Exhibit 4(c)
MIDWEST GRAIN PRODUCTS, INC.
1998 STOCK INCENTIVE PLAN FOR SALARIED EMPLOYEES
TABLE OF CONTENTS
Section Page
1. Purposes......................................................... 1
2. Definitions...................................................... 1
3. Grants of Stock Incentives....................................... 2
4. Stock Subject to the Plan........................................ 4
5. Stock Awards..................................................... 5
6. Stock Options.................................................... 5
7. Stock Appreciation Rights........................................ 8
8. Adjustment Provisions............................................ 9
9. Term............................................................. 10
10. Administration..................................................... 10
11. General Provisions................................................. 11
12. Amendment or Discontinuance of Plan................................ 12
13. Effective Date..................................................... 13
Approved by Board of Directors, subject to
Stockholder Approval: March 5, 1998.
Approved by Stockholders: October _, 1998.
Effective Date: March 5, 1998.
MIDWEST GRAIN PRODUCTS, INC.
1998 STOCK INCENTIVE PLAN FOR SALARIED EMPLOYEES
1. PURPOSES
The purposes of the Plan are (a) to provide additional incentive for
Salaried Emploees of the Company and its Subsidiaries by authorizing a Committee
of the Board of Directors to grant stock incentives to such Salaried Employees,
thereby furthering their identity of interest with the interests of the
Company's shareholders, and increasing their interest in and commitment to the
future growth and prosperity of the Company; and (b) to enable the Company to
induce the employment and continued employment of Salaried Employees and to
compete with other organizations in attracting and retaining the services of
highly-qualified personnel.
2. DEFINITIONS
Unless otherwise required by the context, the following terms, when used in
the Plan, shall have the meanings set forth in this Section 2.
Board of Directors or Board: The Board of Directors of the Company.
The Code: The Internal Revenue Code of 1986 as now or hereafter amended.
Committee: A committee of the Board of Directors of the Company as provided
in Section 10(a) of the Plan.
Common Stock: The Common Stock of the Company, no par value, or such other
class of shares or other securities as may be subject to the Plan as the result
of an adjustment made pursuant to the provisions of Section 8.
Company: Midwest Grain Products, Inc., a Kansas corporation. Fair Market
Value of a Share of Common Stock: The fair market value of a share of Common
Stock on the date as of which fair market value is to be determined shall be:
(a) if the Common Stock is reported on the NASDAQ National Market System of the
National Association of Securities Dealers, Inc., the last reported sales price
of a share of Common Stock as reported by NASDAQ; or (b) if the Common Stock is
listed on an established securities exchange or exchanges, the highest reported
closing price of a share of Common Stock on such exchange or exchanges. The fair
market value of the Common 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.
Incentive Compensation: Bonuses, extra and other compensation payable in
addition to a salary or other base amount, whether contingent or not, whether
discretionary or required to be paid
pursuant to an agreement, resolution, arrangement, plan or practice, and
whether payable currently or on a deferred basis, in cash, Common Stock or other
property.
Incentive Stock Option: A stock option granted hereunder which satisfies
the conditions of Section 6 of the Plan, and the requirements of Section 422 of
the Code.
Salaried Employee: A salaried, full-time employee of the Company or of a
Subsidiary, including an officer or director who is an employee.
Mature Stock: shall mean shares of Common Stock which have been obtained
through the exercise of an option under this Plan or any other plan of the
Company, which are delivered to the Company in order to exercise an Option and
which have been held continuously by an Optionee for six months or more.
Option: An option to purchase shares of Common Stock or, where the context
so requires, the instrument which evidences such an option as provided in
paragraph (c) of Section 3 of the Plan.
Plan: The 1998 Stock Incentive Plan for Salaried Employees herein set forth
as the same may from time to time be amended.
Restricted Shares: Shares of Common Stock issued or transferred subject to
terms and conditions with respect to payment or forfeiture as authorized by
Section 5.
Stock Appreciation Right: A right to receive a number of shares of Common
Stock, cash, or a combination of the two based on the increase in the Fair
Market Value of shares of Common Stock subject to an Option, as set forth in
Section 7 of the Plan.
