Document:

Exhibit
        4.4

    

     

    NEITHER
      THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
      HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
      EXERCISE OF THESE SECURITIES MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO
      AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
      SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE
      SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN
      CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

    

     

    XETHANOL
      CORPORATION

     

    SERIES
      B WARRANT

     

    
      	Warrant No. B1	 	
              Original
                Issue Date: April 13,
                2006

            

    

     

    Xethanol
      Corporation, a Delaware corporation (the “Company”),
      hereby
      certifies that, for value received, Goldman, Sachs & Co. or its registered
      assigns (the “Holder”),
      is
      entitled to purchase from the Company up to a total of 88,8891 
      shares
      of Common Stock (each such share, a “Warrant
      Share”
      and all
      such shares, the “Warrant
      Shares”),
      at any
      time and from time to time from and after the Original Issue Date and through
      and including April 12, 2009 (the “Expiration
      Date”),
      and
      subject to the following terms and conditions:

     

    1.  Definitions.
      As used
      in this Warrant, the following terms shall have the respective definitions
      set
      forth in this Section 1. Capitalized terms that are used and not defined in
      this
      Warrant that are defined in the Purchase Agreement (as defined below) shall
      have
      the respective definitions set forth in the Purchase Agreement.

     

    “Business
      Day”
      means
      any day except Saturday, Sunday and any day that is a federal legal holiday
      in
      the United States or a day on which banking institutions in the State of New
      York are authorized or required by law or other government action to
      close.

     

    
      
        

      

      1 A
        number
        of shares as equals 10% of the Shares issuable to such investor at the Closing
        under the Purchase Agreement.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Common
      Stock”
      means
      the common stock of the Company, par value $.001 per share, and any securities
      into which such common stock may hereafter be reclassified. 

     

    “Exercise
      Price” means
      [$  ]2 ,
      subject
      to adjustment in accordance with Section 9.

     

    “Fundamental
      Transaction”
      means
      any of the following: (1) the Company effects any merger or consolidation of
      the
      Company with or into another Person, (2) the Company effects any sale of all
      or
      substantially all of its assets in one or a series of related transactions,
      (3)
      any tender offer or exchange offer (whether by the Company or another Person)
      is
      completed pursuant to which holders of Common Stock are permitted to tender
      or
      exchange their shares for other securities, cash or property, or (4) the Company
      effects any reclassification of the Common Stock or any compulsory share
      exchange pursuant to which the Common Stock is effectively converted into or
      exchanged for other securities, cash or property.

     

    “Original
      Issue Date”
      means
      the Original Issue Date first set forth on the first page of this
      Warrant.

     

    “New
      York Courts”
      means
      the state and federal courts sitting in the City of New York, Borough of
      Manhattan.

     

    “Purchase
      Agreement”
      means
      the Securities Purchase Agreement, dated April [ ], 2006, to which the Company
      and the original Holder are parties.

     

    “Trading
      Day”
      means
      (i) a day on which the Common Stock is traded on a Trading Market (other than
      the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading
      Market (other than the OTC Bulletin Board), a day on which the Common Stock
      is
      traded in the over-the-counter market, as reported by the OTC Bulletin Board,
      or
      (iii) if the Common Stock is not quoted on any Trading Market, a day on which
      the Common Stock is quoted in the over-the-counter market as reported by the
      Pink Sheets, LLC (or any similar organization or agency succeeding to its
      functions of reporting prices); provided, that in the event that the Common
      Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
      Trading Day shall mean a Business Day.

     

    2.  Registration
      of Warrant.
      The
      Company shall register this Warrant upon records to be maintained by the Company
      for that purpose (the “Warrant
      Register”),
      in the
      name of the record Holder hereof from time to time. The Company may deem and
      treat the registered Holder of this Warrant as the absolute owner hereof for
      the
      purpose of any exercise hereof or any distribution to the Holder, and for all
      other purposes, absent actual notice to the contrary.

     

    3.  Registration
      of Transfers.
      The
      Company shall register the transfer of any portion of this Warrant in the
      Warrant Register, upon surrender of this Warrant, with the Form of Assignment
      attached hereto duly completed and signed, to the Company at its address
      specified herein. Upon any such registration or transfer, a new Warrant to
      purchase Common Stock, in substantially the form of this Warrant (any such
      new
      Warrant, a “New
      Warrant”),
      evidencing the portion of this Warrant so transferred shall be issued to the
      transferee and a New Warrant evidencing the remaining portion of this Warrant
      not so transferred, if any, shall be issued to the transferring Holder. The
      acceptance of the New Warrant by the transferee thereof shall be deemed the
      acceptance by such transferee of all of the rights and obligations of a holder
      of a Warrant. 

     

    
      
        
2 The
        initial Exercise Price shall equal the sum of the published closing price
        of the
        Common Stock on the Trading Day immediately preceding the Closing Date plus
        $0.05

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    4.  Exercise
      and Duration of Warrants.
      This
      Warrant shall be exercisable by the registered Holder at any time and from
      time
      to time on or after the Original Issue Date through and including the Expiration
      Date. At 6:30 p.m., New York City time on the Expiration Date, the portion
      of
      this Warrant not exercised prior thereto shall be and become void and of no
      value. The Company may not call or redeem any portion of this Warrant without
      the prior written consent of the affected Holder.

     

    5.  Delivery
      of Warrant Shares.

     

    (a)  To
      effect
      exercises hereunder, the Holder shall not be required to physically surrender
      this Warrant unless the aggregate Warrant Shares represented by this Warrant
      is
      being exercised. Upon delivery of the Exercise Notice (in the form attached
      hereto) to the Company (with the attached Warrant Shares Exercise Log) at its
      address for notice set forth herein and upon payment of the Exercise Price
      multiplied by the number of Warrant Shares that the Holder intends to purchase
      hereunder, the Company shall promptly (but in no event later than three Trading
      Days after the Date of Exercise (as defined herein)) issue and deliver to the
      Holder, a certificate for the Warrant Shares issuable upon such exercise, which,
      unless otherwise required by the Purchase Agreement, shall be free of
      restrictive legends. The Company shall, upon request of the Holder and
      subsequent to the date on which a registration statement covering the resale
      of
      the Warrant Shares has been declared effective by the Securities and Exchange
      Commission (if any, and provided that such registration statement is then
      effective), use its reasonable best efforts to deliver Warrant Shares hereunder
      electronically through The Depository Trust Company or another established
      clearing corporation performing similar functions, if available, provided,
      that,
      the Company may, but will not be required to change its transfer agent if its
      current transfer agent cannot deliver Warrant Shares electronically through
      The
      Depository Trust Company. A “Date
      of Exercise”
      means
      the date on which the Holder shall have delivered to the Company: (i) the
      Exercise Notice (with the Warrant Exercise Log attached to it), appropriately
      completed and duly signed and (ii) if such Holder is not utilizing the cashless
      exercise provisions set forth in this Warrant, payment of the Exercise Price
      for
      the number of Warrant Shares so indicated by the Holder to be
      purchased.

