process and Independence Determinations.”
If any of the nominees should become unavailable, the discretionary authority provided in the proxy will be exercised to vote for a substitute. The Board of Directors has no reason to believe that any of the nominees will become unavailable to serve. In any event, the enclosed
proxy cannot be voted for a greater number of persons than the number of directors set by the shareholders.
INFORMATION ABOUT NOMINEES FOR DIRECTOR
The information set forth below, in regard to the principal occupation or employment of each nominee during the past five (5) years and in regard to the beneficial ownership of securities of each nominee, has been furnished to the Company by the respective nominee.
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Name and Position with ACI
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Age
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Principal Occupation or
Employment
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Director Since
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Shares Beneficially
Owned As Of
August 31, 2009 (1)
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Percent of Class
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Michael A. Richardson (3)
Chairman of the Board
President
Chief Executive Officer
Executive Committee
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Chairman of ACI since
April, 1991;
President of ACI since
January, 1987.
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1973
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488,455 (2)(4)(5)
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63.74%
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Paul R. Cook
Executive Vice President
Chief Financial Officer
Treasurer
Executive Committee
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59
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Executive Vice President/
Treasurer and Chief Financial
Officer since April 1991.
Director of Capital Bank,
Fort Oglethorpe, GA
since May 1993.
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1991
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1,375 (2)(6)
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*
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Virgil E. Bishop
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70
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Retired since 2006.
Vice President of ACI
from 1969 to 2006.
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1987
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490
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*
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Danny R. Skates
Audit Committee
Compensation Committee
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56
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Vice President of Jackson
Chevrolet, Pontiac, Buick,
GMC
since December 1989.
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2001
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None
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*
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Thomas L. Richardson (3)
Audit Committee
Compensation Committee
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79
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Chairman and Former CEO of
Learning Labs, Inc.
(distributor of educational
equipment) since 1967
(Retired).
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1970
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5,837
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*
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Andrew V. Douglas
Audit Committee
Compensation Committee
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80
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Retired since 1995; Retail
Counselor for Fleming
Companies, Inc. prior to 1995.
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1998
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None
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*Less than 1% of total common shares outstanding.
(6) This includes 1,320 shares jointly owned by Mr. Cook and his wife, as to which they exercise shared voting and investment power.
Additional footnote references are explained above in the “Principal Shareholders” section.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and regulations of the Securities and Exchange Commission (“SEC”) thereunder require the Company’s executive officers and directors and persons who own more than 10% of the Company’s Common Stock, as well as certain
affiliates of such persons, to file initial reports of ownership and periodic transaction reports covering any changes in ownership with the SEC. Executive officers, directors, and persons owning more than 10% of the Company’s Common Stock are required by SEC regulations to furnish the Company with copies of all such reports they file. Based solely on its review of the copies of such reports received by it and written representations that no other reports were required for such persons,
the Company believes that, during fiscal year 2009, all filing requirements applicable to its executive officers, directors, and owners of more than 10% of the Company’s Common Stock were satisfied.
DIRECTORS’ COMMITTEES AND ATTENDANCE
The Board held four meetings in the fiscal year ended May 30, 2009.
Audit Committee
. ACI has an Audit Committee, presently composed of Messrs. Danny R. Skates (Chairman), Thomas L. Richardson, and Andrew V. Douglas, which assists the Board of Directors in providing oversight with respect
to the Company’s financial statements and the financial reporting process. Each of the three members of the Audit Committee has been determined by the Board to be an independent, non-employee director. In determining whether the members of the Audit Committee are independent, the Company’s Board of Directors has applied the independence criteria for audit committee members set forth in Rules 5605(a)(2) and 5605(c)(2)(A) of The NASDAQ Stock Market’s listing standards. The
Audit Committee selects, reviews and evaluates the independent auditors to be employed by the Company. The Audit Committee also approves the services to be rendered to the Company by its independent auditors. The Audit Committee also may, but is not required to, undertake investigations of any matter of a financial nature and make recommendations to the Board of Directors with respect thereto. During fiscal year 2008, the Board of Directors adopted a written charter for the Audit
Committee, a copy of which was included as an annex to the Company’s Proxy Statement for its 2008 Annual Meeting of Shareholders. The Audit Committee met five times during the fiscal year ended May 30, 2009.