Stock Award: An issuance or transfer of shares of Common Stock at the time
a Stock Incentive is granted or as soon thereafter as practicable, or an
undertaking to issue or transfer such shares in the future, including, without
limitation, such an issuance, transfer or undertaking with respect to a Stock
Incentive that is contingent, in whole or in part, upon the attainment of a
specified objective or objectives.
Stock Incentive: A stock incentive granted under the Plan in one of the
forms authorized in Section 3.
Subsidiary: A corporation or other form of business association of which
shares (or other ownership interests) having 50% or more of the voting power are
owned or controlled, directly or indirectly, by the Company.
3. GRANTS OF STOCK INCENTIVES.
(a) Eligibility. Subject to the provisions of the Plan, the Committee may
at any time grant Stock Incentives under the Plan to, and only to, Salaried
Employees who are not members of the
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Committee. Subject to express limitations contained in the Plan, conditions
governing the grant of Incentive Stock Options and applicable Federal and State
laws governing discrimination based on age, sex, race, national origin,
disability and the like, the Committee may exercise complete discretion with
respect to (a) the number and amount of stock incentives to be granted, (b) the
timing and frequency of any grant, (c) the identification of Salaried Employees
to receive grants under the plan and to thereby participate in a grant
("Participant"), (d) the amount of incentives to be granted to a Participant and
the terms and conditions to be established for each grant. In exercising such
discretion, the Committee may take into account all legally cognizable factors,
including without limitation, factors such as the Participant's performance and
length of service, recommendations of supervisors, management and other
superiors, the performance of business units, departments or divisions within
which the Participant is employed, and the financial condition and performance
of the Company as a whole. The Committee may also grant options individually or
to specified classes or groups of persons and thereby exclude other individuals,
classes or groups that may otherwise be eligible to participate in an option
grant. Nothing contained in this Plan is to be construed as providing any
Salaried Employee with any right to receive any stock incentive simply by virtue
of such person's being or achieving the status of a Salaried Employee
(b) Types of Stock Incentives. Stock Incentives may be granted in the
following forms:
(i) a Stock Award, in accordance with Section 5, or
(ii) a Stock Option, in accordance with Section 6, or
(iii) a Stock Appreciation Right, in accordance with Section 7, or
(iv) a combination of any of the foregoing.
(c) Evidence of Grant. Each Stock Incentive shall be evidenced by a written
instrument in a form prescribed by the Committee, which instrument shall be
consistent with the Plan, shall incorporate the Plan by reference, and shall be
signed on behalf of the Company by a person authorized by the Committee. Any
such instrument may contain such additional provisions consistent with the Plan
as the Committee may deem advisable.
(d) Amendments. The Committee may from time to time authorize the amendment
of outstanding stock incentives so long as such amendments are consistent with
the Plan, as amended. Without limiting the foregoing such amendments may, in the
case of any outstanding stock option not immediately exercisable in full,
accelerate the time in which the option may be exercised by the removal or
modification of installments imposed in the initial grant of such option
pursuant to Section 6(d). Any amendment shall be evidenced by a written
instrument in a form prescribed by the Committee, which instrument shall be
consistent with the Plan, and shall be signed on behalf of the Company by a
person authorized by the Committee. Any such amendment may contain such
additional provisions consistent with the Plan, as amended, as the Committee may
deem advisable.
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4. STOCK SUBJECT TO THE PLAN.
(a) Number of Shares. Subject to the provisions of paragraph (c) of this
Section 4 and of Section 8, the aggregate number of shares of Common Stock which
may be issued or transferred pursuant to Stock Incentives granted under the Plan
shall not exceed three hundred thousand (300,000) shares of Common Stock.
(b) Source of Shares. Subject to the requirements of applicable Kansas law,
authorized but unissued shares of Common Stock and shares of Common Stock held
in the treasury, whether acquired by the Company specifically for use under the
Plan or otherwise, may be used, as the Board of Directors may from time to time
determine, for purposes of the Plan; provided, however, that any shares acquired
or held by the Company for the purposes of the Plan shall, unless and until
transferred to a Salaried Employee in accordance with the terms and conditions
of a Stock Incentive, be and at all times remain treasury shares of the Company,
available for any corporate purpose, irrespective of whether such shares are
entered in a special account for purposes of the Plan.