     

    (b)  If
      by the
      third Trading Day after a Date of Exercise the Company fails to deliver the
      required number of Warrant Shares in the manner required pursuant to Section
      5(a), then the Holder will have the right to rescind such exercise.

     

    (c)  If
      by the
      third Trading Day after a Date of Exercise the Company fails to deliver the
      required number of Warrant Shares in the manner required pursuant to Section
      5(a), and if after such third Trading Day and prior to the receipt of such
      Warrant Shares, the Holder purchases (in an open market transaction) shares
      of
      Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
      Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
      then
      the Company shall (1) pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      shares of Common Stock so purchased exceeds (y) the amount obtained by
      multiplying (A) the number of Warrant Shares that the Company was required
      to
      deliver to the Holder in connection with the exercise at issue by (B) the
      published closing price of the Common Stock on the Date of Exercise and (2)
      at
      the option of the Holder, either reinstate the portion of the Warrant and
      equivalent number of Warrant Shares for which such exercise was not honored
      or
      deliver to the Holder the number of shares of Common Stock that would have
      been
      issued had the Company timely complied with its exercise and delivery
      obligations hereunder. The Holder shall provide the Company written notice
      indicating the amounts payable to the Holder in respect of the Buy-In.

     

    
      
        
        

      

      
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    (d)  The
      Company’s obligations to issue and deliver Warrant Shares in accordance with the
      terms hereof are absolute and unconditional, irrespective of any action or
      inaction by the Holder to enforce the same, any waiver or consent with respect
      to any provision hereof, the recovery of any judgment against any Person or
      any
      action to enforce the same, or any setoff, counterclaim, recoupment, limitation
      or termination, or any breach or alleged breach by the Holder or any other
      Person of any obligation to the Company or any violation or alleged violation
      of
      law by the Holder or any other Person, and irrespective of any other
      circumstance which might otherwise limit such obligation of the Company to
      the
      Holder in connection with the issuance of Warrant Shares. Nothing herein shall
      limit a Holder’s right to pursue any other remedies available to it hereunder,
      at law or in equity including, without limitation, a decree of specific
      performance and/or injunctive relief with respect to the Company’s failure to
      timely deliver certificates representing Warrant Shares upon exercise of the
      Warrant as required pursuant to the terms hereof.

     

    6.  Charges,
      Taxes and Expenses.
      Issuance and delivery of Warrant Shares upon exercise of this Warrant shall
      be
      made without charge to the Holder for any issue or transfer tax, withholding
      tax, transfer agent fee or other incidental tax or expense in respect of the
      issuance of such certificates, all of which taxes and expenses shall be paid
      by
      the Company; provided, however, that the Company shall not be required to pay
      any tax which may be payable in respect of any transfer involved in the
      registration of any certificates for Warrant Shares or Warrants in a name other
      than that of the Holder. The Holder shall be responsible for all other tax
      liability that may arise as a result of holding or transferring this Warrant
      or
      receiving Warrant Shares upon exercise hereof.

     

    7.  Replacement
      of Warrant.
      If this
      Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
      cause to be issued in exchange and substitution for and upon cancellation
      hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
      only
      upon receipt of evidence reasonably satisfactory to the Company of such loss,
      theft or destruction and customary and reasonable indemnity (which shall not
      include a surety bond), if requested. Applicants for a New Warrant under such
      circumstances shall also comply with such other reasonable regulations and
      procedures and pay such other reasonable third-party costs as the Company may
      prescribe. If a New Warrant is requested as a result of a mutilation of this
      Warrant, then the Holder shall deliver such mutilated Warrant to the Company
      as
      a condition precedent to the Company’s obligation to issue the New
      Warrant.

     

    
      
        
        

      

      
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    8.  Reservation
      of Warrant Shares.
      The
      Company covenants that it will at all times reserve and keep available out
      of
      the aggregate of its authorized but unissued and otherwise unreserved Common
      Stock, solely for the purpose of enabling it to issue Warrant Shares upon
      exercise of this Warrant as herein provided, the number of Warrant Shares which
      are then issuable and deliverable upon the exercise of this entire Warrant,
      free
      from preemptive rights or any other contingent purchase rights of Persons other
      than the Holder (taking into account the adjustments and restrictions of Section
      9). The Company covenants that all Warrant Shares so issuable and deliverable
      shall, upon issuance and the payment of the applicable Exercise Price in
      accordance with the terms hereof, be duly and validly authorized, issued and
      fully paid and nonassessable.

     

    9.  Certain
      Adjustments.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this Section
      9.

     

    (a)  Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding, (i) pays a stock
      dividend on its Common Stock or otherwise makes a distribution on any class
      of
      capital stock that is payable in shares of Common Stock, (ii) subdivides
      outstanding shares of Common Stock into a larger number of shares, or (iii)
      combines outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Exercise Price shall be multiplied by a fraction
      of
      which the numerator shall be the number of shares of Common Stock outstanding
      immediately before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding immediately after such event. Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clause
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination.

     

    (b)  Fundamental
      Transactions.
      If at
      any time while this Warrant is outstanding there is a Fundamental Transaction,
      the Company shall provide each Holder with notice thereof in accordance with
      Section 9(f) herein. The Holder shall have until 5:30 p.m. on the tenth calendar
      day after receipt of any such notice (“Notice
      Date”)
      to
      exercise any remaining portion of this Warrant. Any portion of this Warrant
      which has not been exercised by 5:30 p.m. on the Notice Date shall be cancelled.
      The Company covenants to honor any Exercise Notice delivered by 5:30 p.m. on
      the
      Notice Date. If any Fundamental Transaction in respect of which such a notice
      shall have been given is not consummated, then such notice shall be deemed
      to
      have been of no force or effect.

     

    (c)  Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Exercise Price pursuant to this
      Section 9, the number of Warrant Shares that may be purchased upon exercise
      of
      this Warrant shall be increased or decreased proportionately, so that after
      such
      adjustment the aggregate Exercise Price payable hereunder for the adjusted
      number of Warrant Shares shall be the same as the aggregate Exercise Price
      in
      effect immediately prior to such adjustment.

     

    (d)  Calculations.
      All
      calculations under this Section 9 shall be made to the nearest cent or the
      nearest 1/100th
      of a
      share, as applicable. The number of shares of Common Stock outstanding at any
      given time shall not include shares owned or held by or for the account of
      the
      Company, and the disposition of any such shares shall be considered an issue
      or
      sale of Common Stock.

