The Annual Meeting of Stockholders of MGP Ingredients, Inc. (the “Annual Meeting”) will be held at the Atchison Event Center located at 710 S. 9th Street, Atchison, Kansas, on May 23, 2018,2019, beginning at 10:00 a.m., local time. Stockholders will consider and vote to:

1.    Elect eight (8) directors;

2.    Ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm;

3.    Adopt an advisory resolution to approve the compensation of our named executive officers; and

4.    Transact such other business as may properly come before the meeting.

The record date for determining which stockholders may vote at this meeting or any adjournment is March 26, 2018.25, 2019.

We are distributing our proxy materials to our stockholders primarily via the Internet under the “Notice and Access” rules of the Securities and Exchange Commission (“SEC”). This approach saves printing and mailing costs and reduces the environmental impact of our Annual Meeting, while providing a convenient way to access the materials and vote. On April 6, 2018,9, 2019, we are mailing a Notice of Internet Availability of Proxy Materials to stockholders of record at the close of business on March 26, 2018,25, 2019, containing instructions about how to access our proxy materials and vote online or vote by telephone.

Please review the instructions on each of your voting options described in this proxy statement and in the notice you received by mail. Your vote is important. Whether or not you plan to attend the Annual Meeting, PLEASE VOTE AS SOON AS POSSIBLE.

If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, then, under applicable rules, the organization that holds your shares may generally vote on “routine” matters but cannot vote on “non-routine” matters. The only routine matter for which your broker will be permitted to vote on your behalf without your instructions is the proposal related to the selection of KMPG LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018.2019. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform the inspectors of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.”

The holders of record of the Company’s common stock, no par value (“Common Stock”), and the Company’s preferred stock, $10 par value (“Preferred Stock”), at the close of business on March 26, 201825, 2019 are entitled to notice of and to vote at the Annual Meeting. As of March 26, 2018,25, 2019, there were 16,844,59617,014,882 shares of Common Stock outstanding and 437 shares of Preferred Stock outstanding. You are entitled to one vote for each share owned of record on that date.

All shares that have been properly voted and not revoked will be voted at the Annual Meeting in accordance with your instructions. If you sign your proxy card but do not give voting instructions, the shares represented by the proxy will be voted by those named in the proxy card in accordance with the recommendations of the Board of Directors.

If any other matters are properly presented at the Annual Meeting for consideration, the persons named in the proxy card will have the discretion to vote on those matters for you. As of the printing of this Proxy Statement, we do not know of any other matter to be presented at the Annual Meeting.

The principal executive offices of the Company are located at Cray Business Plaza, 100 Commercial Street, Atchison, Kansas 66002 and the Company’s telephone number at that address is (913) 367-1480.

The Board of Directors has nominated each of James L. Bareuther, David J. Colo, Terrence P. Dunn, Anthony P. Foglio, Augustus C. Griffin, George W. Page, Jr.,Lynn H. Jenkins, Karen L. Seaberg, and M. Jeannine Strandjord for election as a director, to hold office until the Annual Meeting of stockholders to be held in 20192020 and until their respective successors are duly elected and qualified or until their earlier death, resignation or removal. Information regarding the director nominees is set forth below under the heading “Information Regarding Director Nominees.” Daryl R. Schaller,George W. Page, Jr., a director of the Company since 1997, is retiring from the Board and accordingly2014, is not standing for election. The Nominating and Governance Committee of the Board intends to identify and nominate a candidate for the seat occupied by Mr. Schaller,Page, and that nominee would stand for election at a future special meeting of the holders of Preferred Stock.

Each nominee has consented to stand for election and the Board does not anticipate that any nominee will be unavailable to serve. If any nominee declines to serve or becomes unavailable for any reason before the election, the proxies may be voted for such substitute nominees as the Board of Directors may designate.

The Board of Directors, upon recommendation of its Audit Committee, recommends that you ratify the appointment of KPMG LLP as our independent registered public accounting firm to audit the books, records and accounts of the Company and its subsidiaries for the year ending December 31, 2018.2019. A representative of KPMG LLP will be present at the Annual Meeting, will have an opportunity to make a statement if he or she desires to do so, and will be available to respond to appropriate questions.

Information regarding the aggregate fees billed by KPMG LLP for the years ended December 31, 2017,2018, December 31, 20162017 and December 31, 20152016 for (i) professional services rendered for the audit of the Company’s annual financial statements and the reviews of the financial statements included in the Company’s reports on Form 10-Q during such year (“Audit Fees”), (ii) assurance and related services that are reasonably related to the performance of the audit or review of the Company financial statements but are not included in Audit Fees, (iii) professional services rendered for tax compliance, tax advice or tax planning and (iv) other products and services is reported below under the heading “Audit and Certain Other Fees Paid Accountants.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provides that the Company’s stockholders have the opportunity to vote to approve, on an advisory (nonbinding) basis, the compensation of the Company’s named executive officers as disclosed in this Proxy Statement in accordance with the Securities and Exchange Commission’s (“SEC”) rules. Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended, the Company is presenting the following “say-on-pay” proposal, which gives stockholders the opportunity to approve or not approve the Company’s compensation program for named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, by voting for or against the resolution set out below. While our Board intends to carefully consider the stockholder vote resulting from this proposal, the final vote is advisory in nature and will not be binding on the Company.