(c) Charges Against Plan Limit. If any shares of Common Stock subject to a
Stock Incentive shall not be issued or transferred or shall cease to be issuable
or transferable under such Stock Incentive, or if any such shares shall, after
issuance or transfer, be reacquired by the Company or Subsidiary because of an
employee's failure to comply with or meet the terms and conditions of a Stock
Incentive, such shares shall no longer be charged against the limitation
provided for in paragraph (a) of this Section 4 and may again be made subject to
Stock Incentives; and, only the net additional shares issued upon the exercise
of a stock incentive through the delivery or withholding of shares of Common
Stock in payment of the exercise price or withholding taxes shall be counted
against the number of shares which are authorized for issuance under
Section 3(a). The limitation provided for in paragraph (a) of this Section 4,
shall also be increased by the number of shares subject to any Substitute Stock
Options granted under Section 6(j). Notwithstanding the foregoing, shares shall
be deemed to have been issued pursuant to an Option or Stock Award and shall be
charged against the limitation provided for in paragraph(a) of this Section 4,
whether actually delivered, to the extent of the number of shares covered by
that portion of the related option or award granted under the Plan which is
settled by the exercise of a Stock Appreciation Right or by a cash payment under
a Stock Award.
(d) Certain Limitations on Grants. Notwithstanding any provision herein to
the contrary, and subject to adjustment as provided in Section 8, no Executive
Officer of the Company may receive Stock Incentives under the Plan in any
calendar year that relate to more than fifty thousand (50,000) shares of Common
Stock. In addition, and subject to other provisions of the plan permitting the
expiration of restrictions under certain circumstances, no Stock Award shall be
granted under Section 5 unless the shares subject to the Award (other than
shares purchased for cash at fair market value on date of purchase under a
related Stock Purchase Right) are subject to restrictions on transfer and/or
ownership specified by the Committee and the restrictions continue for a period
of one year from the date of grant in the case of Awards that are performance
based and continue for a period of three years from the date of grant in the
case of Awards that are not performance based.
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5. STOCK AWARDS
Stock Incentives in the form of Stock Awards shall be subject to the
following provisions:
(a) Consideration. A Stock Award shall be granted only in payment of (i)
Incentive Compensation that has been earned, (ii) as Incentive Compensation to
be earned, or (iii) a combination of (i) and (ii).
(b) General. Shares of Common Stock subject to a Stock Award may be issued
or transferred to a Salaried Employee at the time the Stock Award is granted, or
at any time subsequent thereto, or in installments from time to time, as the
Committee shall determine. With respect to a Stock Award providing for issuance
or transfer of shares subsequent to the time it is granted, the Committee may
provide for payment to the grantee of amounts not exceeding the cash dividends
which would have been payable in respect of such shares (as adjusted under
Section8 of the Plan) if they had been issued or transferred at the time the
Stock Award was granted. Such payments may be made in cash, shares of Common
Stock or a combination of cash and shares. Such payments may be made at the time
the shares are issued or transferred, or at the time or times the cash dividends
would have been payable if the shares had been issued or transferred at the time
the Stock Award was granted. Any amount payable in shares of Common Stock under
the terms of the Stock Award may be paid in cash on each date on which delivery
of shares would otherwise have been made, in an amount equal to the Fair Market
Value on such date of the shares which would otherwise have been delivered.
(c) Restrictions on Transfer, Forfeiture. A Stock Award may contain such
terms and conditions as the Committee may determine with respect to transfer,
payment or forfeiture of all or any part of the Stock Award.
(d) Other Terms. A Stock Award may be subject to such other terms and
conditions, including, without limitation, restrictions on sale or other
disposition of the Stock Award or of the shares issued or transferred pursuant
to the Stock Award, as the Committee may determine; provided, however, that upon
the issuance or transfer of shares pursuant to a Stock Award, the recipient
shall, with respect to such shares, be and become a shareholder of the Company
fully entitled to receive dividends, to vote and to exercise all other rights of
a shareholder except to the extent otherwise provided in the Stock Award.
6. STOCK OPTIONS
Stock Incentives granted under the Plan in the form of Stock Options shall
be subject to the following provisions:
(a) Date of Grant. The "Date of Grant" of an Option shall be the date the
action of the Committee providing for the grant of the Option is taken, or such
later date as the Committee may provide.
