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As Filed with the Securities and Exchange Commission on September 26, 1996
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13
of the Securities Exchange Act of 1934
For the Fiscal Year Ended June 30, 1996
MIDWEST GRAIN PRODUCTS, INC.
1300 Main Street
Box 130
Atchison, Kansas 66002
Telephone: (913) 367-1480
Incorporated in the State of Kansas
COMMISSION FILE NO. 0-17196
IRS No. 48-0531200
The Company has no securities registered pursuant to Section 12(b) of
the Act. The only class of common stock outstanding consists of Common Stock
having no par value, 9,765,172 shares of which were outstanding at June 30,
1996.
The Common Stock is registered pursuant to Section 12(g) of the Act.
The aggregate market value of the Common Stock of the Company held by
non-affiliates, based upon the last sales price of such stock on September 12,
1996, was $102,819,510.
The Company has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and
has been subject to such filing requirements for the past 90 days.
As indicated by the following check mark, disclosure of delinquent
filers pursuant to Rule 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge in a definitive proxy or
information statement incorporated by reference in Part III of this Form 10-K:
[X].
The following documents are incorporated herein by reference:
(1) Midwest Grain Products, Inc. 1996 Annual Report to Stockholders,
pages 10 through 28 [incorporated into Part II and contained in
Exhibit 10(c)].
(2) Midwest Grain Products, Inc. Proxy Statement for the Annual
Meeting of Stockholders to be held on October 10, 1996, dated
September 19, 1996 (incorporated into Part III).
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MIDWEST GRAIN PRODUCTS, INC.
FORM 10-K
For the Fiscal Year Ended June 30, 1996
CONTENTS
PAGE
PART I
Item 1. Business.................................................. 4
General Information....................................... 4
Vital Wheat Gluten........................................ 5
Premium Wheat Starch...................................... 6
Alcohol Products.......................................... 7
Flour and Other Mill Products............................. 9
Transportation............................................ 9
Raw Materials............................................. 10
Energy.................................................... 10
Employees................................................. 10
Regulation................................................ 11
Item 2. Properties................................................ 11
Item 3. Legal Proceedings......................................... 11
Item 4. Submission of Matters to a Vote of Security Holders....... 11
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.................................... 12
Item 6. Selected Financial Data................................... 12
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 12
Item 8. Financial Statements and Supplementary Data............... 12
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure................. 12
PART III
Item 10. Directors and Executive Officers of the Registrant........ 13
Item 11. Executive Compensation.................................... 15
Item 12. Security Ownership of Certain Beneficial
Owners and Management.................................. 15
Item 13. Certain Relationships and Related Transactions............ 15
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K............................................... 16
SIGNATURES............................................................ 18
FINANCIAL STATEMENT SCHEDULES......................................... S-1
Report of Independent Public Accountants on Schedules............... S-2
Schedule VIII. Valuation and Qualifying Accounts................... S-3
EXHIBIT INDEX ........................................................ E-1
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The calculation of the aggregate market value of the Common Stock of
the Company held by non-affiliates is based on the assumption that
non-affiliates do not include directors. Such assumption does not constitute an
admission by the Company or any director that any director is an affiliate of
the Company.
3
PART I
Item 1. Business.
General Information
Midwest Grain Products, Inc. (the Company) is a Kansas corporation
headquartered in Atchison, Kansas. It is the successor to a business founded in
1941 by Cloud L. Cray, Sr.
The Company is a fully integrated producer of vital wheat gluten,
premium wheat starch, and alcohol products. These grain products are processed
at plants located in Atchison, Kansas, and Pekin, Illinois. Wheat is purchased
directly from local and regional farms and grain elevators and milled into
flour. The flour is processed with water to extract vital wheat gluten which is
dried into a tan powder and sold in packaged or bulk form. The resulting starch
slurry is further processed to extract premium wheat starch which is also dried
into a powder and sold in packaged or bulk form. The remaining slurry is mixed
with corn or milo and water and then cooked, fermented and distilled into
alcohol. The residue of the distilling operations is dried and sold as a high
protein additive for animal feed. Carbon dioxide which is produced during the
fermentation process is trapped and sold. As a result of these processing
operations, the Company sells approximately 95% (by weight) of grain processed.
The table below shows the Company's sales from continuing operations by
product group for each of the five years ended June 30, 1996, as well as such
sales as a percent of total sales. The table does not reflect the sales of
McCormick Distilling Company, a business that was sold as of December 31, 1992.
PRODUCT GROUP SALES
Year Ended June 30,
----------------------------------------------------------------------------
1996 1995 1994 1993 1992
---------------- ------------ ------------ -------------- --------------
(thousands of dollars)
Amount % Amount % Amount % Amount % Amount %
------ --- ------ --- ------ --- ------ --- ------ ---
Vital Wheat Gluten........$ 39,514 20.3 $ 49,957 27.7 $ 70,966 38.2 $ 54,156 33.1 $ 46,941 30.1
Premium wheat starch....... 26,354 13.5 23,403 13.0 21,110 11.3 18,423 11.3 17,578 11.3
Alcohol Products:
Food Grade Alcohol
Beverage Alcohol...... 39,465 20.3 32,573 18.1 29,536 15.9 27,142 16.6 26,437 17.0
Food Grade Industrial. 32,064 16.5 23,379 13.0 22,585 12.1 17,123 10.5 17,974 11.5
Fuel Grade Alcohol....... 25,347 13.0 28,120 15.6 19,273 10.4 24,468 15.0 21,069 13.6
Alcohol by-products...... 28,449 14.6 19,583 10.9 18,146 9.8 19,288 11.8 17,791 11.4
------ ---- ------ ---- ------ ---- ------ ---- ------ ----
Total alcohol
products............ 125,325 64.4 103,655 57.5 89,540 48.2 88,021 53.9 83,271 53.5
------- ---- ------- ---- ------ ---- ------ ---- ------ ----
Flour and other mill
products................ 3,445 1.8 3,327 1.8 4,352 2.3 2,826 1.7 8,004 5.1
----- --- ----- --- ----- --- ----- --- ----- ---
Net sales ..........$194,638 100.0 $180,252 100.0 $185,968 100.0 $163,426 100.0 $155,794 100.0
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
Although fiscal 1996 sales increased in 1996 by $14.4 million, income
from operations declined by $15.0 million to produce a $3.4 million net loss for
the year. The loss, which was the first annual loss in the Company's 55 year
history, was due primarily to unusually high grain costs in the face of greatly
increased competition from foreign exporters of vital wheat gluten and a
relatively flat market for fuel grade alcohol. The combination of these factors
significantly restricted the ability of the Company to adjust the price of its
gluten and fuel alcohol to compensate for the increased grain costs.
