**Exhibit10.6**

 

**EXECUTIONCOPY**

 

**EMPLOYMENTAGREEMENT**

 

This Employment Agreement(this “Agreement”) is entered into on March 15, 2010 to beeffective as of the date of consummation of the Plan of Reorganization (asdefined below) (the “Effective Date”), by and among Aventine RenewableEnergy Holdings, Inc. (together with its successors and assigns the “Company”)and Ben Borgen (“Executive”).

 

WHEREAS, the Companydesires to employ Executive as Senior Vice President, Commodity Risk Managementof the Company after the consummation of the Company’s plan of reorganizationunder Section 1121 of Title 11 of the United States Code (the “Plan ofReorganization”);

 

WHEREAS, Executivedesires to accept such employment, subject to the terms and provisions of thisAgreement; and

 

WHEREAS, this Agreementis expressly contingent upon the consummation of the Plan of Reorganization;

 

NOW, THEREFORE, inconsideration of the premises and mutual covenants contained herein and forother good and valuable consideration, the receipt of which is mutuallyacknowledged, 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.

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

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## (a)           Duringthe Term of Employment, Executive shall serve as the Senior Vice President,Commodity Risk Management of the Company; shall have all authorities, dutiesand responsibilities customarily exercised by an individual serving in thosepositions in enterprises of a similar size and structure; shall be assigned noauthorities, duties or responsibilities that are inconsistent with, or thatimpair his ability to discharge, the foregoing authorities, duties andresponsibilities; and shall report directly to the Chief Executive Officer ofthe Company (the “CEO”).

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## (b)           Executiveshall devote substantially all of his business time and efforts to the affairsof the Company; provided, however, that while employed by theCompany, Executive may serve as a member of the board of directors of anyfor-profit company 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 ofdirectors of anynot-for-profit entity, (ii) servein any capacity with respect to any civic, educational, professional orcharitable organization, and (iii) manage his and hisfamily’s personal investments.  Executivemay also continue to provide services as managing director of InternationalStrategy Advisors and may retain all compensation earned therefrom; provided,that such services do not materiallyinterfere or conflict with the performance of his duties to the Company orcreate a business conflict with the Company.

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## (c)           Uponexpiration of the Term of Employment or the termination of Executive’semployment for any reason, Executive shall resign, in writing, from anypositions he then holds with the Company, including membership on any boards.

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# 3.             **Principal Placeof 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 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.

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# 4.             **Compensationand Benefits**.

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## (a)           BaseSalary. Commencing as of the Effective Date, the Company shall payExecutive an annualized Base Salary of $400,000 (“Base Salary”), payablein accordance with the regular payroll practices applicable to seniorexecutives of the Company.  Executive’sBase Salary shall be reviewed by the Board for possible increase no lessfrequently than annually during the Term of Employment and any increased BaseSalary shall constitute “Base Salary” for purposes hereof.  The Base Salary (including as increased pursuantto the preceding sentence) shall not be decreased at any time during the Termof Employment.

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## (b)           AnnualBonus. Executive will be entitled to receive an annual bonus each yearduring the Term of Employment (the “Bonus”) with a target equal to atleast 100% of Executive’s Base Salary for the applicable year based onreasonably attainable goals as determined by the Board or its CompensationCommittee.  In addition, Executive shall beafforded the opportunity to earn an incentive bonus of up to another 100% ofthe Executive’s Base Salary each year during the Term based on attainment ofextraordinary performance metrics determined by the CEO and approved by theBoard or its Compensation Committee (the “Incentive Bonus”).  Bonuses will be paid in accordance with theCompany’s bonus policy as in effect from time to time, but in no event laterthan 21⁄2 months after the fiscal year in which it is earned.

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## (c)           InducementBonus.  On the first payday followingthe Effective Date on which the Executive is paid his Base Salary, he shallreceive an additional payment in consideration of his commencement ofemployment with the Company in the amount of $120,000.

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## (d)           EmployeeBenefits. During the Term of Employment, Executive shall be entitled toparticipate in all employee benefit plans and programs offered by the Companyto senior executives of the Company, and, subject to the eligibilityrequirements for participation therein, any employee benefit plans and programswhich the Company may adopt from time to time generally for its employees.

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## (e)           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.

 

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## (f)            LegalFees.  The Company shall either payor reimburse Executive (as elected by the Company) for all reasonable legalfees and expenses incurred by Executive in connection with the negotiation anddrafting of this Agreement.

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## (g)           Reimbursementof Business and Other Expenses. During the Term of Employment, Executive isauthorized to incur reasonable expenses, including, without limitation, expensesfor travel, entertainment and other ordinary and necessary activities, in carrying out his duties and responsibilities under thisAgreement, and the Company shall promptly reimburse him for all such expensessubject to documentation and subject to the expense reimbursement policies ofthe Company relating to expense reimbursement.

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# 5.             **EquityArrangements**.

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## (a)           EquityAwards.  On the Effective Date, theCompany will grant the following equity awards to Executive:  (i) stock options to purchase 51,300shares of the Company’s common stock (the “Common Stock”) (the “Options”)and (ii) 55,576 restricted shares of Common Stock (the “RestrictedStock,” and together with the Options, the “Equity Awards”).  The Equity Awards shall be granted pursuantto an equity incentive plan (the “Incentive Plan”) that the Company willestablish and maintain during the Term of Employment, the terms of which (otherthan as set forth in this Agreement) shall be subject to the approval of theBoard or its Compensation Committee and which shall reserve for grant to theCompany’s employees 855,000 shares of Common Stock.  The Company will take such actions as arenecessary to provide that (i) as of the Effective Date the Incentive Planwill be effective and (ii) as soon as reasonably practicable that theshares of Common Stock available for awards under the Incentive Plan are fullyregistered for resale on a Form S-8 or to the extent otherwise soregistrable in connection with the general registration of Common Stock.

