**Exhibit 10.1**

 

**EXECUTIONCOPY**

 

**EMPLOYMENT AGREEMENT**

 

This Employment Agreement (this “Agreement”) is effective as of May 5,2010 (the “Effective Date”), by and among Aventine Renewable EnergyHoldings, Inc. (together with its successors and assigns the “Company”)and John Castle (“Executive”).

 

WHEREAS, the Company desires to employ Executive as Chief FinancialOfficer of the Company;

 

WHEREAS, Executive desires to accept such employment, subject to theterms and provisions of this Agreement; and

 

NOW, THEREFORE, in consideration of the premises and mutual covenantscontinued herein and for other good and valuable consideration, the receipt ofwhich is mutually acknowledged, the Company and Executive (collectively, the “Parties”)agree as follows:

 

1.             **Term ofEmployment**. The Companyhereby agrees to employ Executive under this Agreement, and Executive herebyaccepts such employment, for the “Term of Employment” which shallcommence as of the Effective Date and shall end on December 31, 2012.

 

2.             **Position, Duties and Responsibilities**.

 

(a)           During the Term ofEmployment, Executive shall serve as the Chief Financial Officer of theCompany; shall have all authorities, duties and responsibilities customarilyexercised by an individual serving in those positions in enterprises of asimilar size and structure; shall be assigned no authorities, duties orresponsibilities that are inconsistent with, or that impair his ability todischarge, the foregoing authorities, duties and responsibilities; and shallreport directly to the Chief Executive Officer of the Company (the “CEO”).

 

(b)           Executive shalldevote substantially all of his business time and efforts to the affairs of theCompany; provided, however, that while employed by the Company,Executive may serve as a member of the board of directors of any for-profitcompany with the consent of the Board of Directors of the Company the “Board”)(which will not be unreasonably withheld). In addition, without approval of the Board, Executive may (i) serve on the boards of directors of any not-for-profitentity, (ii) serve inany capacity with respect to any civic, educational, professional or charitableorganization, and (iii) managehis and his family’s personal investments, provided, that suchactivities do not materially interfere or conflict with the performance of his duties tothe Company or create a business conflict with the Company.

 

(c)           Upon expiration ofthe Term of Employment or the termination of Executive’s employment for anyreason, Executive shall resign, in writing, from any positions he then holdswith the Company, including membership on any boards.

 

3.             **PrincipalPlace of Business**.  Executive’s principal place of business shallbe located in an office of the Company in Dallas, Texas.  Executive agrees to travel on behalf of theCompany as reasonably necessary to perform his duties under this Agreement,including to the Company’s offices in Pekin, Illinois, to which Executiveacknowledges he may be required to 

 

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travel on a regular basis.  The Company will pay, or reimburse Executivein accordance with Section 4(f) below, for all reasonable andnecessary costs in connection with such travel.

 

4.             **Compensationand Benefits**.

 

(a)           Base Salary.Commencing as of the Effective Date, the Company shall pay Executive anannualized Base Salary of $350,000 (“Base Salary”), payable inaccordance with the regular payroll practices applicable to senior executivesof the Company.  Executive’s Base Salaryshall be reviewed by the Board for possible increase no less frequently thanannually during the Term of Employment and any increased Base Salary shallconstitute “Base Salary” for purposes hereof. The Base Salary (including as increased pursuant to the precedingsentence) shall not be decreased at any time during the Term of Employment.

 

(b)           Annual Bonus.Executive will be entitled to receive an annual bonus each year during the Termof Employment (the “Bonus”) with a target equal to at least 100% ofExecutive’s Base Salary for the applicable year based on reasonably attainablegoals as determined by the Board or its Compensation Committee; provided thatfor 2010 Executive’s Bonus will be no less than $350,000.  In addition, Executive shall be afforded theopportunity to earn an incentive bonus of up another 100% of the Executive’sBase Salary each year during the Term based on attainment of extraordinaryperformance metrics determined by the CEO and approved by the Board or itsCompensation Committee (each an “**Incentive****Bonus**”). Bonuses will be paid in accordance with the Company’s bonus policy as ineffect from time to time, but in no event later than 21⁄2 months after the fiscalyear in which it is earned.

 

(c)           Employee Benefits.During the Term of Employment, Executive shall be entitled to participate inall employee benefit plans and programs offered by the Company to seniorexecutives of the Company, and, subject to the eligibility requirements forparticipation therein, any employee benefit plans and programs which the Companymay adopt from time to time generally for its employees.

 

(d)           Vacations.During the Term of Employment, Executive shall be entitled to four (4) weeksof paid vacation per year to be accrued and taken in accordance with theCompany’s normal vacation policies.

 

(e)           Reimbursement ofBusiness and Other Expenses. During the Term of Employment, Executive isauthorized to incur reasonable expenses, including, without limitation, expenses for travel, entertainment and otherordinary and necessary activities, in carrying out his duties and responsibilitiesunder this Agreement, and the Company shall promptly reimburse him for all suchexpenses subject to documentation and subject to the expense reimbursementpolicies of the Company relating to expense reimbursement.

 

5.             **EquityArrangements**.

 

(a)           Equity Awards.  On the Effective Date, the Company will grantthe following equity awards to Executive: (i) stock options to purchase 100,000 shares of the Company’scommon stock (the “Common Stock”) (the “Options”) and (ii) 25,000restricted shares of Common Stock (the “Restricted Stock,” and togetherwith the Options, the “Equity Awards”) 

 

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grantedpursuant to the Company’s equity incentive plan as in effect on the EffectiveDate (the “Incentive Plan”).

 

(b)           Vesting.  Fifty (50%) percent of the Options and Fifty (50%) percent ofthe Restricted Stock will vest in the three equal installments on each of thefirst two anniversaries of the Effective Date and December 31, 2012, subjectto Executive’s continuing employment with the Company.  Fifty (50%) percent ofthe Options and Fifty (50%) percent of the Restricted Stock will vestsubject to the attainment of reasonable performance criteria to be determinedby the Board.  Notwithstanding the foregoing,in the event of (A) a Change of Control (as defined below) of the Company,then 100% of the Equity Awards shall vest, and the Options will remainexercisable for the remainder of the Option Term (as defined below), or (B) atermination of Executive’s employment by the Company without Cause (as definedbelow), or Executive’s resignation with Good Reason (as defined below), then100% of the Equity Awards shall vest, and the Options will remain exercisablefor the applicable period set forth in Section 9(d)(iii).  Any vested Options held by Executive as ofhis termination shall remain exercisable for the applicable periods specifiedbelow under Section 9.  The Optionsshall expire ten (10) years following the Effective Date (the “OptionTerm”).

 

(c)           Exercise Price.  The exercise price of each share of CommonStock underlying an Option shall be equal to the per share fair market value ofthe Common Stock on the Effective Date, as determined by the Board in its solediscretion, in a manner that complies with the requirements of Section 409Aof Internal Revenue Code of 1986, as amended (“Code”), and theregulations and guidance promulgated thereunder (“Code Section 409A”).

 

(d)           Method ofExercise.  To the extent vested, theOptions may be exercised by Executive in whole or in part at any time and fromtime to time during the Option Term by giving written notice of exercise to theCompany specifying the number of shares of Common Stock to be acquired.  Such notice shall be accompanied by paymentin full of the purchase price as follows: (i) in cash or by check, bankdraft or money order payable to the order of the Company; (ii) through acashless exercise whereby the Company reduces the number of shares of CommonStock issuable upon exercise with a value equal to the applicable exerciseprice and withholding, (iii) solely to the extent permitted by applicablelaw, if the Common Stock is then traded on a securities exchange or system inthe United States, through a procedure whereby Executive delivers irrevocableinstructions to a broker reasonably acceptable to the committee establishedunder the Incentive Plan (the “Committee”) to deliver promptly to theCompany an amount equal to the purchase price; or (iv) on such other termsand conditions as may be acceptable to the Committee.

 

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6.             **Call/SaleParticipation/Piggy-Back Rights. **In the event that, as of theEffective Date, the Common Stock is not traded on a securities exchange orsystem, then the provisions of this Section 6 shall apply to any CommonStock acquired by or granted to Executive under any equity award granted toExecutive by the Company until the Common Stock is so traded.  Other than as specifically provided in thisAgreement, the Executive’s right to transfer shares of Common Stock acquired byor granted to Executive under any equity award granted to Executive by theCompany shall not be limited nor shall such shares be subject to any claw-backprovision or be subject to forfeiture due to a breach of Section 11.