During fiscal 1995 the Company completed $96.8 million of expansion
programs started in 1992 which have more than doubled the Company's 1991
capacity to produce all of its products. Although the Company expects that it
will take a number of years to develop profitable markets for all of the new
capacity, management believes that the expanded facilities have positioned the
Company for profitable growth as conditions in the market place improve.
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The bulk of the Company's sales are made under informal arrangements
direct to large institutional food and beverage processors or distributors with
respect to which the Company has longstanding relationships. Under these
arrangements products are usually ordered, produced, sold and shipped within 30
days. As a consequence, the Company's backlog of orders at any time is usually
less than 10 percent of annual sales.
Generally, the Company's sales are not seasonal except for variations
affecting alcohol and gluten sales. Fuel alcohol sales increase during the
period August through March due to requirements of the Clean Air Act which
inhibit the sale of ethanol in certain areas of the country during May 1 through
September 15 each year. Certain environmental regulations also favor greater use
of ethanol during the winter months of the year. See "Alcohol Products- Fuel
Grade Alcohol." Beverage alcohol sales tend to peak in the fall as distributors
order stocks for the holiday season, while gluten sales tend to increase during
the second half of the fiscal year as demand increases for hot dog buns,
hamburger buns, and similar bakery products.
For further information, see the Consolidated Financial Statements of
the Company and Management's Discussion and Analysis of the Company's Financial
Condition and Results of Operations which appear at pages 11 through 17 of the
Annual Report.
Vital Wheat Gluten
Vital wheat gluten is a light tan powder which contains approximately
75% to 80% protein. It is the only commercially available high protein food
additive which possesses vitality. The vitality of the Company's vital wheat
gluten results from its elastic and cohesive characteristics when added to dough
or otherwise reconstituted with water.
Vital wheat gluten is added by bakeries and food processors to baked
goods such as wheat breads, and to pet foods, cereals, processed meats, fish,
and poultry to improve the nutritional content, texture, strength, shape, and
volume of the product. The neutral flavor and color of wheat gluten also
enhances, but does not change, the flavor and color of food. It has been
increasingly used in breads and pet foods. The cohesiveness and elasticity of
the gluten enables the dough in wheat and other high protein breads to rise and
to support added ingredients such as whole cracked grains, raisins and fibers.
This allows the baker to make an array of different breads by varying the gluten
content of the dough. Vital wheat gluten is also added to white breads, and hot
dog and hamburger buns to improve the hinge strength and cohesiveness of the
product.
The Company ships its vital wheat gluten throughout the continental
United States in bulk and in 50 to 100 pound bags. Approximately 53% of fiscal
1996 gluten sales were made to a distributor for the bakery industry, the Ben C.
Williams Bakery Services Company, which in turn distributes vital wheat gluten
to independent bakeries. The remainder is sold directly to major food processors
and bakeries such as Kellogg Co., Interstate Baking Company, Inc. and H. J.
Heinz Co.
The Company's principal competitors in the U.S. vital wheat gluten
market consist of three other domestic producers and a number of foreign
importers. Foreign exporters provide significant competition from time to time
due to low U.S. tariffs and export incentives provided by foreign countries to
their wheat starch producers. Based on industry data, the Company believes that
in terms of fiscal 1996 sales it is the largest producer of vital wheat gluten
in the United States.
Competition in the vital wheat gluten industry is based primarily upon
price, quality, and service. Historically, gluten prices have been affected by
grain prices, grain quality, excess foreign capacity and by subsidies provided
to certain European exporters by their host governments.
The Company's vital wheat gluten processing operations are believed to
produce a quality of vital wheat gluten that is equal to or better than that of
any other wheat gluten on the market. The Company's location in the center of
the United States grain belt, its production capacity and years of operating
experience, enable it to provide a consistently high level of cost effective
service to customers.
5
The Company's sales of vital wheat gluten decreased by $10.4 million
during fiscal 1996 and $21.0 million during fiscal 1995 from the high levels of
fiscal 1994, due to reduced marketing opportunities resulting from significantly
increased European gluten imports which began during the second half of calendar
1994. The high level of fiscal 1994 Gluten sales resulted from a worldwide
shortage of gluten due to poor quality, low protein-yielding wheat following the
extremely wet weather in the spring and summer of 1993. The surge of low priced
foreign gluten occurred concurrent with significantly rising wheat costs which
began in the third quarter in fiscal 1995. Between March, 1995 and the end of
June, 1996, the average per bushel cost of wheat rose from $4.10 to $6.53.
Because of the flood of low priced foreign gluten, US wheat gluten prices failed
to adjust to the rising grain costs with a resulting negative impact on the
profitablility of the Company's gluten operations.
The substantial increase in European gluten imports are due to sizable
increases in European capacity to produce starch and gluten, high subsidies that
enable the sale of excess European gluten in the U.S. at low prices and low U.S.
tariffs on that gluten. The Company and the United States Wheat Gluten Council
have engaged in a number of initiatives to combat the dumping of foreign gluten.
Due to these efforts the United States and the European Union ratified an
agreement on July 22, 1996, that states: "If the market share of European
Community origin wheat gluten exports into the United States increases in
comparison to their average 1990-1992 market share, the European Commission and
the United States government shall consult with a view to finding a mutually
acceptable solution." Consultations pursuant to that agreement have begun, and
the Company is hopeful that they will ultimately result in the creation of a
more level playing field. However, until the intensity of competitive conditions
subside, pursuant to the outcome of consultations or otherwise, and wheat costs
substantially decrease, the Company plans to limit the production of gluten to
those amounts necessary for the production of other more profitable wheat by
products. In addition, the Company has intensified its efforts to develop
additional modified vital wheat gluten products that may be marketed in niches
that will be less affected by grain costs and foreign competition.