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## (b)           Vesting.  Fifty (50%) percent of the Options and Fifty (50%) percent of the Restricted Stock will vest in the threeequal installments on each of the first two anniversaries of the Effective Dateand December 31, 2012, subject to Executive’s continuing employment withthe Company.  Fifty(50%)percent of the Options and Fifty(50%)percent of the Restricted Stock will vest subject to the attainment ofreasonable performance criteria to be determined by the Board.  Notwithstanding theforegoing, in the event of (A) a Change of Control (as defined below) ofthe Company, then 100% of the Equity Awards shall vest, and the Options willremain exercisable 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”).

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## (c)           ExercisePrice.  The exercise price of eachshare of Common Stock underlying an Option shall be equal to the per share fairmarket value of the Common Stock on the Effective Date, as determined by theBoard in its sole discretion, in a manner that complies with the requirementsof Section 409A of Internal Revenue Code of 1986, as amended (“Code”),and the regulations and guidance promulgated thereunder (“Code Section 409A”).

 

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## (d)           Methodof Exercise.  To the extent vested,the Options may be exercised by Executive in whole or in part at any time andfrom time to time during the Option Term by giving written notice of exerciseto the Company specifying the number of shares of Common Stock to beacquired.  Such notice shall beaccompanied by payment in full of the purchase price as follows: (i) incash or by check, bank draft or money order payable to the order of theCompany; (ii) through a cashless exercise whereby the Company reduces thenumber of shares of Common Stock issuable upon exercise with a value equal tothe applicable exercise price and withholding, (iii) solely to the extentpermitted by applicable law, if the Common Stock is then traded on a securitiesexchange or system in the United States, through a procedure whereby Executivedelivers irrevocable instructions to a broker reasonably acceptable to thecommittee established under the Incentive Plan (the “Committee”) todeliver promptly to the Company an amount equal to the purchase price; or (iv) onsuch other terms and conditions as may be acceptable to the Committee.

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# 6.             **Call/SaleParticipation/Piggy-Back Rights****. **In the event that, as of the Effective Date, the CommonStock is not traded on a securities exchange or system, then the provisions ofthis Section 6 shall apply to any Common Stock acquired by or granted toExecutive under any equity award granted to Executive by the Company until theCommon Stock is so traded.  Other than asspecifically provided in this Agreement, the Executive’s right to transfershares of Common Stock acquired by or granted to Executive under any equityaward granted to Executive by the Company shall not be limited nor shall suchshares be subject to any claw-back provision or be subject to forfeiture due toa breach of Section 11.

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## (a)           CallRight.  In the event of Executive’stermination for Cause, the Company shall have a call right on any shares ofCommon Stock acquired by or granted to Executive under any equity award grantedto Executive by the Company then held by Executive at a price per share equalto the lower of the per share fair market value as of the purchase date, asdetermined by the Board in its sole discretion, and the price paid by Executivefor each share of Common Stock; provided; that shares of Common Stockgranted as restricted shares shall be forfeited automatically and withoutconsideration on a termination for Cause. For the avoidance of doubt, the Company will not have any call rightupon a termination other than for Cause in respect of Executive’s shares ofCommon Stock.

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## (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.

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

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## (d)           InitialPublic Offering.  All transferrestrictions, 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.

 

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# 7.             **Termination of Employment**.Executive’s employment hereunder may be terminated during the Term ofEmployment under the following circumstances and any such termination shall notbe, nor deemed to be, a breach of this Agreement:

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

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## (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)           ForCause. The Company shall have the right to terminate Executive’s employmentfor Cause by 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 afelony (other than a traffic violation); (iii) Executive’s willful theftor embezzlement from the Company or its affiliates; (iv) willful andsubstantial failure of Executive to perform his duties or any other materialbreach by Executive of any material provision of this Agreement, which is notcured (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.

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## (d)           WithoutCause.  The Company shall have theright to terminate Executive’s employment hereunder without Cause at any timeby providing Executive with a Notice of Termination.

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## (e)           ByExecutive for Good Reason.  Executiveshall have the right to terminate his employment hereunder for Good Reason byproviding the Company with a Notice of Termination.  For purposes of this Agreement, Executiveshall have “Good Reason” to terminate his employment hereunder if,without Executive’s written consent, any of the following events occurs thatare not cured by the Company within thirty (30) days of written noticespecifying the occurrence such Good Reason event, which notice shall be givenby Executive to the Company 

 

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## withinninety (90) days after the occurrence of the Good Reason event: (i) amaterial diminution in Executive’s then authority, duties or responsibilities; (ii) amaterial diminution in Executive’s Base Salary; (iii) a relocation ofExecutive’s principal business location to a location outside of Dallas, Texas;or (vi) any material breach of this Agreement by the Company.  Executive’s termination hereunder for GoodReason shall not occur later than one hundred eighty (180) days following theinitial date on which the event Executive claims constitutes Good Reasonoccurred.

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## (f)            ByExecutive without Good Reason. Executive shall have the right to terminate his employment hereunder withoutGood Reason by providing the Company with a Notice of Termination at leastthirty (30) days prior to such termination.

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## (g)           Dueto Expiration of the Term of Employment. The Term of Employment shall automatically terminate upon the expirationof the Term of Employment in accordance with Section 1 hereof.