     

    
      
        
        

      

      
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    (e)  Notice
      of Adjustments.
      Upon
      the occurrence of each adjustment pursuant to this Section 9, the Company at
      its
      expense will promptly compute such adjustment in accordance with the terms
      of
      this Warrant and prepare a certificate setting forth such adjustment, including
      a statement of the adjusted Exercise Price and adjusted number or type of
      Warrant Shares or other securities issuable upon exercise of this Warrant (as
      applicable), describing the transactions giving rise to such adjustments and
      showing in detail the facts upon which such adjustment is based. Upon written
      request, the Company will promptly deliver a copy of each such certificate
      to
      the Holder and to the Company’s Transfer Agent.

     

    (f)  Notice
      of Corporate Events.
      If the
      Company (i) declares a dividend or any other distribution of cash, securities
      or
      other property in respect of its Common Stock, including without limitation
      any
      granting of rights or warrants to subscribe for or purchase any capital stock
      of
      the Company or any Subsidiary, (ii) authorizes or approves, enters into any
      agreement contemplating or solicits stockholder approval for any Fundamental
      Transaction or (iii) authorizes the voluntary dissolution, liquidation or
      winding up of the affairs of the Company, then the Company shall deliver to
      the
      Holder a notice describing the material terms and conditions of such transaction
      (but only to the extent such disclosure would not result in the dissemination
      of
      material, non-public information to the Holder) at least 10 calendar days prior
      to the applicable record or effective date on which a Person would need to
      hold
      Common Stock in order to participate in or vote with respect to such
      transaction, and the Company will take all steps reasonably necessary in order
      to insure that the Holder is given the practical opportunity to exercise this
      Warrant prior to such time so as to participate in or vote with respect to
      such
      transaction; provided, however, that the failure to deliver such notice or
      any
      defect therein shall not affect the validity of the corporate action required
      to
      be described in such notice.

     

    10.  Payment
      of Exercise Price.
      In
      connection with each exercise of this Warrant, the
      Holder
      may pay the Exercise Price in immediately available funds.

     

    11.  Limitations
      on Exercise.
      Notwithstanding anything to the contrary contained herein, the number of Warrant
      Shares that may be acquired by the Holder upon any exercise of this Warrant
      (or
      otherwise in respect hereof) shall be limited to the extent necessary to insure
      that, following such exercise (or other issuance), the total number of shares
      of
      Common Stock then beneficially owned by such Holder and its Affiliates and
      any
      other Persons whose beneficial ownership of Common Stock would be aggregated
      with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not
      exceed 9.999% of the total number of issued and outstanding shares of Common
      Stock (including for such purpose the shares of Common Stock issuable upon
      such
      exercise). For such purposes, beneficial ownership shall be determined in
      accordance with Section 13(d) of the Exchange Act and the rules and regulations
      promulgated thereunder. Each delivery of an Exercise Notice hereunder will
      include a representation by the Holder that issuance of the full number of
      Warrant Shares requested on such Exercise Notice is permitted under this
      paragraph and the Company agrees that such determination shall be binding upon
      the Company for purposes of permitting such exercise. This provision shall
      not
      restrict the number of shares of Common Stock which a Holder may receive or
      beneficially own in order to determine the amount of securities or other
      consideration that such Holder may receive in the event of a Fundamental
      Transaction as contemplated in Section 9 of this Warrant. This restriction
      may
      not be waived, and notwithstanding anything to the contrary in any Transaction
      Document, may not be amended by agreement of the parties.

     

    
      
        
        

      

      
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    12.  No
      Fractional
      Shares.
      No
      fractional shares of Warrant Shares will be issued in connection with any
      exercise of this Warrant. In lieu of any fractional shares which would,
      otherwise be issuable, the Company shall pay cash equal to the product of such
      fraction multiplied by the closing price of one Warrant Share as reported by
      the
      applicable Trading Market on the date of exercise.

     

    13.  Notices.
      Any and
      all notices or other communications or deliveries hereunder (including, without
      limitation, any Exercise Notice) shall be in writing and shall be deemed given
      and effective on the earliest of (i) the date of transmission, if such notice
      or
      communication is delivered via facsimile at the facsimile number specified
      in
      this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii)
      the
      next Trading Day after the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      on
      a day that is not a Trading Day or later than 6:30 p.m. (New York City time)
      on
      any Trading Day, (iii) the Trading Day following the date of mailing, if sent
      by
      nationally recognized overnight courier service, or (iv) upon actual receipt
      by
      the party to whom such notice is required to be given. The addresses for such
      communications shall be: (i) if to the Company, to Xethanol Corporation, Attn:
      President, or to Facsimile No.: (646) 723-4001 (or such other address as the
      Company shall indicate in writing in accordance with this Section), or (ii)
      if
      to the Holder, to the address or facsimile number appearing on the Warrant
      Register or such other address or facsimile number as the Holder may provide
      to
      the Company in accordance with this Section.

     

    14.  Warrant
      Agent.
      The
      Company shall serve as warrant agent under this Warrant. Upon 10 days’ notice to
      the Holder, the Company may appoint a new warrant agent. Any corporation into
      which the Company or any new warrant agent may be merged or any corporation
      resulting from any consolidation to which the Company or any new warrant agent
      shall be a party or any corporation to which the Company or any new warrant
      agent transfers substantially all of its corporate trust or shareholders
      services business shall be a successor warrant agent under this Warrant without
      any further act. Any such successor warrant agent shall promptly cause notice
      of
      its succession as warrant agent to be mailed (by first class mail, postage
      prepaid) to the Holder at the Holder’s last address as shown on the Warrant
      Register.

     

    15.  Miscellaneous.

     

    (a)  This
      Warrant shall be binding on and inure to the benefit of the parties hereto
      and
      their respective successors and assigns. Subject to the preceding sentence,
      nothing in this Warrant shall be construed to give to any Person other than
      the
      Company and the Holder any legal or equitable right, remedy or cause of action
      under this Warrant. This Warrant may be amended only in writing signed by the
      Company and the Holder and their successors and assigns.