During fiscal 1995 the Company substantially completed the construction
of new wheat gluten production facilities at the Pekin Illinois plant. The
expansion has increased the Company's total gluten capacity by approximately
40%. That project, together with other gluten expansion projects that were
completed at the Atchison facilities during 1993 and 1994, have approximately
doubled the gluten capacity that was available at June 30, 1991. However, as
mentioned above, due to the unusually high gluten imports from Europe, and
unusually high grain costs, the Company does not expect to immediately use the
increased capacity.
Premium Wheat Starch
Wheat starch constitutes the carbohydrate-bearing portion of wheat
flour. The Company produces a pure white premium wheat starch powder by
extracting the starch from the starch slurry substantially free of all
impurities and fibers and then by spray, flash or drum drying the starch.
Premium wheat starch differs from low grade or B wheat starches which are
extracted along with impurities and fibers and are used primarily as a binding
agent for industrial applications such as the manufacture of charcoal
briquettes. The Company does not produce low grade or B starches since its
integrated processing facilities are able to process the remaining slurry after
the extraction of premium wheat starch into alcohol, animal feed and carbon
dioxide. Premium wheat starch differs from corn starch in its granular
structure, color, granular size and name identification.
An increasing portion of the Company's premium wheat starch is also
chemically altered during processing to produce certain unique modified wheat
starches designed for special applications.
The Company's premium wheat starches are used primarily as an additive
in a variety of food products to affect their appearance, texture, tenderness,
taste, palatability, cooking temperature, stability, viscosity, binding and
freeze-thaw characteristics. For example, the Company's starches are used to
improve the taste and mouth feel of cream puffs, eclairs, puddings, pie
fillings, breadings and batters; to improve the size, symmetry and taste of
angel food cakes; to alter the viscosity of soups, sauces and gravies; to
improve the freeze-thaw stability and shelf life of fruit pies and other frozen
foods; to improve moisture retention in microwavable foods; and to add stability
and to improve spreadability in frostings, mixes, glazes and sugar coatings. The
Company's specialty starches are also sold for a number of industrial and
non-food uses, such as an ink bearing coating in carbonless paper.
6
The Company's premium wheat starch is sold nationwide to food
processors, such as International Multi-Foods Corp., Pillsbury Company and
Keebler Company, to distributors, and for export to countries such as Japan,
Mexico and Malaysia which do not have wheat-based economies.
The Company believes that it is the largest producer of premium wheat
starch in the United States. Although wheat starch enjoys a relatively small
portion of the total United States starch market, the market is one which is
continuing to grow. Growth in the wheat starch market reflects a growing
appreciation for the unique characteristics of wheat starch which provide it
with a number of advantages over corn and other starches for certain baking and
other end uses. The Company has developed a number of different modified wheat
starches and continues to explore the development of additional starch products
with the view to increasing sales of higher margin modified starches.
Premium wheat starch competes primarily with corn starch, which
dominates the United States market. Competition is based upon price, name, color
and differing granular and chemical characteristics which affect the food
product in which it is used. Premium wheat starch prices usually enjoy a price
premium over corn starches and low grade wheat starches. Wheat starch price
fluctuations generally track the fluctuations in the corn starch market, except
in the case of modified wheat starches. The wheat starch market also usually
permits pricing consistent with costs which affect the industry in general,
including increased grain costs. The Company's strategy is to market its premium
wheat starches in special market niches where the unique characteristics of
premium wheat starch or one of the Company's modified wheat starches are better
suited to a customers requirements for a specific use.
Starch sales increased during fiscal 1996 by approximately $3.0
million, due primarily to higher volumes permitted by increased starch
production capacity and increased sales of modified wheat starches.
During June, 1995, the Company completed the construction of a new
starch production facility at the Pekin plant. Previously that Plant was
equipped only to produce gluten, alcohol and alcohol byproducts. The expansion
has increased total starch production capacity by 70%.
Alcohol Products
The Company's Atchison and Pekin plants process corn and milo, mixed
with the starch slurry from gluten and starch processing operations, into food
grade alcohol, fuel grade alcohol, animal feed and carbon dioxide.
Food grade alcohol, or grain neutral spirits, consists of beverage
alcohol and industrial food grade alcohol that are distilled to remove all
impurities and all but approximately 5% of the water content to yield high
quality 190 proof alcohol. Fuel grade alcohol, or "ethanol," is a lower grade of
grain alcohol that is distilled to remove all water to yield 200 proof alcohol
suitable for blending with gasoline.
Food Grade Alcohol
Beverage Alcohol. Food grade beverage alcohol consists primarily of
grain neutral spirits and gin. Grain neutral spirits is sold in bulk or
processed into vodka and gin and sold in bulk quantities at various proof
concentrations to bottlers and rectifiers, such as Heublein, Inc. and James B.
Beam Distilling Co., which further process the alcohol for sale to consumers
under numerous labels.
The Company believes that in terms of fiscal 1996 net sales, it is one
of the two largest bulk sellers of grain neutral spirits, vodka and gin in the
United States. The Company's principal competitors in the beverage alcohol
market are Grain Processing Company of Muscatine, Iowa and Archer Daniels
Midland of Decatur, Illinois. Competition is based primarily upon price and
service, and in the case of gin, formulation. The Company believes that the
centralized location of its Illinois and Kansas distilleries and the capacity of
its dual production facilities combine to provide the Company with a customer
service advantage that is unique within the industry.
Food Grade Industrial Alcohol. Food grade alcohol which is not sold as
beverage alcohol is marketed as food grade industrial alcohol. Food grade
industrial alcohol is sold as an ingredient in foods (e.g., vinegar and food
flavorings), personal care products (e.g., hair sprays and deodorants), cleaning
solutions, biocides, insecticides,
7
fungicides, pharmaceuticals, and a variety of other products. Although grain
alcohol is chemically the same as petroleum-based or synthetic alcohol, certain
customers prefer a natural grain-based alcohol. Food grade industrial alcohol
is sold in tank truck or rail car quantities direct to a number of industrial
processors, such as Integrated Ingredients, a division of Burns Philip Foods,
Inc., 7-Up Company, and Lehn & Fink, a producer of Lysol based household
cleaners, from both the Atchison and Pekin plants.
