Exhibit 10.2

Guidelines for Issuance of Fiscal 2007 Restricted Share Awards
Adopted by the Human Resources Committee of the Board of Directors
of MGP Ingredients, Inc.

RECITALS:

1.                                       MGP INGREDIENTS, INC. has adopted the
Stock Incentive Plan of 2004 (the “Plan”).

2.                                      Under the provisions of Section 5 of the
Plan, the Committee may grant Stock Incentives in the form of Stock Awards.

3.                                      Under the provisions of the Plan, the
Committee may provide for Stock Awards in the form of restricted shares (herein
“Restricted Shares”) to such eligible persons as may be selected by the
Committee in its discretion.

Pursuant to the authority granted to it under the provisions of Section 13(c) of
the Plan, the Committee adopts the following guidelines with respect to the
issuance in 2005 of Stock Awards in the form of Restricted Shares.

A.                                   Terms of Awards of Restricted Shares. 
Restricted Shares awarded under the Plan in 2006 are subject to the following
terms and conditions.

(i)                                     Number of Shares.  The number of shares
issued to a Participant pursuant to a Stock Award in the form of Restricted
Shares shall be as determined by the Committee.

(ii)                                  Vesting.  Subject to the provisions of
paragraphs C and D of these Guidelines, Restricted Shares issued as Stock Awards
under the Plans shall vest (i.e., become owned by the Participant without a
substantial risk of forfeiture) only upon either (a) the Participant’s
completion of seven (7) full years of employment with the Company, commencing on
July 1, 2006 and ending on June 30, 2013, or (b) (1) the Participant’s
completion of three (3) full years of employment, commencing on July 1, 2006 and
ending on June 30, 2009 and (2) the satisfaction by the Company of a Performance
Measure, as specified below, established by the Committee (the “Restriction
Period”).

(c)                                  Performance Measure.  The Performance
Measure shall be earnings per share on a cumulative basis over the period
beginning on July 1, 2006 and ending on June 30, 2009 in the amount established
by the Committee on or prior to the date of the 2006 Stock Awards.  The
Company’s earnings per share shall be determined by the independent accounting
firm regularly engaged by the Company and, except as follows,  shall be
determined in accordance with generally accepted accounting principles.  The
Committee may

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determine whether the calculation of earnings per share should include or
exclude any unusual or non-recurring item or be adjusted to reflect any unusual
or non-recurring event, such as an acquisition, divestiture, change in
accounting principles or tax regulations. Without limiting the foregoing, in the
event of a sale by the Company of shares of its stock, a recapitalization, stock
split, stock dividend, combination or exchange of shares, merger, consolidation,
rights offering, reorganization or liquidation, or any other change in the
corporate structure or shares of the Company, the Committee may make such
equitable adjustments, designed to protect against dilution or enlargement, as
it may deem appropriate with respect to the Performance Measure.

B.                                     Forfeiture.  Except as provided in
paragraph C, if the employment of the Participant to whom Restricted Shares has
been issued terminates for any reason prior to the end of the Restriction
Period, such Restricted Shares shall be immediately forfeited by such
Participant and cancelled by the Company.

C.                                     Further Conditions on Vesting and
Forfeiture.

(i)                                     In the event of a Participant’s death,
Disability, Retirement or, in the sole discretion of the Committee, involuntary
termination of employment without cause, in any such case after one year from
the date of grant specified in the agreement evidencing the Stock Award but
prior to June 30, 2009,  the Restricted Shares issued to such Participant shall
vest, on the date the Committee determines that the Performance Measure has been
met, as to the number of Restricted Shares issued to such Participant multiplied
by a fraction, the numerator of which shall equal the number of months
(including fractional months as full months) that such Participant was employed
by the Company, commencing as of July 1, 2006 and ending on  the date of
termination of employment, and the denominator of which shall be thirty-six. 
The balance of Restricted Shares issued to such Participant shall be forfeited
by the Participant and cancelled by the Company. Pending determination by the
Committee that the Performance Measure has been met, the provisions of paragraph
E below shall continue to apply.

(ii)                                  If the Performance Measure is not
attained, then, in the event of a Participant’s death, Disability, Retirement
or, in the sole discretion of the Committee, involuntary termination of
employment without cause, in any such case after three years from the date of
grant specified in the agreement evidencing the Stock Award but prior to June
30, 2013, the Restricted Shares issued to such Participant shall vest on the
date of termination as to the number of Restricted Shares issued to such
Participant multiplied by a fraction, the numerator of which shall equal the
number of months of employment (including fractional months as full months) that
such Participant was employed by the Company, commencing as of July 1, 2006 and
ending on the date of termination of employment, and the denominator of which
shall be eighty-four.  The balance of Restricted Shares issued to such
Participant shall be forfeited by the Participant and cancelled by the Company.

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(iii)                               Any Restricted Shares shall become fully
vested in the Participant in the event of a Change of Control, as defined in the
Plan.