The Board and the Company’s Human Resources and Compensation Committee value the opinions of our stockholders, and to the extent there is any significant vote against the named executive officer compensation as disclosed in this Proxy Statement, the Company, the Board and the Human Resources and Compensation Committee will consider the results of the vote in future compensation deliberations.

In addition to the advisory vote on executive compensation, the Dodd-Frank Act requires that stockholders have the opportunity to vote on how often they believe the advisory vote on executive compensation should be held in the future. The Dodd-Frank Act requires that stockholders have such opportunity to vote on the frequency of say-on-pay votes every six years after the initial vote. The Company held the initial frequency vote at the 2011 Annual Meeting of Stockholders, where the stockholders voted for holding a say-on-pay vote every year. The Company held the most recent frequency vote at the 2017 Annual Meeting of Stockholders, where the stockholders voted for holding a say-on-pay vote every year. The next frequency vote will occur at the 2023 Annual Meeting of Stockholders, and the next say-on-pay vote will occur at the 20192020 Annual Meeting of Stockholders.

At the 20172018 Annual Meeting of Stockholders, all of the shares of Preferred Stock and more than 99%98% of the shares of Common Stock voting on the matter voted in favor of our say-on-pay proposal, reflecting broad stockholder support for the Company’s compensation of its named executive officers.

Listed below are the eight nominees for election as a director, each of whom currently serves on the Board. Each director elected at the Annual Meeting will serve a one-year term.

The Board of Directors believes that a majority of the directors should be independent and has determined that the following directors are independent: James L. Bareuther, David J. Colo, Terrence P. Dunn, Anthony P. Foglio, George W. Page, Jr., Daryl R. Schaller,Lynn H. Jenkins, Karen L. Seaberg and M. Jeannine Strandjord. In determining the independence of directors, the Board found that none of the independent directors has any material relationship with the Company other than as a director. In making these determinations, the Board considers all facts and circumstances as well as the standards defined in Rule 4200(a)(15) of the NASDAQ Stock Market.

The Board's standing Committees include the Audit Committee, the Nominating and Governance Committee and the Human Resources and Compensation Committee. The composition of these Committees is described under “Board of Directors.”

All of the members of the Nominating and Governance Committee are determined independent under the NASDAQ listing rules.

The members of the Audit Committee are independent under the NASDAQ listing rules and meet the applicable independence requirements of Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended. The members of the Human Resources and Compensation Committee are also determined independent under the NASDAQ listing rules and applicable rules of the Securities and Exchange Commission. Each director on the Committees is a “non-employee” director as defined in Rule 16b-3(b)(3) promulgated under the Securities Exchange Act of 1934 and an “outside” director as defined under Section 162(m) of the Internal Revenue Code.

The Board meets immediately after each Annual Meeting of the stockholders and may hold other regular and special meetings. The meetings are led by the Chairperson of the Board. During 2017,2018, the Board met seven times, the Audit Committee met eight times, the Human Resources and Compensation Committee met four times and the Nominating and Governance Committee met four times. Each non-employee director attended more than 75% of the meetings of the Board and the Committees of which the director was a member.

Our key governance documents include:

All of these documents are available on our website at www.mgpingredients.com in the For Investors / Governance section and a copy of any of these documents will be sent to any stockholder upon request.

The Audit Committee assists the Board of Directors in fulfilling the Board’s oversight responsibilities with respect to the quality and integrity of the financial statements, financial reporting process, and systems of internal controls. The Audit Committee also assists the Board in monitoring the independence and performance of the independent registered public accountant and the internal audit department. It also reviews and makes recommendations with regard to the process involved in the Company’s implementation of its conflict of interest and business conduct policy, is responsible for establishing and monitoring compliance under the code of conduct applicable to the chief executive and financial officers and oversees the Board’s risk management process. In connection with this work, the Committee engages in regular discussions of the Company’s risks with senior management, internal auditors, and external auditors, and annually reviews: (a) the adequacy of the Audit Committee’s written charter that has been adopted by the Board of Directors; (b) the independence and financial literacy of each member of the Audit Committee; (c) the plan for and scope of the annual audit; (d) the services and fees of the independent auditor; (e) certain matters relating to the independence of the independent auditor; (f) certain matters required to be discussed with the independent auditor relative to the quality of the Company’s accounting principles; (g) the audited financial statements and results of the annual audit; (h) recommendations of the independent auditor with respect to internal controls and other financial matters; (i) significant changes in accounting principles that are brought to the attention of the Committee; and (j) various other matters that are brought to the attention of the Committee.

The Board has determined that M. Jeannine Strandjord, James L. Bareuther, David J. Colo, Terrence P. Dunn, Anthony P. Foglio, George W. Page, Jr. and Daryl R. SchallerLynn H. Jenkins are independent, as independence for audit committees is defined in the applicable listing standards of the NASDAQ Stock Market. The Board of Directors has determined that each of M. Jeannine Strandjord, David J. Colo, Terrence P. Dunn and Anthony P. Foglio is an “audit committee financial expert,” as defined in Item 407(d)(5) of SEC Regulation S-K. Under SEC regulations, a person who is determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for purposes of Section 11 of the Securities Act of 1933. Further, the designation or identification of a person as an audit committee financial expert does not impose any duties, obligations, or liability on such person that are greater than the duties, obligations, or liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification and does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors and oversees the entire audit function including the selection of an independent registered public accounting firm. Management has the primary responsibility for the consolidated financial statements and the financial reporting process including internal control over financial reporting and the Company’s legal and regulatory compliance. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited financial statements for the year ended December 31, 2017.2018. The Audit Committee also discussed with the Chief Executive Officer and Chief Financial Officer their respective certifications with respect to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.2018.