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# 8.             **TerminationProcedure**.

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## (a)           Noticeof Termination.  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.

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## (b)           Dateof Termination.  “Date ofTermination” shall mean (i) if Executive’s employment is terminated byhis death, the date of his death, (ii) if Executive’s employment isterminated pursuant to Section 7(b), the thirty-first (31st) day after the Notice of Termination is provided toExecutive (provided that Executive shall not have returned to the substantialperformance of his duties on a full-time basis during the thirty (30) dayperiod following the Notice of Termination), (iii) if Executive’semployment is terminated pursuant to Section 7(f), the thirty-first (31st) day after the Notice of Termination is provided to theCompany; and (iv) if Executive’s employment is terminated for any otherreason, the date the Notice of Termination is given or any later date set forthin such Notice of Termination as the effective date of termination.

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# 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).

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

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### (i)            theCompany shall pay to Executive (or his beneficiaries) any accrued but unpaidBase Salary earned through the Date of Termination, payable in accordance withthe regular payroll practices applicable to senior executives of the Company;

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### (ii)           atthe time that the 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”);

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### (iii)          theCompany shall reimburse Executive pursuant to Section 4(f) for anybusiness expenses incurred through, but not reimbursed prior to, the Date ofTermination;

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### (iv)          withinten (10) days following the Date of Termination, the Company shall pay toExecutive a payment for his accrued but unused vacation through the Date ofTermination;

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### (v)           theCompany shall pay or provide to Executive such vested accrued benefits, if any,as to which Executive may be entitled under the Company’s employee benefitplans and programs applicable to Executive as of the Date of Termination (otherthan any severance pay plan), which shall be paid or provided in accordancewith the terms of the applicable plan or program (clauses (i) — (v) collectivelyreferred to as the “Accrued Obligations”);

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### (vi)          Executiveor his beneficiary, legal representative or estate shall receive an amountequal to the product of (x) and (y), where (x) is the Bonus, if any,that would have been paid to Executive in respect of the year in which suchtermination occurred, based on actual performance for the year of termination,and (y) is a fraction, the numerator of which is the number of daysExecutive was employed by the Company during the calendar year in which suchtermination occurred and the denominator of which is the number of days in suchyear (the “Pro Rata Bonus”), to be paid at such time as the Bonus wouldhave normally been paid pursuant to Section 4(b) hereof in respect ofthe year in which such termination occurred; and

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### (vii)         Allvested stock options and other exercisable awards then held by Executive shallremain exercisable for a period of one year following the Date of Terminationand all unvested equity awards held by Executive shall immediately be forfeitedwithout consideration.

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

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### (i)            theCompany shall pay or provide to Executive the Accrued Obligations (other thanthe Accrued Bonus) at the times, and subject to the same conditions, asprovided in Section 9(a) hereof; and

 

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### (ii)           allequity awards held by Executive, whether or not vested and exercisable, shallimmediately be forfeited without consideration.

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

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### (i)            theCompany shall pay or provide to Executive the Accrued Obligations (other thanthe Accrued Bonus) at the times, and subject to the same conditions, asprovided in Section 9(a) hereof; and

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### (ii)           allvested stock options and other exercisable awards then held by Executive shallremain exercisable for a period of ninety (90) days following the Date ofTermination and all unvested equity awards held by Executive shall immediatelybe forfeited without 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:

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### (i)            theCompany shall pay or provide to Executive the Accrued Obligations at the times,and subject to the same conditions, as provided in Section 9(a) hereof;

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### (ii)           subjectto Executive’s signing (and not revoking) a general release of claims in theform attached hereto as Exhibit A (with such changes as may benecessary for changes in applicable law) within twenty-one (21) days orforty-five (45) days, which ever period is required under ADEA (as defined in Exhibit A)following such termination (the “Release”):

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#### (A)          the Company shall pay Executive the Pro Rata Bonus at suchtime as the Bonus would have normally been paid pursuant to Section 4(b) hereofin respect of the year in which such termination occurred;

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#### (B)   within sixty (60) days following the Date of Termination, theCompany shall pay to Executive a lump sum severance payment equal to the sum ofthe Base Salary and target Bonus; provided that if Date of Termination occurs provided,that, if the termination of your employment occurs less than sixty (60)days preceding 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

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#### (C)           the Company shall pay the costs of continued group life,medical, dental, and vision insurance coverage for Executive and his dependentsunder the plans and programs in which Executive participated immediately priorto the Date of Termination, or materially equivalent plans and programsmaintained by the Company in replacement thereof, for a period of twelve (12)months following the Date of Termination (the “Coverage Period”); provided, that in the event the medical,dental, and 

 

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#### vision plansunder which Executive and his dependents were receiving benefits immediatelyprior to the Date of Termination, or any applicable replacement plan orprogram, is not fully-insured, then in lieu of the foregoing, if Executivetimely elects coverage under the Consolidated Omnibus Budget ReconciliationAct of 1985, as amended (“COBRA”) and timely pays the monthly premiumsfor 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,for purposes of calculating cost, an employee’s ability to pay premiums withpre-tax dollars), on a tax grossed-upbasis to the extent such monthly premium is taxable to Executive, payable onthe first Company payroll date in each month following the Date of Termination;and

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### (iii)          alloutstanding equity awards held by Executive will become fully vested and allstock options and other exercisable awards will become immediately exercisableand will remain exercisable for a period following the Date of Termination of (x) ninety(90) days following a termination by Executive for Good Reason and (y) twelve(12) months following a termination by the Company without Cause.