The Company is a minor competitor in the total United States market for
food grade industrial alcohol, which is dominated by petroleum-based or
synthetic alcohol. Food grade industrial alcohol prices are normally consistent
with prices for synthetic industrial alcohol.
Food grade alcohol sales increased by approximately $6.9 million during
fiscal 1996 due primarily to volume increases. Those increases were primarily
due to increased demand and the availability of increased capacity derived from
the distillery expansion at the Pekin plant.
Fuel Grade Alcohol
Fuel grade alcohol, which is commonly referred to as ethanol, is sold
primarily for blending with gasoline to increase the oxygen and octane levels of
the gasoline. As an octane enhancer, ethanol can serve as a substitute for lead
and petroleum based octane enhancers. As an oxygenate, ethanol permits gasoline
to meet certain environmental regulations and laws that regulate air quality by
reducing carbon monoxide, hydrocarbon particulate and other toxic emissions
generated from the burning of gasoline ("toxics"). Because ethanol is produced
from grain, a renewable resource, it also provides a fuel alternative that tends
to reduce the country's dependence on foreign oil.
Although ethanol can be blended directly with gasoline as an oxygenate
to enable it to reduce toxic air emissions, it also increases the volatility of
gasoline or its tendency to evaporate and release volatile organic compounds
("VOC's"). This latter characteristic has precluded it from meeting certain
clean air act requirements for gasoline that pertain to nine of the smoggiest US
metropolitan areas during the summer months (May 1 through September 15). As a
consequence, the demand for ethanol increases during the period from August
through March of each fiscal year as gasoline blenders acquire stocks for
blending with gasoline to be marketed in the period September 16 through April
30.
The cost of producing ethanol has historically exceeded the cost of
producing gasoline and gasoline additives, such as MTBE, all of which are
derived from fossil non-renewable fuels such as petroleum. Accordingly, to
encourage the production of ethanol for use in gasoline, the Federal government
and various states have enacted tax and other incentives designed to make
ethanol competitive with gasoline and gasoline additives. Under the internal
revenue code, and until October 1, 1999, gasoline that has been blended in
qualifying proportions with ethanol provide sellers of the blend with certain
income tax credits and excise tax reductions that amount to up to $0.54 per
gallon of ethanol that is mixed with the gasoline. A mix of at least 10% ethanol
by volume is required to receive the maximum credit. Although the Federal tax
benefits are not directly available to the Company, they allow it to sell its
ethanol at prices competitive with less expensive additives and gasoline. From
time to time legislation is proposed to eliminate or reduce the tax benefits
enjoyed by the ethanol industry, and indirectly by producers of the grain that
is converted into ethanol. No assurance can be given that such proposals and
complaints will not be successful or that Congress will continue the current
subsidies beyond September 30, 1999.
The Kansas Qualified Agricultural Ethyl Alcohol Producer Incentive
Fund, which expires in 1999, provides incentives for sales of ethanol produced
in Kansas to gasoline blenders. Fiscal 1996 payments to the Company out of the
fund totaled $297,000 for the ethanol produced by the Company at the Atchison
plant during that year. A few other states offer ethanol blending incentives,
which, in the aggregate, did not materially add to the Company's ethanol
revenues during fiscal 1996.
The Fuel grade alcohol market is dominated by Archer Daniels Midland.
In recent years the Company and other competitors have significantly increased
domestic fuel grade alcohol distillation capacity. During fiscal 1995 the
Company more than tripled its fuel grade alcohol production capacity through the
expansion of its distillery operations at the Pekin plant. As a consequence, it
moved from a very small competitor in the fuel grade market to the smaller
8
of a few other larger second tier ethanol producers. The Company competes with
other producers of fuel grade alcohol on the basis of price and delivery
service. Fuel alcohol prices traditionally follow the movement of gasoline
prices.
During 1996 fuel alcohol prices remained flat in the face of rising
gasoline prices, in part due to increased industry wide capacity. At the same
time the cost of grain escalated to extraordinary levels. The combination of
circumstances had a major negative impact on the Company's fuel grade alcohol
operations and those of the entire ethanol industry. A number of producers shut
down plants or otherwise significantly curtailed ethanol production. The
Company's response to the circumstance was to shift as much of its alcohol
production as possible into food grade alcohol products where prices were
adjusting to increased grain costs and to shut down its Pekin plant for the
entire month of June in order to perform extended maintenance.
Alcohol By-Products
The bulk of fiscal 1996 sales of alcohol by-products consist of
distillers feeds. Distillers feeds are the residue of corn, milo and wheat from
alcohol processing operations. The residue is dried and sold primarily to
processors of animal feeds as a high protein additive. The Company competes with
other distillers of alcohol as well as a number of other producers of animal
food additives in the sale of distillers feeds and mill feeds. The $8.9 million
increase in 1996 sales of alcohol by-products is primarily due to the 1995
expansion of the distillery at the Pekin plant, which approximately doubled the
capacity of the Company to produce distillers feeds.
The balance of alcohol by-products consists primarily of carbon
dioxide. During the production of alcohol, the Company traps carbon dioxide gas
that is emitted in the fermentation process. The gas is purchased and liquefied
on site by two principal customers, one at the Atchison Plant and one at the
Pekin Plant, who own and operate the carbon dioxide processing and storage
equipment under long term contracts with the Company. The liquefied gas is
resold by these processors to a variety of industrial customers and producers of
carbonated beverages.
Flour and Other Mill Products
The Company owns and operates a flour mill at the Atchison plant. All
of the mill's output of flour is used internally for the production of vital
wheat gluten and premium wheat starch. In 1993 the Company completed the first
of a two-phase expansion of the mill. The second phase of the expansion was
completed during the first quarter of fiscal 1995. The entire project increased
the mill's total production capacity by approximately 80%.
