<PAGE>
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Dated September 17, 1997
Filed by the registrant [x] Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, for use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule
14a-12
MIDWEST GRAIN PRODUCTS, INC.
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other than Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee Computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies: _____________________________________________
2) Aggregate number of securities to which transaction
applies: _____________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined): ________________________
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------
5) Total fee paid:_______________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date of its
filing.
1) Amount previously paid:__________________________________
2) Form, schedule or registration statement no.:____________
3) Filing party:____________________________________________
4) Date filed:______________________________________________
<PAGE>
NOTICE OF 1997 ANNUAL MEETING OF
STOCKHOLDERS AND PROXY STATEMENT
MIDWEST GRAIN PRODUCTS, INC.
[Logo]
<PAGE>
MIDWEST GRAIN PRODUCTS, INC.
1300 Main Street
Atchison, Kansas 66002
September 17, 1997
NOTICE OF ANNUAL MEETING
To the Stockholders:
The Annual Meeting of Stockholders of Midwest Grain Products, Inc. will be
held at the Presbyterian Community Center, 401 Santa Fe Street, Atchison, Kansas
66002, on Thursday, October 9, 1997, beginning at 10:00 a.m., local time, for
the following purposes:
o To elect three directors each for a three year-term expiring in 2000; and
o To transact such other business as may properly come before the meeting.
Holders of Common and Preferred Stock of record on the books of the Company
at the close of business on August 20, 1997, will be entitled to vote at the
meeting or any adjournment thereof.
STOCKHOLDERS ARE REQUESTED TO COMPLETE, SIGN, DATE AND MAIL PROMPTLY IN THE
ENCLOSED ENVELOPE THE ACCOMPANYING PROXY SO THAT, IF YOU ARE UNABLE TO ATTEND
THE MEETING, YOUR SHARES MAY NEVERTHELESS BE VOTED.
By Order of the Board of Directors
s/Laidacker M. Seaberg
Laidacker M. Seaberg
President and Chief Executive Officer
<PAGE>
PROXY STATEMENT
This Proxy Statement and the enclosed form of Proxy are being furnished in
connection with the solicitation of proxies for use at the Annual Meeting of
Stockholders of Midwest Grain Products, Inc. (the "Company") to be held on
October 9, 1997, as set forth in the preceding Notice. It is expected that this
Proxy Statement and the enclosed form of Proxy will be mailed to Stockholders
commencing September 17, 1997.
GENERAL INFORMATION
The holders of outstanding shares of Common Stock and Preferred Stock of the
Company at the close of business on August 20, 1997, are entitled to notice of
and to vote at the Annual Meeting. The presence in person or by proxy of persons
entitled to vote a majority of the issued and outstanding stock of each class of
stock entitled to vote will constitute a quorum for the transaction of business
at the meeting. As of August 20, 1997, there were 9,700,172 shares of Common
Stock outstanding and 437 shares of Preferred Stock outstanding.
Generally, holders of Common and Preferred Stock each vote separately as a
class with respect to each matter that the class is authorized to vote on with
each share of stock in each class being entitled to one vote. In connection with
the election of directors the holders of Common Stock are entitled to vote on
the election of Group A directors and the holders of Preferred Stock are
entitled to vote on the election of Group B directors. The candidates for office
which receive the highest number of votes will be elected. Although no business
is scheduled to come before the meeting other than the election of directors,
the affirmative vote of the holders of a majority of each class of stock
entitled to vote represented at the meeting (or such higher voting requirement
as may be specified by law or the Company's Articles of Incorporation) is
required for approval of other proposals.
Abstentions and broker non-votes will be counted as present for purposes of
determining the existence of a quorum at the Annual Meeting. Abstentions will be
treated as shares present and entitled to vote for purposes of any matter
requiring the affirmative vote of a majority or other proportion of the shares
present and entitled to vote. With respect to shares relating to any proxy as to
which a broker non-vote is indicated on a proposal, those shares will not be
considered present and entitled to vote with respect to any such proposal. With
respect to any matter brought before the Annual Meeting requiring the
affirmative vote of a majority or other proportion of the outstanding shares of
a class, an abstention or non-vote will have the same effect as a vote against
the matter being voted upon.
Any Stockholder giving a Proxy may revoke it at any time prior to its use by
executing a later dated Proxy or by filing a written revocation with the
Secretary of the Company. A Proxy may also be revoked by appearing at the
meeting and voting by written ballot. All shares represented by a Proxy in the
enclosed form that is properly executed and received in time for the meeting and
not revoked will be voted. If a choice is specified with respect to any matter
to be acted upon, the shares will be voted in accordance with the specification
so made. If no choice is specified, the Proxy will be voted FOR each of the
nominees named on the Proxy with respect to the election of directors.
The principal executive offices of the Company are located at 1300 Main
Street, Atchison, Kansas 66002 and the Company's telephone number at that
address is (913) 367-1480.