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## (e)           Terminationdue to Expiration of the Term of Employment.  If Executive’s employment hereunderterminates due to the expiration of the Term of Employment in accordance with Section 1:

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### (i)            theCompany shall pay to Executive the Accrued Obligations at the times, andsubject to the same conditions, as provided in Section 9(a) hereof;and

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### (ii)           subjectto Executive’s signing (and not revoking) the Release, the Company shall paythe 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 “Expiration Coverage Period”); provided, that in the event the medical, dental, andvision plans under which Executive andhis dependents were receiving benefits immediately prior to the Date ofTermination, or any applicable replacement plan or program, is not fully-insured,then in lieu of the foregoing, if Executive timely elects COBRA coverage andtimely pays the monthly premiums for such COBRA coverage, then the Company shall reimburse Executiveduring the Coverage Period for the amount of such monthly premium that is inexcess of the active employee rate (excluding, for purposes ofcalculating cost, an employee’s ability to pay premiums with pre-tax dollars), on a tax grossed-up basis to the extent suchmonthly premium is taxable to Executive, payable on the first Company payrolldate in each month following the Date of Termination; and

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### (iii)          allvested stock options and other exercisable awards then held by Executive shallremain exercisable for a period of twelve (12) months following the Date ofTermination and all unvested equity awards held by Executive shall immediatelybe forfeited without consideration.

 

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## (f)            NoMitigation; No Off-Set.**** Executive will not berequired to seek other employment or attempt to reduce any payments due toExecutive under this Section 9, and any compensation (in whatever form)earned by Executive from any subsequent employment will not offset or reducethe Company’s severance obligations under this Section 9 followingExecutive’s termination.  The Company’sobligation to pay Executive any payments under this Section 9 will not besubject to set-off, counterclaim or recoupment of amounts owed by Executive tothe Company.

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## (g)           Changeof Control/Golden Parachute Considerations. All equity awards held by Executive shall vest upon the occurrence of 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 “Changein Control” shall mean the occurrence of any of the following eventssubsequent to the Effective Date:  (i) anyperson, other than an exempt person (which includes the Company and itssubsidiaries and employee benefit plans), becoming a beneficial owner of 50% ormore of the shares of common stock or equity interests or voting stock orequity interests of the Company then outstanding; (ii) the consummation ofa reorganization, merger or consolidation in which existing Companystockholders or members own less than 50% of the equity of the resultingcompany; (iii) the consummation of the sale or other disposition of all orsubstantially all of the assets of the Company; or (iv) during any12-month period and provided no other corporation is a majority shareholder ofthe Company,  individuals who on theEffective Date, constitute the Board (the “Incumbent Board”) cease forany reason to constitute at least a majority thereof, provided that any personbecoming a director subsequent to the Effective Date, whose election ornomination for election was approved by a vote of at least a majority of thedirectors comprising the Incumbent Board shall be considered a member of theIncumbent Board.  Notwithstandinganything herein to the contrary, the determination as to whether a “Change inControl” as defined herein has occurred shall be determined in accordance withthe requirements of Code Section 409A and shall be intended to constitutea “change in control event” within the meaning of Code Section 409A,except to that the extent the provisions herein are more restrictive than therequirements of Code Section 409A.

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# 10.           **Indemnification/Directorsand Officers Liability Insurance**.The Company will indemnify Executive to the fullest extent permitted by law andits bylaws (including advancement of legal fees) for any action or inaction ofExecutive while serving as an officer or director of the Company.  The Company will cover Executive under itsdirectors and officers liability insurance and its defamation policies bothduring and, while potential liability exists, after Executive’s termination ofemployment.  The provisions of this Section 10shall survive the termination of Executive’s employment with the Company.

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# 11.           **RestrictiveCovenants**.

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## (a)           Acknowledgments.  Executive acknowledges that:  (i) as a result of Executive’s employmentby the Company, Executive has obtained and will obtain Confidential Information(as defined below); (ii) the Confidential Information has been developedand created by the

 

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## Companyand its affiliates at substantial expense and the Confidential Informationconstitutes valuable proprietary assets; (iii) the Company and itsaffiliates will suffer substantial damage and irreparable harm which will bedifficult to compute if, during the Term of Employment and thereafter,Executive should enter a Competitive Business (as defined herein) in violationof the provisions of this Agreement; (iv) the nature of the Company’s andits affiliates’ business is such that it could be conducted anywhere in theworld and that it is not limited to a geographic scope or region; (v) theCompany and its affiliates will suffer substantial damage which will bedifficult to compute if, during the Term of Employment or thereafter, Executiveshould solicit or interfere with the Company’s or its affiliates’ employees orshould divulge Confidential Information relating to the business of the Companyand its affiliates; (vi) the provisions of this Agreement are reasonableand necessary for the protection of the business of the Company and itsaffiliates; (vi) the Company would not have hired or continued to employExecutive or grant the equity awards and other benefits contemplated under thisAgreement unless he agreed to be bound by the terms hereof; and (vii) theprovisions of this Agreement will not preclude Executive from other gainfulemployment. “Competitive Business” means anybusiness, partnership, enterprise, association or activity that is activelyinvolved in the business of producing and/or marketing ethanol and ethanolco-products, or any other activity or business in which the Company wasengaged, or had taken material steps to engage in, at the time of Executive’stermination or in the twelve (12) months period immediately prior thereto. “ConfidentialInformation” as used in this Agreement shall mean any and all confidentialand/or proprietary knowledge, data, or information of the Company or anyaffiliate, including, without limitation, any: (A) trade secrets,drawings, inventions, methodologies, mask works, ideas, processes, formulas,source and object codes, data, programs, software source documents, works ofauthorship, know-how, improvements, discoveries, developments, designs andtechniques, and all other work product of the Company or any affiliate, whetheror not patentable or registrable under trademark, copyright, patent or similarlaws; (B) information regarding plans for research, development, newservice offerings and/or products, marketing, advertising and selling,distribution, business plans, business forecasts, budgets and unpublishedfinancial statements, licenses, prices and costs, suppliers, customers ordistribution arrangements; (C) any information regarding the skills andcompensation of employees, suppliers, agents, and/or independent contractors ofthe Company or any affiliate; (D) concepts and ideas relating to thedevelopment and distribution of content in any medium or to the current, futureand proposed products or services of the Company or any affiliate; or (E) anyother information, data or the like that is labeled confidential or orallydisclosed to Executive as confidential.

