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Posted 02 November, 2023

MGP INGREDIENTS INC appointed David S. Bratcher as new CEO

Nasdaq:MGPI appointed new Chief Executive Officer David S. Bratcher in a 8-K filed on 02 November, 2023.


  Upon his retirement, David S. Bratcher, the Company's Chief Operating Officer and President of Branded Spirits, will assume the role of Chief Executive Officer and President (the "CEO").  

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Overview of MGP INGREDIENTS INC
Consumer Goods • Food Products
MGP Ingredients, Inc. engages in the manufacture and trade of food, beverage, specialty wheat protein, and starch food ingredients. It operates through the following segments: Distilling Solutions, Branded Spirits, and Ingredient Solutions. The Distilling Solutions segment consists of food grade alcohol and distillery co-products, such as distillers feed, fuel grade alcohol, and corn oil. It also includes warehouse services, including barrel put away, barrel storage, barrel retrieval services, and blending services. The Branded Spirits segment focuses on producing, importing, and bottling distilled spirits through distilleries and bottling facilities. The Ingredient Solutions segment is involved in specialty wheat starches, specialty wheat proteins, commodity wheat starches, and commodity wheat proteins products. The company was founded by Cloud L. Cray, Sr. in 1941 and is headquartered in Atchison, KS.
Market Cap
$1.85B
View Company Details
Relevant filing section
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


On November 2, 2023, the Company announced that its Chief Executive Officer and President, David J. Colo, will retire from his executive officer positions and as a member of the Company's Board of Directors (the "Board") on December 31, 2023. Upon his retirement, David S. Bratcher, the Company's Chief Operating Officer and President of Branded Spirits, will assume the role of Chief Executive Officer and President (the "CEO"). In order to ensure a smooth transition, Mr. Colo will remain with the Company as an employee in a senior advisor, non-officer capacity through April 30, 2023. The Company will seek to have Mr. Bratcher elected as a Class B director of the Company effective January 1, 2024.


Mr. Bratcher, age 55, has served as the Company's Chief Operating Officer since July 2021 and President of Branded Spirits for the Company since the merger with Luxco, Inc. ("Luxco") on April 2021, prior to which he was President of Luxco from 2013 to April 2021. 


In connection with this CEO succession, the Company entered into an Employment Agreement with Mr. Bratcher on October 31, 2023 and a Retirement and Transition Agreement with Mr. Colo on October 31, 2023. A summary of the material terms and conditions of these agreements is set forth below.


Employment Agreement with Mr. Bratcher


Base Salary. Mr. Bratcher will receive a base salary of $625,000 per year. Mr. Bratcher's base salary will be reviewed annually by the Human Resources and Compensation Committee of the Board (the "Compensation Committee") in accordance with the performance evaluation practices of the Company, but it may not be decreased without Mr. Bratcher's consent.


Short-Term Incentive. For 2024, Mr. Bratcher's target short-term incentive ("STI") award pursuant to the Company's Short-Term Incentive Plan (the "STI Plan") for the attainment of the Company's 2024 performance measures will be 100% of his base salary. The amount and timing of payments under the STI Plan will be at the discretion of the Compensation Committee based on the attainment by the Company of quantitative performance measures set by the Board and qualitative goals for Mr. Bratcher determined by the Compensation Committee. The terms and conditions of the STI Plan for future years will be reviewed and established annually by the Compensation Committee.


Long-term Incentive. Mr. Bratcher will be eligible to participate in the Company's long-term equity incentive ("LTI") program for each fiscal year during which he is employed under the Employment Agreement, with an award for each year during its term as determined by the Compensation Committee. For the LTI award for the performance year 2024, Mr. Bratcher's total target LTI award will have a value equal to 170% of his base salary. The terms and conditions of the LTI awards for future years in the Term will be reviewed and established annually by the Compensation Committee.


Personal Benefits. Mr. Bratcher will retain his existing automobile allowance of $1,500 per month and gas allowance in accordance with applicable Company policy. The Company also agreed to reimburse Mr. Bratcher for up to $10,000 of his legal fees incurred in connection with negotiating and drafting his Employment Agreement. 


Severance. In the event that Mr. Bratcher's employment terminates for any reason other than death or disability after the end of a fiscal year but before payment of his STI award for that prior fiscal year, he will be entitled to receive his STI payout. In the event that Mr. Bratcher's employment terminates for reasons other than cause or for good reason, each as defined in the Employment Agreement, he will be entitled to receive (i) two years of base salary continuation, (ii) a pro rata STI award based on actual performance for the performance year in which the termination occurs, (iii) a pro-rata LTI award based on actual performance for the performance year in which termination occurs, and (iv) the full-year STI and LTI awards for any completed performance year unpaid as of the date of termination. In addition, except in the event of a termination by the Company for cause, all of Mr. Bratcher's outstanding restricted stock units that are then unvested will continue to vest on their normal schedule. Payment of any of the foregoing benefits is conditioned upon Mr. Bratcher signing and not rescinding a release in favor of the Company. Upon a termination for disability or death, Mr. Bratcher or his estate will receive the full-year award for any completed year unpaid as of the date of termination and a pro-rata STI payment for the year in which the termination occurs based on actual results and, in the case of termination due to disability, subject to Mr. Bratcher signing and not rescinding a release in favor of the Company.


The Employment Agreement also contains restrictive covenants regarding confidentiality and prohibitions on the soliciting of employees and interference with business relationships.


Retirement and Transition Agreement with Mr. Colo


Mr. Colo's employment under his Employment Agreement dated March 16, 2020 will terminate on the close of business on December 31, 2023 in connection with his retirement as CEO. Mr. Colo will remain an employee in a senior advisor, non-officer capacity to facilitate the CEO transition through April 30, 2024. He will continue to receive his same current base salary during the transition term, but will not be entitled to an STI or LTI award for the portion of the fiscal 2024 performance year while he remains employed.


The foregoing descriptions of the Employment Agreement and the Retirement and Transition Agreement are qualified by reference to the full text of the agreements, which are filed as Exhibits 10.1 and 10.2, respectively, with this Current Report on Form 8-K. 


Attached as Exhibit 99.2 is a press release announcing the CEO transition.