1
<PAGE>
ELECTION OF DIRECTORS
Nominees
Two Group A Directors and one Group B Director are required to be elected at
the Annual Meeting. The holders of the Common Stock are entitled to vote for the
persons nominated for the Group A positions. The holders of Preferred Stock are
entitled to vote for the persons nominated for the Group B position. Daryl R.
Schaller, Ph.D. and F. D. "Fran" Jabara have been nominated by the Board of
Directors for election to the Group A positions for terms expiring at the Annual
Meeting in 2000. Michael Braude has been nominated by the Board of Directors for
election to the Group B position for a term expiring at the Annual Meeting in
2000. Messrs. Jabara and Braude are now and have been directors of the Company
for more than the past two years. Dr. Schaller has been nominated by the Board
to fill the Group A vacancy that will be created by the retirement of Richard
Bruggen, whose term ends immediately before the Annual Meeting. Mr. Bruggen has
served as a Director of the Company since 1976. Each of the nominees have
consented to serve if elected. If for any reason any of the nominees should not
be available or able to serve, the Proxies will exercise discretionary authority
to vote for substitutes deemed by them to be in the best interests of the
Company.
2
<PAGE>
GROUP A NOMINEES
(For terms expiring in 2000)
F. D. "Fran" JABARA Mr. Jabara, age 72, has been a Group A director since
October 6, 1994. He is Chairman of the Human
Resources Committee and a member of the Audit
Committee. He is President of Jabara Ventures Group,
a venture capital firm. From September 1949 to
August 1989 he was a distinguished professor of
business at Wichita State University, Wichita, Kansas.
He is also a director of Commerce Bank, Wichita,
Kansas and NPC International, Inc., an operator of
numerous Pizza Hut and other quick service
restaurants throughout the United States.
DARYL R. SCHALLER, Ph.D. Dr. Schaller, age 53, retired from Kellogg Co. in 1996
after 25 years of service. He served Kellogg as its
Senior Vice President -- Scientific Affairs from 1994
and previously was Senior Vice President -- Research,
Quality and Nutrition for Kellogg. He is also a
director of Iams Company, a producer of pet foods
and of Cancer Research Foundation of America and
a Trustee of Michigan Biotechnology Institute,
American Health Foundation, and Stedman Center for
Nutritional Studies of the Medical School of Duke
University.
GROUP B NOMINEE
(For term expiring in 2000)
MICHAEL BRAUDE Mr. Braude, age 61, has been a Group B director since
1991. He is Chairman of the Audit Committee and a
member of the Nominating Committee. He has been
the President and Chief Executive Officer of the
Kansas City Board of Trade, a commodity futures
exchange, since 1984. Previously, he was Executive
Vice President and a Director of American Bank &
Trust Company of Kansas City. Mr. Braude is a
director of Country Club Bank, Kansas City, Missouri
and National Futures Association, a member and
immediate Past Chairman of the National Grain Trade
Council and a trustee of the University of Missouri-
Kansas City and of Midwest Research Institute.
3
<PAGE>
OTHER
GROUP A DIRECTORS
RICHARD J. BRUGGEN Mr. Bruggen, age 71, has been a Group A director
since 1976. He plans to retire from the Board prior to
the Annual Meeting upon the expiration of his present
term. He is also a member of the Audit and Human
Resources Committees. He was Senior Vice President
of Atchison Casting Corporation from 1991 until his
retirement in July 1992. Previously he was General
Manager of Rockwell International plants at Atchison,
Kansas and St. Joseph, Missouri.
TOM MACLEOD, JR. Mr. MacLeod, age 49, has been a director since 1986.
His present term expires in 1998. He is a member of
the Audit and Nominating Committees. He has been
the President and Chief Operating Officer of the Iams
Company since 1989, a Dayton, Ohio manufacturer of
premium pet foods. Previously, he was the President
and Chief Executive Officer of Kitchens of Sara Lee,
a division of Sara Lee Corporation, a food products
company.
ELEANOR B. SCHWARTZ, D.B.A. Dr. Schwartz, age 60, has been a director since June
3, 1993. Her present term expires in 1999. She is
also a member of the Audit Committee and Chairman of
the Nominating Committee. She has been the
Chancellor of the University of Missouri-Kansas City
since May 1992, was the Interim Chancellor from
September 1991 to May 1992, and was previously the
Vice Chancellor for Academic Affairs. She is a
Trustee of Midwest Research Institute and a director
of Transfinancial Holdings, Inc., a successor to
American Carriers, and the Waddell, Reed, Torchmart
and United Funds Group, Inc.
4
<PAGE>
OTHER
GROUP B DIRECTORS
CLOUD L. CRAY, JR. Mr. Cray, age 74, has been a director since 1957, and
has served as Chairman of the Board since 1980. His
present term expires in 1998. He served as Chief
Executive Officer from 1980 to September, 1988, and
has been an officer of the Company and its affiliates
for more than 30 years.
ROBERT J. REINTJES Mr. Reintjes, age 65, has been a director since 1986.
His present term expires in 1998. He is a member of
the Audit and Human Resources Committees. He has
served as president of Geo. P. Reintjes Co., Inc. of
Kansas City, Missouri, for the past 24 years. Geo. P.