     

    
      
        
        

      

      
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    (b)  All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York (except for matters governed
      by
      corporate law in the State of Delaware), without regard to the principles of
      conflicts of law thereof. Each party agrees that all legal proceedings
      concerning the interpretations, enforcement and defense of this Warrant and
      the
      transactions herein contemplated (“Proceedings”)
      (whether brought against a party hereto or its respective Affiliates, employees
      or agents) shall be commenced exclusively in the New York Courts. Each party
      hereto hereby irrevocably submits to the exclusive jurisdiction of the New
      York
      Courts for the adjudication of any dispute hereunder or in connection herewith
      or with any transaction contemplated hereby or discussed herein, and hereby
      irrevocably waives, and agrees not to assert in any Proceeding, any claim that
      it is not personally subject to the jurisdiction of any New York Court, or
      that
      such Proceeding has been commenced in an improper or inconvenient forum. Each
      party hereto hereby irrevocably waives personal service of process and consents
      to process being served in any such Proceeding by mailing a copy thereof via
      registered or certified mail or overnight delivery (with evidence of delivery)
      to such party at the address in effect for notices to it under this Warrant
      and
      agrees that such service shall constitute good and sufficient service of process
      and notice thereof. Nothing contained herein shall be deemed to limit in any
      way
      any right to serve process in any manner permitted by law. Each party hereto
      hereby irrevocably waives, to the fullest extent permitted by applicable law,
      any and all right to trial by jury in any legal proceeding arising out of or
      relating to this Warrant or the transactions contemplated hereby. If either
      party shall commence a Proceeding to enforce any provisions of this Warrant,
      then the prevailing party in such Proceeding shall be reimbursed by the other
      party for its attorney’s fees and other costs and expenses incurred with the
      investigation, preparation and prosecution of such Proceeding.

     

    (c)  The
      headings herein are for convenience only, do not constitute a part of this
      Warrant and shall not be deemed to limit or affect any of the provisions
      hereof.

     

    (d)  In
      case
      any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonable
      substitute therefor, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant.

     

    (e)  Prior
      to
      exercise of this Warrant, the Holder hereof shall not, by reason of being a
      Holder, be entitled to any rights of a stockholder with respect to the Warrant
      Shares.

     

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    SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
      its
      authorized officer as of the date first indicated above.

     

    XETHANOL
      CORPORATION

     

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
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    EXERCISE
      NOTICE

    XETHANOL
      CORPORATION

    WARRANT
      DATED APRIL 13, 2006

     

    The
      undersigned Holder hereby irrevocably elects to purchase _____________ shares
      of
      Common Stock pursuant to the above referenced Warrant. Capitalized terms used
      herein and not otherwise defined have the respective meanings set forth in
      the
      Warrant.

     

    (1)  The
      undersigned Holder hereby exercises its right to purchase _________________
      Warrant Shares pursuant to the Warrant.

     

    (2)  The
      holder shall pay the sum of $____________ to the Company in accordance with
      the
      terms of the Warrant.

     

    (3)  Pursuant
      to this Exercise Notice, the Company shall deliver to the holder _______________
      Warrant Shares in accordance with the terms of the Warrant.

     

    (4) By
      its
      delivery of this Exercise Notice, the undersigned represents and warrants to
      the
      Company that in giving effect to the exercise evidenced hereby the Holder will
      not beneficially own in excess of the number of shares of Common Stock
      (determined in accordance with Section 13(d) of the Securities Exchange Act
      of
      1934) permitted to be owned under Section 11 of this Warrant to which this
      notice relates.

    

    
      	 	 	 
	 	 	 
	
              Dated:
                _______________,
                _____

            	 	
              Name
                of Holder:

            
	 	 	 
	 	 	
              (Print)
                ________________________

            
	 	 	 
	 	 	
              By:___________________________

            
	 	 	
              Name:_________________________

            
	 	 	
              Title:__________________________

            
	 	 	 
	 	 	
              (Signature
                must conform in all respects to name of holder as specified on the
                face of
                the Warrant)

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Warrant
      Shares Exercise Log

     

    
      	
              Date

            	
              Number
                of Warrant Shares Available to be Exercised

            	
              Number
                of Warrant Shares Exercised

            	
              Number
                of Warrant Shares Remaining to be Exercised

            
	
               

               

               

               

               

               

               

               

               

               

               

               

            	 	 	 

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    XETHANOL
      CORPORATION

    WARRANT
      ORIGINALLY ISSUED April 13, 2006

    WARRANT
      NO. B1

     

    FORM
      OF
      ASSIGNMENT

     

    [To
      be
      completed and signed only upon transfer of Warrant]

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto
      ________________________________ the right represented by the above-captioned
      Warrant to purchase ____________ shares of Common Stock to which such Warrant
      relates and appoints ________________ attorney to transfer said right on the
      books of the Company with full power of substitution in the
      premises.

     

    Dated: _______________,
      ____

     

    _______________________________________

    (Signature
      must conform in all respects to name of holder as specified on the face of
      the
      Warrant)

     

    _______________________________________

    Address
      of Transferee

     

    _______________________________________

     

    _______________________________________

     

    In
      the
      presence of:

     

    __________________________

     

    
      
        
        

      

      
        12Exhibit 10.8

     

    XETHANOL
      CORPORATION

    2005
      INCENTIVE COMPENSATION PLAN

    1.
Purpose.
      The purpose of this XETHANOL CORPORATION 2005
      INCENTIVE COMPENSATION PLAN (the “Plan”) is to assist Xethanol Corporation
      (formerly Zen Pottery Equipment, Inc.), a Colorado corporation (the “Company”)
      and its Related Entities (as hereinafter defined) in attracting, motivating,
      retaining and rewarding high-quality executives and other employees, officers,
      directors, consultants and other persons who provide services to the Company
      or
      its Related Entities by enabling such persons to acquire or increase a
      proprietary interest in the Company in order to strengthen the mutuality of
      interests between such persons and the Company’s shareholders, and providing
      such persons with performance incentives to expend their maximum efforts in
      the
      creation of shareholder value.

    2.
Definitions.
      For purposes of the Plan, the following
      terms shall be defined as set forth below, in addition to such terms defined
      in
      Section 1 hereof.

    (a)
      “Award” means any Option, Stock Appreciation Right, Restricted Stock Award,
      Deferred Stock Award, Share granted as a bonus or in lieu of another award,
      Dividend Equivalent, Other Stock-Based Award or Performance Award, together
      with
      any other right or interest, granted to a Participant under the Plan.

    (b)
      “Award Agreement” means any written agreement, contract or other instrument or
      document evidencing any Award granted by the Committee hereunder.

    (c)
      “Beneficiary” means the person, persons, trust or trusts that have been
      designated by a Participant in his or her most recent written beneficiary
      designation filed with the Committee to receive the benefits specified under
      the
      Plan upon such Participant’s death or to which Awards or other rights are
      transferred if and to the extent permitted under Section 10(b) hereof. If,
      upon
      a Participant’s death, there is no designated Beneficiary or surviving
      designated Beneficiary, then the term Beneficiary means the person, persons,
      trust or trusts entitled by will or the laws of descent and distribution to
      receive such benefits.

    (d)
      “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3
      under the Exchange Act and any successor to such Rule.

    (e)
      “Board” means the Company’s Board of Directors.

