Exhibit
4.3


 


MGP INGREDIENTS,
INC.


NON-EMPLOYEE
DIRECTORS’ RESTRICTED STOCK PLAN


(as amended)


 


1.                                      Introduction


 


1.1                               The Plan; Effective Date; Duration.  This MGP Ingredients, Inc. Non-Employee
Directors’ Restricted Stock Plan (the “Plan”) shall be effective as of the date
of the 2006 Annual Meeting of Stockholders, if approved by stockholders at such
Annual Meeting.  No award shall be made
under the Plan after October 31, 2016. 
This Plan is intended to be exempt from the provisions of Section 409A
of the Internal Revenue Code of 1986, as amended, as a plan which provides for
the transfer of restricted property as described in Prop. Reg. §
1.409A-1(b)(6), and is to be construed in accordance with this intent.


 


1.2                               Purpose.  The purpose of the Plan is to provide each
non-employee member (“Director”) of the Board of Directors (the “Board”) of MGP
Ingredients, Inc. (the “Company”) with awards (“Restricted Stock Awards”)
of shares of common stock, no par value (“Stock”), of the Company, subject to
the restrictions and other provisions of the Plan.  It is intended that the plan will (a) provide
a means of compensating Directors that will help attract and retain qualified
candidates to serve as Directors, and (b) permit Directors to increase
their stock ownership and proprietary interest in the Company and their
identification with the interests of the Company’s stockholders.


 


1.3                               Shares of Stock Available Under the Plan.


 


(a)                                 Subject
to the provisions of clause (c) below, the number of shares of Stock that
may be delivered under the Plan during the term of the Plan is One Hundred
Seventy Five Thousand (175,000). If there is an insufficient number of shares
available to deliver to all Directors on any date as of which an award is made,
the available shares shall be delivered to Directors on such date pro-rata.


 


(b)                                 Shares
of Stock awarded under the Plan (“Restricted Stock”) will be previously-issued
shares of Stock reacquired by the Company, including shares purchased in the
open market.


 


(c)                                  Appropriate
and equitable adjustment shall be made in the number and kind of shares of
Stock available under the Plan and covered by Restricted Stock Awards in the
event of any recapitalization, reorganization, merger, consolidation, spin-off,
combination, repurchase, exchange of shares or other securities of the Company,
stock split, reverse stock split, stock dividend, extraordinary dividend,
liquidation, dissolution, or other similar corporate transaction or event
affecting the Company. If any such adjustment would result in a fractional
security being (i) available under this Plan, such fractional security
shall be disregarded; or (ii) subject to an award under this Plan, the
Company shall pay the holder of such award an amount in cash determined by multiplying
(x) the fraction of such security (rounded to the nearest hundredth) by (y)  the
Fair Market Value thereof on the date of such adjustment. The decision of the
Committee


 


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(as defined in Section 3.1)
regarding such adjustment or substitution shall be final, binding and
conclusive.


 


2.                                      Restricted Stock Awards


 


2.1                               Award Dates.


 


(a)                                 During
the term of this Plan, commencing in 2006, each Director in office on the first
business day following the date of each annual meeting of stockholders (“Annual
Meeting”) shall be awarded shares of Restricted Stock with a Fair Market Value
of $12,500, as determined on such first business day following the Annual
Meeting, subject in all cases to the limits imposed in Section 1.3.


 


(b)                                 A
Director who is elected or appointed to the Board on a date other than the date
of an Annual Meeting shall be awarded shares of Restricted Stock as of the
first business day following such date of election or appointment with a Fair
Market Value of $12,500, as determined on such first business day following the
date of election or appointment, subject in all cases to the limits imposed in Section 1.3


 


(c)                                  The
“Fair Market Value” of a share of Restricted Stock on the date as of which fair
market value is to be determined shall be: (a) if the Stock is reported on
the NASDAQ Stock Market., the closing price of a share of Stock as reported by
NASDAQ as of the day on which the award was made; or (b) if the Stock is
listed on another established securities exchange or exchanges, the highest
reported closing price of a share of Stock on such exchange or exchanges as of
day on which the award was made.  The
Fair Market Value of the Restricted Stock, if not so reported or listed, and
the Fair Market Value of any other property on the date as of which Fair Market
Value is to be determined, shall mean the fair market value as determined by
the Committee in its sole discretion, using a reasonable valuation method
consistently applied as provided in Prop. Reg. § 1.409A-1(b)(5)(iv)(B).


