Document:

Exhibit 10.3

 

EXECUTION COPY

 

AVENTINE RENEWABLE ENERGY
HOLDINGS, INC.

2010 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

 

THIS AGREEMENT, made this 5th day of May, 2010 (the “Date
of Grant”), by and between Aventine Renewable Energy Holdings, Inc.
(the “Company”) and John Castle
(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 $43.75 per share (the “Option
Price”), an aggregate of 100,000 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) 
16,667 Options will vest and become exercisable each of the first two
anniversaries of the Date of Grant, (ii) an additional 16,666 Options will
vest and become exercisable on December 31, 2012, and (iii) the
remaining 50,000 Options will vest and become exercisable subject to the
attainment of reasonable performance criteria to be determined by the Board,
and once so determined will be set forth on Annex A hereto; 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 May 5, 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 

 

1

 

Company for Disability (as defined in the Employment
Agreement) or without Cause, or (c) due 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 

 

2

 

distribution, and are exercisable during the
Participant’s lifetime only by him/her (or his or her 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.

 

3

 

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]

 

4

 

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

 

 

	
   

  	
  AVENTINE RENEWABLE ENERGY HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Thomas Manuel

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: John Castle

  
				

 

 

ANNEX A

 

[PERFORMANCE CRITERIA]Exhibit 10.4

 

EXECUTION COPY

 

AVENTINE RENEWABLE ENERGY HOLDINGS, INC.

2010 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

 

This
Restricted Stock Award Agreement (the “Agreement”)
is made, effective as of the 5th day of May, 2010 (the “Date
of Grant”), by and between Aventine Renewable Energy Holdings, Inc.
(the  “Company”)
and John Castle (the “Participant”).

 

RECITALS:

 

WHEREAS, the Company has adopted the Aventine Renewable
Energy Holdings, Inc.  (the “Plan”) pursuant to which
awards of restricted common shares of the Company (“Common
Shares”) may be granted; and

 

WHEREAS, the Committee has determined that it is in the
best interests of the Company and its shareholders to grant the award of
restricted Common Shares provided for herein (the “Restricted Stock Award”) to the Participant in
recognition of the Participant’s services to the Company, such grant to be
subject to the terms set forth herein.

 

NOW, THEREFORE, in consideration for the mutual covenants
hereinafter set forth, the parties hereto agree as follows:

 

1.                                       Grant
of Restricted Stock Award. 
Pursuant to Section 9 of the  Plan, the
Company hereby issues to the Participant on the Date of Grant a Restricted
Stock Award consisting of, in the aggregate, 25,000 Common Shares in the
capital of the Company (hereinafter called the “Restricted
Stock”).

 

2.                                       Incorporation
by Reference.  The
provisions of the Plan are hereby incorporated herein by reference.  Except as otherwise expressly set forth
herein, this Agreement shall be construed in accordance with the provisions of
the Plan and any capitalized terms not otherwise defined in this Agreement
shall have the definitions set forth in the Plan.

 

3.                                       Restrictions.  Except as provided in the Plan or this
Agreement, the restrictions on the Restricted Stock are that the Participant
may not sell, assign, transfer, hypothecate, pledge or otherwise alienate the
Restricted Stock.

 

4.                                       Vesting.

 

(a)                                  The
restrictions described in Section 3 of this Agreement will lapse with
respect to (i) 4,167 shares of the Restricted Stock on each of the first
two anniversaries of the Date of Grant, (ii) 4,166 shares of the
Restricted Stock on December 31, 2012, and (iii) the remaining 12,500
shares of the Restricted Stock subject to the attainment of reasonable
performance criteria to be determined by the Board, and once so determined will
be set forth on Annex A hereto; provided, that, the
Participant is then employed by the Company. 
Except as set forth in Section 

 

1

 

4(b), any unvested
Restricted Stock shall be forfeited without consideration upon the termination
of the Participant’s employment for any reason.