    (f)
      “Cause” shall, with respect to any Participant have the meaning specified in the
      Award Agreement. In the absence of any definition in the Award Agreement,
“Cause” shall have the equivalent meaning or the same meaning as “cause” or “for
      cause” set forth in any employment, consulting, or other agreement for the
      performance of services between the Participant and the Company or a Related
      Entity or, in the absence of any such agreement or any such definition in such
      agreement, such term shall mean (i) the failure by the Participant to perform,
      in a reasonable manner, his or her duties as assigned by the Company or a
      Related Entity, (ii) any violation or breach by the Participant of his or her
      employment, consulting or other similar agreement with the Company or a Related
      Entity, if any, (iii) any violation or breach by the Participant of any
      non-competition, non-solicitation, non-disclosure and/or other similar agreement
      with the Company or a Related Entity, (iv) any act by the Participant of
      dishonesty or bad faith with respect to the Company or a Related Entity, (v)
      use
      of alcohol, drugs or other similar substances in a manner that adversely affects
      the Participant’s work performance, or (vi) the commission by the Participant of
      any act, misdemeanor, or crime reflecting unfavorably upon the Participant
      or
      the Company or any Related Entity. The good faith determination by the Committee
      of whether the Participant’s Continuous Service was terminated by the Company
      for “Cause” shall be final and binding for all purposes hereunder.

    (g)
      “Change in Control” means a Change in Control as defined with related terms in
      Section 9(b) of the Plan.

    (h)
      “Code” means the Internal Revenue Code of 1986, as amended from time to time,
      including regulations thereunder and successor provisions and regulations
      thereto.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (i)
      “Committee” means a committee designated by the Board to administer the Plan;
      provided, however, that if the Board fails to designate a committee or if there
      are no longer any members on the committee so designated by the Board, then
      the
      Board shall serve as the Committee. The Committee shall consist of at least
      two
      directors, and each member of the Committee shall be (i) a “non-employee
      director” within the meaning of Rule 16b-3 (or any successor rule) under the
      Exchange Act, unless administration of the Plan by “non-employee directors” is
      not then required in order for exemptions under Rule 16b-3 to apply to
      transactions under the Plan, (ii) an “outside director” within the meaning of
      Section 162(m) of the Code, and (iii) “Independent.”

    (j)
      “Consultant” means any person (other than an Employee or a Director, solely with
      respect to rendering services in such person’s capacity as a director) who is
      engaged by the Company or any Related Entity to render consulting or advisory
      services to the Company or such Related Entity.

    (k)
      “Continuous Service” means the uninterrupted provision of services to the
      Company or any Related Entity in any capacity of Employee, Director, Consultant
      or other service provider. Continuous Service shall not be considered to be
      interrupted in the case of (i) any approved leave of absence, (ii) transfers
      among the Company, any Related Entities, or any successor entities, in any
      capacity of Employee, Director, Consultant or other service provider, or (iii)
      any change in status as long as the individual remains in the service of the
      Company or a Related Entity in any capacity of Employee, Director, Consultant
      or
      other service provider (except as otherwise provided in the Award Agreement).
      An
      approved leave of absence shall include sick leave, military leave, or any
      other
      authorized personal leave.

    (l)
      “Covered Employee” means an Eligible Person who is a “covered employee” within
      the meaning of Section 162(m)(3) of the Code, or any successor provision
      thereto.

    (m)
      “Deferred Stock” means a right to receive Shares, including Restricted Stock,
      cash or a combination thereof, at the end of a specified deferral period.

    (n)
      “Deferred Stock Award” means an Award of Deferred Stock granted to a Participant
      under Section 6(e) hereof.

    (o)
      “Director” means a member of the Board or the board of directors of any Related
      Entity.

    (p)
      “Disability” means a permanent and total disability (within the meaning of
      Section 22(e) of the Code), as determined by a medical doctor satisfactory
      to
      the Committee.

    (q)
      “Discounted Option” means any Option awarded under Section 6(b) hereof with an
      exercise price that is less than the Fair Market Value of a Share on the date
      of
      grant.

    (r)
      “Discounted Stock Appreciation Right” means any Stock Appreciation Right awarded
      under Section 6(c) hereof with an exercise price that is less than the Fair
      Market Value of a Share on the date of grant.

    (s)
      “Dividend Equivalent” means a right, granted to a Participant under Section 6(g)
      hereof, to receive cash, Shares, other Awards or other property equal in value
      to dividends paid with respect to a specified number of Shares, or other
      periodic payments.

    (t)
      “Effective Date” means the effective date of the Plan, which shall be February
      2, 2005.

    (u)
      “Eligible Person” means each officer, Director, Employee, Consultant and other
      person who provides services to the Company or any Related Entity. The foregoing
      notwithstanding, only employees of the Company, or any parent corporation or
      subsidiary corporation of the Company (as those terms are defined in Sections
      424(e) and (f) of the Code, respectively), shall be Eligible Persons for
      purposes of receiving any Incentive Stock Options. An Employee on leave of
      absence may be considered as still in the employ of the Company or a Related
      Entity for purposes of eligibility for participation in the Plan.

    (v)
      “Employee” means any person, including an officer or Director, who is an
      employee of the Company or any Related Entity. The payment of a director’s fee
      by the Company or a Related Entity shall not be sufficient to constitute
“employment” by the Company.

    (w)
      “Exchange Act” means the Securities Exchange Act of 1934, as amended from time
      to time, including rules thereunder and successor provisions and rules
      thereto.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (x) “Fair Market
      Value” means the fair market value of Shares, Awards or other property as
      determined by the Committee, or under procedures established by the Committee.
      Unless otherwise determined by the Committee, the Fair Market Value of a Share
      as of any given date shall be the closing sale price per Share reported on
      a
      consolidated basis for stock listed on the principal stock exchange or market
      on
      which Shares are traded on the date as of which such value is being determined
      or, if there is no sale on that date, then on the last previous day on which
      a
      sale was reported.

    (y)
      “Good Reason” shall, with respect to any Participant, have the meaning specified
      in the Award Agreement. In the absence of any definition in the Award Agreement,
      “Good Reason” shall have the equivalent meaning or the same meaning as “good
      reason” or “for good reason” set forth in any employment, consulting or other
      agreement for the performance of services between the Participant and the
      Company or a Related Entity or, in the absence of any such agreement or any
      such
      definition in such agreement, such term shall mean (i) the assignment to the
      Participant of any duties inconsistent in any material respect with the
      Participant’s position, authority, duties or responsibilities as assigned by the
      Company or a Related Entity, or any other action by the Company or a Related
      Entity which results in a material diminution in such position, authority,
      duties or responsibilities, excluding for this purpose any action not taken
      in
      bad faith and which is remedied by the Company or a Related Entity promptly
      after receipt of notice thereof given by the Participant, or any action taken
      with the consent of the Participant; or (ii) any material failure by the Company
      or a Related Entity to comply with its obligations to the Participant as agreed
      upon, other than any failure not occurring in bad faith and which is remedied
      by
      the Company or a Related Entity promptly after receipt of notice thereof given
      by the Participant.