Compensation Committee
. ACI also has a Compensation Committee, the composition of which is identical to that of the Audit Committee (Messrs. Danny R. Skates (Chairman), Thomas L. Richardson, and Andrew V. Douglas). The
Compensation Committee administers the Company’s bonus plan, annually reviews and recommends compensation for all officers of the Company and submits its recommendations to the Board. As part of its process of review, the Committee receives recommendations from the Company’s senior management, and gives particular weight to the recommendations of the Company’s Chairman and Chief Executive Officer, Mr. Michael A. Richardson, with regard to the compensation of all officers other than
himself. The Committee has one regular meeting during the first quarter of each fiscal year to consider compensation, and meets on an as needed basis at other times during the year. The Board of Directors has not adopted a written charter for the Company’s Compensation Committee. Each of the three members of the Compensation Committee has been determined by the Board to be an independent, non-employee director, applying the independence criteria set forth in Rule 5605(a)(2)
of The NASDAQ Stock Market’s listing standards, as discussed below. The Compensation Committee met once during the fiscal year ended May 30, 2009.
During fiscal 2009, all of the Company’s Board Members, except Andrew V. Douglas, attended more than 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings of any committee on which that director served. All directors
are invited and encouraged to attend the annual meeting of shareholders. In general, all directors attend the annual meeting of shareholders unless they are unable to do so due to unavoidable commitments or intervening
events. All of the Company’s incumbent directors attended the 2008 annual meeting of shareholders except for Michael A. Richardson, who was absent due to illness.
DIRECTOR NOMINATION PROCESS AND INDEPENDENCE DETERMINATIONS
The Board of Directors does not have a nominating committee. Prior to the death in 2006 of director Jerome P. Sims, Sr., a majority of the Board of Directors was comprised of independent, non-employee directors and, in accordance with a prior resolution of the Board, director nominees
were chosen by the entire Board with full participation by all of the independent directors. The Board has elected, at present, not to fill the vacancy created by Dr. Sims’ passing. Instead, as a means of preserving the leading role of the independent directors in the director nomination process without the formal creation of a new committee, the Board has adopted a resolution which requires that, in order to be nominated for election as a director of the Company, each nominee
must be approved by a majority vote of the full Board which also includes the affirmative votes of a majority of the Company’s three independent directors. Additionally, the Board has rarely been called upon to fill any vacancies. Accordingly, the Board still does not consider it necessary for the Company to have a nominating committee at this time. The Board of Directors considers the performance of directors in determining whether to nominate them for re-election. In
selecting nominees for director, the Board does not operate pursuant to a charter; however, the Board has adopted the resolution described above addressing the director nomination process.
The Board has determined that each of the Company’s directors is independent, as defined by Rule 5605(a)(2) of The NASDAQ Stock Market’s listing standards, except for Michael A. Richardson, Paul R. Cook and Virgil E. Bishop, all of whom are current or former executive officers of the Company (Mr. Bishop having retired as a Vice
President of ACI in 2006). As noted above, the Board also has determined that each of the three non-employee directors who serve as members of the Audit Committee are independent directors pursuant to the independence criteria for audit committee members set forth in Rules 5605(a)(2) and 5605(c)(2)(A) of The NASDAQ Stock Market. In making its independence determinations with respect to the Company’s three non-employee directors, the Board reviewed and considered the fact that Thomas
L. Richardson is the uncle of Michael A. Richardson. The Board also considered the fact that, while no such purchases occurred during fiscal 2009, during each of the past two fiscal years the Company purchased two new vehicles from Jackson Chevrolet, Pontiac, Buick, GMC, Inc., of which Danny R. Skates serves as Vice President. These vehicle purchases (like others which have occurred from time to time in prior years) were made on terms similar to those available to other commercial customers
of such dealership, and Mr. Skates has had no direct or indirect personal financial interest in any such transactions. In light of its consideration of all relevant factors, including the prior performance and contributions of each of the independent directors during their tenure as members of the Board, the Board of Directors determined that each of the Company’s independent directors is free of any relationship which, in the opinion of the Board of Directors, would interfere with his exercise
of independent judgment in carrying out the responsibilities of a director of the Company, as prescribed by NASDAQ Stock Market Rule 5605(a)(2).