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## (b)           Confidentiality.  In consideration of the benefits provided forunder this Agreement, Executive agrees not to, at any time, either during the Termof 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.

 

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##  

## (c)           Non-Compete.  In consideration of the benefits provided forin this Agreement, Executive covenants and agrees that during Executive’semployment and during the Restrictive Period (as defined below), Executive will not, directly or indirectly for or on behalf of himselfor any other person or entity (i) engagein any Competitive Business (as defined below) or (ii) participate orinvest in, provide or facilitate the provision of financing to, or assist(whether as owner, part-owner, shareholder, member, partner, director, officer,trustee, employee, agent or consultant, or in any other capacity) anyCompetitive Business (as defined below). For the avoidance of doubt, this covenant shall not preclude Executive from tradingethanol-related commodities; provided that such activity does not have amaterial and adverse effect on the Company.

##  

## “Restrictive Period” shall mean theperiod of Executive’s employment with the Company and (i) in the event oftermination of Executive’s employment by the Company for Cause or without Causeor by the Executive for Good Reason, the 12-month period thereafter or (ii) inthe event of termination of Executive’s employment by the Executive withoutGood Reason or upon Expiration of the Term, the period of up to 12 monthsfollowing Executive’s employment for which the Company elects (pursuant to 15days advance written notice) to pay Executive the pro rata portion of theNon-Compete Amount.  “Non-Compete Amount”shall mean the sum of Executive’s Base salary and the average of the AnnualBonuses earned under Section 5 during his Employment; provided that if anysuch termination occurs before the completion of the first Annual Bonus period,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.  Therestrictions set forth in this Section 11(c) shall not limitExecutive’s right to own not more than 5% of any of the debt or equitysecurities of any business organization that is then filing reports with theSecurities 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 

 

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## 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, papers, computer mediaof all types, and models) in which such Intellectual Property Products shall berecorded or otherwise fixed.  Executivefurther agrees promptly to disclose in writing and deliver to the Company allIntellectual Property Products created during his engagement by the Company,whether or not during normal business hours. Executive agrees that all works of authorship created by Executiveduring his engagement by the Company shall be works made for hire of which theCompany or its affiliates is the author and owner of copyright. To the extentthat any competent decision-making authority should ever determine that anywork of authorship created by Executive during his engagement by the Company isnot a work made for hire, Executive hereby assigns all right, title andinterest in the copyright therein, in perpetuity and throughout the world, to theCompany.  To the extent that thisAgreement does not otherwise serve to grant or otherwise vest in the Company orits affiliates all rights in any Intellectual Property Product created byExecutive during his engagement by the Company, or within three (3) monthsthereafter, Executive hereby assigns all right, title and interest therein, inperpetuity 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 any suchparty 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 

 

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## withthe intent to damage the services, business, integrity, veracity or personal orprofessional reputation of Executive in either a professional or personalmanner.  Notwithstanding the foregoing,nothing in this Section 11(f) shall prevent any person from makingany truthful statement to the extent (i) necessary to rebut any untruepublic statements made by another party; (ii) necessary with respect toany litigation, arbitration or mediation involving this Agreement, including,but not limited to, the enforcement of this Agreement or (iii) required bylaw or by any court, arbitrator, mediator or administrative or legislative body(including any 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 breach will cause irreparable injuryto the Company and that money damages will not provide an adequate remedy tothe Company and the Company acknowledges and agrees that any such breach willcause irreparable injury to Executive and that money damages will not providean adequate remedy to Executive.  Suchright and remedy shall be in addition to, and not in lieu of, any other rightsand remedies available to the Company or Executive at law or in equity.

##  

## (h)           BluePencil.  If, at any time, theprovisions of this Section 11 shall be determined to be invalid orunenforceable under any applicable law, by reason of being vague orunreasonable as to area, duration or scope of activity, this Agreement shall beconsidered divisible and shall become and be immediately amended to only sucharea, duration and scope of activity as shall be determined to be reasonableand enforceable by the court or other body having jurisdiction over the matterand Executive and the Company agree that this Agreement as so amended shall bevalid and binding as though any invalid or unenforceable provision had not beenincluded 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**. ** **ThisAgreement may only be assigned to an acquiror of all or substantially all ofthe Company’s business that agrees in writing to assume the Company’sobligations under this Agreement.