Reintjes Co., Inc. is engaged in the business of
refractory construction. He is a director of Butler
Manufacturing Company, a manufacturer of pre-
engineered buildings, and Commerce Bank of Kansas
City.
RANDALL M. SCHRICK Mr. Schrick, age 47, has been a Group B director
since 1987. His present term expires in 1999. He
joined the Company in 1973 and has been Vice
President of Operations since July, 1992. From 1984
to July 1992 he was Vice President and General
Manager of the Pekin plant. From 1982 to 1984 he
was the Plant Manager of the Pekin Plant. Prior to
1982, he was Production Manager at the Atchison
plant.
LAIDACKER M. SEABERG Mr. Seaberg, age 51, has been a Group B director
since 1979. His present term expires in 1999. He
joined the Company in 1969 and has served as the
President of the Company since 1980 and as Chief
Executive Officer since September, 1988. He is the
son-in-law of Mr. Cray, Jr.
5
<PAGE>
Certain information concerning the Board and its Committees
The Board has three standing committees: Audit, Nominating and Human
Resources.
Non-employee directors are paid a retainer at the rate of $2,500
quarterly, $625 for attendance at each meeting of the Board, and $312.50 for
attendance at each meeting of a committee of the Board. Employee directors
receive a fee of $437.50 for attendance at each meeting of the Board of
Directors. At the Annual Meeting of Stockholders in 1996 the Stockholders
approved the Midwest Grain Products, Inc. 1996 Stock Option Plan for Outside
Directors. Pursuant to that Plan each non-employee director receives an
automatic grant of an option to purchase 1,000 shares of the Company's Common
Stock on the first business day following each annual meeting of stockholders at
a price equal to the Fair Market Value of the Common Stock on that date.
Pursuant to the Plan each of the non-employee directors received options on
October 11, 1996, to purchase 1,000 shares of Common Stock, at a price of $16.25
per share. Options become exercisable on the 184th day following the date of
grant and expire on the sooner of (a) five years from the date of grant, (b)
three years following termination of the Director's office due to retirement
following age 70, (c) one year following termination of the Director's office
due to death or (d) 90 days following the date of the termination of the
Director's term of office for any other reason.
During the fiscal year ended June 30, 1997, the Board met five times, the
Audit Committee met three times, the Human Resources Committee met twice and the
Nominating Committee met once. The attendance at Committee and Board meetings by
all Directors in the aggregate was 89%. Each Director attended all of the
meetings of the Board and the Committees of which the Director was a member,
except for Mr. Bruggen and Mr. MacLeod, whose attendance at the meetings were
70% and 45%, respectively.
The Audit Committee recommends to the Board of Directors an independent
accountant to audit the books and records of the Company and its subsidiaries
for the year. It also reviews, to the extent it deems appropriate, the Company's
Employee Conduct Policy, litigation and pending claims, the scope, plan and
findings of the independent accountants' annual audit and internal audits,
recommendations of the auditor, the adequacy of internal accounting controls and
audit procedures, the Company's audited financial statements, non-audit services
performed by the independent auditor, and fees paid to the independent auditor
for audit and non-audit services.
The Human Resources Committee recommends to the Board of Directors the
compensation of all officers and employees who earn $60,000 per year or higher.
The Committee approves a bonus system for various key employees, and reviews the
scope and type of compensation plans for management personnel. The Committee
also administers the Company's Executive Stock Bonus Plan, Stock Incentive Plan
and Directors' Stock Option Plan and also serves as an executive search
committee.
The Nominating Committee recommends to the Board of Directors the
qualifications for new Director nominees, candidates for nomination, and
policies concerning compensation and length of
6
<PAGE>
service. The Committee considers written recommendations from stockholders
concerning these subjects and suggests that they may be addressed to the
Secretary of the Company. Recommendations for director nominees should provide
pertinent information concerning the candidates' background and experience.
OTHER MATTERS
At this time the Company has no knowledge of any matters to come before
the meeting for action by the stockholders other than the election of directors.
However, if any other matters come before the meeting, it is the intention of
the persons named in the accompanying Proxy to vote the Proxy in their best
judgment.
7
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning compensation for
each of the years ending June 30, 1995, 1996 and 1997 awarded to, earned by, or
paid to the five most highly compensated executive officers of the Company for
services rendered in each of those years:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
------------------------------ ----------
Securities
Other Annual Underlying All Other
Name and Salary Bonus Compensation Options Compensation
Principal Position Year ($)(1) ($)(1) ($) (#) ($)(2)
- -------------------- ------ -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Laidacker M. Seaberg
President and Chief 1997 299,520 --- --- 24,000 11,986
Executive Officer 1996 225,226 --- --- 24,000 ---
1995 278,300 24,484 --- --- 13,513
Randy M. Schrick
Vice President of 1997 136,675 --- --- 12,000 10,924
Operations 1996 118,812 --- --- 12,000 ---
1995 127,000 6,052 --- --- 11,990
Robert G. Booe
Vice President-
Administration, 1997 136,675 --- --- 12,000 10,924
Controller, and Chief 1996 118,812 --- --- 12,000 ---
Financial Officer 1995 127,000 6,052 --- --- 11,990
Sukh Bassi, Ph.D.