In selecting director nominees, the Board of Directors will consider, among other factors, the existing composition of the Board and their evaluation of the mix of Board members appropriate for the perceived needs of the Company. The Board of Directors believes that continuity in leadership and board tenure maximizes the Board’s
ability to exercise meaningful oversight. In particular, the Board believes that it is important for directors of ACI to possess a thorough understanding of both the competitive challenges faced by a small grocery retailer such as the Company and the business climate in the communities in which our grocery stores operate. Because qualified incumbent directors generally are uniquely positioned to provide stockholders the benefit of continuity of leadership and seasoned judgment gained through
experience as a director of the Company, the Board will generally consider as potential candidates those incumbent directors interested in standing for re-election who they believe
have satisfied director performance expectations, including regular attendance at, preparation for and meaningful participation in Board and committee meetings.
Generally, the Board will consider stockholder recommendations of proposed director nominees if such recommendations are serious and timely received. To be timely, recommendations must be received in writing at the principal executive offices of the Company at least 120 days prior
to the anniversary date of mailing of the Company’s proxy statement for the prior year’s annual meeting. In addition, any stockholder director nominee recommendation must include the following information:
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the proposed nominee’s name and qualifications and the reason for such recommendation;
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the name and record address of the stockholder(s) proposing such nominee;
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the number of shares of stock of the Company which are beneficially owned by such stockholder(s); and
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a description of any financial or other relationship between the stockholder(s) and such nominee or between the nominee and the Company.
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In order to be considered by the Board, any candidate proposed by one or more stockholders will be required to submit appropriate biographical and other information equivalent to that required of all other director candidates.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Shareholders who wish to communicate with members of the Board, including the independent directors individually or as a group, may send correspondence to them in care of the Corporate Secretary at the Company’s corporate headquarters, P.O. Box 2328, Fort Oglethorpe, GA 30742. All
communications will be compiled by the Company’s Corporate Secretary and submitted to the Board or the individual Director(s) to whom such communication is addressed.
DIRECTOR COMPENSATION
The following table provides compensation information for the fiscal year ended May 30, 2009 for each member of our Board of Directors that does not qualify as a “named executive officer.” Pursuant to applicable SEC rules, director fees paid to Michael A. Richardson during
this period are included in the compensation reported for such “named executive officer” in the Summary Compensation Table set forth in the Executive Compensation section below.
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Name of Director
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Fees Earned
or Paid in Cash(1)
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All Other
Compensation
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Total
Compensation
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Paul R. Cook
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$3,600
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$72,165 (2)
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$75,765
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Virgil E. Bishop
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$3,600
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$ 833 (3)
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$ 4,433
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Danny R. Skates
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$3,600
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—
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$ 3,600
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Thomas L. Richardson
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$3,780
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—
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$ 3,780
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Andrew V. Douglas
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$3,780
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—
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$ 3,780
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(1)
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As described below, includes cash director fees at the rate of $300 per month, plus reimbursement for reasonable expenses incurred in attending Board and Board committee meetings.
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(2) The amount shown includes $72,165 of total compensation which Mr. Cook received related to his service as an executive officer of the Company, consisting of $66,976
in salary, $2,983 in annual bonus compensation, and $2,207 in other compensation (including $323 in Company contributions
allocated to his account under ACI’s 401(k) retirement plan and $432 in premiums paid by the Company for group term life insurance coverage
provided to Mr. Cook, as well as the personal use of company vehicles which are provided to certain officers and a 15% discount on groceries purchased from ACI, provided to all current and retired officers).
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(3)
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The amount shown represents a 15% discount on groceries purchased from ACI. Such discount is provided to all current and retired officers.
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Historically, all of the Company’s Directors have been compensated for their services as Directors at the rate of $300 per month, plus reimbursement for reasonable expenses incurred by non-employee directors in attending meetings of the Board of Directors and any Board committee on which
a director serves. Effective September 1, 2009, the directors’ compensation will increase to $325 per month, plus reimbursement for reasonable expenses incurred in attendance at meetings. Directors who are members of the Audit Committee and the Compensation Committee of the Board of Directors do not receive any additional compensation for such committee service.
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the compensation for Michael A. Richardson, the Company’s President and Chief Executive Officer, for each of the Company’s two most recent fiscal years. Mr. Richardson is the only “named executive officer”
in accordance with the applicable SEC rules, since no other executive officer of the Company received total compensation in excess of $100,000 for the Company’s most recent fiscal year.