The Audit Committee has reviewed and discussed the matters as are required to be discussed with the independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB) including those matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees; has received the written disclosures and letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee; and has discussed with the independent auditor the auditor’s independence. Based on such review and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements for 20172018 be included in the Company’s Annual Report on Form 10-K for filing with the Securities and Exchange Commission.

The purposes of the Nominating and Governance Committee are to recommend to the Board the qualifications for new director nominees, candidates for nomination and policies concerning compensation and length of service.

In identifying nominees for the Board of Directors, the Nominating and Governance Committee relies on personal contacts of the committee members and other members of the Board of Directors and management. The Nominating and Governance Committee will also consider candidates recommended by stockholders in accordance with its policies and procedures. However, the Nominating and Governance Committee may choose not to consider an unsolicited candidate recommendation if no vacancy exists on the Board. The Nominating and Governance Committee may, in its discretion, use an independent search firm to identify nominees. Ms. Jenkin's nomination was first recommended to the Nominating and Governance Committee by the Company's Chief Executive Officer.

The Nominating and Governance Committee believes that each candidate for the Board should be a person known for his or her integrity and honesty. Although the Committee does not have a formal policy with regard to diversity in identifying candidates, it looks for education, experience, knowledge or skills that complement those of existing members and that may be helpful to the Board in exercising its oversight responsibilities. A sufficient number of Board members must meet the tests for independence set forth in the applicable listing standards of the NASDAQ Stock Market and Section 10A of the Securities Exchange Act of 1934, as amended, to permit the Company to satisfy applicable NASDAQ and legal requirements. The Committee also believes it is desirable for at least one Board member to be an “audit committee financial expert,” as defined in Rule 407(d)(5) of Regulation S-K. In considering candidates, the Committee may take into account other factors as it deems relevant.

In evaluating potential nominees, the Nominating and Governance Committee determines whether the nominee is eligible and qualified for service on the Board of Directors by evaluating the candidate under the selection criteria set forth above. The Nominating and Governance Committee will conduct a check of the individual’s background and generally will conduct personal interviews before recommending any candidate to the Board. The Nominating and Governance Committee in its sole discretion may require candidates (including a stockholder’s recommended candidate) to complete a form of questionnaire providing information required to be disclosed in the Company’s proxy statement.

Stockholders who wish to recommend candidates for consideration by the Nominating and Governance Committee in connection with next year’s Annual Meeting should submit the candidate’s name and the information set forth below in writing to the chairperson of the Nominating and Governance Committee, in care of the Company’s Secretary, at Cray Business Plaza, 100 Commercial Street, P.O. Box 130, Atchison, Kansas, 66002, on or after January 23, 2019 and on or before February 22, 2019. In addition to the name of the candidate, a stockholder should submit:

The Human Resources and Compensation Committee recommends to the Board of Directors the salary and incentive compensation of the Chief Executive Officer and other executive officers of the Company. The Committee reviews the scope and type of compensation plans for other management personnel and makes recommendations to the Board with respect to equity-based plans that are subject to Board approval. The Committee administers the Company’s stock option and restricted stock plans, and also serves as an executive search committee. Each Committee member qualifies as a non-employee director under SEC Rule 16b-3 and as an outside director for purposes of Internal Revenue Code Section 162(m). The Committee has a charter, which may be found on the Company’s website at www.mgpingredients.com.

The Committee typically meets four or five times a year and generally considers and recommends various components of the Company’s compensation programs at regularly scheduled times throughout the year. Such programs typically originate as recommendations of management. The Committee typically considers any proposed amendments to benefit plans that are to take effect in the following year at its November meeting. It has typically conducted performance and salary reviews of the Chief Executive Officer and receives the Chief Executive Officer’s performance reviews and salary recommendations for other officers at its December meeting. It generally considers long-term incentive awards and performance goals for annual cash incentives in February.

When considering compensation matters, the Committee relies upon the experience of its members, the recommendations of management and outside consultants retained by the Committee.

See “Compensation Discussion and Analysis - Compensation Overview – How We Determine Compensation” for further information on the processes we follow in setting compensation.

We reviewed and discussed with management the “Compensation Discussion and Analysis” section of this Proxy Statement. Based on such review and discussion, we recommended to the Board that this Proxy Statement include the “Compensation Discussion and Analysis.”

Our Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board. The Board believes it is in the best interest of the Company to make that determination in a manner it believes best provides appropriate leadership for the Company at the time, based on the circumstances and direction of the Company and the membership of the Board. Our current structure does not combine the positions of Chief Executive Officer and Chairman of the Board of Directors, the latter also acting in the capacity of lead director. Augustus C. Griffin is currently our Chief Executive Officer and is responsible for day-to-day leadership of the Company. Karen L. Seaberg serves as the Chairman of the Board. The Board of Directors believes this is the most appropriate structure for the Company at this time, as it permits the President and Chief Executive Officer to focus his attention on managing our day-to-day business and enhances the ability of the Board of Directors to provide strong oversight of the Company’s management and affairs.

This discussion provides an overview and analysis of our compensation programs and policies, the compensation decisions we made under those programs and policies, and the factors we considered in making those decisions. We also provide a series of tables that present information about the compensation earned or paid in each of 2015, 2016, 2017, and 20172018 to our named executive officers, including:

The discussion below is intended to help you understand the information provided in the tables and put that information into context within our overall compensation program.

