MEMORANDUM OF AGREEMENT CONCERNING OPTIONS


To:      ________________

From:    Ladd Seaberg

Date:    December 7, 2001

Re:      Cancellation  of  Existing Stock Option  and Grant of Option on June 8,
         2000

         In  consideration  of your offer to cancel the option granted to you on
January 5, 1996 to purchase ________ shares of the Common Stock of Midwest Grain
Products,  Inc., the Company,  as authorized by the Human Resources Committee on
this date,  has agreed to issue to you on June 8, 2001,  an option to purchase a
like number of shares upon the terms set forth in the option  agreement  that is
attached hereto.  The option price per share for the option to be issued will be
the greater of $___.___,  which is the per share fair market value of the Common
Stock as of 10:15 a.m.  CST on  December  7, 2000,  or the per share fair market
value of the Common Stock as of 10:15 a.m. CDT on June 8, 2001.

                                                     ___________________________
                                                     Ladd M. Seaberg, President

         Cancellation of option is hereby acknowledged.

         Dated December 7, 2000                      ___________________________



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                          MIDWEST GRAIN PRODUCTS, INC.
                             INCENTIVE STOCK OPTION
                 GRANTED UNDER THE STOCK INCENTIVE PLAN OF 1996


Date of Grant: June 8, 2001                                    ________ Shares
Time of Grant: 10:15 a.m. CDT

                          THIS OPTION IS NOT ASSIGNABLE

         Grant.  Midwest  Grain  Products,   Inc.,  a  Kansas  corporation  (the
"Company"),  hereby grants to the optionee named below an option to purchase, in
accordance  with and  subject  to the  terms and  restrictions  set forth in the
Midwest Grain  Products,  Inc.  Stock  Incentive  Plan of 1996 (the "Plan"),  as
amended and in this option,  the number of shares of Common Stock, no par value,
of the  Company  ("Shares")  set forth  below,  at the price set forth below and
expiring at the date set forth below:

         Optionee:  ________________________________________________
         Number of Shares subject to option:  ______________________
         Number of such Shares to be Incentive Options: ____________
         Number of such Shares to be Nonqualified Options: _________
         Option price per Share: ___________________________________

         Incentive  Stock  Option.  This  option is  intended  to  qualify as an
incentive  stock option under  Section 422 of the Code,  as amended from time to
time  ("Incentive  Option")  as to the shares  specified  above to be  Incentive
Options  and  as a  nonqualified  option  as to the  remainder  of  such  shares
("Nonqualified  Option");  provided that to the extent that the  aggregate  fair
market  value (as defined in the Code),  of Common  Stock with  respect to which
Incentive  Stock  Options are  exercisable  for the first time by you during any
calendar  year under the Plan or any other Company plan exceeds  $100,000,  this
Option  shall  be  treated  as a  Nonqualified  Option  in  accordance  with the
provisions of Section 422 of the Code, as amended.

         Exercisability.

              (a)  Incentive  Option  Installments.   Subject  to  the  $100,000
limitation, the Incentive options shall become exercisable as to all or any part
of  _______  shares  upon the first  anniversary  of the Date of Grant,  _______
shares upon the second  anniversary of the Date of Grant,  _______ shares on the
third  anniversary  of the Date of  Grant  and  ________  shares  on the  fourth
anniversary of the Date of Grant; provided,  that in the case of death or normal
retirement all installments shall become  immediately  exercisable as of the day
immediately prior to the date of death or date of retirement.

              (b) Nonqualified  Option  Installments.  The Nonqualified  options
shall become  exercisable as to all or any part of _______ shares upon the first
anniversary of the Date of Grant,  _______ shares upon the second anniversary of
the Date of Grant,  _______ shares on the third anniversary of the Date of Grant
and ________ shares on the fourth anniversary of the Date of

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<PAGE>

Grant; provided, that in the case of death or normal retirement all installments
shall become immediately exercisable as of the day immediately prior to the date
of death or date of retirement.

              (c) Other Provision concerning  Exercisability.  The options shall
otherwise  be  exercisable  to  the  extent  permitted  in the  Plan,  including
provisions therein relating to a Change In Control,  death,  retirement or other
termination of  employment.  Installments  or portions  thereof not exercised in
earlier periods shall be cumulative and shall be available for exercise in later
periods.