Vice President-
Wheat Gluten 1997 120,550 --- --- 7,000 9,637
Marketing and Research1996 104,785 --- --- 7,000 ---
and Development 1995 112,000 5,337 --- --- 10,567
Tony J. Petricola
Vice President- 1997 120,460 --- --- 7,000 9,609
Engineer 1996 105,314 --- --- 7,000 ---
1995 111,939 4,518 --- --- 10,508
<FN>
- -----------------
(1) Includes amounts contributed by the Company to the Company's Executive
Stock Bonus Plan for the account of the executive as well as cash bonuses.
No amounts were contributed to any of the named Executive Officers for
1996 and 1997.
(2) Consists of the amount of the Company's contributions to the Company's
Employee Stock Ownership Plans allocated to the accounts of each executive
officer for the years indicated.
</TABLE>
8
<PAGE>
Stock Options
The following table contains information concerning the grant of stock
options under the Company's Stock Incentive Plan of 1996 to the Named Executive
Officers during the fiscal year ended June 30, 1997.
<TABLE>
<CAPTION>
OPTION GRANTS IN 1997
Potential
Individual Grants Realizable Value
Number of % of Total at Assumed
Securities Options Annual Rates of
Underlying Granted to Stock Price
Options Employees Exercise Appreciation for
Granted in Fiscal Price Expiration Option Term
Name (#) (1) Year ($/Sh) Date 5% ($) 10% ($)
---- ---------- ---------------------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Laidacker M. Seaberg 24,000 26.7 15.2 12/13/01 $100,959 $223,432
Randy M. Schrick 12,000 13.4 15.2 12/13/01 50,479 111,716
Robert G. Booe 12,000 13.4 15.2 12/13/01 50,479 111,716
Sukh Bassi, Ph.D. 7,000 7.7 15.2 12/13/01 29,446 65,167
Tony J. Petricola 7,000 7.7 15.2 12/13/01 29,446 65,167
</TABLE>
Option Exercises and Year End Holdings
The following table provides information, with respect to the Named
Executive Officers, concerning the exercise of options during the fiscal year
ended June 30, 1997, and unexercised options held as of the end of fiscal 1997:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL 1997
AND FY-END OPTION VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise ($) Unexercisable Unexercisable (1)
---- ------------ -------------------------- -----------------
<S> <C> <C> <C> <C>
Laidacker M. Seaberg --- --- 6,000/42,000 ---
Randy M. Schrick --- --- 3,000/21,000 ---
Robert G. Booe --- --- 3,000/21,000 ---
Sukh Bassi, Ph.D. --- --- 1,750/12,250 ---
Tony J. Petricola --- --- 1,750/12,250 ---
0
</TABLE>
9
<PAGE>
Performance of the Company's Common Stock
The following performance graph compares the performance of the Company's
Common Stock during the period beginning June 30, 1992 and ending June 30, 1997,
to the Center for Research in Security Prices of the University of Chicago
School of Business ("CRSP") index for the NASDAQ Stock Market (the "NASDAQ
COMPOSITE" index consisting of US companies) and a peer group CRSP index
consisting of 119 NASDAQ stocks of US processors of food and kindred products
having SIC codes between 2000 - 2099 (the "NASDAQ Food" index) for the same
period. The graph assumes a $100 investment in the Company's Common Stock and in
each of the indexes at the beginning of the period and a reinvestment of
dividends paid on such investments throughout the period.
VALUE OF $100 INVESTMENTS
ASSUMING REINVESTMENT OF DIVIDENDS AT JUNE 30, 1992
AND AT EACH SUBSEQUENT JUNE 30
[Performance Graph which reflects the data shown in the below table.]
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
MWGP $100 $111 $158 $83 $59 $60
NASDAQ FOOD $100 $109 $110 $118 $121 $143
NASDAQ COMPOSITE $100 $126 $127 $170 $218 $265
<PAGE>
Report of the Human Resources Committee
Human Resources Committee Interlocks and Insider Participation. Executive
compensation is based primarily upon recommendations made to the Board of
Directors by the Company's Human Resources Committee (the "Committee"). The
Committee for the year ended June 30, 1997, and the present Committee consists
of F.D. "Fran" Jabara (Chairman), Richard J. Bruggen and Robert J. Reintjes. All
of the members of the Committee are non-employee directors of the Company. The
Committee recommends to the Board of Directors compensation and compensation
plans for officers and employees who are paid in excess of $60,000 per annum.
The recommendations are acted upon by the full board which includes Messrs.
Seaberg and Schrick, who are two of the five highest paid officers of the
Company.
This report is provided by the Committee to assist stockholders in
understanding the Committee's philosophy in establishing the compensation of the
Chief Executive Officer and all other Executive Officers of the Company for the
year ended June 30, 1997 ("the Year").
