Exhibit 10.7


 


EXECUTION COPY


 


AVENTINE RENEWABLE ENERGY HOLDINGS, INC.


2010 EQUITY INCENTIVE PLAN


STOCK
OPTION AGREEMENT


 


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


 


W I T N E S S E T
H:


 


WHEREAS, pursuant to the
Aventine Renewable Energy Holdings, Inc. 2010 Equity Incentive Plan (the “Plan”), the Company desires to
afford the Participant the opportunity to acquire ownership of the Company’s
common shares, $0.001 par value per share (“Common
Shares”), so that the Participant may have a direct proprietary
interest in the Company’s success.


 


NOW, THEREFORE, in
consideration of the covenants and agreements herein contained, the parties
hereto 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 to
purchase 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 128,250
Common Shares (the “Option Shares”).  The Options granted hereunder shall expire
ten (10) years following the Date of Grant.


 


2.                                       Limitation on Exercise of
Option.


 


(a)                                  Subject to the terms and conditions set
forth herein and the Plan, the Participant will become vested in the Options as
follows: (i) 25% of the Options will vest and become exercisable on the
Date of Grant, (ii) an additional 25% will vest and become exercisable on each
of the first two anniversaries of the Date of Grant, (iii) and the
remaining 25% of the Options will vest and become exercisable on December 31,
2012; provided, that, the Participant is then employed by the
Company.


 


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


 


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


 


3.                                       Post-Termination Exercise
Period. If
the Participant’s termination of employment is due to (i) (a) the
Participant’s death, (b) the Participant’s termination by the Company for
Disability (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 the
Employment Agreement), all vested Options then held by the Participant shall
remain exercisable until the earlier of (x) the first anniversary of the
Date of Termination (as defined in the Employment Agreement) and (y) the
expiration of the Option Period, and shall thereafter terminate; or (ii) termination
by the Participant with or without Good Reason, all vested Options then held by
the Participant shall remain exercisable until the earlier of (x) ninety
days following the Date of Termination and (y) the expiration of the
Option 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 for
Cause, all vested Options) shall terminate on the Date of Termination.


 


4.                                       Method of Exercising
Option.


 


(a)                                  Payment of Option Price. 
Options, to the extent vested, may be exercised, in whole or in part, by
giving written notice of exercise to the Company specifying the number of
Common Shares to be purchased.  Such
notice shall be accompanied by the payment in full of the aggregate Option
Price.  Such payment shall be made: (i) in
cash or by check, bank draft or money order payable to the order of the
Company, (ii) through a cashless exercise whereby the Company reduces the
number of Common Shares issuable upon exercise with a value equal to the
aggregate Option Price and withholding obligation, (iii) solely to the
extent permitted by applicable law, if the Common Shares are then traded on an
established securities exchange or system in the United States, through a
procedure whereby the Participant delivers irrevocable instructions to a broker
reasonably acceptable to the Committee to deliver promptly to the Company an
amount equal to the aggregate Option Price or (iv) on such other terms and
conditions as the Committee may permit, in its sole discretion.


 


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


 


5.                                       Issuance of Shares. 
Except as otherwise provided in the Plan, as promptly as practical after
receipt of such written notification of exercise and full payment of the Option
Price and any required income tax withholding, the Company shall issue or
transfer to the Participant the number of Option Shares with respect to which
Options have been so exercised (less shares withheld for payment of the Option
Price and/or in satisfaction of tax withholding obligations, if any), and shall
deliver to the Participant a certificate or certificates therefor, registered
in the Participant’s name.


 


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


 


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legal representative in the event of incapacity).  No assignment or transfer of the Options, or
of the rights represented thereby, whether voluntary or involuntary, by
operation 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 or
transferee any interest or right herein whatsoever, but immediately upon such
assignment or transfer the Options shall terminate and become of no further
effect.  Notwithstanding the foregoing,
the Participant may transfer the Options to an Immediate Family Member in
accordance with Section 16(b)(ii) and (iii) of the Plan.


 


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


 


8.                                       Adjustments. 
In the event of any adjustment pursuant to Section 12 of the Plan
that would adversely affect the value of the Options granted hereunder or cause
such Options to become subject to Section 409A of the Code, such
adjustment may only be made with the Participant’s written consent, which
consent shall not be unreasonably withheld.


 


9.                                       Compliance with Law. 
Notwithstanding any of the provisions hereof, the Participant hereby
agrees that he/she will not exercise the Options, and that the Company will not
be obligated to issue or transfer any shares to the Participant hereunder, if
the exercise hereof or the issuance or transfer of such shares shall constitute
a violation by the Participant or the Company of any provisions of any law or
regulation of any governmental authority. 
Any determination in this connection by the Committee shall be final,
binding and conclusive.


 


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


 


11.                                 Non-Qualified Stock
Options.  The Options granted hereunder are not
intended to be incentive stock options within the meaning of Section 422
of the Code.


 


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


 


13.                                 Governing Law. 
This Agreement shall be construed and interpreted in accordance with the
laws 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 by
reference, and the Participant hereby acknowledges receiving a copy of the
Plan.  In the event of a conflict or
inconsistency between the terms and provisions of the Plan and the provisions
of this Agreement, this Agreement shall govern and control.  All capitalized terms not defined herein
shall have the meaning ascribed to them as set forth in the Plan.  Notwithstanding anything herein or in the
Plan to the contrary, the provisions of Section 15 of the Plan shall not
apply to the Participant.


 


15.                                 Interpretation. Any dispute regarding the
interpretation of this Agreement shall be submitted by the Participant or the
Company to the Committee for review.  The
resolution of such a dispute by the Committee shall be binding on the Company
and the Participant.


 


16.                                 No Right to Continued
Employment.  Nothing in
this Agreement shall be deemed by implication or otherwise to impose any
limitation on any right of the Company to terminate the Participant’s
employment.


 


17.                                 Severability. 
Every provision of this Agreement is intended to be severable and any
illegal or invalid term shall not affect the validity or legality of the
remaining terms.


 


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


 


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


 


[signature page follows]


 


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IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date first
set 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