(b) Option Price. The price at which shares of Common Stock may be
purchased under an Option (the "Option Price") shall be specified in the Option
and shall be not less than 100% of the Fair Market Value of such stock on the
Date of Grant of the Option. In the case of options other than
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incentive stock options, the Committee may grant options at a price equal
to such percentage of the Fair Market Value of the stock on the date of grant as
the Committee may specify, provided that in no case shall the price be less than
100% of such Fair Market Value.
(c) Term of Option. An Option shall be exercisable only during a term (the
"Term of the Option" or "Term") commencing not sooner than six months and one
day after the Date of Grant of the Option and ending (unless the Option shall
have terminated earlier under other provisions of the Plan) on a date fixed by
the Committee and stated in the Option, which date shall be an anniversary of
the Date of Grant of the Option and shall not be later than the tenth
anniversary. If an Option is granted for an original Term of less than ten
years, the Committee may, at any time prior to the expiration of the Option,
extend its Term for a period ending not later than the tenth anniversary of the
Date of Grant of the Option.
(d) Installments. An Option may provide that it shall be exercisable in
full or in part at any time during the Term of the Option, or that it shall be
exercisable in a specified series of installments. Unless otherwise provided in
the Option, installments or portions thereof not exercised in earlier periods
shall be cumulative and shall be available for exercise in later periods. The
Committee may, by so providing in an Option, require any partial exercise
thereof to be with respect to a specified minimum number of shares.
(e) Termination of Employment other than by Death or Retirement. The
provisions set forth in this subsection shall apply, unless the Committee
otherwise specifies in the Award or unless the Option is intended to be an
Incentive Stock Option. If an optionee shall cease, for a reason other than his
death or retirement, to be employed by the Company or Subsidiary, the Option
shall terminate ninety (90) days after the cessation of employment if the option
is an Incentive Stock Option and not later than one year after the cessation of
employment with respect to other options, unless the Incentive or other option
terminates earlier by its terms or under other provisions of the Plan. Until the
Option terminates it may be exercised by the optionee, his estate or legal
representatives for all or a portion of the shares as to which the right of
purchase had accrued under the Plan at the time of cessation of employment,
subject to all applicable conditions and restrictions provided in the Plan and
the Option. In no event shall an Option be exercisable later than the date of
expiration of the Term of the Option, and in no event shall an Option be
exercisable for any shares as to which the right of purchase had not accrued at
the time of cessation of employment. Employment for the purposes of this
paragraph shall mean continuous full-time salaried employment. Vacations, sick
leaves and any approved absence on leave shall not constitute a termination of
employment or an interruption of continuous full-time salaried employment.
(f) Retirement. The provisions set forth in this subsection shall apply,
unless the Committee otherwise specifies in the Award or unless the Option is
intended to be an Incentive Stock Option. If an optionee shall retire, the
Option shall terminate on the third anniversary of such retirement, unless it
terminates earlier by its terms or under other provisions of the Plan. Until the
Option terminates it may be exercised by the optionee, his estate or legal
representatives for all or a portion of the shares as to which the right of
purchase had accrued as of the date of such exercise, subject to all applicable
conditions and restrictions provided in the Plan and the Option. In no event
shall an Option be exercisable later than the date of expiration of the Term of
the Option, and in no event shall an Option be exercisable
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for any shares as to which the right of purchase had not accrued at the
time of exercise. "Retirement" for purposes of paragraph 6(e) and (f) shall be
defined by the Committee with respect to age, service, and other requirements.
Notwithstanding the foregoing, if the option is an Incentive Stock Option, it
may be exercised as an incentive stock option by the retired optionee or his
estate not later than the day three months after the date of termination of his
employment and by his estate not later than the first anniversary of such
termination of employment if the optionee's death occurred prior to the day
three months after the termination of employment.
(g) Death. If an optionee shall die while in the employ of the Company or a
Subsidiary and if the Option was in effect at the time of his death (whether or
not its terms had then commenced), the Option may, until the expiration of one
year from the date of death of the optionee or until the earlier expiration of
the Term of the Option, be exercised as and to the extent it could have been
exercised by the optionee had he been living at the time, by the legal
representatives of the optionee or by any person, persons or entity to whom his
rights under the Option shall have been transferred pursuant to the provisions
of paragraph (g) of Section 11 of the Plan. Such exercise shall not be limited
to the shares as to which the right of purchase had accrued at the date of death
of the optionee, but shall be subject to all applicable conditions and
restrictions prescribed in the Plan and the Option, including any installment
provision.