In addition to flour, the wheat milling process generates mill feeds or
midds and a small quantity of wheat germ. Midds are sold to processors of animal
feeds as a feed additive. Wheat germ is sold primarily for use in vitamin E
production.
Transportation
The Company's output is transported to customers by truck, rail and
barge transportation equipment, most of which is provided by common carriers
through arrangements made by the Company. The Company leases 250 rail cars which
may be dispatched on short notice. Shipment by barge is offered to customers
through barge loading facilities on the Missouri and Illinois Rivers. The barge
facility on the Illinois River is adjacent to the Pekin plant and owned by the
Company. The facility on the Missouri River, which is not company-owned, is
approximately one mile from the Atchison plant.
Raw Materials
The Company's principal raw material is grain, consisting of wheat
which is processed into all of the Company's products and corn and milo which
are processed into alcohol, animal feed and carbon dioxide. Grain is purchased
directly from surrounding farms, primarily at harvest time, and throughout the
year from grain elevators. Historically, the cost of grain is subject to
substantial fluctuations depending upon a number of factors which affect
commodity prices in general, including crop conditions, weather, government
programs, and purchases by foreign
9
governments. Although significant variations in grain prices may temporarily
affect positively or negatively the results of the Company's operations, the
Company has usually, but not always, been able to compensate for such variations
through adjustments in prices charged for the Company's grain products.
Beginning in fiscal 1995 and continuing through fiscal 1996 wheat, corn
and milo prices increased to unusually high levels in the face of intense
competition from foreign exporters of vital wheat gluten and relatively flat to
depressed markets for fuel grade ethanol. In fiscal 1996, the Company's corn and
milo costs averaged 44% more per bushel than those costs in fiscal 1995, and
wheat costs in fiscal 1996 averaged 32% more per bushel. While the Company used
only 2.3 million more bushels of grain in fiscal 1996, its total combined cost
for wheat, corn and milo for fiscal 1996 rose approximately $27 million above
grain expenditures in the prior year. The increase in grain prices appears to be
primarily due to historically low US stocks of grain reserves caused by weather
and increased worldwide demand. The combination of these factors have
significantly restricted the ability of the company to adjust the price of its
gluten and fuel grade alcohol to compensate for the high grain costs. The
Company is responding to these circumstances by shifting as much of its
production as is possible to starch and food grade alcohol production, by
restricting the production of gluten and fuel grade alcohol and through the
implementation of other cost-cutting measures.
Historically the Company has not engaged in the purchase of commodity
futures to hedge economic risks associated with fluctuating grain and grain
products prices. However, due to the significantly increased volumes of grain
and grain products that are expected as a result of the expansion of the
Company's production facilities and the fact that the markets for an increasing
portion of the Company's products are not adjusting to fluctuations in gain
costs, the Company began during 1995 to make limited purchases of commodity
futures, including wheat, corn and gasoline futures. It expects to increase such
hedging activity in the future.
Energy
Because energy comprises a major cost of operations, the Company seeks
to assure the availability of fuels for the Pekin and Atchison plants at
competitive prices.
All of the natural gas demand for the Atchison plant is transported by
a wholly-owned subsidiary which owns a gas pipeline. The subsidiary procures the
gas in the open market from various suppliers. The Atchison boilers may also be
oil fired.
In the past, the Company's Pekin plant generated the bulk of its energy
needs from coal and gas fired boilers. However, due to the expansion of the
Pekin plant, the Company entered into a long-term arrangement in 1995 with an
Illinois utility to satisfy the energy needs of the entire plant with a new gas
fired plant. Under the arrangement, the utility constructed at the Pekin plant
on ground leased from the Company a gas powered electric and steam generating
facility. The utility sells to the Company steam and electricity, generally at
fixed rates, using gas procured by the Company.
Employees
As of June 30, 1996, the Company had 385 employees, 263 of whom are
covered by three collective bargaining agreements with two labor unions. On
August 31, 1996, the Company successfully negotiated a contract covering 168
employees at the Atchison Plant. A contract covering 93 employees expires at the
Pekin plant on October 31, 1996, and the third contract covering 2 employees
expires on June 30, 1997. As of June 30, 1995, the Company had 429 employees.
The decline in employees resulted primarily from measures taken during fiscal
1996 to reduce the size of the workforce due to adverse economic circumstances
affecting the Company's operations.
During fiscal 1995, the Company reduced compensation expense for
non-union personnel, including managers and executives by over $2.0 million. An
additional $1.2 million reduction was implemented in 1996. The reductions
include reductions of base salary in 1996 of approximately 8%, major reductions
in cash bonuses and ESOP contributions in 1995 and the elimination of all bonus
programs and ESOP contributions in 1996. These reductions were implemented in
response to the decline in the Company's operating results during the last two
fiscal years.
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The Company considers its relations with its personnel to be good and
has not experienced a work stoppage since 1978.
Regulation
The Company's beverage and industrial alcohol business is subject to
regulation by the Bureau of Alcohol, Tobacco and Firearms ("BATF") and the
alcoholic beverage agencies in the States of Kansas and Illinois. Such
regulation covers virtually every aspect of the Company's alcohol operations,
including production facilities, marketing, pricing, labeling, packaging, and
advertising. Food products are also subject to regulation by the Food and Drug
Administration. BATF regulation includes periodic BATF audits of all production
reports, shipping documents, and licenses to assure that proper records are
maintained. The Company is also required to file and maintain monthly reports
with the BATF of alcohol inventories and shipments.
Item 2. Properties.
The Company maintains the following principal plants, warehouses and
office facilities:
Plant Area Tract Area
Location Purpose (in sq. ft.) (in acres)
-------- ------- ------------ ----------
Atchison, Kansas Principal executive offices,
grain processing, warehousing,
and research and quality
control laboratories. 494,640 25
Pekin, Illinois Grain processing, warehousing,
and quality control laboratories. 462,926 49
Except as otherwise reflected under Item 1, the facilities mentioned
above are generally in good operating condition, are currently in normal
operation, are generally suitable and adequate for the business activity
conducted therein, and have productive capacities sufficient to maintain prior
levels of production. Except as otherwise reflected under Item 1, all of the
plants, warehouses and office facilities are owned. Although none are subject to
any major encumbrance, the Company has entered into loan agreements which
contain covenants against the pledging of such facilities to others. The Company
also owns transportation equipment and a gas pipeline described under
Transportation and Energy.