Our compensation program objectives are to align compensation programs with our business objectives and stockholders’ interests, to reward performance, to be externally competitive and internally equitable and to retain talent on a long-term basis. In particular, our philosophy is to balance salary and benefits with incentive and equity compensation so that the interests of the executive officers will be aligned with those of stockholders.

The principal components of our compensation program are base salary, annual cash incentive awards, long-term equity incentives and equity- and non-equity-based retirement compensation.

At the 20172018 Annual Meeting of Stockholders, all of the shares of Preferred Stock and more than 99%98% of the shares of Common Stock voting on the matter voted for the approval of compensation of the Company’s named executive officers. We believe this indicates stockholder confidence in our pay for performance philosophy.

As noted elsewhere in this Proxy Statement, our Human Resources and Compensation Committee recommends to the Board of Directors the salary and incentive compensation of the Chief Executive Officer and other executive officers of the Company. The Committee reviews the scope and type of compensation plans for other management personnel and makes recommendations to the Board with respect to equity-based plans that are subject to Board approval. The Chief Executive Officer provides the Committee with performance reviews and salary recommendations for other officers.

The Committee has unrestricted access to management. It may also request the participation of management or the Committee’s independent consultant at any meeting or executive session. Committee meetings are regularly attended by the Chief Executive Officer, except for executive sessions and discussions of his own compensation and the Committee’s independent consultant. The Committee regularly reports to the Board on compensation matters and annually reviews the Chief Executive Officer’s compensation with the Board in an executive session of non-management directors only.

The Committee has sole discretion, at Company expense, to retain and terminate independent advisors, including sole authority to approve the fees and retention terms for such advisors, if it shall determine the services of such advisors to be necessary or appropriate.

When made, annual adjustments usually take place after the start of the next year, but are retroactive to the start of such year. When making annual adjustments, the Human Resources and Compensation Committee generally uses a matrix format that takes into account each executive’s performance review and the extent to which his or her salary is above or below the midpoint for comparable positions. Adjustments sometimes occur at other times of the year as a result of a promotion or other change in duties.

The Company's Short-Term Incentive Plan (the “STI Plan”) is designed to motivate and retain Company officers and employees and to tie their short-term incentive compensation to achievement of certain profitability goals of the Company.

Pursuant to the STI Plan, short-term incentive compensation is dependent on the achievement of certain performance metrics by the Company established by the Board of Directors and certain individual qualitative objectives. Each performance metric is calculated in accordance with the rules approved by the Human Resources and Compensation Committee. For 2017,2018, such performance metrics were operating income, EBITDA, and earnings per share (EPS), each calculated as presented in the table below. Operating income was the core measure of performance under the STI Plan, reflecting the belief that this measure of performance is the most sensitive to management's performance. EBITDA is a common metric used by shareholders to measure performance and EPS both reflectreflects the Company's full financial performance, including the performance of its investment in Illinois Corn Processing, LLC prior to its sale in 2017.performance. These quantitative goals represent 90% of the total short-term incentive. In addition, 10% of the total incentive was based on qualitative goals. Payments at any of these levels of performance were conditioned upon there being no uncured default in compliance with the Company’s debt covenants under its Credit Agreement and on minimum put-away of 25,000 barrels of premium whiskey, reflecting investment for the future. Levels in the table below for operating income and EBITDA are shown in thousands.

The Human Resources and Compensation Committee determines the officers and employees eligible to participate under the STI Program for the plan year as well as the target annual incentive compensation for each participant for each plan year.

For 2017,2018, the Human Resources and Compensation Committee determined that for purposes of the STI Plan the Company achieved Operating Income of $42,682,000$50,148,000 and EBITDA of $65,025,000, after adjusting its results downward in each case to exclude the gain from the sale of a real estate asset;$61,509,000; these adjusted amounts were 101%106% of target and 114%105% of target, respectively. The Human Resources and Compensation Committee also determined that the Company achieved earnings per share of $2.24, after adjusting its results downward to exclude the estimated effects of tax reform legislation;$2.17; this adjusted amount was 130%107% of target. As a result of this performance, Mr. Griffin received a payment of $741,449,$778,055, Mr. Pigott received a payment of $344,479,$357,313, Mr. Rindom received a payment of $301,304,$309,391, Mr. Dykstra received a payment of $187,003,$192,759, and Mr. Glaser received a payment of $173,880.$179,691.

Except for provisions in long-term incentive plans applicable to all participants and provisions in employment agreements or offer letters with identified officers, as described below, we generally do not have formal arrangements for paying severance to our executive officers upon their termination of employment or a change in control, but may negotiate severance arrangements on a case-by-case basis.