(h) Exercise. To the extent that the right to purchase shares has accrued
under an Option, the Option may be exercised from time to time by the optionee
or by a person or persons entitled to exercise the Option, by delivery to the
Company of a written notice, in the manner and in such form as may be prescribed
by the Committee, stating the number of shares with respect to which the Option
is being exercised, and by making provision satisfactory to the Company for the
payment in full of the Option price of the shares prior to or in connection with
the delivery of certificates evidencing the shares. The Committee may, in its
discretion and upon request of the Participant, issue shares of Common Stock
upon the exercise of an Option directly to a brokerage firm or firms to be
approved by the Company, without payment of the purchase price by the optionee
but upon delivery of an irrevocable guarantee by such brokerage firm or firms of
the payment of such purchase price or upon the participant's issuance to the
brokerage firm of irrevocable instructions to sell or margin a sufficient
portion of the shares and deliver the sale or margin loan proceeds directly to
the Company to pay the exercise price and any withholding taxes. Upon receipt of
such notice and payment arrangement in form satisfactory to the Company, the
Company shall deliver to or upon the order of the optionee, or such other person
entitled to exercise the Option, at the General Office of the Company, or at
such place as shall be mutually acceptable, a certificate of certificates
evidencing such shares. An Option may not be exercised for fractional shares of
Common Stock. Payment in form satisfactory to the Company may, at the option of
the Company, include payment by transfer to the Company of other shares of
Mature Stock or other Common Stock which was not obtained through the exercise
of a stock option owned by the Optionee or by the withholding of shares to be
distributed in connection with the exercise of a Stock Incentive. 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.
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(i) No Rights Before Exercise. No person shall have any rights of a
stockholder by virtue of an Option except with respect to shares actually issued
to him, and issuance of shares shall not confer retroactive rights to dividends.
(j) Substitute Options. Options may be granted under the Plan from time to
time in substitution for stock options held by employees of other corporations
who are about to become employees of the Company or a Subsidiary as the result
of a merger or consolidation of the employing corporation with the Company or a
Subsidiary, or the acquisition by the Company or a Subsidiary of the assets of
the employing corporation, or the acquisition by the Company or a Subsidiary of
stock of the employing corporation as the result of which it becomes a
Subsidiary. The terms and conditions of the substitute options so granted may
vary from the terms and conditions set forth in this Section 6 to such extent as
the Committee at the time of grant may deem appropriate to conform, in whole or
in part, to the provisions of the options in substitution for which they are
granted.
(k) Certain Limits on Incentive Stock Options. In the case of Incentive
Stock Options, the amounts, terms and conditions of such grants shall be subject
to and comply with the requirements for Incentive Stock Options as set forth in
Section 422 of the Code, as from time to time amended, and any regulations
implementing such statute.
7. STOCK APPRECIATION RIGHTS.
(a) Grant. Stock Appreciation Rights may be granted in connection with any
Option granted under the Plan, either at the time of the grant of such Option or
at any time thereafter during the term of the Option. A grant of Stock
Appreciation Rights shall either be included in the instrument evidencing the
Option to which they relate or evidenced by a separate instrument meeting the
requirements of Section 3 of the Plan.
(b) Settlement. A person entitled to exercise an Option in connection with
which Stock Appreciation Rights shall have been granted shall be entitled, at
such time or times and subject to such terms and conditions as may be stated in
the granting instrument, to settle all or part of the Option by requesting the
Company to pay, in cancellation of the part of the Option to be settled,
consideration in an amount equal to the number of shares of Common Stock subject
to the canceled part of the Option times the amount by which the fair market
value of one share on the exercise date exceeds the Option Price (the
"Appreciation"). The election shall be made in a written instrument, in form
satisfactory to the Committee, delivered in the manner prescribed in
Section 6(h) for the exercise of options.
(c) Form of Consideration. The form of the consideration to be paid for the
Appreciation shall either be cash, shares of Common Stock having an aggregate
market value on the exercise date equal to the Appreciation, or a combination of
cash and shares. Such form of consideration shall be specified either by the
Committee or, subject to the approval of the Committee, by the person exercising
the Stock Appreciation Right, provided that such form of consideration shall in
no event include fractional shares of Common Stock.