 


2.2                               Issuance of Stock.  As promptly as practical after the date as of
which an award is made, the Company shall issue a certificate (“Certificate”),
registered in the name of each Director receiving an award, representing the
number of shares of Restricted Stock covered by the Director’s award.


 


2.3                               Rights of Holders of Restricted Stock.  Upon issuance of a Certificate, the Director
in whose name the Certificate is registered shall, subject to the provisions of
the Plan, have all of the rights of a stockholder with respect to the shares of
Restricted Stock represented by the Certificate, including the right to vote
the shares and receive cash dividends and other cash distributions thereon.


 


2.4                               Vesting Period.  The Restricted Stock shall be subject to the
restrictions set forth in Sections 2.5 and 2.7 of the Plan. The Restricted
Stock shall also be subject to a vesting period (the “Vesting Period”)
commencing on the date as of which the Restricted Stock is awarded (the “Award
Date”). The Restricted Stock becomes fully vested on the occurrence of one of
the following events (the “Vesting Events”): (1) the third anniversary of
the Award Date


 


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with respect to an award of Restricted Stock to a Director; (2) the
death of the Director; or (3) a Change in Control, as defined below.
Further, the Committee is authorized to accelerate vesting in any given case in
the event of the following terminations of the Director’s Board service:


 


(a)                                 the
retirement of the Director from the Board at the end of the Director’s term;


 


(b)                                 the
termination of the Director’s service on the Board as a result of the Director’s
not standing for reelection for the Board; or


 


(c)                                  the
termination of the Director’s service on the Board because of the Director’s
inability to perform substantially such Director’s duties and responsibilities
as a Director of the Company due to a physical or mental condition, as
determined in the discretion of the Committee.


 


As used herein the term “Change
in Control” means:


 


(x)                                 The
acquisition (other than from the Company) by any person, entity or “group,”
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, (excluding, for this purpose, the Company or its subsidiaries,
any employee benefit plan of the Company or its subsidiaries, trustees of the
MGP Ingredients, Inc. Voting Trust or of the Cray Family Trust, or any
person who acquires Common or Preferred Stock from Cloud L. Cray, Jr. or
from any trust controlled by or for the benefit of Cloud L. Cray, Jr.
prior to or as a result of his death) of beneficial ownership, (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of at least 30%
of the then outstanding shares of common stock and 50% of the then outstanding
shares of preferred stock, par value $10 per share,  or 30% of the combined voting power of the
Company’s then outstanding voting securities entitled to vote generally in the
election of directors; or


 


(y)                                 Individuals
who, as of the date hereof, constitute the Board (as of the date hereof the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company)
shall be, for purposes of this Plan, considered as though such person were a
member of the Incumbent Board; or


 


(z)                                  Approval
by the stockholders of the Company of a reorganization, merger, consolidation,
in each case, with respect to which persons who were the stockholders of the
Company immediately prior to such reorganization, merger or consolidation do
not, immediately thereafter, own collectively as a group more than 50% of the
combined voting power entitled to vote generally in the election of directors
of the reorganized,  merged or
consolidated company’s then outstanding voting securities, or a liquidation or
dissolution of the Company or of the sale of all or substantially all of the assets
of the Company.


 


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If
any of the events enumerated in clauses (x) through (z) occur, the
Committee shall determine the effective date of the Change in Control resulting
therefrom for purposes of the Plan.


 


2.5                               Forfeiture of Restricted Stock.  As of the date (“Resignation Date”) a
Director resigns from the Board during the Director’s term, the Director shall
forfeit to the Company all Restricted Stock awarded to the Director for which
the Vesting Period has not ended as of or prior to the Resignation Date.


 


2.6                               Release of Restricted Stock.  Restricted Stock shall be released to the
Director, free and clear of all restrictions and other provisions of the Plan,
on the first business day immediately following the last day of the Vesting
Period with respect to such Restricted Stock.