    (z)
      “Incentive Stock Option” means any Option intended to be designated as an
      incentive stock option within the meaning of Section 422 of the Code or any
      successor provision thereto.

    (aa)
      “Independent,” when referring to either the Board or members of the Committee,
      shall have the same meaning as used in the rules of the Nasdaq Stock Market
      or
      any national securities exchange on which any securities of the Company are
      listed for trading, and if not listed for trading, by the rules of the Nasdaq
      Stock Market.

    (bb)
      “Incumbent Board” means the Incumbent Board as defined in Section 9(b)(ii) of
      the Plan.

    (cc)
      “Option” means a right granted to a Participant under Section 6(b) hereof, to
      purchase Shares or other Awards at a specified price during specified time
      periods.

    (dd)
      “Optionee” means a person to whom an Option is granted under this Plan or any
      person who succeeds to the rights of such person under this Plan.

    (ee)
      “Option Proceeds” means the cash actually received by the Company for the
      exercise price in connection with the exercise of Options that are exercised
      after the Effective Date of the Plan, plus the maximum tax benefit that could
      be
      realized by the Company as a result of the exercise of such Options, which
      tax
      benefit shall be determined by multiplying (i) the amount that is deductible
      for
      Federal income tax purposes as a result of any such option exercise (currently,
      equal to the amount upon which the Participant’s withholding tax obligation is
      calculated), times (ii) the maximum Federal corporate income tax rate for the
      year of exercise. With respect to Options, to the extent that a Participant
      pays
      the exercise price and/or withholding taxes with Shares, Option Proceeds shall
      not be calculated with respect to the amounts so paid in Shares.

    (ff)
      “Other Stock-Based Awards” means Awards granted to a Participant under Section
      6(i) hereof.

    (gg)
      “Outside Director” means a member of the Board who is not an Employee.

    (hh)
      “Participant” means a person who has been granted an Award under the Plan which
      remains outstanding, including a person who is no longer an Eligible
      Person.

    (ii)
      “Performance Award” shall mean any Award of Performance Shares or Performance
      Units granted pursuant to Section 6(h).

    (jj)
      “Performance Period” means that period established by the Committee at the time
      any Performance Award is granted or at any time thereafter during which any
      performance goals specified by the Committee with respect to such Award are
      to
      be measured.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (kk)
      “Performance Share” means any grant pursuant to Section 6(h) of a unit valued by
      reference to a designated number of Shares, which value may be paid to the
      Participant by delivery of such property as the Committee shall determine,
      including cash, Shares, other property, or any combination thereof, upon
      achievement of such performance goals during the Performance Period as the
      Committee shall establish at the time of such grant or thereafter.

    (ll)
      “Performance Unit” means any grant pursuant to Section 6(h) of a unit valued by
      reference to a designated amount of property (including cash) other than Shares,
      which value may be paid to the Participant by delivery of such property as
      the
      Committee shall determine, including cash, Shares, other property, or any
      combination thereof, upon achievement of such performance goals during the
      Performance Period as the Committee shall establish at the time of such grant
      or
      thereafter.

    (mm)
      “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the
      Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall include
      a
“group” as defined in Section 13(d) thereof.

    (nn)
      “Related Entity” means any Subsidiary, and any business, corporation,
      partnership, limited liability company or other entity designated by Board
      in
      which the Company or a Subsidiary holds a substantial ownership interest,
      directly or indirectly.

    (oo)
      “Restricted Stock” means any Share issued with the restriction that the holder
      may not sell, transfer, pledge or assign such Share and with such risks of
      forfeiture and other restrictions as the Committee, in its sole discretion,
      may
      impose (including any restriction on the right to vote such Share and the right
      to receive any dividends), which restrictions may lapse separately or in
      combination at such time or times, in installments or otherwise, as the
      Committee may deem appropriate.

    (pp)
      “Restricted Stock Award” means an Award granted to a Participant under Section
      6(d) hereof.

    (qq)
      “Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable to
      the Plan and Participants, promulgated by the Securities and Exchange Commission
      under Section 16 of the Exchange Act.

    (rr)
      “Shareholder Approval Date” means the date on which this Plan is approved
      shareholders of the Company eligible to vote in the election of directors,
      by a
      vote sufficient to meet the requirements of Code Sections 162(m) (if applicable)
      and 422, Rule 16b-3 under the Exchange Act (if applicable), applicable
      requirements under the rules of any stock exchange or automated quotation system
      on which the Shares may be listed on quoted, and other laws, regulations and
      obligations of the Company applicable to the Plan.

    (ss)
      “Shares” means the shares of common stock of the Company, par value $.001 per
      share, and such other securities as may be substituted (or resubstituted) for
      Shares pursuant to Section 10(c) hereof.

    (tt)
      “Stock Appreciation Right” means a right granted to a Participant under Section
      6(c) hereof.

    (uu)
      “Subsidiary” means any corporation or other entity in which the Company has a
      direct or indirect ownership interest of 50% or more of the total combined
      voting power of the then outstanding securities or interests of such corporation
      or other entity entitled to vote generally in the election of directors or
      in
      which the Company has the right to receive 50% or more of the distribution
      of
      profits or 50% or more of the assets on liquidation or dissolution.

    (vv)
      “Substitute Awards” shall mean Awards granted or Shares issued by the Company in
      assumption of, or in substitution or exchange for, awards previously granted,
      or
      the right or obligation to make future awards, by a company acquired by the
      Company or any Related Entity or with which the Company or any Related Entity
      combines.

    3.
Administration.

    (a)
      Authority of the Committee. The Plan shall be administered by the
      Committee, except to the extent the Board elects to administer the Plan, in
      which case the Plan shall be administered by only those directors who are
      Independent Directors, in which case references herein to the “Committee” shall
      be deemed to include references to the Independent members of the Board. The
      Committee shall have full and final authority, subject to and consistent with
      the provisions of the Plan, to select Eligible Persons to become Participants,
      grant Awards, determine the type, number and other terms and conditions of,
      and
      all other matters relating to, Awards, prescribe Award Agreements (which need
      not be identical for each Participant) and rules and

     

    
      
        
        

      

      
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    regulations
      for the administration of the Plan, construe and interpret the Plan and Award
      Agreements and correct defects, supply omissions or reconcile inconsistencies
      therein, and to make all other decisions and determinations as the Committee
      may
      deem necessary or advisable for the administration of the Plan. In exercising
      any discretion granted to the Committee under the Plan or pursuant to any Award,
      the Committee shall not be required to follow past practices, act in a manner
      consistent with past practices, or treat any Eligible Person or Participant
      in a
      manner consistent with the treatment of other Eligible Persons or
      Participants.

