**Exhibit 10.7**

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EXECUTION COPY

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**AVENTINE RENEWABLE ENERGY HOLDINGS, INC.**

**2010 EQUITY INCENTIVE PLAN**

**STOCKOPTION AGREEMENT**

 

THIS AGREEMENT, made asof this 15th day of March, 2010 (the “***Dateof Grant***”), by and between Aventine Renewable Energy Holdings, Inc.(the “***Company***”) and Thomas Manuel(the “***Participant***”).

 

W I T N E S S E TH:

 

WHEREAS, pursuant to theAventine Renewable Energy Holdings, Inc. 2010 Equity Incentive Plan (the “***Plan***”), the Company desires toafford the Participant the opportunity to acquire ownership of the Company’scommon shares, $0.001 par value per share (“***CommonShares***”), so that the Participant may have a direct proprietaryinterest in the Company’s success.

 

NOW, THEREFORE, inconsideration of the covenants and agreements herein contained, the partieshereto hereby agree as follows:

 

# 1.                                       **Grant of Option**. Subject to the terms and conditions set forth herein and in the Plan,the Company hereby grants to the Participant the right and option (the right topurchase any one Common Share hereunder being an “***Option***”)to purchase from the Company, at a price of $45.60 per share (the “***Option Price***”), an aggregate of 128,250Common Shares (the “***Option Shares***”).  The Options granted hereunder shall expireten (10) years following the Date of Grant.

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# 2.                                       **Limitation on Exercise ofOption**.

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### (a)                                  Subject to the terms and conditions setforth herein and the Plan, the Participant will become vested in the Options asfollows: (i) 25% of the Options will vest and become exercisable on theDate of Grant, (ii) an additional 25% will vest and become exercisable on eachof the first two anniversaries of the Date of Grant, (iii) and theremaining 25% of the Options will vest and become exercisable on December 31,2012; provided, that, the Participant is then employed by theCompany.

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### (b)                                 Notwithstanding the foregoing, in theevent that the Participant’s employment with the Company is terminated (i) bythe Company without Cause (as defined in the Employment Agreement between theCompany and the Participant dated as of March 15, 2010 (the “***Employment Agreement***”)), or (ii) bythe Participant for Good Reason (as defined in the Employment Agreement), theOptions shall immediately vest and become exercisable in full.

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### (c)                                  Change inControl.  Upon the occurrence of a Change in Control(as defined in the Employment Agreement), the Options shall immediately vestand become exercisable in full.

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# 3.                                       **Post-Termination ExercisePeriod**. Ifthe Participant’s termination of employment is due to (i) (a) theParticipant’s death, (b) the Participant’s termination by the Company forDisability (as defined in the Employment Agreement) or without Cause, or (c) due

 

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to the expiration of the Term of Employment (as defined in theEmployment Agreement), all vested Options then held by the Participant shallremain exercisable until the earlier of (x) the first anniversary of theDate of Termination (as defined in the Employment Agreement) and (y) theexpiration of the Option Period, and shall thereafter terminate; or (ii) terminationby the Participant with or without Good Reason, all vested Options then held bythe Participant shall remain exercisable until the earlier of (x) ninetydays following the Date of Termination and (y) the expiration of theOption Period, and shall thereafter terminate. If the Participant’s termination of employment is for any other reason,all unvested Options (and in the case of a termination by the Company forCause, all vested Options) shall terminate on the Date of Termination.

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# 4.                                       **Method of ExercisingOption**.

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### (a)                                  Payment of Option Price. Options, to the extent vested, may be exercised, in whole or in part, bygiving written notice of exercise to the Company specifying the number ofCommon Shares to be purchased.  Suchnotice shall be accompanied by the payment in full of the aggregate OptionPrice.  Such payment shall be made: (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 Common Shares issuable upon exercise with a value equal to theaggregate Option Price and withholding obligation, (iii) solely to theextent permitted by applicable law, if the Common Shares are then traded on anestablished securities exchange or system in the United States, through aprocedure whereby the Participant delivers irrevocable instructions to a brokerreasonably acceptable to the Committee to deliver promptly to the Company anamount equal to the aggregate Option Price or (iv) on such other terms andconditions as the Committee may permit, in its sole discretion.

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### (b)                                 Tax Withholding. At the time of exercise, the Participant shall pay to the Company suchamount as the Company deems necessary to satisfy its obligation, if any, towithhold federal, state or local income or other taxes incurred by reason ofthe exercise of Options granted hereunder. Such payment shall be made: (i) in cash, (ii) by having theCompany withhold from the delivery of Common Shares for which the Option wasexercised that number of Common Shares having a Fair Market Value equal to theminimum withholding obligation, (iii) by delivering Common Shares owned bythe holder of the Option that are Mature Shares, or (iv) by a combinationof any such methods.  For purposeshereof, Common Shares shall be valued at Fair Market Value.

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# 5.                                       **Issuance of Shares**. Except as otherwise provided in the Plan, as promptly as practical afterreceipt of such written notification of exercise and full payment of the OptionPrice and any required income tax withholding, the Company shall issue ortransfer to the Participant the number of Option Shares with respect to whichOptions have been so exercised (less shares withheld for payment of the OptionPrice and/or in satisfaction of tax withholding obligations, if any), and shalldeliver to the Participant a certificate or certificates therefor, registeredin the Participant’s name.