Compensation Philosophy. Historically, executive compensation has been
designed to link rewards with business results and stockholder returns
consistent with (a) the executive's level of responsibility, (b) compensation
paid to the executive in the prior year, (c) the Company's
performance for the Year and the prior year, (d) the executive's individual
performance for the Year and the prior year, (e) salary levels for executives in
comparable positions in comparable enterprises, (f) inflation and (g) a variety
of other factors. The components of Executive Compensation which reflect this
philosophy consist of (i) annual base salary, (ii) annual cash bonuses, (iii)
annual stock bonuses, (iv) stock options and (v) equity based retirement
compensation which is reflected in the Company's Employee Stock Ownership Plan.
In formulating its compensation recommendations the Committee considers
information and recommendations provided by management and by Hay Management
Consultants, a nationally known and recognized firm of management consultants.
Base Salary. The past practice of the Committee has been to establish base
salaries of all executives prior to the beginning of the Year based on the
various factors described in the preceding paragraph. However, due to severely
adverse economic conditions which had significant negative impacts on the
Company's earnings and cash flows, the Committee reduced base salaries in the
summer of 1995 for all executive officers. In January, 1996 a portion of the
reductions were restored and by the end of the fiscal year ending June 30, 1996,
the rates of base pay were returned to levels in effect at the beginning of the
prior year. In January, 1997, the base salaries of all full time salaried
employees were modestly increased, with the increase for executive officers
averaging 3%.
Annual Cash Bonuses. Annual cash bonuses are paid primarily pursuant to a
Cash Bonus Plan that has been utilized for the past several years. Under the
plan each executive, along with all other nonunion personnel, become entitled to
cash bonuses, payable semiannually, of up to 25% of each employee's base salary
if certain performance targets are met. Due to a continuation of adverse
economic situations which prevailed in fiscal 1996 the bonus targets were not
met. Accordingly, no cash bonuses were paid to any Executive Officer for the
Year.
11
<PAGE>
The Committee has also authorized a $50,000 bonus pool that may be paid at
the discretion of the Chief Executive Officer to reward superior performance
during the Year by any employee of the Company other than the CEO. No awards
were made from the bonus pool during the Year.
Executive Stock Bonus Plan. From time to time the Company has made shares
of the Company's Common Stock available to key executive and managerial
employees on favorable terms in order to encourage stock ownership at those
management levels. The Company's Executive Stock Bonus Plan and the Stock
Incentive Plan have been the vehicles designed to achieve this objective. Under
the Executive Stock Bonus Plan key executives and managerial employees are
selected at the end of the year by the Committee to receive stock bonuses based
primarily upon recommendations received by the Committee from Company management
after an assessment of each participant's individual performance for the Year
and based upon the amount of stock previously acquired by the participant from
the Company under such plans in prior years. Under that Plan, the aggregate
amount contributed by the Company for the purchase of stock under the Plan may
not exceed 5% of the Company's consolidated pretax income for the year. Due to
the reduced profitability of the Company for the last two years, the Committee
has elected not to implement the Executive Stock Bonus Plan for any employees in
either fiscal 1996 or 1997. The Committee also decided in 1996 to exclude
participation by Senior Executives in the plan in the future due to their
inclusion in the Stock Incentive Plan of 1996, as discussed below.
Stock Incentive Plan of 1996. In January, 1996, the Board of Directors,
upon recommendation of the Committee, adopted the Stock Incentive Plan of 1996.
The Plan was approved by stockholders at the Annual Meeting in 1996. The Board
and the Committee took this action due to a recognized need to provide medium
term incentives for the retention and motivation of Senior Executives consistent
with current needs to conserve cash. Concurrent with that action the Committee
granted options to nine Senior Executives to purchase a total of 90,000 shares
of the Company's common stock at a price of $14 per share during terms that
expire on January 5, 2001. Similar grants were provided to the same nine
executives at $15.25 per share in December, 1996.
Employee Stock Ownership Plan. The final component of executive
compensation consists of participation in the Company's employee stock ownership
plans, which are available to all union and nonunion employees. Amounts
contributed by the Company are invested in shares of the Company's Common Stock.
Shares purchased are allocated to participant accounts in proportion to the
participant's eligible compensation (as defined). Generally, accounts are
distributed to participants who have completed at least ten years of service
upon death, permanent disability or retirement. The amount of the Company's
contribution to the nonunion ESOP's is determined by the Board each year based
upon the recommendation of the Committee. The Committee bases its recommendation
primarily upon Company performance for the Year. Due to the Company's reduced
profitability, the Committee elected to provide no contributions to the nonunion
ESOP for Fiscal 1996. In fiscal 1997, the Company contributed an amount equal to
8% of eligible compensation.
Compensation of the Chief Executive Officer for 1997. All of the
components of the 1997 compensation of the Chief Executive Officer were
determined in accordance with the criteria described above for other Senior
Executives.
This report is being made over the names of F.D. ("Fran") Jabara
(Chairman), Richard Bruggen and Robert J. Reintjes, who were the members of the
Committee which passed on Executive Compensation for the Year.