         Term. All options granted to you under this grant must be exercised, if
at all, on or before  December 6, 2010.  In the event of your death,  retirement
from the  Company or other  termination  of  employment,  whether  voluntary  or
involuntary,  the  options  will  expire  and  may be  exercised  in the  manner
specified in Section 6 of the Plan.

         Exercise.  Upon  exercise of an option,  you may pay all or any part of
the option price in cash, by check satisfactory to the Company or by transfer to
the  Company  of shares  of Mature  Stock or other  Common  Stock  which was not
obtained  through the exercise of a stock option owned by the  Optionee.  Common
Stock  transferred  to the Company or withheld from shares to be  distributed in
payment of the option  price or  withholding  taxes  shall be valued at the Fair
Market Value of the Common Stock on the date of the exercise.

         Option Not Assignable. This Option is not transferable by you otherwise
than by will or the laws of descent and distribution, and is exercisable, during
your lifetime,  only by you; provided,  however,  to the extent that the options
covered  hereby  constitute  nonqualified  stock  options,  you may assign  such
options to the extent that such  assignment is hereafter  approved in writing by
the Committee..

         Not a 10% Owner.  You hereby  certify  that,  at the date  hereof,  you
believe  that you do not own stock of the Company  that  possesses  more than 10
percent  of the  total  combined  voting  power of all  classes  of stock of the
Company or of any parent or subsidiary of the Company.

         Payment of Taxes.  The Plan grants the Company  the  authority  to make
such provision as the Company deems  appropriate for the collection of any taxes
which the  Company  may  withhold  in  connection  with the grant or exercise of
options.  Pursuant  to that  authority,  the  Company  authorizes  you to settle
withholding  taxes  generated  upon the  exercise  of  Nonqualified  Options  by
allowing you to pay the taxes with cash or shares of the Company's  Common Stock
in accordance with the following guidelines:

     1. You may  satisfy  obligations  to pay to the  Company  the amount of any
federal, state or local income tax imposed on you as a result of the exercise of
this option by either:

         (a)  Delivering  to the Company a personal  check  satisfactory  to the
Company  in the amount of the tax  liability  on the date that the amount of the
tax to be withheld is to be determined (the "Tax Date"); or by

         (b) Electing to pay the tax liability in shares of the Company's Common
Stock ("Stock Payment Election") by

              (1)  directing the Company at or prior to the Tax Date to withhold
from the number of shares to be issued to the  optionee in  connection  with the
exercise of a Nonqualified Option that

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number of shares  equal to the amount of the tax  liability  divided by the fair
market  value (as  defined  by the Plans) of one share of the  Company's  common
stock on the Tax Date; or

              (2)  delivering to the Company on the Tax Date good and marketable
title to that number of shares of Mature Stock (as defined in the Plan) or other
Stock which was not  obtained  through the  exercise of a stock  option owned by
you, 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.

     2. 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.

     3. The amount of tax which may be paid by an  optionee  pursuant to a Stock
Payment Election will be the 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.

     4. The  provisions  of these rules  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.

         Compliance  With Law. When the issue or transfer of the shares  covered
by this option may, in the opinion of the Company,  conflict or be  inconsistent
with  any  applicable  law or  regulation  of  any  governmental  agency  having
jurisdiction, the Company reserves the right to refuse to issue or transfer said
stock.  The  Company  may also  legend  certificates  covering  shares  purchase
hereunder with usual and customary  transfer  restrictions to insure  compliance
with  applicable  securities  laws,  and may issue the same subject to its prior
receipt  of  written   representations  from  optionee  in  form  and  substance
satisfactory to the Company.

         IN WITNESS WHEREOF, this instrument has been executed by the Company as
of this __ day of _____, 200_.

                              MIDWEST GRAIN PRODUCTS, INC.



                              By_________________________________
                                   Laidacker M. Seaberg
                                   President and Chief Executive Officer


                                 ACKNOWLEDGMENT

      I hereby  acknowledge  receipt of the above  option and a copy of the Plan
referred  to in said  option.  I am familiar  with the terms of the Plan,  and I
understand  my rights  under the option are subject to and governed by the terms
of the Plan, as well as by the terms set forth in the foregoing option itself.

________________________________              __________________________________
     Date Acknowledged                                Signature of Optionee

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