 

(a)           Call Right.  In the event of Executive’s termination forCause, the Company shall have a call right on any shares of Common Stockacquired by or granted to Executive under any equity award granted to Executiveby the Company then held by Executive at a price per share equal to the lowerof the per share fair market value as of the purchase date, as determined bythe Board in its sole discretion, and the price paid by Executive for eachshare of Common Stock; provided; that shares of Common Stock granted asrestricted shares shall be forfeited automatically and without consideration ona termination for Cause.  For theavoidance of doubt, the Company will not have any call right upon a terminationother than for Cause in respect of Executive’s shares of Common Stock.

 

(b)           SaleParticipation.  If the event of asale or other disposition of all or substantially all the Common Stock to athird party whether by stock sale, merger or otherwise, Executive agrees toreasonably participate in such transaction with respect to the Equity Awardsand sell, exchange or transfer such Equity Awards on a commercially reasonablebasis to the third party and the Company agrees to take all commerciallyreasonable steps to facilitate such participation.

 

(c)           PiggybackRegistration Rights.  Executive willbe entitled to standard “piggyback” registration rights.

 

(d)           Initial PublicOffering.  All transfer restrictions,call rights, sale participation rights and obligation under this Section 6shall terminate on the earlier of a public offering of the Common Stock or thelisting of the Common Stock on a securities exchange or system.

 

7.             **Termination of Employment**. Executive’s employment hereunder may beterminated during the Term of Employment under the following circumstances andany such termination shall not be, nor deemed to be, a breach of thisAgreement:

 

(a)           Death.Executive’s employment hereunder shall terminate automatically upon Executive’sdeath.

 

(b)           Disability.  The Company shall have the right to terminateExecutive’s employment hereunder for Disability by providing Executive with aNotice of Termination (as defined below) at least thirty (30) days prior tosuch termination.  For purposes of thisAgreement, “Disability” shall mean Executive’s becoming incapacitated byreason of sickness, accident or other physical or mental incapacity and havingbeen unable to perform his normal duties for a period of six (6) consecutivemonths as a result thereof.

 

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(c)           For Cause.The Company shall have the right to terminate Executive’s employment for Causeby providing Executive with a Notice of Termination.  For purposes of this Agreement, “Cause”shall mean (i) willful misconduct or gross negligence of a material natureby Executive in the performance of his duties; (ii) Executive’s beingconvicted of, or pleading guilty or *nolo contendere* to a felony (other than a traffic violation); (iii) Executive’swillful theft or embezzlement from the Company or its affiliates; (iv) willfuland substantial failure of Executive to perform his duties or any othermaterial breach by Executive of any material provision of this Agreement, whichis not cured (if curable) by Executive within thirty (30) days following his receiptof written notice thereof.  For thepurposes of this definition, no act, or failure to act, on the part ofExecutive shall be considered “willful,” unless done, or omitted to be done, byhim in bad faith and without reasonable belief that his action or omission wasin, or not opposed to, the best interest of the Company (includingreputationally).  Notwithstanding theforegoing, the Company may not terminate Executive for Cause unless prior tosuch termination: (x) Executive is given five (5) business dayswritten notice specifying the alleged Cause event and is entitled to appearwith counsel upon written request, made within five (5) business days ofreceiving such notice, before a meeting of the full Board, which may betelephonic, within a reasonable time after such request to present informationregarding his views on the Cause event, and (y) after such meeting orExecutive’s failure to request such a meeting, there is a majority vote of thefull Board (excluding Executive) to terminate Executive for Cause.  After providing the notice in foregoingsentence, the Board may suspend Executive with full pay and benefits until afinal determination has been made in accordance with the procedures set forthabove.

 

(d)           Without Cause.  The Company shall have the right to terminateExecutive’s employment hereunder without Cause at any time by providingExecutive with a Notice of Termination.

 

(e)           By Executive forGood Reason.  Executive shall havethe right to terminate his employment hereunder for Good Reason by providingthe Company with a Notice of Termination. For purposes of this Agreement, Executive shall have “Good Reason”to terminate his employment hereunder if, without Executive’s written consent,any of the following events occurs that are not cured by the Company withinthirty (30) days of written notice specifying the occurrence such Good Reasonevent, which notice shall be given by Executive to the Company within ninety(90) days after the occurrence of the Good Reason event: (i) a material diminution in Executive’sthen authority, duties or responsibilities; (ii) a material diminution inExecutive’s Base Salary; (iii) a relocation of Executive’s principalbusiness location to a location outside of Dallas, Texas; or (vi) any material breach of this Agreementby the Company.  Executive’s terminationhereunder for Good Reason shall not occur later than one hundred eighty (180)days following the initial date on which the event Executive claims constitutesGood Reason occurred.

 

(f)            By Executivewithout Good Reason.  Executive shallhave the right to terminate his employment hereunder without Good Reason byproviding the Company with a Notice of Termination at least thirty (30) daysprior to such termination.

 

(g)           Due to Expirationof the Term of Employment.  The Termof Employment shall automatically terminate upon the expiration of the Term ofEmployment in accordance with Section 1 hereof.

 

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8.             **TerminationProcedure**.

 

(a)           Notice ofTermination.  Any termination ofExecutive’s employment by the Company or by Executive during the Term ofEmployment (other than termination pursuant to Section 7(a)) shall becommunicated by written Notice of Termination to the other party hereto inaccordance with Section 15 hereof. For purposes of this Agreement, a “Notice of Termination” shallmean a notice which shall indicate the specific termination provision in thisAgreement relied upon and, in the event of a termination under Section 7(b),7(c) or 7(e) above, shall set forth in reasonable detail the factsand circumstances claimed to provide a basis for termination of Executive’semployment under the provision so indicated.

 

(b)           Date ofTermination.  “Date of Termination”shall mean (i) if Executive’s employment is terminated by his death, thedate of his death, (ii) if Executive’s employment is terminated pursuantto Section 7(b), the thirty-first (31st) day after theNotice of Termination is provided to Executive (provided that Executive shallnot have returned to the substantial performance of his duties on a full-timebasis during the thirty (30) day period following the Notice of Termination), (iii) ifExecutive’s employment is terminated pursuant to Section 7(f), thethirty-first (31st) day after the Notice of Termination isprovided to the Company; and (iv) if Executive’s employment is terminatedfor any other reason, the date the Notice of Termination is given or any laterdate set forth in such Notice of Termination as the effective date oftermination.

 

9.             **CompensationUpon Termination**.  Upon the termination of Executive’semployment, the Company shall provide Executive with the payments and benefitsset forth below.  The payments andbenefits described herein shall be in lieu of, and Executive hereby waives hisrights to receive, any other severance or termination benefits that Executivemay otherwise be eligible to receive under any policy, plan or programmaintained by the Company or as otherwise mandated by law (to the extent suchlegal rights may be waived by Executive).

 

(a)           Death orDisability.  If Executive’semployment is terminated due to his death or is terminated by the Company dueto Disability during the Term of Employment:

 

(i)            the Company shallpay to Executive (or his beneficiaries) any accrued but unpaid Base Salaryearned through the Date of Termination, payable in accordance with the regularpayroll practices applicable to senior executives of the Company;

 

(ii)           at the time thatthe Bonus would otherwise be paid in accordance with Section 4(b) hereof,the Company shall pay to Executive (or his beneficiaries) any earned but unpaidBonus in respect of any completed year preceding the year in which suchtermination occurs (the “Accrued Bonus”);

 

(iii)          the Company shallreimburse Executive pursuant to Section 4(f) for any businessexpenses incurred through, but not reimbursed prior to, the Date ofTermination;

 

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(iv)          within ten (10) daysfollowing the Date of Termination, the Company shall pay to Executive a paymentfor his accrued but unused vacation through the Date of Termination;

 

(v)           the Company shallpay or provide to Executive such vested accrued benefits, if any, as to whichExecutive may be entitled under the Company’s employee benefit plans andprograms applicable to Executive as of the Date of Termination (other than anyseverance pay plan), which shall be paid or provided in accordance with theterms of the applicable plan or program (clauses (i) — (v) collectively referred to as the “AccruedObligations”);

 

(vi)          Executive or hisbeneficiary, legal representative or estate shall receive an amount equal tothe product of (x) and (y), where (x) is the Bonus, if any, thatwould have been paid to Executive in respect of the year in which such terminationoccurred, based on actual performance for the year of termination, and (y) isa fraction, the numerator of which is the number of days Executive was employedby the Company during the calendar year in which such termination occurred andthe denominator of which is the number of days in such year (the “Pro RataBonus”), to be paid at such time as the Bonus would have normally been paidpursuant to Section 4(b) hereof in respect of the year in which suchtermination occurred; and

 

(vii)         All vested stockoptions and other exercisable awards then held by Executive shall remainexercisable for a period of one year following the Date of Termination and allunvested equity awards held by Executive shall immediately be forfeited withoutconsideration.

