Document:

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

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

  

 

 5Exhibit 10.3

MGP INGREDIENTS, INC.

AGREEMENT AS TO AWARD OF RESTRICTED SHARES

GRANTED UNDER THE STOCK INCENTIVE PLAN OF 2004

	
  Date of Grant: December 6, 2006

  	
   

  
	
  Time of Grant: 10:15 a.m. CST

  	
  Restricted Shares

  

 

In accordance with and
subject to the terms and restrictions set forth in the MGP Ingredients, Inc. Stock
Incentive Plan of 2004 (the “2004 Plan”) and this Agreement, MGP INGREDIENTS,
INC., a Kansas corporation (the “Company”), hereby grants to the Participant
named below the number of Restricted Shares of Common Stock of the Company as set
forth below:

Participant: Ladd Seaberg

Number of Restricted Shares under the 2004 Plan: 20,600

NOW, THEREFORE, the Company and the Participant hereby
agree to the following terms and conditions:

1.                                       Issuance
of Restricted Shares.  The shares
described above are being issued by the Company to the Participant as
Restricted Shares pursuant to the terms and provisions of the 2004 Plan and of
the Guidelines for Issuance of Fiscal 2007 Restricted Share Awards (the “Guidelines”)
adopted by the Human Resources Committee of the Board of Directors of the
Company, true copies of which are attached hereto as Exhibits A and B and
incorporated herein by reference.  Upon
the execution of this Agreement, the Company shall issue in the Participant’s
name the aggregate number of Restricted Shares described above, subject to the
provisions of the Guidelines requiring that such certificate or certificates be
held in the custody of the Company.

2.                                       Vesting
in Restricted Shares.  Subject to the
provisions of the Guidelines, Restricted Shares shall vest in the Participant
upon the Participant’s completion of seven (7) full years of employment with
the Company commencing on July 1, 2006. 
However, in the event that the Performance Measure is achieved, the
Restricted Shares shall vest in the Participant upon completion of three (3)
full years of employment commencing on July 1, 2006.  The Performance Measure means that the
Company has achieved earnings per share on a cumulative basis for the period
beginning on July 1, 2006 and ending on June 30, 2009 of $3.28 per share.  The Performance Measure is subject to
adjustment, as provided in the Guidelines, and the inclusion or exclusion of
unusual or non-recurring items is subject to the discretion of the Compensation
Committee, as provided in the Guidelines. 
Except as provided in the Guidelines, the Restricted Shares issued to
the Participant shall be forfeited to the Company if the Participant’s
employment with the Company is terminated prior to the end of the applicable
Restriction Period.

3.                                       Restriction
on Transfer. The Participant shall not voluntarily sell, exchange,
transfer, pledge, hypothecate, or otherwise dispose of any Restricted Shares to
any other person or entity during the applicable Restriction Period.  Any disposition or purported disposition made
in violation of this paragraph shall be null and void, and the Company shall
not recognize or give effect to such disposition on its books and records.

4.                                       Legend
on Certificates.  In order that all
potential transferees and others shall be put on notice of this Agreement and
so long as the risk of forfeiture exists under the Plan and Guidelines, each certificate
evidencing ownership of the Restricted Shares issued pursuant to the Plan (and
any replacements thereto) shall bear a legend in substantially the following
form:

“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.”

5.                                       Controlling
Provisions.  The provisions of the
Guidelines shall apply to the award made under this Agreement.  In the event of a conflict between the
provisions of this Agreement and the Guidelines, the provisions of the
Guidelines will control.

IN WITNESS WHEREOF, this Instrument has been executed
as of this 6th day of December 2006.

	
   

  	
  MGP
  INGREDIENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian T. Cahill

  	
   

  
	
   

  	
   

  	
  Vice President
  and CFO

  

 

ACKNOWLEDGEMENT

I understand and agree
that the Restricted Shares to be acquired by me are subject to the terms,
provisions and conditions hereof and of the Plan and Guidelines, to all of
which I hereby expressly assent.  This
Agreement shall be binding upon and inure to the benefit of the Company,
myself, and our respective successors and legal representatives.

This Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof, and may not be modified, amended, renewed or terminated, nor

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may any term, condition
or breach of any term or condition be waived, except in writing signed by the
parties sought to be bound thereby.  Any
waiver of any term, condition or breach shall not be a waiver of any term or
condition of the same term or condition for the future or any subsequent
breach.  In the event of the invalidity
of any part or provision of this Agreement, such invalidity shall not affect
the enforceability of any other part or provision of this Agreement.

Signed this 21st day of December,
2006.

	
  

  	
  /s/ Ladd M. Seaberg

  
	
   

  	
  Signature of Participant

  

 

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