#  

# 13.           **Representation**. Executive represents and warrants to the Company, andExecutive acknowledges that the Company has relied on such representations andwarranties in employing Executive, that neither Executive’s duties as anemployee of the Company nor his performance of this Agreement will breach anyother agreement to which Executive is a party and that he has not entered into,and will not enter into, any agreement, either oral or written, in conflictherewith.  The Company represents andwarrants to Executive that all necessary corporate actions for the approval ofthis Agreement have been taken such that, upon the 

 

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#  

# Company’s execution of this Agreement,this Agreement will constitute a legal, valid and binding obligation of theCompany.

#  

# 14.           **Resolution ofDisputes**.  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 the extent necessary toenforce any judgment, and neither the Company nor Executive shall not disclosethe existence of a claim, the nature of a claim, any documents, exhibits, orinformation exchanged or presented in connection with any such a claim, or theresult of any arbitration (collectively, “Arbitration Materials”), toany third party, with the sole exception of such Parties legal counsel, whoalso shall be bound by all confidentiality terms of this Agreement.  In the event of any court proceeding tochallenge or enforce an arbitrator’s award, the parties hereby consent to theexclusive jurisdiction of the state and federal courts in Dallas, Texas andagree to venue in that jurisdiction.  Theparties agree to take all steps necessary to protect the confidentiality of theArbitration Materials in connection with any such proceeding, agree to file allConfidential Information (and documents containing Confidential Information)under seal to the extent possible and agree to the entry of an appropriateprotective order encompassing 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**.  Any notice,consent, demand, request or other communication given to a person in connectionwith this Agreement (a “Notice”) shall be in writing and delivered inperson, by facsimile transmission (with a Notice contemporaneously given byanother method specified in this Section 15), by overnight courier serviceor by postage prepaid mail with a return receipt requested, at the followinglocations (or to such other address as either party may have furnished to theother in writing by like Notice).  Allsuch Notices shall be deemed to have been given and effective upon receipt (orrefusal 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). |

 

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#  

# 16.           **Miscellaneous**.

#  

## (a)           EntireAgreement.  This Agreement, and theexhibits attached hereto, contain the entire understanding and agreement amongthe Parties concerning the subject matter hereof and supersede all prioragreements, term sheets, understandings, discussions, negotiations andundertakings, whether written 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.

##  

## (c)           Amendmentor Waiver.  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)           WithholdingTaxes.  The Company may withhold fromany amounts or benefits payable under this Agreement any taxes that arerequired to be withheld pursuant to any applicable law or regulation.

##  

## (h)           409AProvisions.

##  

### (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 

 

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###  

### extentpermitted, this Agreement shall be interpreted to be exempt from or incompliance with Code Section 409A.

###  

### (ii)           IfExecutive notifies the Company (with specificity as to the reason therefor)that Executive believes that any provision of this Agreement (or of any awardof compensation 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 possible, maintain theoriginal intent and economic benefit to Executive and the Company withoutviolating the provisions of Section 409A.

###  

### (iii)          Notwithstandingany provision 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 andusing the identification methodology selected by the Company from time to time,or if none, the default methodology under Code Section 409A, any payments or benefits due upon a termination ofExecutive’s employment under any arrangement that constitutes a “deferral ofcompensation” within the meaning of Code Section 409A (whether under thisAgreement, any other plan, program, payroll practice or any equity grant) andwhich do not otherwise qualify 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.

 

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### (v)           Eachpayment under this Agreement or otherwise (including any installment payments)shall be treated as a separate payment for purposes of Code Section 409A.

###  

### (vi)          Inno event may Executive, directly or indirectly, designate the calendar year ofany payment to be made under this Agreement or otherwise which constitutes a “deferralof compensation” within the meaning of Code Section 409A.

###  

### (vii)         Allexpenses or other reimbursements paid pursuant to Section 4(g) hereofor otherwise that are taxable income to Executive shall in no event be paidlater than the end of the calendar year next following the calendar year inwhich Executive 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 aspermitted by Code Section 409A, (i) the right to reimbursement orin-kind benefits shall not be subject to liquidation or exchange for anotherbenefit, (ii) the amount of expenses eligible for reimbursement, ofin-kind benefits, provided during any taxable year shall not affect theexpenses eligible for reimbursement, or in-kind benefits to be provided, in anyother taxable year, *provided* thatthe foregoing clause (ii) shall not be violated without regard to expensesreimbursed 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)            GoverningLaw.  This Agreement shall begoverned, construed, performed and enforced in accordance with its expressterms, and otherwise in accordance with the laws of the State of New York,without reference to principles 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)           EffectivenessContingent Upon Emergence. This Agreement shall become effective only uponthe consummation of the Plan of Reorganization. In the event the Plan of Reorganization is terminated prior to theconsummation thereof in accordance with its terms for whatever reason, thisAgreement shall become null and void.

##  

## (l)            JointDrafting.  The Company and Executiveacknowledge and agree that this Agreement was jointly drafted by the Company onthe one side and by Executive on the other

 

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##  

## side.  Neither party, nor any party’s counsel, shallbe deemed the drafter of this Agreement in any proceeding that may hereafterarise between them.

##  

[SIGNATURE PAGEFOLLOWS]

 

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

 

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

 

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**EXHIBITA**

 

GENERAL RELEASE

 

# 1.             Terminationof Employment.  Ben Borgen (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 fiduciary of any Company benefitplan including, without limitation, Executive’s rights under Section 10of the Employment Agreement; (iii) impair any vested benefits Executive may have, as of theTermination Date, under any other employee benefit plans and programsapplicable to Executive as of the Termination Date; and (iv) impair yourrights to any continuation of medical coverage, pursuant to the ConsolidatedOmnibus Budget Reconciliation Act of 1985, as amended.