 

(b)           Termination forby the Company for Cause.  IfExecutive’s employment is terminated by the Company for Cause during the Termof Employment:

 

(i)            the Company shallpay or provide to Executive the Accrued Obligations (other than the AccruedBonus) at the times, and subject to the same conditions, as provided in Section 9(a) hereof;and

 

(ii)           all equity awardsheld by Executive, whether or not vested and exercisable, shall immediately beforfeited without consideration.

 

(c)           Termination byExecutive without Good Reason.  IfExecutive’s employment is terminated by Executive other than for Good Reasonduring the Term of Employment:

 

(i)            the Company shallpay or provide to Executive the Accrued Obligations (other than the AccruedBonus) at the times, and subject to the same conditions, as provided in Section 9(a) hereof;and

 

(ii)           all vested stockoptions and other exercisable awards then held by Executive shall remainexercisable for a period of ninety (90) days following the Date of Terminationand all unvested equity awards held by Executive shall immediately be forfeitedwithout consideration.

 

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(d)           Terminationwithout Cause or for Good Reason. In the event that Executive’s employmentunder this Agreement is terminated by the Company without Cause or by Executivefor Good Reason during the Term of Employment:

 

(i)            the Company shallpay or provide to Executive the Accrued Obligations at the times, and subjectto the same conditions, as provided in Section 9(a) hereof;

 

(ii)           subject to Executive’s signing (and notrevoking) a general release of claims in the form attached hereto as Exhibit A(with such changes as may be necessary for changes in applicable law) withintwenty-one (21) days or forty-five days, which ever period is required underADEA (as defined in Exhibit A) following such termination (the “Release”):

 

(A)          the Company shall payExecutive the Pro Rata Bonus at such time as the Bonus would have normally beenpaid pursuant to Section 4(b) hereof in respect of the year in whichsuch termination occurred;

 

(B)           within sixty (60)days following the Date of Termination, the Company shall pay to Executive alump sum severance payment equal to the sum of the Base Salary and targetBonus; provided that if Date of Termination occurs provided, that,if the termination of your employment occurs less than sixty (60) dayspreceding the end of a calendar year and the effective date of the Releasewould occur before January 1 of the subsequent calendar year, paymentshall be made on January 2 of such subsequent calendar year; and

 

(C)           the Company shallpay the costs of continued group life, medical, dental, and vision insurancecoverage for Executive and his dependents under the plans and programs in whichExecutive participated immediately prior to the Date of Termination, ormaterially equivalent plans and programs maintained by the Company inreplacement thereof, for a period of twelve (12) months following the Date ofTermination (the “Coverage Period”); provided, that in the eventthe medical, dental, and vision plans under which Executive and his dependentswere receiving benefits immediately prior to the Date of Termination, or anyapplicable replacement plan or program, is not fully-insured, then in lieu ofthe foregoing, if Executive timely elects coverage under the ConsolidatedOmnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) andtimely pays the monthly premiums for such COBRA coverage, then the Companyshall reimburse Executive during the Coverage Period for the amount of suchmonthly premium that is in excess of the active employee rate (excluding, forpurposes of calculating cost, an employee’s ability to pay premiums withpre-tax dollars), on a tax grossed-up basis to the extent such monthly premiumis taxable to Executive, payable on the first Company payroll date in eachmonth following the Date of Termination; and

 

(iii)          all outstandingequity awards held by Executive will become fully vested and all stock optionsand other exercisable awards will become immediately exercisable and willremain exercisable for a period following the Date of Termination of 

 

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(x) ninety (90) days following a termination by Executive for GoodReason and (y) twelve (12) months following a termination by the Companywithout Cause.

 

(e)           Termination dueto Expiration of the Term of Employment. If Executive’s employment hereunder terminates due to the expiration ofthe Term of Employment in accordance with Section 1:

 

(i)            the Company shallpay to Executive the Accrued Obligations at the times, and subject to the sameconditions, as provided in Section 9(a) hereof; and

 

(ii)           subject toExecutive’s signing (and not revoking) the Release, the Company shall pay thecosts of continued group life, medical, dental, and vision insurance coveragefor Executive and his dependents under the plans and programs in whichExecutive participated immediately prior to the Date of Termination, ormaterially equivalent plans and programs maintained by the Company inreplacement thereof, for a period of twelve (12) months following the Date ofTermination (the “Expiration Coverage Period”); provided, that inthe event the medical, dental, and vision plans under which Executive and hisdependents were receiving benefits immediately prior to the Date ofTermination, or any applicable replacement plan or program, is notfully-insured, then in lieu of the foregoing, if Executive timely elects COBRAcoverage and timely pays the monthly premiums for such COBRA coverage, then theCompany shall reimburse Executive during the Coverage Period for the amount ofsuch monthly premium that is in excess of the active employee rate (excluding,for purposes of calculating cost, an employee’s ability to pay premiums withpre-tax dollars), on a tax grossed-up basis to the extent such monthly premiumis taxable to Executive, payable on the first Company payroll date in eachmonth following the Date of Termination; and

 

(iii)          all vested stockoptions and other exercisable awards then held by Executive shall remainexercisable for a period of twelve (12) months following the Date ofTermination and all unvested equity awards held by Executive shall immediatelybe forfeited without consideration.

 

(f)            No Mitigation;No Off-Set.**** Executive will not be required to seek otheremployment or attempt to reduce any payments due to Executive under this Section 9,and any compensation (in whatever form) earned by Executive from any subsequentemployment will not offset or reduce the Company’s severance obligations underthis Section 9 following Executive’s termination.  The Company’s obligation to pay Executive anypayments under this Section 9 will not be subject to set-off, counterclaimor recoupment of amounts owed by Executive to the Company.

 

(g)           Change ofControl/Golden Parachute Considerations. All equity awards held by Executive shall vest upon the occurrence aChange in Control of the Company.  IfExecutive becomes entitled to any payments and/or benefits that constitute “parachutepayments” within the meaning of Section 280G(b)(2) of the Code, andas a result becomes subject to the excise tax under Section 4999 of theCode, the provisions of Exhibit B attached hereto shall apply and areincorporated herein.

 

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For purposes of this Agreement, a “Change in Control” shall meanthe occurrence of any of the following events subsequent to the EffectiveDate:  (i) any person, other than anexempt person (which includes the Company and its subsidiaries and employeebenefit plans), becoming a beneficial owner of 50% or more of the shares ofcommon stock or equity interests or voting stock or equity interests of theCompany then outstanding; (ii) the consummation of a reorganization, mergeror consolidation in which existing Company stockholders or members own lessthan 50% of the equity of the resulting company; (iii) the consummation ofthe sale or other disposition of all or substantially all of the assets of theCompany; or (iv) during any 12-month period and provided no othercorporation is a majority shareholder of the Company,  individuals who on the Effective Date,constitute the Board (the “Incumbent Board”) cease for any reason toconstitute at least a majority thereof, provided that any person becoming adirector subsequent to the Effective Date, whose election or nomination forelection was approved by a vote of at least a majority of the directorscomprising the Incumbent Board shall be considered a member of the IncumbentBoard.  Notwithstanding anything hereinto the contrary, the determination as to whether a “Change in Control” asdefined herein has occurred shall be determined in accordance with therequirements of Code Section 409A and shall be intended to constitute a “changein control event” within the meaning of Code Section 409A, except to thatthe extent the provisions herein are more restrictive than the requirements ofCode Section 409A.

 

10.           **Indemnification/Directorsand Officers Liability Insurance**. The Company will indemnify Executive to the fullest extent permitted bylaw and its bylaws (including advancement of legal fees) for any action orinaction of Executive while serving as an officer or director of theCompany.  The Company will coverExecutive under its directors and officers liability insurance and itsdefamation policies both during and, while potential liability exists, afterExecutive’s termination of employment. The provisions of this Section 10 shall survive the termination ofExecutive’s employment with the Company.

 

11.           **RestrictiveCovenants**.