12
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth as of July 1, 1997, the number of shares
beneficially owned and the percentage of ownership of the Company's Preferred
Stock and Common Stock by (i) each person who is known by the Company to own
beneficially more than 5% of either class of the Company's capital stock
outstanding, (ii) each director of the Company, and (iii) all directors and
officers of the Company as a group.
Shares Beneficially Owned(a)
-------------------------------------
Stockholder Common Stock Preferred Stock
----------- ------------------ ------------------
No. of Shares % No. of Shares %
------------- --- ------------- ---
Richard J. Bruggen (b)......... 10,423 .10
Michael Braude (b)............. 4,864 .05
Robert G. Booe (b) (c)(d)...... 995,283 10.26
Brian Cahill (c).............. 930,206 9.59
Cloud L. Cray, Jr.(b)(e)(f).... 2,303,153 23.74 333 76.2
Richard B. Cray (e)(g)......... 115,139 1.19 334 76.4
F. D. "Fran". Jabara (b)....... 3,387 .03
Dave Rindom (c)................ 917,878 9.46
Tom MacLeod (b)................ 8,691 .09
Robert J. Reintjes (b)(h)...... 18,205 .19
Randy M. Schrick (b)(c)(i)..... 945,290 9.74
Laidacker M. Seaberg (b)(c)(e)(j) 1,476,136 15.21 383 87.6
Eleanor B. Schwartz (b)........ 2,294 .02
Cray Family Trust (e).......... 333 76.2
Trustees of the
Company's ESOPs (c)........... 917,280 9.46
All Officers and Directors
as a Group of 18 (b)(k)...... 4,011,368 41.23 384 87.9
- -------------
(a) For the purposes of the table, a person is deemed to be a beneficial owner
of shares if the person has or shares the power to vote or to dispose of
them. Except as otherwise indicated in the table or the footnotes below,
each person had sole voting and investment power over the shares listed in
the beneficial ownership table and all stockholders shown in the table as
having beneficial ownership of 5% or more of either of the classes of
stock had business addresses at 1300 Main Street, Atchison, Kansas 66002,
as of June 30, 1997. Stockholders disclaim beneficial ownership in the
shares described in the footnotes as being "held by" or "held for the
benefit of" other persons.
13
<PAGE>
(b) The table includes shares which may be acquired pursuant to stock options
granted under the Company's stock option plans that became exercisable on
or before May 1, 1997. These consist of options held by seven non-employee
directors to purchase 1,000 shares each, options held by Messrs. Booe,
Schrick and Seaberg to purchase 3,000, 3,000 and 6,000 shares,
respectively and options held by all officers and directors as a group to
purchase 29,500 shares.
(c) The Company's Employee Stock Ownership Plans (ESOPs) hold for the benefit
of participants 917,280 shares of Common Stock, all of which are attributed
in the table to each of the five trustees, who are the same for each Plan.
The trustees are obligated to vote the shares which are allocated to
participants in accordance with instructions given by such participants
(all except 1,000 were allocated at July 1, 1997). Unallocated shares are
voted by the trustees. The trustees, and the number of shares allocated to
their accounts are as follows: Mr. Seaberg (64,628 shares); Mr. Booe
(38,076 shares); Mr. Cahill (8,146 shares); Mr. Rindom (5,258 shares); and
Mr. Schrick (19,085 shares). A total of 196,708 shares are allocated to the
accounts of all other officers and directors.
(d ) Includes 45,000 shares held by Mr. Booe's wife.
(e) The Cray Family Trust holds 333 shares of Preferred Stock which are
attributed in the table to the trustees, who share the power to vote and
dispose of such shares. The trustees are Mr. Cray, Jr., Mr. Seaberg and Mr.
Richard B. Cray.
(f) Includes 144,098 shares of Common Stock held by the Cray Medical Research
Foundation with respect to which Mr. Cray, Jr. is a director and 570,765
shares of Common Stock held by other family trusts with respect to which
Mr. Cray, Jr. or his spouse is a trustee, and 50,000 shares held by the
Cloud L. Cray Foundation.
(g) Includes 333 shares of Preferred Stock held by the Cray Family Trust and
50,000 shares of Common Stock held by a foundation with respect to which
Mr. Richard B. Cray is a Trustee.
(h) All but 3,865 of the shares are held by members of Mr. Reintjes' family.
(i) Includes 9,025 shares held by members of Mr. Schrick's family.
(j) Includes 147,265 shares held by Mr. Seaberg's wife and other family
trusts with respect to which Mr. Seaberg or his wife is a trustee or a
custodian.
(k) Includes shares discussed under notes (a) through (i) as well as shares
held by members of the families of officers not listed in the table.
14
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected the firm of Baird, Kurtz & Dobson as
independent certified public accountants to audit the books, records and
accounts of the Company for 1997. The selection was made upon the recommendation
of the Audit Committee, which consists of Mr. Braude, Chairman, and Messrs.
Bruggen, MacLeod, Jr., Jabara and Reintjes and Ms. Schwartz. Baird, Kurtz &
Dobson has audited the Company's books annually since 1958.