(iv)                              As used herein,  the term “Disability” shall
mean the inability of a Participant to perform substantially such Participant’s
duties and responsibilities due to a physical or mental condition that would
entitle such Participant to benefits under the Company’s Long-Term Disability
Plan (or any successor to the plan in effect on the date of adoption of these
Guidelines) or, if no such plan is in effect, such condition as would enable the
Participant to receive an award for permanent and total disability from the
Social Security Administration, and the term “Retirement” means the attainment
by the Participant of age 62.

(v)                                 The Committee’s determinations to permit
vesting in the event of involuntary terminations of employment without cause
need not be uniform and may be made selectively among participants, whether or
not such participants are similarly situated.

D.                                    Issuance of Restricted Shares.  A
certificate or certificates representing the number of shares awarded as a Stock
Award in the form of Restricted Shares shall be issued from the Company’s
treasury shares and registered in the Participant’s name and may bear
substantially the following legend:

“The shares evidenced by this Certificate have been issued pursuant to the MGP
Ingredients, Inc. Stock Incentive Plan of 2004 and a related agreement (the
“Agreement”) between the Company and the registered holder.  The holder’s rights
are subject to the restrictions, terms and conditions of the Plan and to the
Agreement, which restricts the transfer of the shares and subjects them to
forfeiture to the Company under the circumstances referred to in the Agreement. 
This legend may be removed when the holder’s rights to the shares vest under the
Agreement.”

All certificates so registered in the Participant’s name shall be deposited with
the Company, together with stock powers or other instruments of assignment, each
endorsed in blank with a guarantee of signature deemed appropriate by the
Company which would permit transfer to the Company of all or a portion of the
Restricted Shares in the event such award is forfeited in whole or in part. 
Upon vesting and provision for taxes required to be withheld, such certificate
or certificates evidencing unrestricted ownership of the requisite number of
shares of Common Stock shall be delivered to the holder of such Stock Award.

E.                                      Rights with Respect to Restricted
Shares.  The holder of an award of Restricted Shares shall have the following
rights of a stockholder of the Company: voting rights and the right to receive
dividends during any applicable Restriction Period.

F.                                      Non-Assignability.  Except as may be
permitted by the Plan, until they have vested, Restricted Shares may not, by
operation of law or otherwise, be sold,

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assigned, transferred, pledged, hypothecated or otherwise disposed of by the
holder thereof or be subject to execution, attachment or other legal process.

G.                                     Provisions of Plan Apply.  Even though
not set forth herein or in any related grant agreement, the provisions of the
Plan applicable to Stock Awards, including those relating to adjustment of Stock
Awards, shall apply to Restricted Shares.

H.                                    Taxes.    No certificates evidencing
ownership of shares shall be delivered to the holder of a Stock Award upon
vesting until the holder makes such provision as the Company deems appropriate
for the payment of any taxes which the Company may withhold in connection with
the vesting of such Stock Award.   Withholding taxes resulting from vesting of
Stock Awards may be settled with cash or shares of the Company’s Common Stock in
accordance with the following guidelines.

(i)                                     Holders may deliver to the Company a
personal check satisfactory to the Company in the amount of the tax liability.

(ii)                                  Holders may elect to pay the tax liability
in shares of the Company’s Common Stock  by directing the Company to withhold
from the number of shares to be delivered upon vesting that number of shares
equal to the amount of the tax liability divided by the fair market value (as
defined by the Plan) of one share of the Company’s common stock on the date  the
tax to be withheld is to be determined (the “Tax Date”); or

(iii)                               Holders may elect to pay the tax liability
in shares of the Company’s Common Stock by delivering to the Company good and
marketable title to that number of shares of Mature Stock (as defined in the
Plan) owned by the holder as shall equal the amount of the tax liability divided
by the fair market value of one share of the Company’s common stock on the Tax
Date.

(iv)                              If a holder does not notify the Company on or
before the Tax Date as to the manner the holder wishes to provide for
withholding taxes, the Company may, without notice to the holder, satisfy its
withholding obligations as provided in clause (ii) above or any other manner
permitted by law.

(v)                                 No fractional shares will be issued in
connection with any election to satisfy a tax liability by paying in shares. 
The balance of any tax liability representing a fraction of a share will be
settled in cash by the Participant.

(vi)                              The amount of tax which may be paid  pursuant
to a stock payment election under clause (ii), (iii) or (iv) above  will be the
Company’s minimum required federal (including FICA and FUTA) and state
withholding amounts at the time of the election to pay the taxes with
surrendered or withheld shares.

(vii)                           The foregoing provisions  relating to the use of
stock to satisfy obligations may be unilaterally revised by the Committee from
time to time to conform the same to any applicable laws or regulations

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The undersigned Secretary of MGP Ingredients Inc. does hereby certify that the
foregoing Guidelines were adopted by the Human Resources Committee of the Board
of Directors of the Company on August 31, 2006.

 

 

/s/ Marta Myers

 

 

 

 

 

 

Marta Myers, Secretary

 

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