 

(a)           Acknowledgments.  Executive acknowledges that:  (i) as a result of Executive’semployment by the Company, Executive has obtained and will obtain ConfidentialInformation (as defined below); (ii) the Confidential Information has beendeveloped and created by the Company and its affiliates at substantial expenseand the Confidential Information constitutes valuable proprietary assets; (iii) theCompany and its affiliates will suffer substantial damage and irreparable harmwhich will be difficult to compute if, during the Term of Employment andthereafter, Executive should enter a Competitive Business (as defined herein)in violation of the provisions of this Agreement; (iv) the nature of theCompany’s and its affiliates’ business is such that it could be conductedanywhere in the world and that it is not limited to a geographic scope orregion; (v) the Company and its affiliates will suffer substantial damagewhich will be difficult to compute if, during the Term of Employment orthereafter, Executive should solicit or interfere with the Company’s or itsaffiliates’ employees or should divulge Confidential Information relating tothe business of the Company and its affiliates; (vi) the provisions ofthis Agreement are reasonable and necessary for the protection of the businessof the Company and its affiliates; (vi) the Company would not have hiredor continued to employ Executive or grant the equity awards and other benefitscontemplated under this Agreement unless he agreed to be bound by the termshereof; and (vii) the provisions of this Agreement will not precludeExecutive from other gainful employment. “Competitive Business” means any business, 

 

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partnership,enterprise, association or activity that is actively involved in the businessof producing and/or marketing ethanol and ethanol co-products, or any otheractivity or business in which the Company was engaged, or had taken materialsteps to engage in, at the time of Executive’s termination or in the twelve(12) months immediately period prior thereto. “Confidential Information”as used in this Agreement shall mean any and all confidential and/orproprietary knowledge, data, or information of the Company or any affiliate,including, without limitation, any: (A) trade secrets, drawings,inventions, methodologies, mask works, ideas, processes, formulas, source andobject codes, data, programs, software source documents, works of authorship,know-how, improvements, discoveries, developments, designs and techniques, andall other work product of the Company or any affiliate, whether or notpatentable or registrable under trademark, copyright, patent or similar laws; (B) informationregarding plans for research, development, new service offerings and/orproducts, marketing, advertising and selling, distribution, business plans,business forecasts, budgets and unpublished financial statements, licenses,prices and costs, suppliers, customers or distribution arrangements; (C) anyinformation regarding the skills and compensation of employees, suppliers,agents, and/or independent contractors of the Company or any affiliate; (D) conceptsand ideas relating to the development and distribution of content in any mediumor to the current, future and proposed products or services of the Company orany affiliate; or (E) any other information, data or the like that islabeled confidential or orally disclosed to Executive as confidential.

 

(b)           Confidentiality.  In consideration of the benefits provided forunder this Agreement, Executive agrees not to, at any time, either during theTerm of Employment or thereafter, divulge, use, publish or in any other mannerreveal, directly or indirectly, to any person, firm, corporation or any otherform of business organization or arrangement and keep in the strictestconfidence any Confidential Information, except (i) in the good faithperformance of Executive’s duties hereunder, (ii) with the Company’sexpress written consent, (iii) to the extent that any such information isin or becomes in the public domain or the relevant trade or industry other thanas a result of Executive’s breach of any of obligations hereunder, or (iv) whererequired to be disclosed by court order, subpoena or other government processand in such event, Executive shall cooperate with the Company in attempting tokeep such information confidential.  Uponthe request of the Company, Executive agrees to promptly deliver to the Companythe originals and all copies, in whatever medium, of all such ConfidentialInformation.

 

(c)           Non-Compete.  In consideration of the benefits provided forin this Agreement, Executive covenants and agrees that during Executive’semployment and during the RestrictivePeriod (as defined below), Executive will not, directly or indirectly for or onbehalf of himself or any other person or entity (i) engage in anyCompetitive Business (as defined below) or (ii) participate or invest in,provide or facilitate the provision of financing to, or assist (whether asowner, part-owner, shareholder, member, partner, director, officer, trustee,employee, agent or consultant, or in any other capacity) any CompetitiveBusiness (as defined below).  For theavoidance of doubt, this covenant shall not preclude Executive from trading ethanol-related commodities; provided that suchactivity does not have a material and adverse effect on the Company.

 

“Restrictive Period” shall mean the period ofExecutive’s employment with the Company and (i) in the event of terminationof Executive’s employment by the Company for Cause or without Cause or by theExecutive for Good Reason, the 12-month period thereafter or (ii) in theevent of 

 

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termination of Executive’s employment by theExecutive without Good Reason or upon Expiration of the Term, the period of upto 12 months following Executive’s employment for which the Company elects(pursuant to 15 days advance written notice) to pay Executive the pro rataportion of the Non-Compete Amount.  “Non-CompeteAmount” shall mean the sum of Executive’s Base salary and the average of theAnnual Bonuses earned under Section 5 during his Employment; provided thatif any such termination occurs before the completion of the first Annual Bonusperiod, the Annual Bonus amount will be deemed to be the Target Bonus.  The noncompetition covenant in this Section 11(c) willnot apply in the event of a termination without Cause or for Good Reason ifExecutive provides a written waiver to the Company of his right to allseverance benefits, including equity acceleration (but other than the AccruedAmounts) within five business days following such termination.  The restrictions set forth in this Section 11(c) shallnot limit Executive’s right to own not more than 5% of any of the debt orequity securities of any business organization that is then filing reports withthe Securities and Exchange Commission pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934, as amended, or any compensatory equitysecurities that Executive receives in connection with services provided or tobe provided.

 

(d)           Non-Solicitationof Employees.  During Executive’semployment and for a period of twelve (12) months thereafter, Executive willnot directly or indirectly for or on behalf of himself or any other person orentity (i) solicit, recruit, hire, endeavor to entice away from theCompany, or otherwise interfere with the Company’s relationship with, any ofits current employees, or anyone who was employed by or engaged to provideexclusive services to the Company at any time during the twelve (12) monthsprior to Executive’s Date of Termination, and (ii) endeavor to entice awayfrom or otherwise interfere with, the Company’s relationship with any personsor entities that were investors, suppliers, clients, customers or licensees ofthe Company at any time during the twelve (12) months prior to Executive’s Dateof Termination; provided that the foregoing shall not be violated bygeneral advertising nor by serving as a reference upon request.

 

(e)           Post-EmploymentProperty.  The parties agree that anywork of authorship, invention, design, discovery, development, technique,improvement, source code, hardware, device, data, apparatus, practice, process,method or other work product whatever (whether patentable or subject tocopyright, or not, and hereinafter collectively called “discovery”) related totraining or marketing methods and techniques that Executive, either solely orin collaboration with others,  has madeor may make, discover, invent, develop, perfect, or reduce to practice duringthe term of his employment, whether or not during regular business hours andcreated, conceived or prepared on the Company’s or any affiliates’ premises orotherwise shall be the sole and complete property of the Company and/or itsaffiliates.  More particularly, andwithout limiting the foregoing, Executive agrees that all of the foregoing andany (i) inventions (whether patentable or not, and without regard towhether any patent therefor is ever sought), (ii) marks, names, or logos(whether or not registrable as trade or service marks, and without regard towhether registration therefor is ever sought), (iii) works of authorship(without regard to whether any claim of copyright therein is ever registered),and (iv) trade secrets, ideas, and concepts ((i) - (iv) collectively,“Intellectual Property Products”) created, conceived, or prepared on theCompany’s or any affiliates’ premises or otherwise, whether or not duringnormal business hours, shall perpetually and throughout the world be theexclusive property of the Company and/or its affiliates, as the case may be, asshall all tangible media (including, but not limited to,

 

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papers, computer media of all types, and models) in which suchIntellectual Property Products shall be recorded or otherwise fixed.  Executive further agrees promptly to disclosein writing and deliver to the Company all Intellectual Property Products createdduring his engagement by the Company, whether or not during normal businesshours.  Executive agrees that all worksof authorship created by Executive during his engagement by the Company shallbe works made for hire of which the Company or its affiliates is the author andowner of copyright. To the extent that any competent decision-making authorityshould ever determine that any work of authorship created by Executive duringhis engagement by the Company is not a work made for hire, Executive hereby assignsall right, title and interest in the copyright therein, in perpetuity andthroughout the world, to the Company.  Tothe extent that this Agreement does not otherwise serve to grant or otherwisevest in the Company or its affiliates all rights in any Intellectual PropertyProduct created by Executive during his engagement by the Company, or withinthree (3) months thereafter, Executive hereby assigns all right, title andinterest therein, in perpetuity and throughout the world, to the Company.  Executive agrees to execute, immediately uponthe Company’s reasonable request and without charge, any further assignments,applications, conveyances or other instruments, at any time after execution ofthis Agreement, whether or not Executive is engaged by the Company at the timesuch request is made, in order to permit the Company, its affiliates and/ortheir respective assigns to protect, perfect, register, record, maintain, orenhance their rights in any Intellectual Property Product; provided, that,the Company shall bear the cost of any such assignments, applications orconsequences.   Upon termination ofExecutive’s employment with the Company for any reason whatsoever, and at anyearlier time the Company so requests, Executive will immediately deliver to thecustody of the person designated by the Company all originals and copies of anydocuments and other property of the Company in Executive’s possession, underExecutive’s control or to which he may have access.