(d) Provisions in a Related Option. An Option in connection with which
Stock Appreciation Rights are granted may prescribe or limit the period or
periods of time during which the
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Stock Appreciation Rights may be exercised as provided in paragraph (b) of
this Section 7, and may prescribe such additional terms and conditions
applicable to the exercise of the Stock Appreciation Rights as may be determined
by the Committee and as are consistent with the Plan. In no event may Stock
Appreciation rights be exercised at a time when the Option in connection with
which they were granted is not exercisable.
8. ADJUSTMENT PROVISIONS
In the event of a reorganization of the Company, an equitable adjustment
shall be made in: (a) the number and class of shares or other securities that
may be issued or transferred pursuant to Stock Incentives in the aggregate or to
any individual, (b) the number and class of shares or other securities which
have not been issued or transferred under outstanding Stock Incentives, (c) the
purchase price to be paid per share under outstanding Options, and (d) the price
to be paid per share by the Company or a subsidiary for shares or other
securities issued or transferred pursuant to Stock Incentives which are subject
to a right of the Company or a Subsidiary to reacquire such shares or other
securities. For this purpose, a "reorganization" shall be deemed to have
occurred in the event:
(i)any recapitalization, reclassification, split-up or consolidation of
shares of Common Stock shall be effected;
(ii)the outstanding shares of Common Stock are, in connection with a merger
or consolidation of the Company or the acquisition by another corporation of
Common Stock or of all or part of the assets of the Company, exchanged for a
different number or class of shares of stock or other securities of the Company
or for shares of the stock or other securities of another corporation;
(iii)new, different or additional shares or other securities of the Company
or of another corporation are received by the holders of Common Stock with
respect to such stock; or
(iv)any distribution other than a cash dividend is made to the holders of
Common Stock.
The Committee may also unilaterally amend outstanding stock incentives to
remove restrictions or otherwise change the terms of outstanding stock
incentives to permit such incentives to be substituted for comparable incentives
to be provided by any entity which assumes the Company's obligations with
respect to such outstanding stock incentives upon terms and conditions approved
by the Board of Directors or Stockholders.
In the event of any other change in the capital structure or in the capital
stock of the Company, the Committee shall be authorized to make such appropriate
adjustments in the maximum number of shares of Common Stock available for
issuance under the Plan in the aggregate or to any individual and any
adjustments and/or modifications to outstanding Stock Incentives as it deems
appropriate.
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The action of the Committee in approving any adjustment or change
contemplated by this Section 8 shall be conclusively deemed to be equitable,
appropriate, fair and/or comparable and shall be binding on all persons holding
rights under the Plan.
9. TERM
(a) Effective Date. The Plan shall be effective as of March 5, 1998,
subject to approval by the affirmative vote of the holders of a majority of the
shares of the Company's Common Stock present or represented, and entitled to
vote at a meeting duly held in accordance with applicable law within one year
after such effective date.
(b) Expiration Date. No Stock Incentives shall be granted under the Plan
after March 4, 2008. Unless otherwise expressly provided in the Plan or in an
applicable award agreement, any Stock Incentive granted hereunder may, and the
authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under any such Stock Incentive shall, continue after the authority for grant of
new Stock Incentives hereunder has been exhausted.
10. ADMINISTRATION.
(a) Composition of Committee. The Plan shall be administered by the
Committee which shall be composed solely of two or more non-employee or
"outside" directors as defined by Section 162(m) of the Code and the regulations
promulgated thereunder and Rule 16b-3(b)(3) of the Securities and Exchange
Commission (or any successor rule or statute at the time in effect). Any member
of the Committee shall automatically cease to be a member of the Committee at
such time as such person ceases to qualify as a "non-employee" or "outside"
director as so defined and any vote cast by such person while so disqualified to
act shall be deemed a nulity and shall not adversely affect any vote cast or
action taken pursuant to the affirmative votes of a majority of the remaining
members of the Committee who at such time were not so disqualified.
(b) Delegation of Board Authority. The Board of Directors may delegate to
the Committee any or all its authority under the Plan, including the authority
to award Stock Incentives, but excluding the authority to amend or discontinue
the Plan.
