15. COMMITMENTS AND CONTINGENCIES

Employment and Non-Compete Agreements

At June 30, 2020, the Company was a party to various employment agreements and non-compete and/or non-solicitation agreements with its employees, including employment agreements with Greg Roberts, our CEO, and Brian Aquilino, our COO, which both expire on June 30, 2023, and Thor Gjerdrum, our President, which expires on June 30, 2022. The employment agreements provide for minimum salary levels, incentive compensation and severance benefits, among other items.

Employee Benefit Plan

The Company maintains an employee savings plan for United States employees under the Internal Revenue Code section 401(k). Employees are eligible to participate in the plan after three complete calendar months of service and all contributions are immediately vested. Employees' contributions are discretionary to a maximum of 90% of compensation. For all plan members, the Company contributes 30% of the eligible employees' contributions on the first 60% of the participants' compensation to the IRS maximum annual contribution. The Company's matching 401(k) contributions totaled $276,000 and $263,000 for the years ended June 30, 2020 and 2019, respectively.

State and Local Tax Audits

The Company's filed Utah State tax returns remain under exam for the period ended June 30, 2014 through 2015. We have reached an informal settlement agreement with the State pending receipt of final audit stipulation. The impact of the settlement is immaterial to the financial statements. The Company received a routine Notice of Audit and is reviewing the information document request of its filed New York City tax return for the period ended June 30, 2017. We are unable to determine the outcome of this exam at this time.

In general, the U.S Federal and the majority of state and local examinations have been completed by the tax authorities for the respective jurisdictions or the statute of limitations have expired through the year ended June 30, 2016.

Operational Contingencies

In connection with the closing of the SilverTowne transaction, AMST entered into an exclusive distribution agreement with the Company with respect to the silver products produced by AMST which, among other things, set weekly minimum order quantities by A-Mark. The agreement has a three-year term, with two automatic two-year renewals (unless terminated prior thereto.)  The Company was initially required to order no less than 300,000 ounces of silver products per week on average during any consecutive four week period during the term of the agreement.  This initial commitment has been periodically adjusted, and as of June 30, 2020, the Company is required to order no less than 500,000 ounces of silver products per week. The price paid per ounce is mutually determined by both parties, and is subject to adjustments every six months during the term.

Additionally, in connection with the SilverTowne transaction, AMST entered into an exclusive supplier agreement, dated August 31, 2016, with Asahi, whereby Asahi agreed to supply all of AMST's requirements for refined silver used for producing the silver products as to which A-Mark has the exclusive right to distribute. The term of the agreement was initially for three years, with two automatic two-year term renewals (unless terminated prior thereto).  Pricing under the agreement is subject to adjustments every six months.

A-Mark has also guaranteed AMST's obligations under its agreement with Asahi to lease 100,000 ounces of refined silver. The lease term is for one year with an automatic one year renewal (unless terminated prior thereto), and the lease fees are subject to adjustments every six months.

Contingencies related to Purchase of Goldline

In connection with the acquisition of assets of Goldline LLC, the Company held back and deposited a portion of the original purchase price into escrow to serve as security for the seller’s indemnification obligations.  At June 30, 2019, $750,000 remained in escrow. In October 2019, the Company entered into a settlement agreement and mutual release with Goldline LLC, pursuant to which the Company received $460,000 from the escrow account and released Goldline from any further obligations relating to the acquisition.  The costs associated with the settlement of our purchase of Goldline were recorded as other income, net in the consolidated statements of income.

COVID-19

The Company is exposed to the effects of the COVID-19 pandemic.  The extent to which this outbreak ultimately impacts our results of operations, cash flows and financial condition will depend on future developments, which are highly uncertain and unpredictable, including new information which may emerge concerning the severity and duration of this outbreak and the actions taken by governmental authorities and us to contain it or treat its impact.