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# 6.                                       **Non-Transferability**. The Options are not transferable by the Participant otherwise than to adesignated beneficiary upon death or by will or the laws of descent anddistribution, and are exercisable during the Participant’s lifetime only byhim/her (or his or her 

 

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legal representative in the event of incapacity).  No assignment or transfer of the Options, orof the rights represented thereby, whether voluntary or involuntary, byoperation of law or otherwise (except to a designated beneficiary, upon death,by will or the laws of descent and distribution), shall vest in the assignee ortransferee any interest or right herein whatsoever, but immediately upon suchassignment or transfer the Options shall terminate and become of no furthereffect.  Notwithstanding the foregoing,the Participant may transfer the Options to an Immediate Family Member inaccordance with Section 16(b)(ii) and (iii) of the Plan.

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# 7.                                       **Rights as Shareholder**. The Participant or a transferee of the Options shall have no rights asshareholder with respect to any Option Shares until he shall have become theholder of record of such shares, and no adjustment shall be made for dividendsor distributions or other rights in respect of such Option Shares for which thedate on which shareholders of record are determined for purposes of paying cashdividends on Common Shares is prior to the date upon which he/she shall becomethe holder of record thereof.

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# 8.                                       **Adjustments**. In the event of any adjustment pursuant to Section 12 of the Planthat would adversely affect the value of the Options granted hereunder or causesuch Options to become subject to Section 409A of the Code, suchadjustment may only be made with the Participant’s written consent, whichconsent shall not be unreasonably withheld.

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# 9.                                       **Compliance with Law**. Notwithstanding any of the provisions hereof, the Participant herebyagrees that he/she will not exercise the Options, and that the Company will notbe obligated to issue or transfer any shares to the Participant hereunder, ifthe exercise hereof or the issuance or transfer of such shares shall constitutea violation by the Participant or the Company of any provisions of any law orregulation of any governmental authority. Any determination in this connection by the Committee shall be final,binding and conclusive.

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# 10.                                 **Notice**. Every notice or other communication relating to this Agreement shall bein writing, and shall be mailed to or delivered to the party for whom it isintended at such address as may from time to time be designated by it in anotice mailed or delivered to the other party as herein provided; provided,that, unless and until some other address be so designated, all noticesor communications by the Participant to the Company shall be mailed ordelivered to the Company at its principal executive office, and all notices orcommunications by the Company to the Participant may be given to theParticipant personally or may be mailed to him at his address as recorded inthe records of the Company.

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# 11.                                 **Non-Qualified StockOptions**.  The Options granted hereunder are notintended to be incentive stock options within the meaning of Section 422of the Code.

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# 12.                                 **Binding Effect**. Subject to Section 6 hereof, this Agreement shall be bindingupon the heirs, executors, administrators and successors of the parties hereto.

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# 13.                                 **Governing Law**. This Agreement shall be construed and interpreted in accordance with thelaws of the State of New York without regard to its conflict of law principles.

 

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# 14.                                 **Plan**. The terms and provisions of the Plan are incorporated herein byreference, and the Participant hereby acknowledges receiving a copy of thePlan.  In the event of a conflict orinconsistency between the terms and provisions of the Plan and the provisionsof this Agreement, this Agreement shall govern and control.  All capitalized terms not defined hereinshall have the meaning ascribed to them as set forth in the Plan.  Notwithstanding anything herein or in thePlan to the contrary, the provisions of Section 15 of the Plan shall notapply to the Participant.

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# 15.                                 **Interpretation**. Any dispute regarding theinterpretation of this Agreement shall be submitted by the Participant or theCompany to the Committee for review.  Theresolution of such a dispute by the Committee shall be binding on the Companyand the Participant.

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# 16.                                 **No Right to ContinuedEmployment**.  Nothing inthis Agreement shall be deemed by implication or otherwise to impose anylimitation on any right of the Company to terminate the Participant’semployment.

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# 17.                                 **Severability**. Every provision of this Agreement is intended to be severable and anyillegal or invalid term shall not affect the validity or legality of theremaining terms.

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# 18.                                 **Headings**. The headings of the Sections hereof are provided for convenience onlyand are not to serve as a basis for interpretation of construction, and shallnot constitute a part of this Agreement.

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# 19.                                 **Signature in Counterparts**. This Agreement may be signed incounterparts, each of which shall be deemed an original, with the same effectas if the signatures thereto and hereto were upon the same instrument

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**[signature page follows]**

 

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IN WITNESSWHEREOF, the parties hereto have executed this Agreement as of the date firstset forth above.

 

 
|   | **AVENTINE RENEWABLE ENERGY  HOLDINGS, INC.** |
|--------|-----------------------------------------------|
|   |                                          |   |
|   |                                          |   |
|   | By:                                           | /s/ Gene Davis |
|   | Name:                                         | Gene Davis |
|   | Title:                                        | Chairman of the Board |
|   |                                          |
|   |                                          |
|   | **PARTICIPANT**                               |
|   | ** **                                    |
|   | ** **                                    |
|   | By:                                           | /s/ Thomas Manuel |
|   | Name:                                         | Thomas Manuel |

 

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