Also on January 11, 2012, Penford entered into stock option agreements with R. Bentley Cheatham, Dwight L. Carlson and Steven P. Brower, the former owners of Carolina Starches. Pursuant to these agreements, Penford granted each such individual options to purchase up to 27,500 shares of the company's common stock, $1.00 par value per share, at an exercise price equal to the closing price as of the close of business on January 11, 2012. Each grant was approved by a majority of the company's independent directors, and was granted as an inducement material to each recipient's entering into employment with a subsidiary of the company in accordance with Nasdaq Listing Rule 5635(c)(4). Pursuant to the terms of the stock option agreements, the options have a term of seven years and will vest over a two year period, with one-half of the options vesting on the first anniversary of the grant date and the remainder becoming vested on the second anniversary of the grant date, provided that the recipient has not been terminated by the company for cause or resigned by such date. The vesting of these options will accelerate and the award will become exercisable in full immediately prior to a change of control.

 From the January 12, 2012, Prepared Foods' Daily News.