 

(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 May 5,
2010 (the “Employment Agreement”)), or (ii) by
the Participant for Good Reason (as defined in the Employment Agreement), the
restrictions described in Section 3 of this Agreement shall lapse and all
Restricted Stock shall automatically become vested and immediately
nonforfeitable in full.

 

(c)                                  Change in Control.  Upon the occurrence of a Change in Control
(as defined in the Employment Agreement), the restrictions described in Section 3
of this Agreement shall lapse and all Restricted Stock shall automatically
become vested and immediately nonforfeitable in full.

 

5.                                       Tax Withholding. In the event
that the Company determines that tax withholding is required with respect to
the Participant, the Participant shall be required to pay to the Company, and
the Company shall have the right to deduct from any compensation paid to the
Participant pursuant to the Plan, the amount of any required withholding taxes
in respect of the Restricted Stock Award and to take such other action as the
Committee deems necessary to satisfy all obligations for the payment of such
withholding and taxes.  The Committee may
permit the Participant to satisfy the withholding liability: (a) in cash,
(b) by having the Company withhold from the number of Common Shares
otherwise issuable or deliverable pursuant to the settlement of the Restricted
Stock Award a number of shares with a Fair Market Value equal to the minimum
withholding obligation, (c) by delivering Common Shares owned by the
Participant that are Mature Shares, or (d) by a combination of any such
methods.  For purposes hereof, Common
Shares shall be valued at Fair Market Value.

 

6.                                       Rights
as Shareholder; Dividends.  The Participant shall be the record owner of
the Restricted Shares unless and until such Common Shares are sold or otherwise
disposed of, and as record owner shall be entitled to all rights of a
shareholder of the Company, including, without limitation, voting rights, if
any, with respect to the Restricted Shares and the right to receive dividends,
if any, at the time paid to other stockholders, while the Restricted Shares are
held in custody.

 

7.                                       Compliance
with Laws and Regulations. The issuance and transfer
of Common Shares shall be subject to compliance by the Company and the
Participant with all applicable requirements of securities laws and with all
applicable requirements of any stock exchange on which the Company’s Common
Shares may be listed at the time of such issuance or transfer.

 

8.                                       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 at any time.

 

2

 

9.                                       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

 

10.                                 Bound
by Plan.  By signing
this Agreement, the Participant acknowledges that he has received a copy of the
Plan and has had an opportunity to review the Plan and agrees to be bound by
all of the terms and provisions of 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.

 

11.                                 Beneficiary.  The Participant may file with the Committee a
written designation of a beneficiary on such form as may be prescribed by the
Committee and may, from time to time, amend or revoke such designation.  If no designated beneficiary survives the
Participant, the executor or administrator of the Participant’s estate shall be
deemed to be the Participant’s beneficiary.

 

12.                                 Successors.  The terms of this Agreement shall be binding
upon and inure to the benefit of the Company, its successors and assigns, and
on the Participant and the beneficiaries, executors and administrators, heirs
and successors of the Participant.

 

13.                                 Amendment
of Restricted Stock Award.  Subject to Section 14 of this Agreement,
the Committee at any time and from time to time may amend the terms of this
Restricted Stock Award; provided, however, the Participant’s
rights under this Restricted Stock Award shall not be adversely affected by any
such amendment without the Participant’s consent.

 

14.                                 Adjustments.  In the event of any adjustment pursuant to Section 12
of the Plan that would adversely affect the value of the Restricted Stock Award
granted hereunder or cause such Restricted Stock Award 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.

 

15.                                 Governing
Law; Modification.  This
Agreement shall be governed by the laws of the state of New York without regard
to the conflict of law principles.  The
Agreement may not be modified except in writing signed by both parties.

 

16.                                 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.

 

3

 

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]

 

4

 

IN
WITNESS WHEREOF, the parties hereto have signed 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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John Castle

  
	
   

  	
   

  	
   

  	
   Name:
  John Castle

  

 

 

EXECUTION COPY

 

ANNEX A

 

[PERFORMANCE CRITERIA]

 

6

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