Representatives of Baird, Kurtz & Dobson will be present at the
stockholders meeting. They will have the opportunity to make a statement and
will be available to respond to appropriate questions.
PROXY SOLICITATIONS
The cost of soliciting proxies will be borne by the Company. The Company
will reimburse brokers, banks or other persons for reasonable expenses in
sending proxy material to beneficial owners. Proxies may be solicited through
the mail and through telephonic or telegraphic communications to, or by meetings
with, stockholders or their representatives by directors, officers and other
employees of the Company who will receive no additional compensation therefore.
Stockholders who intend to present proposals for inclusion in the
Company's Proxy Statement for the next Annual Meeting of Stockholders on October
8, 1998, must forward them to the Company at 1300 Main Street, Box 130,
Atchison, Kansas 66002, Attention: Robert G. Booe, Chief Financial Officer, so
that they are received on or before May 1, 1998.
By Order of the Board of Directors
s/Laidacker M. Seaberg
Laidacker M. Seaberg
President and Chief Executive Officer
September 17, 1997
15
<PAGE>
[MWGP LOGO] MIDWEST GRAIN PRODUCTS, INC PROXY
1300 Main Street, Atchison, Kansas 66002 COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Cloud L. Cray, Jr., Laidacker M. Seaberg and
Robert G. Booe, or any of them, each with full power to appoint his substitute,
proxies to vote, in the manner specified on the reverse hereof, all of the
shares of Common Stock of Midwest Grain Products, Inc., held by the undersigned
at the Annual Meeting of Stockholders to be held on October 9, 1997, or at any
adjournment thereof.
The undersigned has received the Company's Annual Report for 1997, and its
Proxy Statement. This Proxy is revocable and it shall not be voted if the
undersigned is present and voting in person.
---------------------------
Stockholder's Signature
---------------------------
Stockholder's Signature
Dated
-----------------------
Please sign exactly as your
name(s) appear above. Joint
owners should each sign.
Executors, trustees,
custodians, etc., should
indicate the capacity in
which they are signing.
PLEASE RETURN THIS PROXY PROMPTLY IN THE ACCOMPANYING ENVELOPE.
<PAGE>
(Continued from other side)
The Board of Directors Recommends a vote FOR the following proposal:
1. Election of two Group A Directors for terms expiring in 2000. The Board of
Directors has nominated:
DARYL R. SCHALLER, Ph.D. and F. D. "FRAN" JABARA
[ ] FOR both Nominees [ ] AUTHORITY WITHHELD from both Nominees
[ ] FOR all Nominees, except vote withheld from the following Nominee:
----------------------
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED, THE
SHARES WILL BE VOTED "FOR" THE NOMINEES UNDER PROPOSAL 1.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD.
<PAGE>
[LOGO]
MIDWEST GRAIN PRODUCTS, INC PROXY
1300 Main Street, Atchison, Kansas 66002 PREFERRED STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Cloud L. Cray, Jr., Laidacker M. Seaberg and
Robert G. Booe, or any of them, each with full power to appoint his substitute,
proxies to vote, in the manner specified on the reverse hereof, all of the
shares of Preferred Stock of Midwest Grain Products, Inc., held by the
undersigned at the Annual Meeting of Stockholders to be held on October 9, 1997,
or at any adjournment thereof.
The undersigned has received the Company's Annual Report for 1997, and its
Proxy Statement. This Proxy is revocable and it shall not be voted if the
undersigned is present and voting in person.
----------------------------
Stockholder's Signature
----------------------------
Stockholder's Signature
Dated
-----------------------
Please sign exactly as your
name(s) appear above. Joint
owners should each sign.
Executors, trustees,
custodians, etc., should
indicate the capacity in
which they are signing.
PLEASE RETURN THIS PROXY PROMPTLY IN THE ACCOMPANYING ENVELOPE.
<PAGE>
(Continued from other side)
The Proxies are hereby given the following authority:
1. Election of the following nominee as a Group B Director for a term expiring
in 2000: MICHAEL BRAUDE
[ ] FOR the Nominee [ ] AUTHORITY WITHHELD from the Nominee
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED, THE
SHARES WILL BE VOTED "FOR" THE NOMINEE UNDER PROPOSAL 1.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD.
<PAGE>
MIDWEST GRAIN PRODUCTS, INC. EMPLOYEE STOCK PURCHASE PLAN
C/O Midwest Grain Products, Inc.
1300 Main Street, Atchison, Kansas 66002
INSTRUCTIONS FOR THE VOTING OF MIDWEST GRAIN PRODUCTS, INC. COMMON STOCK
The undersigned hereby instructs United Missouri Bank of Kansas City, N.A. as
Trustee of the Midwest Grain Products, Inc. Employee Stock Purchase Plan (the
"ESPP"), to vote, in the manner specified on the reverse hereof, all of the
shares of Common Stock of Midwest Grain Products, Inc., held by the ESPP and
allocated to the account of the undersigned at the Annual Meeting of
Stockholders to be held on October 9, 1997, or at any adjournment thereo .
