Exhibit 10
MEMORANDUM OF AGREEMENT CONCERNING OPTIONS
To: ________________
From: Ladd Seaberg
Date: December 10, 2001
Re: Cancellation of Existing Stock Option and Grant of Option on June 11, 2002
In consideration of your offer to cancel the option granted to you on
December 10, 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 11, 2002, 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 10, 2001, or the per
share fair market value of the Common Stock as of 10:15 a.m. CDT on June 11,
2002.
________________________________________
Ladd M. Seaberg, President
Cancellation of option is hereby acknowledged.
Dated December 10, 2001 ________________________________________
MIDWEST GRAIN PRODUCTS, INC.
INCENTIVE STOCK OPTION
GRANTED UNDER THE STOCK INCENTIVE PLAN OF 1996
Date of Grant: June 11, 2002 ________ 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.
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(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 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 9, 2011. 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:
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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 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 purchased 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_.
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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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