 

(f)            Non-Disparagement.Executive acknowledges and agrees that during and for a period of three (3) yearsfollowing the Term of Employment, he will not defame or publicly criticize theCompany and/or its affiliates and their respective officers, directors,partners, executives or agents with the intent to damage the services,business, integrity, veracity or personal or professional reputation of anysuch party in either a professional or personal manner.  In addition, the Company acknowledges andagrees that during and for a period of three (3) years following the Termof Employment, the Company will not defame or publicly criticize Executive withthe intent to damage the services, business, integrity, veracity or personal orprofessional reputation of Executive in either a professional or personal manner.  Notwithstanding the foregoing, nothing inthis Section 11(f) shall prevent any person from making any truthfulstatement to the extent (i) necessary to rebut any untrue publicstatements made by another party; (ii) necessary with respect to any litigation,arbitration or mediation involving this Agreement, including, but not limitedto, the enforcement of this Agreement or (iii) required by law or by anycourt, arbitrator, mediator or administrative or legislative body (includingany committee thereof) with jurisdiction over such person.

 

(g)           Enforcement.  If Executive commits a breach of any of theprovisions of this Section 11 or the Company commits a breach of Section 11(g),the Company or Executive, as applicable, shall have the right and remedy tohave the provision specifically enforced by any court having jurisdiction.  Executive acknowledges and agrees that theservices being rendered hereunder to the Company are of a special, unique andextraordinary character and that any such 

 

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breach willcause irreparable injury to the Company and that money damages will not providean adequate remedy to the Company and the Company acknowledges and agrees thatany such breach will cause irreparable injury to Executive and that moneydamages will not provide an adequate remedy to Executive.  Such right and remedy shall be in additionto, and not in lieu of, any other rights and remedies available to the Companyor Executive at law or in equity.

 

(h)           Blue Pencil.  If, at any time, the provisions of this Section 11shall be determined to be invalid or unenforceable under any applicable law, byreason of being vague or unreasonable as to area, duration or scope ofactivity, this Agreement shall be considered divisible and shall become and beimmediately amended to only such area, duration and scope of activity as shallbe determined to be reasonable and enforceable by the court or other bodyhaving jurisdiction over the matter and Executive and the Company agree thatthis Agreement as so amended shall be valid and binding as though any invalidor unenforceable provision had not been included herein.

 

(i)            EXECUTIVEACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS SECTION 11 AND HAS HAD THEOPPORTUNITY TO REVIEW ITS PROVISIONS WITH ANY ADVISORS AS HE CONSIDEREDNECESSARY AND THAT EXECUTIVE UNDERSTANDS THIS AGREEMENT’S CONTENTS ANDSIGNIFIES SUCH UNDERSTANDING AND AGREEMENT BY SIGNING BELOW.

 

12.           **Assignability**. ** **This Agreement may only be assigned to an acquiror of all orsubstantially all of the Company’s business that agrees in writing to assumethe Company’s obligations under this Agreement.

 

13.           **Representation**. Executive represents and warrants to theCompany, and Executive acknowledges that the Company has relied on suchrepresentations and warranties in employing Executive, that neither Executive’sduties as an employee of the Company nor his performance of this Agreement willbreach any other agreement to which Executive is a party and that he has notentered into, and will not enter into, any agreement, either oral or written,in conflict herewith.  The Companyrepresents and warrants to Executive that all necessary corporate actions forthe approval of this Agreement have been taken such that, upon the Company’sexecution of this Agreement, this Agreement will constitute a legal, valid andbinding obligation of the Company.

 

14.           **Resolutionof Disputes**.  Any dispute concerning the validity,interpretation, enforcement, or breach of this Agreement, or otherwise arisingbetween the parties, shall (except to the extent otherwise provided in Section 11(g) withrespect to certain requests for injunctive relief) be submitted to bindingarbitration before the American Arbitration Association (“AAA”) forresolution.  Such arbitration shall beconducted in Dallas, Texas, and the arbitrator will apply New York law,including federal law as applied in New York courts.  The arbitration shall be conducted inaccordance with the AAA’s Commercial Arbitration Rules, as modified by theterms set forth in this Agreement.  Thearbitration will be conducted by a single arbitrator, who shall be an attorneywho specializes in the field of employment law and shall have prior experiencearbitrating employment disputes.  Theaward of the arbitrator shall be final and binding on the parties, and judgmenton the award may be confirmed and entered in any court havingjurisdiction.  The arbitration shall beconducted on a strictly confidential basis except to 

 

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the extent necessary to enforce any judgment,and neither the Company nor Executive shall not disclose the existence of aclaim, the nature of a claim, any documents, exhibits, or information exchangedor presented in connection with any such a claim, or the result of anyarbitration (collectively, “Arbitration Materials”), to any third party,with the sole exception of such Parties legal counsel, who also shall be boundby all confidentiality terms of this Agreement. In the event of any court proceeding to challenge or enforce anarbitrator’s award, the parties hereby consent to the exclusive jurisdiction ofthe state and federal courts in Dallas, Texas and agree to venue in thatjurisdiction.  The parties agree to takeall steps necessary to protect the confidentiality of the Arbitration Materialsin connection with any such proceeding, agree to file all ConfidentialInformation (and documents containing Confidential Information) under seal tothe extent possible and agree to the entry of an appropriate protective orderencompassing the confidentiality terms of this Agreement.  Each party agrees (a) to pay its owncosts and fees in connection with any arbitration of a dispute arising underthis Agreement, and any court proceeding arising therefrom, regardless ofoutcome and (b) that the arbitration costs and other joint expenses shallbe borne equally by the Parties.

 

15.           **Notices**.  Anynotice, consent, demand, request or other communication given to a person inconnection with this Agreement (a “Notice”) shall be in writing anddelivered in person, by facsimile transmission (with a Notice contemporaneouslygiven by another method specified in this Section 15), by overnightcourier service or by postage prepaid mail with a return receipt requested, atthe following locations (or to such other address as either party may havefurnished to the other in writing by like Notice).  All such Notices shall be deemed to have beengiven and effective upon receipt (or refusal of receipt).

 
| If to the Company: | Principal Place of Business                                                                                                                 |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|
|               | Attn:  Chief Executive Officer                                                                                                         |
|               | Facsimile:                                                                                                                                  |
|               |                                                                                                                                        |
| If to Executive:   | To the address of his principal residence as it appears in the  Company’s records, with a copy to him (during the Term of Employment). |

 

16.           **Miscellaneous**.

 

(a)           Entire Agreement.  This Agreement, and the exhibits attachedhereto, contain the entire understanding and agreement among the Partiesconcerning the subject matter hereof and supersede all prior agreements, termsheets, understandings, discussions, negotiations and undertakings, whetherwritten or oral, among them with respect thereto.

 

(b)           Severability.  In the event that any provision or portion ofthis Agreement shall be determined to be invalid or unenforceable for anyreason, in whole or in part, the remaining provisions of this Agreement shallbe unaffected thereby and shall remain in full force and effect to the fullestextent permitted by law so as to achieve the purposes of this Agreement.

 

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(c)           Amendment orWaiver.  No provision in thisAgreement may be amended unless such amendment is set forth in a writing thatspecifically identifies the provision being amended and that is signed by theParties.  No waiver by any person of anybreach of any condition or provision contained in this Agreement shall bedeemed a waiver of any similar or dissimilar condition or provision at the sameor any prior or subsequent time.  To beeffective, any waiver must be set forth in a writing that specifically refersto the condition or provision that is being waived and is signed by the waivingperson.