(c) Rules, etc. The Committee may establish such rules and regulations and
may construe, interpret and further define terms used in the Plan so long as
such rules, regulations and other actions are not inconsistent with the
provisions of the Plan and are otherwise believed to be necessary or appropriate
to promote the purposes of the Plan, and may amend or revoke the same. All such
rules, regulations, determinations, definitions and interpretations shall be
binding and conclusive upon all persons granted stock incentives under the Plan,
the Company, its Subsidiaries, its stockholders and all employees; upon their
respective legal representatives, beneficiaries, successors and assigns, and
upon all other persons claiming under or through any of them.
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(d) Limited Liability. No member of the Board or of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any Stock Incentive granted under the Plan, and shall incur no liability
except for willful misconduct in the performance of their duties.
11. GENERAL PROVISIONS
(a) No right to Continued Employment. Nothing in the Plan nor in any
instrument executed pursuant thereto shall confer upon any employee any right to
continue in the employ of the Company or a Subsidiary or shall affect the right
of the Company or of a Subsidiary to terminate the employment of any employee
with or without cause.
(b) Legal Requirements for Transfers. No shares of Common Stock shall be
issued or transferred pursuant to a Stock Incentive unless the Company is
satisfied that there has been compliance with all legal requirements applicable
to the issuance or transfer of such shares. In connection with any such issuance
or transfer, the person acquiring the shares shall, if requested by the Company,
give assurances satisfactory to the Company that the shares are being acquired
for investment and not with a view to resale or distribution thereof and
assurances in respect of such other matters as the Company may deem desirable to
assure compliance with all applicable legal requirements.
(c) No Rights in shares Before Issue or Transfer. No employee (individually
or as a member of a group), and no beneficiary or other person claiming under or
through him, shall have any right, title or interest in or to any shares of
Common Stock allocated or reserved for the purposes of the Plan or subject to
any Stock Incentive, except as to such shares of Common Stock, if any, as shall
have been issued or transferred to him.
(d) Grants to Prospective Salaried Employees. The Company or Subsidiary
may, with the approval of the Committee, enter into an agreement or other
commitment to grant a Stock Incentive in the future to a person who is or will
be at the time of grant a Salaried Employee, and, notwithstanding any other
provision of the Plan, any such agreement or commitment shall not be deemed the
grant of a Stock Incentive until the date on which the Committee takes action to
implement such agreement or commitment, which date shall for the purpose of the
Plan be the date of grant.
(e) Implementation by subsidiary. In the case of a grant of a Stock
Incentive to any employee of a Subsidiary, such grant may, if the Committee so
directs, be implemented by the Company issuing or transferring the shares, if
any, covered by the Stock Incentive to the Subsidiary, for such lawful
consideration as the Committee may specify, upon the condition or understanding
that the Subsidiary will transfer the shares to the employee in accordance with
the terms of the Stock Incentive. Notwithstanding any other provision hereof,
such Stock Incentive may be issued by and in the name of the Subsidiary and
shall be deemed granted on the date it is approved by the Committee or on such
later date as the Committee shall specify.
(f) Taxes. The Company or a Subsidiary may make such provisions as it may
deem appropriate for the withholding and payment of any taxes which the Company
or Subsidiary determines it is required to withhold or which the employee deems
to be payable in connection with any Stock
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Incentive. Such provisions may include a requirement that all or part of
the amount of such taxes be paid to the Company or Subsidiary, in cash or by
transfer to the Company of shares of Mature Stock or other Stock which was not
obtained through the exercise of a stock option owned by the employee, or by the
withholding of cash or shares of Common Stock payable to the employee under the
stock incentive, or by any combination of the foregoing. To the extent that tax
provisions are satisfied with shares of the Company's Common Stock, such stock
shall be valued at Fair Market Value on the appropriate transaction date.
(g) No Assignments. No Stock Incentive and no rights under a Stock
Incentive or under the Plan, contingent or otherwise, shall, by operation of law
or otherwise, be transferable or assignable or subject to any encumbrance,
pledge, hypothecation or charge of any nature, or to execution, attachment or
other legal process, except that, in the event of the death of the holder of a
Stock Incentive, the holder's rights under the Stock Incentive may pass, as
provided by law, to the legal representatives of the holder, and such legal
representatives may transfer any rights in respect of such Stock Incentive to
the person or persons or entity (including a trust) entitled thereto under the
will of the holder of such Stock Incentive, or in the case of intestacy, under
the applicable laws relating to intestacy. During the life of a holder of a
Stock Incentive, the Stock Incentive shall be exercisable only by such holder.