Item 3. Legal Proceedings.
There are no material legal proceedings pending as of June 30, 1996.
Legal proceedings which are pending consist of matters normally incident to the
business conducted by the Company and taken together do not appear material.
Item 4. Submissions of Matters to a Vote of Security Holders.
No matters have been submitted to a vote of stockholders during the
fourth quarter of fiscal year covered by this report.
PART II
Item 5. Market for Registrants Common Equity and Related Stockholders Matters.
11
The Common Stock of the Company has been traded on the NASDAQ National
Market System under the symbol MWGP since November 1988.
The following table reflects the cash dividends paid and the high and
low closing prices of the Common Stock for each quarter of fiscal 1996 and 1995:
Quarterly Cash Sales Price
Dividends High Low
--------- ---- ---
1995:
First Quarter...........................$ .125 $ 36.25 $ 27.25
Second Quarter.......................... .125 28.50 22.50
Third Quarter........................... .125 24.00 17.00
Fourth Quarter.......................... .125 18.75 17.00
------
$ .50
======
1996:
First Quarter...........................$ .000 $ 19.50 $ 16.50
Second Quarter.......................... .000 17.00 10.75
Third Quarter........................... .000 15.00 12.00
Fourth Quarter.......................... .000 13.50 11.38
------
$ .000
======
At June 30, 1996, there were approximately 1,000 holders of record of
the Company's Common Stock. It is believed that the Common Stock is held by more
than 2,000 beneficial owners.
Item 6. Selected Financial Data.
Incorporated by reference to the information under Selected Financial
Information on page 10 of the Annual Report, a copy of which page is included in
Exhibit 10(c) to this Report.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Incorporated by reference to the information under Managements
Discussion and Analysis of Financial Condition and Results of Operations on
pages 11 through 17 of the Annual Report, copies of which pages are included in
Exhibit 10(c) to this Report.
Item 8. Financial Statements and Supplementary Data.
Incorporated by reference to the consolidated financial statements and
related notes on pages 18 through 28 of the Annual Report, copies of which pages
are included in Exhibit 10(c) to this Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
12
PART III
Item 10. Directors and Executive Officers of the Registrant.
The directors and executive officers of the Company are as follows:
Name Age Position
- ---- --- --------
Cloud L. Cray, Jr. 73 Chairman of the Board and Director
Laidacker M. Seaberg 50 President, Chief Executive Officer and Director
Sukh Bassi, Ph.D. 55 Vice President - Vital Wheat Gluten Marketing,
Research and Development and Corporate Technical
Director
Robert G. Booe 59 Vice President - Administration, Controller,
Treasurer and Chief Financial Officer
Gerald Lasater 58 Vice President - Wheat Starch Marketing
Raymond Miller 62 Vice President - Purchasing and Energy and
President of Midwest Grain Pipeline, Inc.
Anthony J. Petricola 60 Vice President - Engineering
Randy M. Schrick 46 Vice President - Operations and Director
Robert L. Swaw 66 Vice President - Alcohol Marketing
Michael Braude 60 Director
Richard J. Bruggen 70 Director
F.D. "Fran" Jabara 71 Director
Tom MacLeod, Jr. 48 Director
Robert J. Reintjes 64 Director
Eleanor B. Schwartz, D.B.A. 59 Director
Mr. Cray, Jr. has been a Director since 1957, and has served as Chairman
of the Board since 1980. 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 thirty years.
Mr. Seaberg, a Director since 1979, 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.
13
Dr. Bassi has served as Vice President of Research and Development
since 1985, Technical Director since 1989 and Vice President - Vital Wheat
Gluten Marketing since 1992. From 1981 to 1992 he was Manager of the Vital Wheat
Gluten Strategic Business Unit. He was previously a professor of biology at
Benedictine College for ten years.
Mr. Booe has served as Vice President, Treasurer and Chief Financial
Officer of the Company since 1988. He joined the Company in 1966 as its
Treasurer and became the Controller and Treasurer in 1980. In 1992 he was
assigned the additional task of Vice President - Administration.
Mr. Lasater joined the Company in 1962. He has served as Vice President
- - Starch Marketing since 1992. Previously he served as Vice President in charge
of the Wheat Starch Strategic Business Unit.
Mr. Miller joined the Company in 1956. He has served as Vice President
- - Purchasing and Energy since 1992, President of Midwest Grain Pipeline, Inc.
since 1987, and as Vice President of the Company since 1967.
Mr. Petricola joined the Company in 1985. He has served as Vice
President - Engineering since 1992. Previously he served as Corporate Director
of Engineering.
Mr. Schrick, a Director since 1987, joined the Company in 1973. He has
served as Vice President - Operations since 1992. From 1984 to 1992 he served as
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.
Mr. Swaw joined the Company in 1989. He has served as Vice President-
Alcohol Marketing since September 1, 1995. Previously he was sales manager of
the Company's industrial alcohol division. Before joining the Company, Mr. Swaw
was general manager for the bulk alcohol division of Sofecia, S.A. and general
sales manager with Publicker Industries in Philadelphia.
Mr. Bruggen has been a Director since 1976 and is a member of the Audit
and Human Resources committees. He was Senior Vice President of Atchison Casting
Corporation from 1991 until his retirement in 1992. Previously he was the
General Manager of Rockwell International Plants at Atchison, Kansas and
St. Joseph, Missouri.
Mr. Braude has been a Director since 1991 and 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 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.
Mr. Jabara has been a director since October 6, 1994, and 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.
Mr. MacLeod, Jr. has been a Director since 1986 and is a member of the
Audit and Nominating Committees. He has been the President and Chief Operating
Officer of Iams Company, a manufacturer of premium pet foods, since 1989.
Previously, he was President and Chief Executive Officer of Kitchens of Sara
Lee, a division of Sara Lee Corporation, a food products company.
Mr. Reintjes has been a Director since 1986, and 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 23 years. The 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.