 

(d)           Headings.  The headings of the Sections and sub-sectionscontained in this Agreement are for convenience only and shall not be deemed tocontrol or affect the meaning or construction of any provision of thisAgreement.

 

(e)           Beneficiaries/References.  Executive shall be entitled, to the extentpermitted under applicable law, to select and change a beneficiary orbeneficiaries to receive any compensation or benefit under this Agreementfollowing Executive’s death by giving the Company written notice thereof.  In the event of Executive’s death or ajudicial determination of his incompetence, references in this Agreement toExecutive shall be deemed, where appropriate, to refer to his beneficiary,transferee, estate or other legal representative.

 

(f)            Survivorship.  Except as otherwise set forth in thisAgreement, the respective rights and obligations of the Parties hereunder shallsurvive any termination of Executive’s employment under this Agreement.

 

(g)           Withholding Taxes.  The Company may withhold from any amounts orbenefits payable under this Agreement any taxes that are required to bewithheld pursuant to any applicable law or regulation.

 

(h)           409A Provisions.

 

(i)            Notwithstandinganything herein to the contrary, this Agreement is intended to be interpretedand applied so that the payments and benefits set forth herein either shalleither be exempt from the requirements of Code Section 409A, or shallcomply with the requirements of Code Section 409A, and, accordingly, tothe maximum extent permitted, this Agreement shall be interpreted to be exemptfrom or in compliance with Code Section 409A.

 

(ii)           If Executivenotifies the Company (with specificity as to the reason therefor) thatExecutive believes that any provision of this Agreement (or of any award ofcompensation or benefit, including equity compensation or benefits providedherein or at any time during his employment with the Company) would cause theExecutive to incur any additional tax or interest under Code Section 409Aor the Company independently makes such determination, the Company shall, afterconsulting with Executive, reform such provision (or award of compensation orbenefit) to attempt to comply with or be exempt from Code Section 409Athrough good faith modifications to the minimum extent reasonablyappropriate.  To the extent that anyprovision hereof (or award of compensation or benefit) is modified in order tocomply with Code Section 409A, such modification shall be made in goodfaith and shall, to the maximum extent reasonably 

 

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possible, maintain the original intent and economic benefit toExecutive and the Company without violating the provisions of Section 409A.

 

(iii)          Notwithstanding anyprovision in this Agreement or elsewhere to the contrary, if on his Date ofTermination Executive is deemed to be a “specified employee” within the meaningof Code Section 409A and using the identification methodology selected bythe Company from time to time, or if none, the default methodology under Code Section 409A,any payments or benefits due upon a termination of Executive’s employment underany arrangement that constitutes a “deferral of compensation” within themeaning of Code Section 409A (whether under this Agreement, any otherplan, program, payroll practice or any equity grant) and which do not otherwisequalify under the exemptions under Treas. Regs. Section 1.409A-1(including without limitation, the short-term deferral exemption and thepermitted payments under Treas. Regs. Section 1.409A-1(b)(9)(iii)(A)),shall be delayed and paid or provided to Executive in a lump sum (whether theywould have otherwise been payable in a single sum or in installments in theabsence of such delay) with interest at the prime rate as published in the WallStreet Journal on the first business day on or following the Date ofTermination, on the earlier of (i) the date which is six (6) monthsand one (1) day after Executive’s separation from service (as such term isdefined in Code Section 409A) for any reason other than death, and (ii) thedate of Executive’s death, and any remaining payments and benefits shall bepaid or provided in accordance with the normal payment dates specified for suchpayment or benefit.

 

(iv)          Notwithstandinganything in this Agreement or elsewhere to the contrary, a termination ofemployment shall not be deemed to have occurred for purposes of any provisionof this Agreement providing for the payment of any amounts or benefits thatconstitute “non-qualified deferred compensation” within the meaning of Code Section 409Aupon or following a termination of Executive’s employment unless suchtermination is also a “separation from service” within the meaning of Code Section 409Aand, for purposes of any such provision of this Agreement, references to a “termination,”“termination of employment” or like terms shall mean “separation from service.”and the date of such separation from service shall be the Date of Terminationfor purposes of any such payment or benefits.

 

(v)           Each payment underthis Agreement or otherwise (including any installment payments) shall betreated as a separate payment for purposes of Code Section 409A.

 

(vi)          In no event may Executive,directly or indirectly, designate the calendar year of any payment to be madeunder this Agreement or otherwise which constitutes a “deferral of compensation”within the meaning of Code Section 409A.

 

(vii)         All expenses orother reimbursements paid pursuant to Section 4(g) hereof orotherwise that are taxable income to Executive shall in no event be paid laterthan the end of the calendar year next following the calendar year in whichExecutive incurs such expense or pays such related tax.  With regard to any provision herein thatprovides for reimbursement of costs and expenses or in-kind benefits, except 

 

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as permitted by Code Section 409A, (i) the right toreimbursement or in-kind benefits shall not be subject to liquidation orexchange for another benefit, (ii) the amount of expenses eligible forreimbursement, of in-kind benefits, provided during any taxable year shall notaffect the expenses eligible for reimbursement, or in-kind benefits to beprovided, in any other taxable year, *provided*that the foregoing clause (ii) shall not be violated without regard toexpenses reimbursed under any arrangement covered by Internal Revenue Code Section 105(b) solelybecause such expenses are subject to a limit related to the period thearrangement is in effect and (iii) such payments shall be made on orbefore the last day of Executive’s taxable year following the taxable year inwhich the expense occurred.  Any taxgross-up payment as provided herein shall be made in any event no later thanthe end of the calendar year immediately following the calendar year in whichExecutive remits the related taxes, and any reimbursement of expenses incurreddue to a tax audit or litigation shall be made no later than the end of thecalendar year immediately following the calendar year in which the taxes thatare the subject of the audit or litigation are remitted to the taxingauthority, or, if no taxes are to be remitted, the end of the calendar yearfollowing the calendar year in which the audit or litigation is completed.

 

(i)            Governing Law.  This Agreement shall be governed, construed,performed and enforced in accordance with its express terms, and otherwise inaccordance with the laws of the State of New York, without reference toprinciples of conflict of laws.

 

(j)            Counterparts.  This Agreement may be executed in two or morecounterparts, each of which shall be deemed an original and all of whichtogether shall be deemed to be one and the same instrument.

 

(k)           Joint Drafting.  The Company and Executive acknowledge andagree that this Agreement was jointly drafted by the Company on the one sideand by Executive on the other side. Neither party, nor any party’s counsel, shall be deemed the drafter ofthis Agreement in any proceeding that may hereafter arise between them.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as ofthe date first set forth above.

 
|   | Aventine Renewable Energy Holdings, Inc. |
|--------|-----------------------------------------------|
|   |                                          |
|   |                                          |
|   | By:                                           | /s/ Thomas Manuel |
|   | Name:                                         | Thomas Manuel |
|   | Title:                                        | Chief Executive Officer |
|   |                                          |
|   |                                          |
|   | Executive:                                    |
|   |                                          |
|   |                                          |
|   | /s/ John Castle                               |
|   | John Castle                                   |
|        |                                               |  |  |

 

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**EXHIBIT A**

 

GENERAL RELEASE

 

1.             Terminationof Employment.  John Castle (the “Executive”)acknowledges that Executive’s last day of employment with Aventine RenewableEnergy Holdings, Inc. (together with its successors and assigns the “Company”)is[                              ](the “Termination Date”).

 

2.             Consideration.  In accordance with the Employment Agreementby and between the Company and Executive, dated March 15, 2010 (the “EmploymentAgreement”), a copy of which is attached hereto and incorporated herewith,the Company agrees to provide the consideration set forth in Section 9([d][e])(ii) of the EmploymentAgreement in exchange for this General Release.