    (b)
      Manner of Exercise of Committee Authority. The Committee, and not the
      Board, shall exercise sole and exclusive discretion on any matter relating
      to a
      Participant then subject to Section 16 of the Exchange Act with respect to
      the
      Company to the extent necessary in order that transactions by such Participant
      shall be exempt under Rule 16b-3 under the Exchange Act. Any action of the
      Committee shall be final, conclusive and binding on all persons, including
      the
      Company, its Related Entities, Participants, Beneficiaries, transferees under
      Section 10(b) hereof or other persons claiming rights from or through a
      Participant, and shareholders. The express grant of any specific power to the
      Committee, and the taking of any action by the Committee, shall not be construed
      as limiting any power or authority of the Committee. The Committee may delegate
      to officers or managers of the Company or any Related Entity, or committees
      thereof, the authority, subject to such terms as the Committee shall determine,
      to perform such functions, including administrative functions as the Committee
      may determine to the extent that such delegation will not result in the loss
      of
      an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject
      to Section 16 of the Exchange Act in respect of the Company and will not cause
      Awards intended to qualify as “performance-based compensation” under Code
      Section 162(m) to fail to so qualify. The Committee may appoint agents to assist
      it in administering the Plan.

    (c)
      Limitation of Liability. The Committee and the Board, and each member
      thereof, shall be entitled to, in good faith, rely or act upon any report or
      other information furnished to him or her by any officer or Employee, the
      Company’s independent auditors, Consultants or any other agents assisting in the
      administration of the Plan. Members of the Committee and the Board, and any
      officer or Employee acting at the direction or on behalf of the Committee or
      the
      Board, shall not be personally liable for any action or determination taken
      or
      made in good faith with respect to the Plan, and shall, to the extent permitted
      by law, be fully indemnified and protected by the Company with respect to any
      such action or determination.

    4.
Shares
      Subject to Plan.

    (a)
      Limitation on Overall Number of Shares Available for Delivery under Plan.
      Subject to adjustment as provided in Section 10(c) hereof, the total number
      of
      Shares reserved and available for delivery under the Plan shall be 4,000,000.
      Any Shares delivered under the Plan may consist, in whole or in part, of
      authorized and unissued shares or treasury shares.

    (b)
      Application of Limitation to Grants of Award. No Award may be granted if
      the number of Shares to be delivered in connection with such an Award or, in
      the
      case of an Award relating to Shares but settled only in cash (such as cash-only
      Stock Appreciation Rights), the number of Shares to which such Award relates,
      exceeds the number of Shares remaining available for delivery under the Plan,
      minus the number of Shares deliverable in settlement of or relating to then
      outstanding Awards. The Committee may adopt reasonable counting procedures
      to
      ensure appropriate counting, avoid double counting (as, for example, in the
      case
      of tandem or substitute awards) and make adjustments if the number of Shares
      actually delivered differs from the number of Shares previously counted in
      connection with an Award.

    (c)
      Availability of Shares Not Delivered under Awards and Adjustments to
      Limits.

    (i)
      If any Shares subject to an Award are forfeited, expire or otherwise terminate
      without issuance of such Shares, or any Award is settled for cash or otherwise
      does not result in the issuance of all or a portion of the Shares subject to
      such Award or award, the Shares shall, to the extent of such forfeiture,
      expiration, termination, cash settlement or non-issuance, again be available
      for
      Awards under the Plan, subject to Section 4(c)(v) below.

    (ii)
      In the event that any Option or other Award granted hereunder is exercised
      through the tendering of Shares (either actually or by attestation) or by the
      withholding of Shares by the Company, or withholding tax liabilities arising
      from such option or other award are satisfied by the tendering of Shares (either
      actually or by attestation) or by the withholding of Shares by the Company,
      then
      only the number of 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Shares
      issued net of the Shares tendered or withheld shall be counted for purposes
      of
      determining the maximum number of Shares available for grant under the
      Plan.

    (iii)
      Shares reacquired by the Company on the open market using Option Proceeds shall
      be available for Awards under the Plan. The increase in Shares available
      pursuant to the repurchase of Shares with Option Proceeds shall not be greater
      than the amount of such proceeds divided by the Fair Market Value of a Share
      on
      the date of exercise of the Option giving rise to such Option Proceeds.

    (iv)
      Substitute Awards shall not reduce the Shares authorized for grant under the
      Plan or authorized for grant to a Participant in any period. Additionally,
      in
      the event that a company acquired by the Company or any Related Entity or with
      which the Company or any Related Entity combines has shares available under
      a
      pre-existing plan approved by shareholders and not adopted in contemplation
      of
      such acquisition or combination, the shares available for delivery pursuant
      to
      the terms of such pre-existing plan (as adjusted, to the extent appropriate,
      using the exchange ratio or other adjustment or valuation ratio or formula
      used
      in such acquisition or combination to determine the consideration payable to
      the
      holders of common stock of the entities party to such acquisition or
      combination) may be used for Awards under the Plan and shall not reduce the
      Shares authorized for delivery under the Plan; provided that Awards using such
      available shares shall not be made after the date awards or grants could have
      been made under the terms of the pre-existing plan, absent the acquisition
      or
      combination, and shall only be made to individuals who were not Employees or
      Directors prior to such acquisition or combination.

    (v)
      Any Shares that again become available for delivery pursuant to this Section
      4(c) shall be added back as one (1) Share.

    (vi)
      Notwithstanding anything in this Section 4(c) to the contrary and solely for
      purposes of determining whether Shares are available for the delivery of
      Incentive Stock Options, the maximum aggregate number of shares that may be
      granted under this Plan shall be determined without regard to any Shares
      restored pursuant to this Section 4(c) that, if taken into account, would cause
      the Plan to fail the requirement under Code Section 422 that the Plan designate
      a maximum aggregate number of shares that may be issued.

    5.
Eligibility;
      Per-Person Award Limitations. Awards may be
      granted under the Plan only to Eligible Persons. The maximum dollar value
      payable to any one Participant with respect to Performance Units is (x)
      $1,000,000 with respect to any 12 month Performance Period, and (y) with respect
      to any Performance Period that is more than 12 months, $1,000,000 multiplied
      by
      the number of full years in the Performance Period.