The undersigned has received the Company's Annual Report for 1997 and its Proxy
Statement.
---------------------------
Accountholder's Signature
Accountholder Dated:
---------------------
Number of Shares Allocated to Account:
-----------
PLEASE RETURN THIS INSTRUCTION CARD PROMPTLY IN THE ACCOMPANYING ENVELOPE.
<PAGE>
(Continued from other side)
The Board of Directors of Midwest Grain Products, Inc. Recommends a vote FOR
the following proposal:
1. Election of two Group A Directors for terms expiring in 2000. The Board of
Directors has nominated:
DARYL R. SCHALLER, Ph.D. and F. D. "FRAN" JABARA
[ ] FOR both Nominees [ ] AUTHORITY WITHHELD from both Nominees
[ ] FOR all Nominees, except vote withheld from the following Nominee:
2. In its discretion, the Trustee is authorized to vote upon such other business
as may properly come before the meeting.
IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED INSTRUCTION CARD IS
RETURNED, THE SHARES WILL BE VOTED "FOR" THE NOMINEES UNDER PROPOSAL 1.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD.
<PAGE>
September 17, 1997
TO: Participants in the Midwest Grain Products, Inc.
Employee Stock Purchase Plan
Provisions of the Midwest Grain Products, Inc. Employee Stock Purchase
Plan (the "Plan") entitle participants to instruct the Trustee of the Plan as to
the voting of Midwest Grain Products, Inc. Common Stock allocated to the
accounts of participants. Accordingly, please find enclosed a form of
instruction card that will permit you to direct the Trustee as to the voting of
Common Stock allocated to your accounts in the Plan with respect to proposals to
be acted upon at the Annual Meeting of Stockholders of the Company to be held on
October 9, 1997.
We are also enclosing a copy of the Company's Annual Report for 1997 and
its Proxy Statement, unless you are being mailed one as a record holder of
Common Stock.
Please promptly complete and sign the instruction card and return it in
the enclosed envelope.
Thank you.
Very truly yours,
s/ Ladd M. Seaberg
Laidacker M. Seaberg
President and
Chief Executive Officer
<PAGE>
MIDWEST GRAIN PRODUCTS, INC. EMPLOYEE STOCK OWNERSHIP PLAN
C/O Midwest Grain Products, Inc.
1300 Main Street, Atchison, Kansas 66002
INSTRUCTIONS FOR THE VOTING OF MIDWEST GRAIN PRODUCTS, INC. COMMON STOCK
The undersigned hereby instructs Laidacker M. Seaberg, Robert G. Booe, Brian
Cahill, Dave Rindom and Randy Schrick, as Trustees of the Employee Stock
Ownership Plan indicated below (the "ESOP"), or any of them, to vote, in the
manner specified on the reverse hereof, all of the shares of Common Stock of
Midwest Grain Products, Inc., held by the ESOP and allocated to the account of
the undersigned at the Annual Meeting of Stockholders to be held on October 9,
1997, or at any adjournment thereof.
The undersigned has received the Company's Annual Report for 1997 and its Proxy
Statement.
Name of ESOP:
------------------------------
--------------------------
Accountholder's Signature
Accountholder Dated:
--------------------
Number of Shares Allocated to Account:
----------
PLEASE RETURN THIS INSTRUCTION CARD PROMPTLY IN THE ACCOMPANYING ENVELOPE.
<PAGE>
(Continued from other side)
The Board of Directors of Midwest Grain Products, Inc. Recommends a vote FOR
the following proposal:
1. Election of two Group A Directors for terms expiring in 2000. The Board of
Directors has nominated:
DARYL R. SCHALLER, Ph.D. and F. D. "FRAN" JABARA
[ ] FOR both Nominees [ ] AUTHORITY WITHHELD from both Nominees
[ ] FOR all Nominees, except vote withheld from the following Nominee:
2. In its discretion, the Trustees are authorized to vote upon such other
business as may properly come before the meeting.
IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED INSTRUCTION CARD
IS RETURNED, THE SHARES WILL BE VOTED "FOR" THE NOMINEES UNDER
PROPOSAL 1.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD.
<PAGE>
September 17, 1997
TO: Participants in the
Employee Stock Ownership Plan
Provisions of the Employee Stock Ownership Plan (the "Plan") entitle
participants to instruct the Trustees of the Plan as to the voting of Midwest
Grain Products, Inc. Common Stock allocated to the accounts of participants.
Accordingly, please find enclosed a form of instruction card that will permit
you to direct the Trustees as to the voting of Common Stock allocated to your
accounts in the Plan with respect to proposals to be acted upon at the Annual
Meeting of Stockholders of the Company to be held on October 9, 1997.
We are also enclosing a copy of the Company's Annual Report for 1997 and
its Proxy Statement, unless you are being mailed one as a record holder of
Common Stock.
Please promptly complete and sign the instruction card and return it in
the enclosed envelope.
Thank you.
Very truly yours,
s/Ladd M. Seaberg
Laidacker M. Seaberg
President and
Chief Executive Officer