 

3.             Full Release.  Executive, for himself, his heirs, executors,administrators, successors and assigns (hereinafter collectively referred to asthe “Releasors”), hereby fully releases and discharges the Company, itsparents, subsidiaries, affiliates, insurers, successors, and assigns, and theirrespective officers, directors, employees, related parties and agents (all suchpersons, firms, corporations and entities being deemed beneficiaries hereof andare referred to herein as the “Related Parties”) from any and allactions, causes of action, claims, obligations, costs, losses, liabilities,damages and demands of whatsoever character, whether or not known, suspected orclaimed, which the Releasors have, from the beginning of time through the dateof this General Release, against the Related Parties arising out of or in anyway related to Executive’s employment with the Company or the termination ofhis employment with the Company. Notwithstanding anything herein to the contrary, this General Releaseshall not (i) apply to any benefits due to Executive under this GeneralRelease or otherwise under Section 9 of the Employment Agreement,including without limitation, your right to a gross-up payment under Section 9(g) andExhibit B of the Employment Agreement; (ii) apply to Executive’srights to indemnification from the Company or rights to be covered under anyapplicable insurance policy with respect to any liability Executive incurred ormight incur as an employee, officer or director of the Company or a fiduciaryof any Company benefit plan including, without limitation, Executive’s rightsunder Section 10 of the Employment Agreement; (iii) impair any vestedbenefits Executive may have, as of the Termination Date, under any otheremployee benefit plans and programs applicable to Executive as of theTermination Date; and (iv) impair your rights to any continuation ofmedical coverage, pursuant to the Consolidated Omnibus Budget ReconciliationAct of 1985, as amended.

 

4.             Waiver of RightsUnder All Applicable Statutes, Contract And Common Law.  Executive understands that this GeneralRelease waives all claims and rights Executive may have under certainapplicable federal, state and local statutory and regulatory laws, as each maybe amended from time to time, including but not limited to, the AgeDiscrimination in Employment Act (including the Older Workers BenefitProtection Act) (“ADEA”), Title VII of the Civil Rights Act; theEmployee Retirement Income Security Act of 1974; the Equal Pay Act; theRehabilitation Act of 1973; the Americans with Disabilities Act; the Americanswith Disabilities Amendment Act, the Worker Adjustment and RetrainingNotification Act; the Family and Medical Leave Act, and all other statutes,regulations, contracts, common law, and other laws in any and alljurisdictions.

 

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5.             Informedand Voluntary Signature.  No promiseor inducement has been made other than those set forth in this GeneralRelease.  This General Release isexecuted by Executive without reliance on any representation by the Company orany of its agents.  Executive states thatthat he is fully competent to manage his business affairs and understands thathe is waiving legal rights by signing this General Release.  Executive hereby acknowledges that he hascarefully read this General Release and has had the opportunity to thoroughlydiscuss the terms of this General Release with legal counsel of hischoosing.  Executive hereby acknowledgesthat he fully understands the terms of this General Release and its final andbinding effect and that he affixes his signature hereto voluntarily and of hisown free will.

 

6.             Waiverof Rights Under the Age Discrimination Act. Executive understands that this General Release, and the releasecontained herein, waives all of his claims and rights under the ADEA. Thewaiver of Executive’s rights under the ADEA does not extend to claims or rightsthat might arise after the date this General Release is executed.  All or part of the consideration to be paidto Executive are in addition to any sums to which Executive would be entitled withoutsigning this General Release. For a period of seven (7) days followingexecution of this General Release, Executive may revoke the terms of thisGeneral Release by a written document received by the Employer no later than11:59 p.m. of the seventh day following Executive’sexecution of this General Release.  ThisGeneral Release will not be effective until said revocation period has expiredwithout a revocation by Executive (the “Effective Date”). Executiveacknowledges that he has been given up to [21/45](1) days to decidewhether to sign this General Release. Executive has been advised to consultwith an attorney prior to executing this General Release and has been given afull and fair opportunity to do so.

 

7.             Covenant Not ToSue.  Except for an action brought toenforce this General Release or challenge the validity of the ADEA waiver,Executive agrees to refrain from filing or otherwise initiating any action,lawsuit, charge, claim, demand, grievance, arbitration or other legal actionagainst the Company or Related Parties over matters released or waived herein,and agrees that he will refrain from participating in any action, complaint,charge, claim, demand, grievance, arbitration or other legal action initiatedor pursued by any individual, group of individuals, partnership, corporation orother entity against Executive and/or the Related Parties over matters releasedor waived herein, except as required by law. Notwithstanding the foregoing, nothing in this General Release shallinterfere with Executive’s right to file a charge with or participate in aninvestigation or proceeding by the Equal Employment Opportunity Commission orother federal or state regulatory or law enforcement agency.  However, the consideration provided toExecutive under this General Release shall be the sole relief provided for thereleased claims. Executive will not be entitled to recover and Executive agreesto waive any monetary benefits or other recovery in connection with any suchcharge or proceeding, without regard to who has brought such charge or proceeding.

 

8.             Litigation AndRegulatory Cooperation.  Executiveshall (a) reasonably cooperate with the Company and/or Related Parties inthe defense or prosecution of any claims or actions now in existence or thatmay be brought in the future against or on behalf of the Company and/or RelatedParties that relate to events or occurrences that transpired while Executivewas employed by the Company and (b) reasonably cooperate with the Companyin connection with any 

 

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(1)  Insert 45 days in the event of a layoff of two or moreemployees.

 

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investigation or review by any federal, state, or local regulatoryauthority as any such investigation or review relates to events or occurrencesthat transpired while Executive was employed by the Company; provided, that theforgoing shall not apply if the interests of the Company and Executive areadverse.  Any request for suchcooperation shall take into account Executive’s other personal and businesscommitments.  For any such cooperationthat Executive provides after December 31, 2012, the Company shall payExecutive a per diem fee for such cooperation (calculated as one-fifth theweekly gross Base Salary at the rate in effect immediately prior to theTermination Date), paid on the last day of the month following the month inwhich such fee was earned.  The Companyshall reimburse the Executive for all reasonable out-of-pocket expensesincurred by him in connection with providing such cooperation.

 

9.             Reaffirmation ofContinuing Obligations Under Employment Agreement And Applicable Law.  Nothing in this General Release is intendedto replace, supersede or supplant Executive’s independent and obligations underthe Employment Agreement that specifically continue following a termination ofhis employment.  By executing thisGeneral Release, Executive hereby acknowledges and reaffirms all suchcontinuing obligations under the Employment Agreement and applicable law,including but not limited to his obligations set forth in Section 11 ofthe Employment Agreement, entitled “Restrictive Covenants.”  These obligations include, withoutlimitation, Executive’s agreements concerning Confidential Information,non-competition and non-solicitation.

 

10.           No Admission ofLiability.  This General Releaseshall not in any way be considered or construed as an admission by the Companyof any improper actions or liability whatsoever as to Executive or any otherperson.

 

11.           Miscellaneous.

 

(a)           This General Releaseshall be governed in all respects by the laws of the State of New York withoutregard to the principles of conflict of law.

 

(b)           In the event that any one or more ofthe provisions of this General Release is held to be invalid, illegal orunenforceable, the validity, legality and enforceability of the remainingprovisions will not in any way be affected or impaired thereby. Moreover, ifany one or more of the provisions contained in this General Release is held tobe excessively broad as to duration, scope, activity or subject, such provisionswill be construed by limiting and reducing them so as to be enforceable to themaximum extent compatible with applicable law.

 

(c)           This General Release may be executedin two or more counterparts, each of which shall be deemed an original, but allof which together shall constitute one and the same instrument.

 

(d)           The paragraph headings used in thisGeneral Release are included solely for convenience and shall not affect or beused in connection with the interpretation of this General Release.

 

(e)           This General Release and theEmployment Agreement represent the entire agreement between the parties withrespect to the subject matter hereto and may not be amended except in a writingsigned by the Company and Executive.

 

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(f)            This General Release shall bebinding on the executors, heirs, administrators, successors and assigns ofExecutive and the successors and assigns of the Related Parties and theReleasors and shall inure to the benefit of the respective executors, heirs,administrators, successors and assigns of the Related Parties and theReleasors.

 

[signature page follows]

 

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IN WITNESSWHEREOF, the parties hereto haveexecuted this General Release on this        dayof                              .

 

 
|   | Aventine Renewable Energy Holdings, Inc. |
|--------|-----------------------------------------------|
|   |                                          |
|   |                                          |
|   | By:                                           |   |
|   | Name:                                         |
|   | Title:                                        |
|   |                                          |
|   |                                          |
|   | Executive:                                    |
|   |                                          |
|   |                                          |
|   |                                          |
|   | John Castle                                   |

 

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**EXHIBIT B**

 

PARACHUTE TAX INDEMNITY PROVISIONS

 

This Exhibit B sets forth the terms and provisions applicable toExecutive pursuant to the provisions of the Section 9(g) of theAgreement.  This Exhibit B shall besubject in all respects to the terms and conditions of the Agreement.  Capitalized terms used without definition inthis Exhibit B shall have the meanings set forth in the Agreement.