SUMMARY COMPENSATION TABLE
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Name of Individual and Capacity
in which Such Individual Served
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Year
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Salary
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Bonus(1)
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All Other
Compensation(2)
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Total
Compensation
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Michael A. Richardson
President and
Chief Executive Officer
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2009
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$88,400
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$4,474
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$6,776
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$ 99,650
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2008
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$88,400
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$9,882
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$6,450
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$104,732
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(1)
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The Company has a policy of awarding discretionary cash bonuses to selected officers of the Company based on the results of operations. The amounts of such bonuses are determined by the Board of Directors, based upon the recommendation of the Compensation Committee. Individuals receiving such bonuses do not participate in the determination of the amount, if any, to be awarded.
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(2)
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The amounts shown include (i) $3,600 in fees paid to Mr. Richardson at the rate of $300 per month for his service as a director of ACI; (ii) Company contributions allocated to Mr. Richardson’s account under ACI’s 401(k) retirement plan ($433 for 2009 and $432 for 2008); and (iii) premiums paid by the Company for group term life insurance coverage provided to Mr. Richardson ($432 for 2009 and $297 for 2008). The
amounts shown for both fiscal years 2009 and 2008 also includes the personal use of company vehicles which are provided to certain officers and a 15% discount on groceries purchased from ACI, provided to all current and retired officers.
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ADDITIONAL INFORMATION CONCERNING EXECUTIVE COMPENSATION
Compensation of the Company’s executive officers, including its Chief Executive Officer, consists primarily of a base salary, representing a “not−at−risk” component intended to provide market rate compensation to our officers for fulfilling the responsibilities
of their respective positions, plus an “at−risk” component consisting of an opportunity for each of the Company’s key officers to receive a discretionary annual bonus based on a percentage determined by the Compensation Committee, which historically has been equal to 6% of the Company’s annual pre-tax income for the Chief Executive Officer. While the Chief Executive Officer also receives a monthly stipend for service as a director of ACI, these fees total $300 per month and
do not represent a significant proportion of his total compensation. Our officers also participate in the 401(k) retirement plan that ACI makes available to substantially all of its employees, and a portion of any annual, discretionary contributions made by the Company to this plan is
allocated to the account of each participating employee (including each participating executive officer). The Company’s compensation programs do not include extensive fringe benefits for either officer or non-officer employees. The opportunity to participate in group insurance benefits is made available to all full
time Company employees, including our officers. The Company pays 100% of the premiums for group life and disability insurance benefits provided under these plans, and pays a portion of the premiums for group medical insurance benefits. Finally, all current and retired officers receive a 15% discount on groceries purchased from ACI, and we also provide certain officer and non-officer employees, including the Chief Executive Officer, with Company supplied vehicles that are used primarily for
Company business.
The Company does not provide any compensation to its executive officers pursuant to any equity compensation or long-term incentive plans.
POTENTIAL PAYMENTS UPON TERMINATION
None of the Company’s officers, including the named executive officer listed above, have any employment, severance or change of control agreements with the Company. Accordingly, such officers will not receive compensation in connection with any termination of employment due
to death, disability, retirement or any other reason, except for such benefits as are available generally to all salaried employees under the Company’s 401(k) Plan, insurance and other benefits programs, and except for the Company’s policy of allowing retired officers, and the surviving spouse of any deceased officer, to continue to receive the same 15% discount on groceries purchased from ACI that is provided to all current and retired officers.
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF AMERICAN CONSUMERS, INC.
The Audit Committee of the Board of Directors, composed of Messrs. Danny R. Skates, Thomas L. Richardson and Andrew V. Douglas, has reviewed and discussed the audited financial statements of the Company for the year ended May 30, 2009 (“Audited Financial Statements”) with management
of ACI and with Hazlett, Lewis & Bieter, PLLC, the independent auditing firm for the Company. In addition, we have discussed with Hazlett, Lewis & Bieter, PLLC the matters required by Statement on Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
The Committee also has received the written report, disclosure and the letter from Hazlett, Lewis & Bieter, PLLC required by applicable requirements of the Public Company Accounting Oversight Board concerning such firm’s independence, and we have reviewed, evaluated, and discussed
with that firm the written report and its independence from the Company. The Committee also has discussed with management of the Company and its independent accountants such other matters and received such assurances from them as the Committee deemed appropriate.