 

4.             Waiver of Rights Under AllApplicable 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 To Sue.  Except for an action brought to enforce thisGeneral Release or challenge the validity of the ADEA waiver, Executive agreesto refrain from filing or otherwise initiating any action, lawsuit, charge,claim, demand, grievance, arbitration or other legal action against the Companyor Related Parties over matters released or waived herein, and agrees that hewill refrain from participating in any action, complaint, charge, claim,demand, grievance, arbitration or other legal action initiated or pursued byany individual, group of individuals, partnership, corporation or other entityagainst Executive and/or the Related Parties over matters released or waivedherein, 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 orproceeding.

 

8.             Litigation And RegulatoryCooperation.  Executive shall (a) reasonablycooperate with the Company and/or Related Parties in the defense or prosecutionof any claims or actions now in existence or that may be brought in the futureagainst or on behalf of the Company and/or Related Parties that relate toevents or occurrences that transpired while Executive was employed by theCompany and (b) reasonably cooperate with the Company in connection withany 

 

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(1) Insert 45 days in the event of a layoff oftwo or more employees.

 

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investigationor review by any federal, state, or local regulatory authority as any suchinvestigation or review relates to events or occurrences that transpired whileExecutive was employed by the Company; provided, that the forgoing shall notapply if the interests of the Company and Executive are adverse.  Any request for such cooperation shall takeinto account Executive’s other personal and business commitments.  For any such cooperation that Executiveprovides after December 31, 2012, the Company shall pay Executive a perdiem fee for such cooperation (calculated as one-fifth the weekly gross BaseSalary at the rate in effect immediately prior to the Termination Date), paidon the last day of the month following the month in which such fee wasearned.  The Company shall reimburse theExecutive for all reasonable out-of-pocket expenses incurred by him inconnection with providing such cooperation.

 

9.             Reaffirmation of ContinuingObligations 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 of Liability.  This General Release shall not in any way beconsidered or construed as an admission by the Company of any improper actionsor liability whatsoever as to Executive or any other person.

 

11.           Miscellaneous.

 

(a)           This General Release shall begoverned in all respects by the laws of the State of New York without regard tothe 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, suchprovisions will be construed by limiting and reducing them so as to beenforceable to the maximum 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 WITNESS WHEREOF**, the parties hereto have executed this General Release onthis        day of                              .

 

 
|   | Aventine Renewable  Energy Holdings, Inc. |
|--------|------------------------------------------------|
|   |                                           |
|   |                                           |   |
|   | By:                                            |   |
|   | Name:                                          |
|   | Title:                                         |
|   |                                           |
|   |                                           |
|   | Executive:                                     |
|   |                                           |
|   |                                           |
|   | Ben Borgan                                     |

 

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**EXHIBITB**

 

PARACHUTE TAX INDEMNITY PROVISIONS

 

This Exhibit B setsforth the terms and provisions applicable to Executive pursuant to theprovisions of the Section 9(g) of the Agreement.  This Exhibit B shall be subject in allrespects 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)            In the event that Executive shallbecome entitled to payments and/or benefits provided by the Agreement or anyother amounts to (or for the benefit of) Executive that constitute “parachutepayments,” as such term is defined under Section 280G of the Code, as aresult of a change in ownership or effective control of the Company or in theownership of a substantial portion of the assets of the Company (collectively,the “Company Payments”), and such Company Payments will be subject tothe tax (the “Excise Tax”) imposed by Section 4999 of the Code (andsimilar tax, if any, that may hereafter be imposed by any taxing authority),the Company shall pay to Executive at the time specified in clause (v) belowan additional amount (the “Gross-Up Payment”) such that the net amountretained by Executive from the Company Payments together with the Gross-UpPayment, after deduction of any Excise Tax on the Company Payments and any U.S.federal, state, and local income or payroll tax upon the Gross-Up Paymentprovided for by this clause (i), but before deduction for any U.S. federal,state, and local income or payroll tax on the Company Payments, shall be equalto the Company Payments.

 

(ii)           Notwithstanding the foregoingprovisions of this Exhibit B to the contrary, if it shall be determinedthat Executive is entitled to a Gross-Up Payment, but the Company Payments donot exceed 110% of the greatest amount (the “Reduced Amount”) that couldbe paid to Executive such that the receipt of the Company Payments would notgive rise to any Excise Tax, then no Gross-Up Payment shall be made toExecutive and the Company Payments, in the aggregate, shall be reduced to theReduced Amount.  Any such reduction shallbe made in 

 

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the followingorder:  any cash severance Executive isentitled to receive (starting with the last payment due), then other cashamounts Executive is entitled to receive that are considered parachute paymentsunder Section 280G of the Code (starting with the last payment due), thenany stock options that have exercise prices higher than the then fair marketvalue price of the stock (based on the latest vesting tranches), thenrestricted stock and restricted stock units based on the last ones scheduled tobe distributed and then other stock options based on the latest vestingtranches.  In the event that the InternalRevenue Service or court ultimately makes a determination that the “excessparachute payments” plus the “base amount” is an amount other than asdetermined initially, an appropriate adjustment shall be made with regard tothe Gross-Up Payment or Reduced Amount, as applicable, to reflect the finaldetermination and the resulting impact on whether this clause (ii) applies.