 

(i)            Inthe event that Executive shall become entitled to payments and/or benefitsprovided by the Agreement or any other amounts to (or for the benefit of)Executive that constitute “parachute payments,” as such term is defined under Section 280Gof the Code, as a result of a change in ownership or effective control of theCompany or in the ownership of a substantial portion of the assets of theCompany (collectively, the “Company Payments”), and such CompanyPayments will be subject to the tax (the “Excise Tax”) imposed by Section 4999of the Code (and similar tax, if any, that may hereafter be imposed by anytaxing authority), the Company shall pay to Executive at the time specified inclause (v) below an additional amount (the “Gross-Up Payment”) suchthat the net amount retained by Executive from the Company Payments togetherwith the Gross-Up Payment, after deduction of any Excise Tax on the CompanyPayments and any U.S. federal, state, and local income or payroll tax upon theGross-Up Payment provided for by this clause (i), but before deduction for anyU.S. federal, state, and local income or payroll tax on the Company Payments,shall be equal to the Company Payments.

 

(ii)           Notwithstandingthe foregoing provisions of this Exhibit B to the contrary, if it shall bedetermined that Executive is entitled to a Gross-Up Payment, but the CompanyPayments do not exceed 110% of the greatest amount (the “Reduced Amount”)that could be paid to Executive such that the receipt of the Company Paymentswould not give rise to any Excise Tax, then no Gross-Up Payment shall be madeto Executive and the Company Payments, in the aggregate, shall be reduced tothe Reduced Amount.  Any such reductionshall be made in the following order: any cash severance Executive is entitled to receive (starting with thelast payment due), then other cash amounts Executive is entitled to receivethat are considered parachute payments under Section 280G of the Code(starting with the last payment due), then any stock options that have exerciseprices higher than the then fair market value price of the stock (based on thelatest vesting tranches), then restricted stock and restricted stock units basedon the last ones scheduled to be distributed and then other stock options basedon the latest vesting tranches.  In theevent that the Internal Revenue Service or court ultimately makes adetermination that the “excess parachute payments” plus the “base amount” is anamount other than as determined initially, an appropriate adjustment shall bemade with regard to the Gross-Up Payment or Reduced Amount, as applicable, toreflect the final determination and the resulting impact on whether this clause(ii) applies.

 

(iii)          Forpurposes of determining whether any of the Company Payments and Gross-UpPayment (collectively, the “Total Payments”) will be subject to theExcise Tax and the amount of such Excise Tax:

 

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(A)  theTotal Payments shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) ofthe Code, and all “parachute payments” in excess of the “base amount” (asdefined under Section 280G(b)(3) of the Code) shall be treated assubject to the Excise Tax, unless and except to the extent that, in the opinionof the Company’s independent certified public accountants appointed prior toany change in ownership (as defined under Section 280G(b)(2) of theCode) or a certified public accountant appointed following a change inownership that is or tax counsel selected by such accountants or the Company(the “Accountants”) such Total Payments (in whole or in part):  (1) do not constitute “parachutepayments,” (2) represent reasonable compensation for services actuallyrendered within the meaning of Section 280G(b)(4) of the Code inexcess of the “base amount” or (3) are otherwise not subject to the ExciseTax; and

 

(B) thevalue of any non-cash benefits or any deferred payment or benefit shall be determinedby the Accountants in accordance with the principles of Section 280G ofthe Code.

 

In the event that the Accountants are serving as accountants orauditors for the individual, entity or group effecting the change in control(within the meaning of Section 280G of the Code), Executive may appointanother nationally recognized accounting firm to make the determinationshereunder (which accounting firm shall then be referred to as the “Accountants”hereunder).  All determinations hereundershall be made by the Accountants which shall provide detailed supportingcalculations both to the Company and Executive at such time as it is requestedby the Company or Executive.  Thedetermination of the Accountants, subject to the adjustments provided below,shall be final and binding upon the Company and Executive.

 

(iv)          Forpurposes of determining the amount of the Gross-Up Payment, Executive’smarginal blended actual rates of federal, state and local income taxation inthe calendar year in which the change in ownership or effective control thatsubjects Executive to the Excise Tax occurs shall be used.  In the event that the Excise Tax issubsequently determined by the Accountants to be less than the amount takeninto account hereunder at the time the Gross-Up Payment is made, Executiveshall repay to the Company, at the time that the amount of such reduction inExcise Tax is finally determined, the portion of the prior Gross-Up Paymentattributable to such reduction (plus the portion of the Gross-Up Payment attributableto the Excise Tax and U.S. federal, state and local income tax imposed on theportion of the Gross-Up Payment being repaid by Executive if such repaymentresults in a reduction in Excise Tax or a U.S. federal, state and local incometax deduction).  Notwithstanding theforegoing, in the event that any portion of the Gross-Up Payment to be refundedto the Company has been paid to any U.S. federal, state and local taxauthority, repayment thereof (and related amounts) shall not be required untilactual refund or credit of such portion has been made to Executive.  Executive and the Company shall mutuallyagree upon the course of action to be pursued (and the method of allocating theexpense thereof) if Executive’s claim for refund or credit is denied.  In the event that the Excise Tax is laterdetermined by the Accountants or the Internal Revenue Service (or other taxingauthority) to exceed the amount taken into account hereunder at the time theGross-Up Payment is made (including by reason of any payment the existence oramount of which cannot be determined at the time of the Gross-Up Payment), theCompany shall make an 

 

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additional Gross-Up Payment in respect of such excess (plus anyinterest or penalties payable with respect to such excess) promptly after theamount of such excess is finally determined.

 

(v)           TheGross-Up Payment or portion thereof provided for in clause (iv) aboveshall be paid not later than the sixtieth (60th) day following an event occurring whichsubjects Executive to the Excise Tax; provided, however, that if the amount ofsuch Gross-Up Payment or portion thereof cannot be finally determined on orbefore such day, the Company shall pay to Executive on such day an estimate, asdetermined in good faith by the Accountants, of the minimum amount of suchpayments and shall pay the remainder of such payments (together with interestat the rate provided in Section 1274(b)(2)(B) of the Code), subjectto further payments pursuant to clause (iv) above, as soon as the amountthereof can reasonably be determined, but in no event later than theseventy-fifth (75th) dayafter the occurrence of the event subjecting Executive to the Excise Tax.  Subject to clauses (iv) and (ix) ofthis Exhibit B, in the event that the amount of the estimated paymentsexceeds the amount subsequently determined to have been due, such excess shallconstitute a loan by the Company to Executive, payable on the fifth (5th) dayafter demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) ofthe Code).

 

(vi)          Inthe event of any controversy with the Internal Revenue Service (or other taxingauthority) with regard to the Excise Tax, Executive shall permit the Company tocontrol issues related to the Excise Tax (at its expense), provided that suchissues do not potentially materially adversely affect Executive, but Executiveshall control any other issues.  In theevent that the issues are interrelated, Executive and the Company shall in goodfaith cooperate so as not to jeopardize resolution of either issue, but if theparties cannot agree, Executive shall make the final determination with regardto the issues.  In the event of anyconference with any taxing authority as to the Excise Tax or associated incometaxes, Executive shall permit the representative of the Company to accompanyExecutive, and Executive and Executive’s representative shall cooperate withthe Company and its representative.

 

(vii)         TheCompany shall be responsible for all charges of the Accountants.

 

(viii)        TheCompany and Executive shall promptly deliver to each other copies of anywritten communications, and summaries of any verbal communications, with anytaxing authority regarding the Excise Tax covered by this Exhibit B.

 

(ix)           Nothingin this Exhibit B is intended to violate the Sarbanes-Oxley Act of 2002and to the extent that any advance or repayment obligation hereunder would doso, such obligation shall be modified so as to make the advance a nonrefundablepayment to Executive and the repayment obligation null and void.

 

(x)            Notwithstandingthe foregoing, any payment or reimbursement made pursuant to this Exhibit Bshall be made in any event no later than the end of the calendar yearimmediately following the calendar year in which Executive remits the relatedtaxes, and any reimbursement of expenses incurred due to a tax audit orlitigation shall be made no later than the end of the calendar year immediatelyfollowing the calendar year in which the taxes that are the subject of theaudit or litigation are remitted to the taxing authority, or, if no taxes areto be 

 

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remitted, the end of the calendar year following the calendar year inwhich the audit or litigation is completed.

 

(xi)           Theprovisions of this Exhibit B shall survive the termination of Executive’semployment with the Company for any reason and any amount payable under this Exhibit Bshall be subject to the provisions of Section 16(h) of the Agreement.

 

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