14
Dr. Schwartz has been a director since June 3, 1993. She is Chairman of
the Nominating Committee and a member of the Audit Committee. She has been the
Chancellor of the University of Missouri-Kansas City since May 1992, and was
previously the Vice Chancellor for Academic Affairs. She is a Trustee of Midwest
Research Institute and a director of ANNUHCO, Inc. and Waddell, Reed, Torchmart
and United Funds Group, Inc.
The Board of Directors is divided into two groups (Groups A and B) and
three classes. Group A directors are elected by the holders of Common Stock and
Group B directors are elected by the holders of Preferred Stock. One class of
directors is elected at each annual meeting of stockholders for three-year
terms. The present directors' terms of office expire as follows:
Group A Directors Term Expires Group B Directors Term Expires
Mr. Bruggen 1997 Mr. Cray, Jr. 1998
Mr. MacLeod 1998 Mr. Reintjes 1998
Dr. Schwartz 1996 Mr. Braude 1997
Mr. Jabara 1997
Mr. Schrick 1996
Mr. Seaberg 1996
Item 11. Executive Compensation.
Incorporated by reference to the information under "Executive
Compensation" on pages 15 through 19 of the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Incorporated by reference to the information under "Principal
Stockholders" beginning on page 20 of the Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
None.
15
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
The following documents are filed as part of this report:
(a) Financial Statements:
Auditors Report on Financial Statements.
Consolidated Balance Sheets at June 30, 1996 and 1995.
Consolidated Statements of Income - for the Three Years Ended
June 30, 1996, 1995 and 1994.
Consolidated Statements of Stockholders Equity for the Three
Years Ended June 30, 1996, 1995 and 1994.
Consolidated Statements of Cash Flow - for the Three Years
Ended June 30, 1996, 1995 and 1994.
Notes to Consolidated Financial Statements.
The foregoing have been incorporated by reference to the Annual
Report as indicated under Item 8.
(b) Financial Statement Schedules:
Auditors Report on Financial Statement Schedules:
VIII - Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable
or the information is contained in the Consolidated
Financial Statements or notes thereto.
(c) Exhibits:
Exhibit No. Description
---------- -----------
3(a) Articles of Incorporation of the Company
(Incorporated by reference to Exhibit 3(a) of
the Company's Registration Statement No. 33-24398
on Form S-1).
3(b) Bylaws of the Company (Incorporated by reference
to Exhibit 3(b) of the Company's Registration
Statement No. 33-24398 on Form S-1).
4(a) Copy of Note Agreement dated as of August 1,
1993, providing for the issuance and sale of
$25 million of 6.68% term notes ("Term Notes",
incorporated by reference to Exhibit 4.1 to
the Company's Report on Form 10-Q for the
quarter ended September 30, 1993).
4(b) Copy of Term Notes dated August 27, 1993
(incorporated by reference to Exhibit 4.2 to
the Company's Report on Form 10-Q for the
quarter ended September 30, 1993).
4(c) Copy of Third Amended Line of Credit Loan
Agreement providing for the Issuance of a Line
of Credit Note in the amount of $27,000,000.
4(d) Copy of Line of Credit Note Under Third Amended
Line of Credit Loan Agreement.
9(a) Copy of Cray Family Trust (Incorporated by
reference to Exhibit 1 of Amendment No. 1 to
Schedule 13D of Cloud L. Cray, Jr. dated
November 17, 1995).
16
10(a) Summary of informal cash bonus plan
(incorporated by reference to the summary
contained in the Company's Proxy Statement
dated September 19, 1996, which is
incorporated by reference into Part III of
this Form 10-K).
10(b) Executive Stock Bonus Plan as amended June 15,
1992 (incorporated by reference to Exhibit
10(b) to the Company's Form 10-K for the year
ended June 30, 1992).
10(c) Information contained in the Midwest Grain
Products, Inc. 1996 Annual Report to
Stockholders that is incorporated herein by
reference.
10(d) Copy of Midwest Grain Products, Inc. Stock
Incentive Plan of 1996, as amended as of
August 26, 1996 (incorporated by reference to
Exhibit A to Midwest Grain Products, Inc. Notice
of 1996 Annual Meeting and Proxy Statement under
definitive Schedule 14A filed September 17,
1996).
10(e) Form of Stock Option with respect to stock
options granted under the Midwest Grain
Products, Inc. Stock Incentive Plan of 1996.
10(f) Copy of Midwest Grain Products, Inc. 1996 Stock
Option Plan for Outside Directors, as amended as
of August 26, 1996 (incorporated by reference to
Exhibit B to Midwest Grain Products, Inc. Notice
of 1996 Annual Meeting and Proxy Statement under
definitive Schedule 14A filed September 17,
1996).
22 Subsidiaries of the Company other than
insignificant subsidiaries:
State of Incorporation
Subsidiary or Organization
---------- ---------------
Midwest Solvents Company
of Illinois, Inc. Illinois
Midwest Grain Pipeline, Inc. Kansas
Midwest Grain Products of
Illinois, Inc. Illinois
Midwest Purchasing Company, Inc. Illinois
25 Powers of Attorney executed by all officers
and directors of the Company who have signed
this report on Form 10-K (incorporated by
reference to the signature pages of this
report).
27 Midwest Grain Products Financial Data Schedule as
at June 30, 1996 and for the year then ended.
No reports on Form 8-K have been filed during the quarter ended June
30, 1996.
17
SIGNATURES
Pursuant to requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, in the city of Atchison, State of
Kansas, on this 19th day of September, 1996.
MIDWEST GRAIN PRODUCTS, INC.
By /s/Laidacker M. Seaberg
-------------------------
Laidacker M. Seaberg, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Cloud L. Cray, Jr., Laidacker M. Seaberg
and Robert G. Booe and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and re-substitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all reports of
the Registrant on Form 10-K and to sign any and all amendments to such reports
and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities & Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant in the capacities indicated on the dates indicated.