 

(iii)          For purposes of determining whetherany of the Company Payments and Gross-Up Payment (collectively, the “TotalPayments”) will be subject to the Excise Tax and the amount of such ExciseTax:

 

(A)  the Total Payments shall be treated as “parachutepayments” within the meaning of Section 280G(b)(2) of the Code, andall “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) ofthe Code) shall be treated as subject to the Excise Tax, unless and except tothe extent that, in the opinion of the Company’s independent certified publicaccountants appointed prior to any change in ownership (as defined under Section 280G(b)(2) ofthe Code) or a certified public accountantappointed following a change in ownership that is or tax counselselected by such accountants or the Company (the “Accountants”) suchTotal Payments (in whole or in part):  (1) donot constitute “parachute payments,” (2) represent reasonable compensationfor services actually rendered within the meaning of Section 280G(b)(4) ofthe Code in excess of the “base amount” or (3) are otherwise not subjectto the Excise Tax; and

 

(B) the value of any non-cash benefits or anydeferred payment or benefit shall be determined by the Accountants inaccordance with the principles of Section 280G of the Code.  

 

In the event thatthe Accountants are serving as accountants or auditors for the individual,entity or group effecting the change in control (within the meaning of Section 280Gof the Code), Executive may appoint another nationally recognized accountingfirm to make the determinations hereunder (which accounting firm shall then bereferred to as the “Accountants” hereunder). All determinations hereunder shall be made by the Accountants whichshall provide detailed supporting calculations both to the Company andExecutive at such time as it is requested by the Company or Executive.  The determination of the Accountants, subjectto the adjustments provided below, shall be final and binding upon the Companyand Executive.

 

(iv)          For purposes of determining the amountof the Gross-Up Payment, Executive’s marginal blended actual rates of federal,state and local income taxation in the calendar year in which the change inownership or effective control that subjects Executive to the Excise Tax occursshall be used.  In the event that theExcise Tax is subsequently determined by the Accountants to be less than theamount taken into account hereunder at the time the Gross-

 

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Up Payment ismade, Executive shall repay to the Company, at the time that the amount of suchreduction in Excise Tax is finally determined, the portion of the priorGross-Up Payment attributable to such reduction (plus the portion of theGross-Up Payment attributable to the Excise Tax and U.S. federal, state andlocal income tax imposed on the portion of the Gross-Up Payment being repaid byExecutive if such repayment results in a reduction in Excise Tax or a U.S.federal, state and local income tax deduction). Notwithstanding the foregoing, in the event that any portion of theGross-Up Payment to be refunded to the Company has been paid to any U.S. federal,state and local tax authority, repayment thereof (and related amounts) shallnot be required until actual refund or credit of such portion has been made toExecutive.  Executive and the Companyshall mutually agree upon the course of action to be pursued (and the method ofallocating the expense thereof) if Executive’s claim for refund or credit isdenied.  In the event that the Excise Taxis later determined by the Accountants or the Internal Revenue Service (orother taxing authority) to exceed the amount taken into account hereunder atthe time the Gross-Up Payment is made (including by reason of any payment theexistence or amount of which cannot be determined at the time of the Gross-UpPayment), the Company shall make an additional Gross-Up Payment in respect ofsuch excess (plus any interest or penalties payable with respect to suchexcess) promptly after the amount of such excess is finally determined.

 

(v)           The Gross-Up Payment or portionthereof provided for in clause (iv) above shall be paid not later than thesixtieth (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) day after the occurrence of the eventsubjecting Executive to the Excise Tax. Subject to clauses (iv) and (ix) of this Exhibit B, inthe event that the amount of the estimated payments exceeds the amountsubsequently determined to have been due, such excess shall constitute a loanby the Company to Executive, payable on the fifth (5th) day after demand by theCompany (together with interest at the rate provided in Section 1274(b)(2)(B) ofthe Code).

 

(vi)          In the event of any controversy withthe Internal Revenue Service (or other taxing authority) with regard to theExcise Tax, Executive shall permit the Company to control issues related to theExcise Tax (at its expense), provided that such issues do not potentiallymaterially adversely affect Executive, but Executive shall control any otherissues.  In the event that the issues areinterrelated, Executive and the Company shall in good faith cooperate so as notto jeopardize resolution of either issue, but if the parties cannot agree,Executive shall make the final determination with regard to the issues.  In the event of any conference with anytaxing authority as to the Excise Tax or associated income taxes, Executiveshall permit the representative of the Company to accompany Executive, andExecutive and Executive’s representative shall cooperate with the Company andits representative.

 

(vii)         The Company shall be responsible forall charges of the Accountants.

 

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(viii)        The Company and Executive shall promptlydeliver to each other copies of any written communications, and summaries ofany verbal communications, with any taxing authority regarding the Excise Taxcovered by this Exhibit B.

 

(ix)           Nothing in this Exhibit B isintended to violate the Sarbanes-Oxley Act of 2002 and to the extent that anyadvance or repayment obligation hereunder would do so, such obligation shall bemodified so as to make the advance a nonrefundable payment to Executive and therepayment obligation null and void.

 

(x)            Notwithstanding the foregoing, anypayment or reimbursement made pursuant to this Exhibit B shall be made inany event no later than the end of the calendar year immediately following thecalendar year in which Executive remits the related taxes, and anyreimbursement of expenses incurred due to a tax audit or litigation shall bemade no later than the end of the calendar year immediately following thecalendar year in which the taxes that are the subject of the audit orlitigation are remitted to the taxing authority, or, if no taxes are to beremitted, the end of the calendar year following the calendar year in which theaudit or litigation is completed.

 

(xi)           The provisions of this Exhibit Bshall survive the termination of Executive’s employment with the Company forany reason and any amount payable under this Exhibit B shall be subject tothe provisions of Section 16(h) of the Agreement.

 

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