In connection with the retention of Mr. Griffin as the Company’s President and Chief Executive Officer, the Human Resources and Compensation Committee negotiated and recommended to the Board of Directors for approval the Company’s entrance into an employment agreement with Mr. Griffin. In 2017, the Committee negotiated and approved the Company’s entrance into a new employment agreement with Mr. Griffin to replace the original agreement. Pursuant to the new employment agreement, Mr. Griffin was entitled to a base salary of $565,000 for 2017, and his base salary will be reviewed by the Human Resources and Compensation Committee annually thereafter during the term. The employment agreement provided for short-term and long-term incentive awards for 2017 consistent with those described in this Compensation Disclosure and Analysis. Unless Mr. Griffin is terminated for cause by the Company or terminates his employment for good reason (each as defined in the employment agreement), the Company will purchase his Atchison, Kansas residence from him following the expiration of the term for his original purchase price of $325,000. Except in the event of a voluntary termination by Mr. Griffin without good reason or by the Company with cause, upon a termination other than at the expiration of the term or upon a termination at death or for disability, Mr. Griffin will receive severance of two times his base salary. Except in the event of a voluntary termination by Mr. Griffin without good reason or by the Company for cause, a pro-rata long-term incentive award for the year in which termination occurs or the full-year award for any completed year unpaid as of the date of termination, and an amount equal to $2,000 times the number of full calendar months from the date of termination until the date in which Mr. Griffin and his spouse are Medicare eligible. In addition, except in the limited circumstances described above, upon termination all outstanding RSUs that are then unvested will vest.

Our Board has adopted stock ownership guidelines to better align the interests of our executive officers and directors with the interests of stockholders and further promote our commitment to sound corporate governance. On May 20, 2015, our Board updated the stock ownership guidelines applicable to directors.

Under the guidelines, our executive officers are required to achieve ownership of our Common Stock valued at two times their annual base salary (five times in the case of the Chief Executive Officer and two and a half times in the case of the Chief Financial Officer). The individual guideline level for each executive officer is initially calculated using the executive officer’s base salary as of the date the person is first appointed as an executive officer. This guideline level is then recalculated at each January 1st. Unless an executive officer has satisfied his or her applicable guideline level, the executive officer is required to retain an amount equal to 50% of the net shares received as the result of the exercise, vesting or payment of any equity awards granted to the executive officer. Executive officers are expected to be in compliance with their guideline level within five (5) years of the later of (a) becoming an executive officer and (b) implementation of this policy. With the exception of Mr. Pigott, who joined the Company in 2015, and Mr. Glaser, who was appointed to his current

Under the guidelines, the chairman of the Board is expected to beneficially own Common Stock valued at five times the annual cash retainer as a director and each other non-employee director is expected to beneficially own Common Stock valued at three times the annual cash retainer payable to such director. The guideline level is calculated using the annual cash retainer due the director when first elected to the Board. This guideline level is then recalculated at each January 1st. Non-employee directors are required to satisfy their guideline level within three (3) years of joining the Board, and are expected to continuously own sufficient shares to satisfy the guideline once attained for so long as they remain a member of the Company’s Board.

Shares that count toward satisfaction of the stock ownership guidelines for executive officers and directors include the following: (i) shares owned outright by the executive officer or director, or his or her immediate family members residing in the same household; (ii) shares held in trust for the benefit of the executive officer or director, or his or her immediate family members; (iii) vested shares of restricted stock; and (iv) vested shares of restricted stock units. The following do not count towards satisfaction of the stock ownership guidelines: (i) unvested shares of restricted stock or restricted stock units; (ii) shares pledged as collateral for a loan; (iii) unexercised stock options (whether vested or unvested); and (iv) incentive performance awards that may be settled in cash (whether vested or unvested).

The stock ownership guidelines are administered, interpreted, and construed by the Human Resources and Compensation Committee. In administering the stock ownership guidelines, the Human Resources and Compensation Committee will annually review the extent to which each executive officer and director of the Company has complied with the stock ownership policy.

The ownership levels of our named executive officers and non-employee directors as of March 26,25, 2018 are set forth in the table entitled “Principal Stockowners” below. We also have an insider trading policy that, among other things, prohibits executive officers from entering into any hedging or monetization transactions or otherwise trading in any instrument relating to the future price of our securities, such as a put or call option, futures contract, short sale, collar or other derivative security. Other than the stock ownership guidelines described above, we do not have a policy regarding the length of time executives or directors have to hold their stock after exercise or vesting.

Tax Considerations. Under IRC Section 162(m), publicly-held companies may not deduct compensation paid to named executive officers to the extent that an executive’s compensation exceeds $1,000,000 in any one year, unless such compensation is “performance based.” This historic exception to the $1,000,000 limitation for performance-based compensation meeting certain requirements was eliminated in recent changes to the tax code, subject to certain grandfathering for arrangements in place prior to November 2, 2017. Although deductibility of compensation is preferred, tax deductibility is not a primary objective of our compensation programs. We believe it is important to retain flexibility to compensate executives competitively even if such compensation is potentially not deductible for tax purposes. The Board and the Human Resources and Compensation Committee may determine, after balancing tax efficiency with long-term strategic objectives, that it is in the best interests of our stockholders to approve compensation that is not deductible under Section 162(m).

Under our clawback policy, a participant under any of our annual incentive or other performance-based compensation plans is required to repay or forfeit, to the fullest extent permitted by law and as directed by the Board, any annual incentive or other performance-based compensation received by him or her if:

Our policy applies to any annual incentive or other performance-based award granted to an officer with respect to fiscal periods beginning on or after July 1, 2009 and to other participants with respect to any annual incentive or other performance-based award granted with respect to fiscal periods beginning on or after July 1, 2011. The remedy specified in this policy is not intended to be exclusive, but in addition to every other right or remedy at law or in equity that may be available to us.

Our policy will be amended if and as required to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act, as it is implemented. Any such amendment will be applicable to any annual incentive or other performance-based award made to any executive officer with respect to prior periods to the extent required by law.