Based on the foregoing review and discussions and relying thereon, the Committee has recommended to the Company’s Board of Directors the inclusion of the Audited Financial Statements in the Company’s Annual Report for the year ended May 30, 2009 on Form 10-K, to be filed with
the Securities and Exchange Commission.
THE AUDIT COMMITTEE
Danny R. Skates
Thomas L. Richardson
Andrew V. Douglas
CERTAIN TRANSACTIONS
During the fiscal year ended May 30, 2009, we reduced the Company’s borrowings under its unsecured notes payable to Michael A. and Diana K. Richardson and to Matthew Richardson, son of Michael A. Richardson by a net amount of $10,820 (reflecting payments of $11,318 net of $498 in additional
interest accrued). The outstanding balances remaining on such notes as of the end of the 2009 fiscal year following such repayments are $0 and $510, respectively, and the largest principal balances outstanding on such notes at any time during the Company’s fiscal year 2009 were $10,217 and $1,581, respectively. The interest rate on these borrowings at any given time is set at .25% less than the then-current base rate charged the Company by its principal lender, which resulted in an
effective interest rate of 5.75% at May 30, 2009. The Audit Committee of the Company’s Board of Directors has reviewed and approved the terms of these transactions in accordance with the requirement set forth in the Company’s Code of Business Conduct and Ethics that any transactions which present a potential conflict of interest must be reviewed and approved by the Audit Committee, following disclosure of all relevant facts and circumstances. In connection with its review, the
Audit Committee noted that the transactions are favorable to ACI, in that they allow the Company to finance a portion of its ongoing working capital requirements at a lower cost than is available through its bank financing, and concluded that the transactions do not present an inappropriate conflict of interest in light of all of the relevant circumstances reviewed by the Committee.
INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee, the Board of Directors has selected the firm of Hazlett, Lewis & Bieter, PLLC as independent certified public accountants to examine and report upon the financial statements of the Company for the fiscal year ending in 2010. Such
selection is subject to the negotiation of a reasonable fee for services to be rendered by the firm. A representative of Hazlett, Lewis & Bieter, PLLC is expected to be present at the Annual Meeting to respond to appropriate questions and will have an opportunity to make a statement if he so desires.
AUDIT FEES
The following table sets forth the fees paid to Hazlett, Lewis & Bieter, PLLC for services provided during ACI’s fiscal years 2009 and 2008:
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2009
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2008
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Audit Fees (1)
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$61,670
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$59,651
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Audit-Related Fees (2)
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10,250
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12,275
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Tax Fees (3)
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4,750
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4,750
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All Other Fees
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0
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0
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Total
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$76,670
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$76,676
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(1)
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Represents fees and expenses for professional services provided in connection with the audit of the Company’s annual financial statements, review of the Company’s quarterly financial statements and review of other SEC filings.
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(2)
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Represents fees for professional services provided in connection with the audit of the Company’s 401(k) retirement plan during both periods presented, and in connection with the Company’s response to an SEC comment letter received during fiscal 2008.
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(3)
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Represents fees for professional services provided in connection with the review of federal and state tax returns, employment tax consulting and other related services.
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It is the policy of the Audit Committee to pre-approve all services provided by its independent auditors. In addition, the Audit Committee has granted the Chairman of the Audit Committee the power to approve any modifications to the list of pre-approved non-audit services. None
of the fiscal 2009 and fiscal 2008 fees were approved by the Audit Committee pursuant to the de minimis exception of Rule 2-01(c)(7)(i)(C) of SEC Regulation S-X.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended May 30, 2009, including financial statements for the fiscal year and the comparable prior year period, including the notes thereto, accompanies this Proxy Statement.
DELIVERY OF PROXY MATERIALS TO SHAREHOLDERS
If you and other residents at your mailing address own our Common Stock in street name, your broker or bank may have sent you a notice, pursuant to applicable SEC rules, that your household will receive only one annual report and proxy statement for each company in which you hold shares through
that broker or bank. This practice of sending only one copy of proxy materials is known as “householding.” If you did not respond that you did not want to participate in householding, you may have been deemed to have consented to the process. If the foregoing procedures apply to you, your broker has sent one copy of our Annual Report and Proxy Statement to your address. However, even if your broker has sent only one copy of these proxy materials, you should
receive a proxy card for each shareholder in your household.
