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Exhibit 10.1
INDEMNIFICATION AGREEMENT
THIS AGREEMENT, dated as of
day of the
,
2006, by and between MGP INGREDIENTS, INC. , a Kansas
corporation (the "Company") and
(the
"Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available; and
WHEREAS, Indemnitee is a director or officer of the Company;
and
WHEREAS, both the Company and Indemnitee recognize the increased
risk of litigation and other claims being asserted against
directors and officers of public companies in today’s
environment; and
WHEREAS, the Kansas legislature, in recognition of the need to
secure the continued service of competent and experienced people in
senior corporate positions and to assure that they will be able to
exercise judgment without fear of personal liability so long as
they fulfill the basic duties of honesty, care and good faith, has
enacted K.S.A. 17-6305, which empowers the Company to indemnify its
officers, directors, employees and agents and expressly provides
that the indemnification provided by the statute is not exclusive;
and
WHEREAS, the Bylaws of the Company require the Company to
indemnify and advance expenses to its directors and officers to the
fullest extent now or hereafter authorized by the Kansas Statutes
Annotated, and the Bylaws, further, provide that the right to
indemnification and payment of expenses conferred therein shall not
be exclusive of any other right which any person may have or
acquire under any statute, provision of the Articles of
Incorporation, bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise; and
WHEREAS, in recognition of the fact that the Indemnitee
continues to serve as a director or officer of the Company, in part
in reliance on the Bylaws, and of the fact of Indemnitee’s
need for substantial protection against personal liability in order
to enhance Indemnitee’s continued service to the Company in
an effective manner, and in part to provide Indemnitee with
specific contractual assurance that the protection promised by the
Bylaws will be available to Indemnitee (regardless of, among other
things, any amendment to the Bylaws or any change in the
composition of the Company’s Board of Directors or any
acquisition transaction relating to the Company), and due to the
possibility that the Company’s directors’ and
officers’ liability insurance coverage could at some future
time become inadequate, the Company wishes to provide in this
Agreement for the indemnification of, and the advancing of expenses
to, Indemnitee to the fullest extent (whether partial or complete)
now or hereafter authorized or permitted by law and as set forth in
this Agreement, and, to the extent insurance is maintained, for the
continued coverage of Indemnitee under the Company’s
directors’ and officers’ liability insurance
policies;
NOW, THEREFORE, in consideration of the premises
and of Indemnitee continuing to serve the Company directly or, at
its request, through service to another enterprise, and intending
to be legally bound hereby, the parties hereto agree as
follows:
1.
CERTAIN DEFINITIONS:
(a)
"Acquiring Person" means a person, entity or group
that has made an acquisition described in Section 1(e)(i) or the
reorganized or surviving company in a reorganization or
consolidation described in Section 1(e)(iii).
(b)
"Approved Law Firm" shall mean any law firm that has
at least twenty (20) attorneys (wherever located) and an office
located in Kansas and is rated "av" by Martindale-Hubbell Law
Directory; provided, however, that such law firm shall not, for a
five-year period prior to the earliest date as of which Indemnitee
first has actual knowledge of the relevant Indemnifiable Claim,
have been engaged by the Company, an Acquiring Person, any
affiliate or associate of an Acquiring Person, or
Indemnitee.
(c)
"Applicable Standard of Conduct" shall mean the
standard of conduct that must be satisfied to permit
indemnification under K.S.A. 17-6305(a) or (b), whichever is or
would be applicable under the circumstances.
(d)
"Board of Directors" or "Board" shall mean the Board
of Directors of the Company.