In 2015 the Company announced a new five-year strategic plan. The Company updates the plan annually. Under the 2015 plan:

For 2018,2019, as in 2017,2018, 10% of the award will be based on subjective evaluation of the executive officer’s qualitative performance, and 90% will be based on the attainment of goals established pursuant to certain quantitative metrics. The quantitative metrics used for evaluating 2018 executive officer performance will be:

These goals reflect the strategies adopted with our new plan. Payments at any of these levels of performance are conditioned upon (i) there being no uncured default in compliance with the Company’s debt covenants under its Credit Agreement and (ii) the production and warehousing of at least 25,000 barrels of premium whiskey in new white oak barrels for MGP inventory. If Credit Agreement waivers are issued during a plan year to allow for debt covenant compliances, the HRCC shallwill review the waivers for compliance with the quantitative metrics used for evaluating 20182019 performance.

The Human Resources and Compensation Committee has determined that the short-term incentive opportunity for Mr. Griffin for 20182019 is 100% of his base salary, while the short-term incentive opportunity for the other named executive officers ranges from 70% of each such officer’s base salary for Mr. Pigott and Mr. Rindom, to 50% of each such officer’s base salary for Mr. Dykstra and Mr. Glaser.

The long-term incentive opportunity for 20182019 for Mr. Griffin is 100%125% of his base salary, while the long-term incentive opportunity for the other executive officers is 70%80% of such officer’s base salary for Mr. Pigott and Mr. Rindom, and 50%65% of such officer's base salary for Mr. Dykstra and Mr. Glaser. The equity incentive awards based on 20182019 performance will be made in early 2019.2020. The awards willprovide for a cliff vest at the end of a three-year service period.

The following table shows the compensation that we paid for services rendered to us in all capacities to the persons who served as our principal executive officer (“PEO”), principal financial officer (“PFO”) and the three most highly-compensated executive officers serving as such at the end of 2017.2018. The table also includes information for each such person during the years ended December 31, 20162017 and December 31, 20152016 that he also was deemed a named executive officer.

The following table sets forth information with respect to each named executive officer concerning grants of awards during the year ended December 31, 2017,2018, under both the Company’s equity and non-equity plans.

The following table shows information concerning restricted stock and restricted stock unit awards outstanding held by the named executive officers on December 31, 2017.2018. No options were outstanding to any named executive officers as of such date. Amounts shown are based on a price of $76.88$57.05 per share, the closing market price on December 29, 2017.31, 2018.

The following table sets forth information with respect to each named executive officer concerning the exercise of options and the vesting of stock during the year ended December 31, 2017.2018.

As noted above, our long-term incentive plans contain change-in-control provisions. The employment agreements with some of our named executive officers discussed above in “Compensation Discussion and Analysis - Employment Agreements and Other Arrangements” contain change-in-control provisions as well.

As discussed above, the Company entered into an employment agreement with Mr. Griffin in October 2017. Except in the event of a voluntary termination by Mr. Griffin without good reason or by the Company with cause (each as defined in the Employment Agreement), upon a termination other than at the expiration of the term, Mr. Griffin will receive severance of two times his base salary, which base salary was $565,000$595,000 as of December 31, 2017.2018. Except in the event of a voluntary termination by Mr. Griffin without good reason or by the Company for cause, a pro-rata long-term incentive award for the year in which termination occurs or the full-year award for any completed year unpaid as of the date of termination, and an amount equal to $2,000 times the number of full calendar months from the date of termination until the date in which Mr. Griffin and his spouse are Medicare-eligible. As of December 31, 2017,2018, the lump sum payment of $2,000 per month would have been $192,000.$168,000. In addition, except in the limited circumstances described above, upon termination all RSUs that are then unvested will vest. In the event of a termination due to death or disability, Mr. Griffin would receive a pro-rata bonus, an amount equal to Mr. Griffin’s base compensation, and any full-year short-term and long-term awards for any completed year unpaid at the date of such termination event. Values for these events as of December 31 ,2017,2018 are shown in the table below, except for the pro-rata bonus amount, which as of that date was the full-year amount reflected in the Summary Compensation Table under Non-Equity Incentive Plan Compensation. Unless Mr. Griffin is terminated for cause or terminated his employment for good reason, the Company will purchase Mr. Griffin's Atchison, Kansas residence from him following the expiration of the term for his original purchase price of $325,000.

Additionally, as discussed above, the Company entered into an offer letter with Mr. Pigott upon his retention as the Company’s Vice President of Finance and Chief Financial Officer. The offer letter providesprovided that the Company willwould provide one year’s base salary as severance in the event of a termination of Mr. Pigott without cause. Mr. Pigott resigned from the Company in March 2019.

For awards under our 2004 Plan, immediate vesting occurs under our restricted stock unit awards upon a change of control. Accelerated or pro-rata vesting is permitted for restricted stock units if employment is terminated as a result of death, disability, retirement or, in the discretion of the Human Resources and Compensation Committee, termination without cause. The following summarizes the arrangements provided for outstanding restricted stock unit awards in the event of termination or change in control, although the Committee has discretion under the 2004 Plan to modify these arrangements and has generally exercised such discretion in the event of involuntary termination. We provide for change-in-control payments in our long-term incentive plans so that employees will remain focused on our business in the event of potential or actual changes in control.