 


2.7                               Restrictions.  Restricted Stock shall be subject to the
following restrictions during the Vesting Period:


 


(a)                                 The
Restricted Stock shall be subject to forfeiture to the Company as provided in Section 2.5
of the Plan.


 


(b)                                 The
Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated
or otherwise disposed of, and neither the right to receive Restricted Stock nor
any interest under the Plan may be assigned by a Director, and any attempted
assignment shall be void.


 


(c)                                  Each
Certificate representing shares of Restricted Stock shall be held by the
Company and shall, at the option of the Company, bear an appropriate
restrictive legend and be subject to appropriate “stop transfer” orders.  The Director shall deliver to the Company a
stock power endorsed in blank to the Company to be used by the Company in the
event the Restricted Stock is forfeited.


 


(d)                                 Any
additional Stock or other securities or property (other than cash) that may be
issued with respect to Restricted Stock as a result of any stock dividend,
stock split, business combination or other event, shall be subject to the
restrictions and other provisions of the Plan.


 


(e)                                  The
issuance of any Restricted Stock award shall be subject to and contingent upon (i) completion
of any registration or qualification of the Stock under any federal or state
law or government rule or regulation that the Company, in its sole
discretion, determines to be necessary or advisable; and (ii) the
execution by the Director and delivery to the Company of (A) any agreement
reasonably required by the Company, and (B) the stock power referred to in
Section 2.7(c).


 


3.                                      General Provisions.


 


3.1                               Administration.  The Plan shall be administered by a committee
(the “Committee”) that shall be the Human Resources and Compensation Committee
of the Board.  The Committee shall have
full power, discretion and authority to interpret and administer the Plan.  The Committee’s interpretations and actions
shall be final, conclusive and binding upon all persons for all purposes.  No member of the Board or the Committee, nor
any officer or 


 


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employee of the Company acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board and the Committee and any officer or employee of the
Company acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect to any such action,
determination or interpretation.


 


3.2                               No Retention Rights.  Neither the establishment of the Plan nor the
awarding of Restricted Stock to a Director shall be considered to give the
Director the right to be retained on, or nominated for reelection to, the
Board, or to any benefits or awards not specifically provided for by the Plan.


 


3.3                               Interests Not Transferable.  Except as to withholding of any tax required
under the laws of the United States or any state or locality, no benefit
payable at any time under the Plan shall be subject in any manner to
alienation, sale, transfer, assignment, pledge, attachment, or other legal
process, or encumbrance of any kind.  Any
attempt to alienate, sell, transfer, assign, pledge, attach or otherwise
encumber any such benefits whether currently or thereafter payable, shall be
void.  No benefit shall, in any manner,
be liable for or subject to the debts or liabilities of any person entitled to
such benefits.  If any person shall
attempt to, or shall alienate, sell, transfer, assign, pledge or otherwise
encumber such person’s benefits under the Plan, or if by reason of such person’s
bankruptcy or any other event, such benefits would devolve upon any other
person or would not be enjoyed by the person entitled thereto under the Plan,
then the Committee, in its discretion, may terminate the interest in any such
benefits of the person entitled thereto under the Plan and hold or apply them
to or for the benefit of such person entitled thereto under the Plan or such
person’s spouse, children or other dependents, or any of them, in such manner
as the Committee may deem proper.


 


3.4                               Amendment and Termination.  The Board may at any time amend or terminate
the Plan; provided that:


 


(a)                                 no
amendment or termination shall, without the written consent of a Director,
adversely affect the Director’s rights under outstanding awards of Restricted
Stock; and


 


(b)                                 Stockholder
approval of any amendment shall be required if stockholder approval is required
under applicable law or the rules of any national securities exchange or
automated quotation system on which are listed or quoted any of the Company’s
equity securities.


 


3.5                               Severability.  If all or any part of the Plan is declared by
any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate any portion of the
Plan not declared to be unlawful or invalid. 
Any Section or part thereof so declared to be unlawful or invalid
shall, if possible, be construed in a manner which will give effect to the
terms of such Section or part thereof to the fullest extent possible while
remaining lawful and valid.


 


3.6                               Controlling Law.  The law of Kansas, except its law with
respect to choice of law,  shall be
controlling in all matters relating to the Plan.


 


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