Notwithstanding the foregoing, a Stock Incentive may be transferable, to the
extent set forth in the applicable award agreement.
(h) No Restriction on Other Plans. Nothing in the Plan is intended to be a
substitute for, or shall preclude or limit the establishment or continuation of,
any other plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of employees,
which the Company or any Subsidiary now has or may hereafter lawfully put into
effect, including, without limitation, any retirement, pension, profit-sharing,
insurance, stock purchase, incentive compensation or bonus plan.
(i) Applicable Law. The place of administration of the Plan shall
conclusively be deemed to be within the State of Kansas and the validity,
construction, interpretation and administration of the Plan and of any rules and
regulations or determinations or decisions made thereunder, and the rights of
any and all persons having or claiming to have any interest therein or
thereunder, shall be governed by and be determined exclusively and solely in
accordance with, the laws of the State of Kansas. Without limiting the
generality of the foregoing, the period within which any action arising under or
in connection with the Plan, or any payment or award made or purportedly made
under or in connection therewith, must be commenced, shall be governed by the
laws of the State of Kansas, irrespective of the place where the act or omission
complained of took place and of the residence of any party to such action and
irrespective of the place where the action may be brought.
12. AMENDMENT OR DISCONTINUANCE OF PLAN
(a) Amendments. The Plan may be amended by the Board of Directors at any
time, provided that without the affirmative vote of the holders of a majority of
the shares of the Company's Common Stock and a vote of the holders of a majority
of the Company's Preferred Stock present or represented, and entitled to vote at
a meeting duly held in accordance with applicable law, no amendment shall be
made which (i) increases the aggregate number of shares of Common Stock that may
be issued
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or transferred pursuant to Stock Incentives as provided in paragraph (a) of
Section 4, (ii) permits any person who is not determined to be a Salaried
Employee to be granted a Stock Incentive, (iii) amends the provisions of
paragraph (b) of Section 6, (iv) amends Section 9 to extend the term of the
Plan, or (v) amends this Section 12.
(b) Plan Termination. The Board of Directors may by resolution adopted by a
majority of the entire Board of Directors discontinue the Plan.
(c) Effect of Amendment or Termination. No amendment or discontinuance of
the Plan by the Board of Directors or the shareholders of the Company shall
adversely affect, without the consent of the holder thereof, any Stock Incentive
theretofore granted.
13. EFFECTIVE DATE OF PLAN.
The Plan shall become effective on its adoption by the Board, provided,
however, the Plan shall be submitted for approval by the holders of a majority
of the shares of the Company's Common Stock and by the holders of a majority of
the shares of the Company's Preferred Stock, present or represented and entitled
to vote at a meeting duly held in accordance with applicable law prior to the
first anniversary of such adoption by the Board. Any Stock Incentive granted
prior to stockholder approval of the Plan shall become null and void if such
approval is not obtained before the first anniversary of the effective date.
Such grants shall also contain provisions for the return or cancellation of
benefits if such stockholder approval is not obtained.
CERTIFICATIONS
The undersigned Secretary of Midwest Grain Products, Inc., hereby certifies
that the foregoing Plan reflects the Plan as duly adopted by the Board of
Directors at a regular meeting of the Board duly called, noticed, convened and
held on March 5, 1998, all in accordance with the Certificate of Incorporation,
Bylaws and applicable laws of the State of Kansas.
Dated March 5, 1998.
s/Marta Myers
________________________________
Marta Myers, Secretary
The undersigned Secretary of Midwest Grain Products, Inc., hereby certifies
that the foregoing Plan was duly approved by the holders of a majority of the
Common and Preferred Stock present or represented and entitled to vote at the
Annual Meeting of Stockholders duly called, noticed, convened and held on
October __, 1998, in accordance with the Certificate of Incorporation, Bylaws
and applicable laws of the State of Kansas.
Dated October __, 1998.
________________________________
Marta Myers, Secretary
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