Any shareholder who wants to receive separate copies of the Annual Report and/or Proxy Statement in the future, or any shareholder who is receiving multiple copies and would prefer to receive only one copy per household, should contact the shareholder’s bank, broker or other nominee
holder of record. In any event, if you did not receive an individual copy of this Proxy Statement or our Annual Report, you can obtain a copy by contacting our Corporate Secretary, Reba S. Southern, by mail at our corporate office address as set forth above. Oral requests should be made by calling Ms. Southern at (706) 861-3347 during regular business hours, Eastern Time.
OTHER MATTERS
Reports of officers will be received by the Company’s shareholders at the Annual Meeting; such receipt will not constitute approval of the matters referred to in such reports.
Management knows of no matters to be presented for action at the Annual Meeting other than fixing the number of directors at six (6) and the election of directors for the ensuing fiscal year. If other matters should come before the meeting, the enclosed proxy confers upon the
persons named therein discretionary authority to vote such proxies in respect to any such other matters in accordance with their best judgment.
Dated: September 8, 2009
STOCKHOLDERS OF RECORD ON AUGUST 31, 2009 MAY OBTAIN COPIES OF ACI’S ANNUAL REPORT ON FORM 10-K (EXCLUDING EXHIBITS) AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY WRITING TO AMERICAN CONSUMERS, INC., ATT’N: CORPORATE SECRETARY, P.O. BOX 2328, FORT OGLETHORPE, GEORGIA, 30742.
AMERICAN CONSUMERS, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
October 8, 2009
THIS PROXY IS BEING SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
Michael A. Richardson and Paul R. Cook, and each of them, with full power to act alone in the absence of the other, are hereby authorized to vote the shares of the undersigned in American Consumers, Inc. (“ACI” or the “Company”) at its Annual Meeting of Shareholders to be held Thursday, October 8, 2009, or at any
adjournment or adjournments thereof (the “Annual Meeting”), upon the matters set forth below in the manner indicated and at the discretion of the persons named above on any other matter or matters which may properly come before the Annual Meeting and require the vote of shareholders:
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WITH ( ) WITHOUT ( ) authority to fix the number of directors for the ensuing fiscal year at six (6) and to vote for the election of the entire group of persons nominated for election to the Board of Directors (except as indicated below), consisting of Danny R. Skates; Michael A. Richardson; Thomas L. Richardson; Paul
R. Cook; Andrew V. Douglas; and Virgil E. Bishop, or for such substitute nominee or nominees named by the Board of Directors at the Annual Meeting if any of the foregoing nominees is unable to serve or will not serve.
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(You may withhold authority to vote for any nominee listed above by entering his name in the space below.)
If this proxy is executed and returned, it will be voted in accordance with your instructions indicated above unless revoked.
IN THE ABSENCE OF SUCH INDICATION, THIS PROXY WILL BE VOTED AFFIRMATIVELY FOR EACH OF THE LISTED NOMINEES.
The proxy may be revoked by you at any time before it is voted, and will in no way interfere with your right to vote in person if you attend the meeting.
IF ANY OF THE FOREGOING NAMED NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS IS UNABLE TO SERVE OR WILL NOT SERVE, THIS PROXY CONFERS DISCRETIONARY AUTHORITY TO VOTE AT THE ANNUAL MEETING FOR SUBSTITUTE NOMINEES SELECTED BY THE BOARD OF DIRECTORS. THE BOARD IS NOT AWARE OF ANY OTHER MATTER TO BE BROUGHT BEFORE
THE ANNUAL MEETING FOR A VOTE OF SHAREHOLDERS. IF, HOWEVER, OTHER MATTERS ARE PROPERLY PRESENTED, THIS PROXY CONFERS DISCRETIONARY AUTHORITY TO VOTE UPON SUCH MATTERS IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXY HOLDERS.
This proxy should be dated, signed by the shareholder, and returned promptly in the enclosed envelope. Persons signing in a fiduciary capacity should so indicate.
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DATED
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, 2009
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Signature of Shareholder
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