(e)
A "Change in Control" shall be deemed to have
occurred upon:
(i)
The acquisition (other than from the Company) by any
person, entity or "group," within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (excluding, for this purpose, the Company or its
subsidiaries, any employee benefit plan of the Company or its
subsidiaries, trustees of the MGP Ingredients, Inc. Voting Trust or
of the Cray Family Trust, or any person who acquires common or
preferred stock of the Company from Cloud L. Cray, Jr. or from any
trust controlled by or for the benefit of Cloud L. Cray, Jr. prior
to or as a result of his death), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of at
least 30% of the then outstanding shares of common stock and 50% of
the then outstanding shares of $10 par value preferred stock of the
Company or 30% of the combined voting power of the Company’s
then outstanding voting securities entitled to vote generally in
the election of directors; or
(ii)
The cessation, for any reason, of individuals who,
as of the date hereof, constitute the Board (as of the date hereof
the "Incumbent Board") to constitute at least a majority of the
Board, provided that any person becoming a director subsequent to
the date hereof whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the
directors of the Company) shall be, for
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purposes of this Plan, considered as though such
person were a member of the Incumbent Board; or
(iii)
Approval by the stockholders of the Company of
(A) a reorganization, merger or consolidation, in each case,
with respect to which persons who were the stockholders of the
Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own collectively as a
group more than 50% of the combined voting power entitled to vote
generally in the election of directors of the reorganized or
surviving company’s then outstanding voting securities, or
(B) a liquidation or dissolution of the Company or the sale of
all or substantially all of the assets of the Company.
(f)
"Claim" shall mean any threatened, pending or
completed action, suit or proceeding, or any inquiry or
investigation, whether conducted by the Company or any other party,
that Indemnitee in good faith believes might lead to the
institution of any such action, suit or proceeding, whether civil,
criminal, administrative, investigative or other.
(g)
"Company-Related Enterprise" shall mean any
corporation of any type or kind, domestic or foreign, partnership,
joint venture, trust, employee benefit plan or other enterprise for
which Indemnitee serves or has served as a Fiduciary at the request
of the Company. For this purpose, and without limitation of
any indemnification provided hereunder, if Indemnitee serves as a
Fiduciary for (i) another corporation, partnership, joint venture
or trust of which 20 percent or more of the voting power or
residual economic interest is held, directly or indirectly, by the
Company, or (ii) any employee benefit plan of the Company or any
entity referred to in clause (i), Indemnitee shall be deemed to be
doing or to have done so at the request of the Company.
(h)
"Expenses" shall include attorneys’ fees and
all other costs, expenses and obligations reasonably paid or
incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing
to defend, be a witness in or participate in, any Indemnifiable
Claim, together with interest, computed at the Company’s
average cost of funds for short-term borrowings, accrued from the
date of payment of such expense to the date Indemnitee receives
reimbursement therefor.
(i)
"Fiduciary" shall mean director, officer, general
partner, manager, employee, trustee, agent or other
fiduciary.
(j)
"Indemnifiable Claim" shall mean any Claim based
upon, or arising in whole or in part out of (i) the fact that
Indemnitee is or was a Fiduciary of the Company or is or was a
Fiduciary of any Company-Related Enterprise, (ii) anything done or
not done (or alleged to have been done or not done) by Indemnitee
in any such capacity or (iii) anything done or not done (or alleged
to have been done or not done) by Indemnitee in any other capacity
for the Company or a Company-Related Enterprise while serving as a
Fiduciary of the Company or a Company-Related
Enterprise.
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(k)
"Reviewing Party" shall be (i) the Board of
Directors, acting by majority vote of directors (the "Disinterested
Directors") who are not parties to the particular Claim with
respect to which Indemnitee is seeking indemnification, even
through less than a quorum, (ii) a committee of the
Disinterested Directors designated by a majority vote of the
Disinterested Directors, even though less than a quorum, or
(iii) if there are no Disinterested Directors, or if the
Disinterested Directors so direct, (A) independent legal
counsel or (B) the stockholders.
2.
BASIC INDEMNIFICATION ARRANGEMENT. If
Indemnitee was, is or becomes at any time a party to, or witness or
other participant in, or is threatened to be made a party to, or
witness or other participant in, an Indemnifiable Claim, the
Company shall indemnify Indemnitee to the fullest extent now or
hereafter authorized or permitted by law as soon as practicable
but
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