Under our 2004 Plan, restricted stock unit awards vested in five years. In the event of a participant’s death, disability, retirement or, in the sole discretion of the Human Resources and Compensation Committee, involuntary termination of employment without cause, in any such case after three years from the date of grant specified in the agreement evidencing the stock award, restricted stock units vest as to the number of restricted stock units issued to the participant multiplied by a fraction, the numerator of which equals the number of months (including fractional months as full months) that such participant was employed by us, commencing as of January 23, 2014 and ending on the date of termination of employment, and the denominator of which is sixty. The balance of restricted stock units issued to the participant is forfeited. Further, in accordance with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), the vested portion of a participant’s restricted stock unit award will be distributed in shares of the Company’s Common Stock on the earliest to occur of (i) the end of the five-year vesting period, (ii) the participant’s death or “separation from service” (as defined in the Section 409A Treasury regulations) or (iii) certain change-in-control events described below. If a participant is a “specified employee” under the Section 409A Treasury regulations (generally an officer whose annual compensation exceeds $160,000), a distribution of vested restricted stock unit award shares on account of the participant’s separation from service will be delayed until the first business day immediately following the six-month anniversary of the date the participant separates from service.

All restricted stock unit awards under the 2004 Plan become fully vested in the event of a change of control. A change in control is deemed to occur in the event of (i) certain acquisitions of 30% or more of our outstanding Common Stock and 50% of our outstanding Preferred Stock, or 30% of the combined voting power of our then outstanding voting securities entitled to vote generally in the election of directors, (ii) certain changes of more than a majority of the membership of the Board of Directors, or (iii) certain mergers which result in our stockholders owning less than 50% of the combined voting power of the surviving corporation. All restricted stock unit awards also become fully vested and the shares of Company Common Stock covered by the awards are immediately distributed to the participants upon a “change in the ownership” of the Company or the subsidiary for which a participant performs services, a “change in effective control” of the Company or a “change in the ownership of a substantial portion of the assets” of the Company (in each case as defined in the Section 409A Treasury regulations). Generally, (i) a change in ownership of the Company or a subsidiary occurs upon an acquisition that gives the acquirer ownership of more than 50% of the total fair market value or voting power of the Company or a subsidiary, respectively, (ii) a change in effective control of the Company occurs upon either (A) the acquisition of 30% or more of the total voting power of the Company during a twelve-month period or (B) the replacement of a majority of the members of the Company’s Board of Directors during a twelve-month period where such replacement was not endorsed by a majority of the existing members and (iii) a change in the ownership of a substantial portion of assets of the Company occurs upon an acquisition during a twelve-month period of 50% or more of the total gross fair market value of all the assets of the Company.

Restricted stock units granted under the 2014 Plan will generally vest over a period of not less than three (3) years from the date of grant of such Award, provided that such Award may vest earlier on a pro-rata basis over any vesting period. Upon the occurrence of a change in control (as defined in the 2014 Equity Incentive Plan) or upon the participant’s death or disability any restricted stock units that have not previously vested will vest. Upon termination of employment or separation from service without cause, or upon the occurrence of such other event to the extent specified in the applicable Award Agreement, any restricted stock units that have not previously vested shall be forfeited. Upon retirement at or after age 65, generally the award will vest, with the payment under the award made on the settlement date originally contemplated by the award agreement. The Committee may, in its sole discretion, waive such vesting requirement, or provide for continued vesting consistent with the vesting period in an Award; provided that it shall not waive such requirement or continue such vesting to the extent such action would create adverse tax consequences for a Participant under Code Section 409A or result in any Awards that are intended to constitute performance-based compensation for purposes of Code Section 162(m) to cease to so constitute performance-based compensation. Generally, any Award under the 2014 Equity Incentive Plan to a participant who has experienced a termination of employment, separation from service, or termination of some other service relationship with the Company and its affiliates may be cancelled,canceled, accelerated, paid or continued, as provided in the applicable Award Agreement, or, as the Committee may otherwise determine to the extent not prohibited by the 2014 Equity Incentive Plan.

Assuming retirement at or after age 65, termination without cause, the holder’s death or disability, or that a change in control occurred as of December 31, 2017,2018, the value of the restricted stock unit awards outstanding as of such date held by the named executive officers that would vest (a) in accordance with the terms of their grant awards for each event and (b) pursuant to the terms of his employment agreement for Mr. Griffin. Amounts shown are based on a price of $76.88$57.05 per share, the closing market price on December 29, 2017.31, 2018.

Except in the case of Mr. Griffin, if an employee’s employment during a plan year terminates for any reason, he or she shall not be entitled to the payment of incentive compensation for the plan year. However, the Human Resources and Compensation Committee has full discretion to determine that payment of a prorated annual component may be made when termination results from job elimination, reduction in workforce or other similar Company initiative or is otherwise without cause, or is encouraged or induced by incentives offered by us. Upon a change in control, the annual incentive plan terminates. The Committee will determine payments on an annualized basis, based on our performance through the most recently completed quarter for which financial results are available. Incentive compensation will be paid on a pro-rata basis (measured through the end of such quarter) in accordance with the guidelines for payment of annual incentive compensation described in “Compensation Overview – Annual Cash Incentive.” The Committee may elect to make a partial incentive compensation payment on the basis of estimated results before the end of the year. Payment is to be made in a lump sum as soon as feasible following the change in control, but in no event later than two and one-half months following the end of the plan year in which the change in control occurs.

WeLast year, we identified the median employee using our employee population on November 1, 2017. Under the relevant rules, we were required to identify the median employee by use of a “consistently applied compensation measure,” or CACM. We chose a CACM that closely approximates the annual total compensation of our employees. Specifically, we identified the median employee by looking at payroll data for compensation paid through the measurement date. We did not perform adjustments to the compensation paid to part-time employees to calculate what they would have been paid on a full-time basis.