Name Title Date
---- ----- ----
/s/ Laidacker M. Seaberg
--------------------- President (Principal
Laidacker M. Seaberg Executive Officer) and Director September 19, 1996
/s/ Robert G. Booe
--------------------- Vice President, Treasurer
Robert G. Booe and Controller (Principal
Financial and Accounting Officer) September 19, 1996
/s/ Michael Braude
---------------------
Michael Braude Director September 19, 1996
/s/ Richard J. Bruggen
---------------------
Richard J. Bruggen Director September 19, 1996
/s/ Cloud L. Cray, Jr.
---------------------
Cloud L. Cray, Jr. Director September 19, 1996
/s/ F. D. Jabara
---------------------
F. D. "Fran" Jabara Director September 19, 1996
/s/ Tom MacLeod
---------------------
Tom MacLeod, Jr. Director September 19, 1996
/s/ Robert J. Reintjes
---------------------
Robert J. Reintjes Director September 19, 1996
/s/ Randy M. Schrick
---------------------
Randy M. Schrick Director September 19, 1996
/s/ Eleanor B. Schwartz
-------------------
Eleanor B. Schwartz Director September 19, 1996
18
MIDWEST GRAIN PRODUCTS, INC.
Consolidated Financial Statement Schedules
(Form 10-K)
June 30, 1996, 1995 and 1994
(With Auditors' Report Thereon)
S-1
BAIRD,
KURTZ &
DOBSON Report of Independent Accountants
---------------------------------
on Financial Statement Schedule
-------------------------------
Board of Directors and Stockholders
Certified Midwest Grain Products, Inc.
Public Atchison, Kansas
Accountants
In connection with our audit of the financial statements of MIDWEST GRAIN
PRODUCTS, INC. for each of the three years in the period ended June 30, 1996, we
have also audited the following financial statement schedule. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement schedule
based on our audits of the basic financial statements. The schedule is
presented for purposes of complying with the Securities and Exchange
Commission's rules and regulations and is not a required part of the
consolidated financial statements.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
/s/Baird, Kurtz & Dobson
Kansas City, Missouri
August 9, 1996
City Center Square
Suite 2700
1100 Main
Kansas City,
Missouri 64105
816 221-6300
FAX: 816 221-6380
- ------------------
With Offices in:
Arkansas
Colorado
Kansas
Kentucky
Missouri
Nebraska
Oklahoma
- --------
Member of
Moores Rowland
International
MIDWEST GRAIN PRODUCTS, INC.
VIII. VALUATION AND QUALIFYING ACCOUNTS
Additions
----------------------
Balance, Charged to Charged Balance,
Beginning Costs and to Other Deductions End of
of Period Expenses Accounts Write-Offs Period
--------- ---------- -------- ---------- --------
(In Thousands)
YEAR ENDED JUNE 30, 1996 $85 $214 $14 $285
Allowance for doubtful == === == ===
accounts
YEAR ENDED JUNE 30, 1995 $25 $101 $41 $ 85
Allowance for doubtful == === == ==
accounts
YEAR ENDED JUNE 30, 1994 $25 $ 59 $59 $ 25
Allowance for doubtful == === == ===
accounts
S-3
EXHIBIT INDEX
Exhibit No. Description
---------- -----------
3(a) Articles of Incorporation of the Company (Incorporated by
reference to Exhibit 3(a) of the Company's Registration Statement
No. 33-24398 on Form S-1).
3(b) Bylaws of the Company (Incorporated by reference to Exhibit 3(b)
of the Company's Registration Statement No. 33-24398 on Form S-1).
4(a) Copy of Note Agreement dated as of August 1, 1993, providing for
the issuance and sale of $25 million of 6.68% term notes ("Term
Notes", incorporated by reference to Exhibit 4.1 to the Company's
Report on Form 10-Q for the quarter ended September 30, 1993).
4(b) Copy of Term Notes dated August 27, 1993 (incorporated by
reference to Exhibit 4.2 to the Company's Report on Form 10-Q
for the quarter ended September 30, 1993).
4(c) Copy of Third Amended Line of Credit Loan Agreement providing for
the Issuance of a Line of Credit Note in the amount of
$27,000,000.
4(d) Copy of Line of Credit Note Under Third Amended Line of Credit
Loan Agreement.
9(a) Copy of Cray Family Trust (Incorporated by reference to Exhibit 1
of Amendment No. 1 to Schedule 13D of Cloud L. Cray, Jr. dated
November 17, 1995).
10(a) Summary of informal cash bonus plan (incorporated by reference to
the summary contained in the Company's Proxy Statement dated
September 19, 1996, which is incorporated by reference into Part
III of this Form 10-K).
10(b) Executive Stock Bonus Plan as amended June 15, 1992 (incorporated
by reference to Exhibit 10(b) to the Company's Form 10-K for the
year ended June 30, 1992).
10(c) Information contained in the Midwest Grain Products, Inc. 1996
Annual Report to Stockholders that is incorporated herein by
reference.
10(d) Copy of Midwest Grain Products, Inc. Stock Incentive Plan of 1996,
as amended as of August 26, 1996 (incorporated by reference to
Exhibit A to Midwest Grain Products, Inc. Notice of 1996 Annual
Meeting and Proxy Statement under definitive Schedule 14A filed
September 17, 1996).
10(e) Form of Stock Option with respect to stock options granted under
the Midwest Grain Products, Inc. Stock Incentive Plan of 1996.
10(f) Copy of Midwest Grain Products, Inc. 1996 Stock Option Plan for
Outside Directors, as amended as of August 26, 1996 (incorporated
by reference to Exhibit B to Midwest Grain Products, Inc. Notice
of 1996 Annual Meeting and Proxy Statement under definitive
Schedule 14A filed September 17, 1996).
E-1
Exhibit No. Description
---------- -----------
22 Subsidiaries of the Company other than insignificant subsidiaries:
State of Incorporation
Subsidiary or Organization
---------- ---------------
Midwest Solvents Company of Illinois, Inc. Illinois
Midwest Grain Pipeline, Inc. Kansas
Midwest Grain Products of Illinois, Inc. Illinois
Midwest Purchasing Company, Inc. Illinois
25 Powers of Attorney executed by all officers and directors of the
Company who have signed this report on Form 10-K (incorporated by
reference to the signature pages of this report).
27 Midwest Grain Products Financial Data Schedule as at June 30, 1996
and for the year then ended.
E-2