After applying our CACM methodology, we identified the median employee for 2017. Under the SEC rules, we are only required to identify the median employee once every three years. However, if it is no longer appropriate for us to continue to use the median employee identified last year due to a change in the median employee's circumstances that we reasonably believe would result in a significant change in our pay ratio disclosure, we are permitted to use another employee whose compensation is substantially similar to the original median employee based on the CACM used to select the original median employee. The original median employee's compensation for 2018 was significantly reduced due to a prolonged medical leave during 2018. As a result, the median employee for 2018 is another employee whose compensation is substantially similar to the original median employee based on the CACM used to select the original median employee.

Once the median employee was identified for 2018, we calculated the median employee’s total annual compensation in accordance with the requirements of the Summary Compensation Table.

Our median employee compensation as calculated using Summary Compensation Table requirements was $75,070.$79,555. Our CEO’s compensation as reported in the Summary Compensation Table was $1,869,066.$2,153,228. Therefore, our CEO to median employee pay ratio is 25:27:1.

This information is being provided for compliance purposes. Neither the Compensation Committee nor management of the Company used the pay ratio measure in making compensation decisions.

The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. SEC rules for identifying the median compensated employee and calculating the pay ratio allow companies to adopt a variety of methodologies and apply various assumptions. As a result, the pay ratio reported by other companies may not be comparable with the pay ratio that we have reported. A multitude of factors that could cause ratios to be less meaningful for company-to-company comparisons include the following, among others:

The following table shows compensation earned by or paid to all persons who were directors during 20172018 who were not also executive officers during such period.

The following table sets forth, as of March 26, 2017,25, 2019, 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 and director nominee of the Company, (iii) each of the named executive officers named in the Summary Compensation Table, and (iv) all directors and executive officers of the Company as a group.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers and directors, and persons who own more than 10% of the Company’s Common Stock, to file reports of ownership and changes in ownership with the SEC and NASDAQ. Executive officers, directors and greater-than-10% beneficial owners are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. Based on a review of the copies of such forms furnished to the Company and the Company’s officers’ and directors’ written representations, the Company believes that during 2017,2018, all required reports were filed except as follows: (i) Mr. PigottDykstra had twoa late Form 4, transactions reported in 2017, (ii) Mr. PageRindom had onea late Form 4, transaction reported in 2017;and (iii) Ms. Seaberg had one late Form 4 transaction reported in 2017; (iv)each of Mr. Griffin, had one late Form 4 transaction filed in 2017; (v)Mr. Dykstra, Mr. Glaser and Mr. Rindom had three late Form 4 transactions reported in 2017; (vi) Mr. Mansinne had one late Form 4 transaction filed in 2017; (vii) Mr. Buttshaw had two late Form 4 transactions reported in 2017; and (viii) Mr. Dykstra had one late Form 4 transaction filed in 2017 and a late Form 5 reporting late a tax withholding transaction for 2017 reported in 2018.connection with the vesting of RSUs.

We know of no other business that will be presented at the meeting. If any other matter properly comes before the stockholders for a vote at the meeting, however, the proxy holders will vote your shares in accordance with their best judgment. A proxy also confers discretionary authority on the persons named to approve minutes of last year’s Annual Meeting, to vote on matters incident to the conduct of the meeting and to vote on the election of any person as a director if a nominee herein named should decline or become unable to serve as a director for any reason.

In 2017,2018, KPMG LLP served as independent registered public accountants. Representatives of KPMG LLP 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.

Set forth below are the aggregate fees billed the Company by its principal accountant, KPMG LLP, for the years ended December 31, 2017,2018, December 31, 20162017 and December 31, 20152016 for (i) professional services rendered for the audit of the Company’s annual financial statements and the reviews of the financial statements included in the Company’s reports on Form 10-Q during such year (“Audit Fees”), (ii) assurance and related services that are reasonably related to the performance of the audit or review of the Company financial statements but are not included in Audit Fees (“Audit-Related Fees”), (iii) professional services rendered for tax compliance, tax advice or tax planning (“Tax Fees”) and (iv) other products and services (“Other Fees”).

The Audit Committee considers whether the provision of such services is compatible with maintaining the independence of its principal auditor. The Audit Committee has the sole right to engage and terminate the Company’s independent auditor, to pre-approve the performance of audit services and permitted non-audit services and to approve all audit and non-audit fees. The Audit Committee has empowered its chairman to act on the Committee’s behalf between meetings to approve permitted non-audit services; the chairman must report any such services to the Audit Committee at its next scheduled meeting. The Audit Committee may provide for the pre-approval of services through the adoption of additional pre-approval policies and procedures, provided the policies and procedures are detailed as to the particular services, the Audit Committee is informed of each service and the procedures do not include delegation to management

This proxy is being solicited by the Board of Directors of the Company. The cost of soliciting proxies will be borne directly by the Company. In addition to soliciting proxies by mail, certain officers and employees of the Company, without extra compensation, may also solicit proxies personally or by telephone. Copies of proxy solicitation materials will be furnished to fiduciaries, custodians and brokerage houses for forwarding to the beneficial owners of shares held in their names. The Company will reimburse brokers, banks or other persons for reasonable expenses in sending proxy material to beneficial owners.

MGP reserves the right to reject, rule out of order, or take other appropriate actions with respect to any proposal or nomination that does not comply with these and other applicable requirements.