    6.
Specific
      Terms of Awards.

    (a)
      General. Awards may be granted on the terms and conditions set forth in
      this Section 6. In addition, the Committee may impose on any Award or the
      exercise thereof, at the date of grant or thereafter (subject to Section 10(e)),
      such additional terms and conditions, not inconsistent with the provisions
      of
      the Plan, as the Committee shall determine, including terms requiring forfeiture
      of Awards in the event of termination of the Participant’s Continuous Service
      and terms permitting a Participant to make elections relating to his or her
      Award. The Committee shall retain full power and discretion to accelerate,
      waive
      or modify, at any time, any term or condition of an Award that is not mandatory
      under the Plan. Except in cases in which the Committee is authorized to require
      other forms of consideration under the Plan, or to the extent other forms of
      consideration must be paid to satisfy the requirements of applicable law, no
      consideration other than services may be required for the grant (but not the
      exercise) of any Award.

    (b)
      Options. The Committee is authorized to grant Options to any Eligible
      Person on the following terms and conditions:

    (i)
      Exercise Price. Other than in connection with Substitute Awards, the exercise
      price per Share purchasable under an Option shall be determined by the
      Committee, provided that such exercise price shall not, in the case of Incentive
      Stock Options, be less than 100% of the Fair Market Value of a Share on the
      

     

    
      
        
        

      

      
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    date
      of grant of the Option and shall not, in any event, be less than the par value
      of a Share on the date of grant of the Option. If an Employee owns or is deemed
      to own (by reason of the attribution rules applicable under Section 424(d)
      of
      the Code) more than 10% of the combined voting power of all classes of stock
      of
      the Company (or any parent corporation or subsidiary corporation of the Company,
      as those terms are defined in Sections 424(e) and (f) of the Code, respectively)
      and an Incentive Stock Option is granted to such employee, the exercise price
      of
      such Incentive Stock Option (to the extent required by the Code at the time
      of
      grant) shall be no less than 110% of the Fair Market Value a Share on the date
      such Incentive Stock Option is granted.

    (ii)
      Time and Method of Exercise. The Committee shall determine the time or times
      at
      which or the circumstances under which an Option may be exercised in whole
      or in
      part (including based on achievement of performance goals and/or future service
      requirements), the time or times at which Options shall cease to be or become
      exercisable following termination of Continuous Service or upon other
      conditions, the methods by which the exercise price may be paid or deemed to
      be
      paid (including in the discretion of the Committee a cashless exercise
      procedure), the form of such payment, including, without limitation, cash,
      Shares, other Awards or awards granted under other plans of the Company or
      a
      Related Entity, or other property (including notes or other contractual
      obligations of Participants to make payment on a deferred basis provided that
      such deferred payments are not in violation of the Sarbanes-Oxley Act of 2002,
      or any rule or regulation adopted thereunder or any other applicable law),
      and
      the methods by or forms in which Shares will be delivered or deemed to be
      delivered to Participants.

    (iii)
      Incentive Stock Options. The terms of any Incentive Stock Option granted under
      the Plan shall comply in all respects with the provisions of Section 422 of
      the
      Code. Anything in the Plan to the contrary notwithstanding, no term of the
      Plan
      relating to Incentive Stock Options (including any Stock Appreciation Right
      issued in tandem therewith) shall be interpreted, amended or altered, nor shall
      any discretion or authority granted under the Plan be exercised, so as to
      disqualify either the Plan or any Incentive Stock Option under Section 422
      of
      the Code, unless the Participant has first requested, or consents to, the change
      that will result in such disqualification. Thus, if and to the extent required
      to comply with Section 422 of the Code, Options granted as Incentive Stock
      Options shall be subject to the following special terms and conditions:

    (A)
      the Option shall not be exercisable more than ten years after the date such
      Incentive Stock Option is granted; provided, however, that if a Participant
      owns
      or is deemed to own (by reason of the attribution rules of Section 424(d) of
      the
      Code) more than 10% of the combined voting power of all classes of stock of
      the
      Company (or any parent corporation or subsidiary corporation of the Company,
      as
      those terms are defined in Sections 424(e) and (f) of the Code, respectively)
      and the Incentive Stock Option is granted to such Participant, the term of
      the
      Incentive Stock Option shall be (to the extent required by the Code at the
      time
      of the grant) for no more than five years from the date of grant; and

    (B)
      The aggregate Fair Market Value (determined as of the date the Incentive Stock
      Option is granted) of the Shares with respect to which Incentive Stock Options
      granted under the Plan and all other option plans of the Company (and any parent
      corporation or subsidiary corporation of the Company, as those terms are defined
      in Sections 424(e) and (f) of the Code, respectively) during any calendar year
      exercisable for the first time by the Participant during any calendar year
      shall
      not (to the extent required by the Code at the time of the grant) exceed
      $100,000.

    (c)
      Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights
      to
      any Eligible Person in conjunction with all or part of any Option granted under
      the Plan or at any subsequent time during the term of such Option (a “Tandem
      Stock Appreciation Right”), or without regard to any Option (a “Freestanding
      Stock Appreciation Right”), in each case upon such terms and conditions as the
      Committee may establish in its sole discretion, not inconsistent with the
      provisions of the Plan, including the following:

    (i)
      Right to Payment. A Stock Appreciation Right shall confer on the Participant
      to
      whom it is granted a right to receive, upon exercise thereof, the excess of
      (A)
      the Fair Market Value of one Share on the date of exercise over (B) the grant
      price of the Stock Appreciation Right as determined by the Committee. The grant
      price of a Stock Appreciation Right shall not be less than 100% of the Fair
      Market Value of a Share on the date of grant, in the case of a Freestanding
      Stock Appreciation Right, or less than the associated Option exercise price,
      in
      the case of a Tandem Stock Appreciation Right.

     

    
      
        
        

      

      
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    (ii)
      Other Terms. The Committee shall determine at the date of grant or thereafter,
      the time or times at which and the circumstances under which a Stock
      Appreciation Right may be exercised in whole or in part (including based on
      achievement of performance goals and/or future service requirements), the time
      or times at which Stock Appreciation Rights shall cease to be or become
      exercisable following termination of Continuous Service or upon other
      conditions, the method of exercise, method of settlement, form of consideration
      payable in settlement, method by or forms in which Shares will be delivered
      or
      deemed to be delivered to Participants, whether or not a Stock Appreciation
      Right shall be in tandem or in combination with any other Award, and any other
      terms and conditions of any Stock Appreciation Right.

    (iii)
      Tandem Stock Appreciation Rights. Any Tandem Stock Appreciation Right may be
      granted at the same time as the related Option is granted or, for Options that
      are not Incentive Stock Options, at any time thereafter before exercise or
      expiration of such Option. Any Tandem Stock Appreciation Right related to an
      Option may be exercised only when the related Option would be exercisable and
      the Fair Market Value of the Shares subject to the related Option exceeds the
      exercise price at which Shares can be acquired pursuant to the Option. In
      addition, if a Tandem Stock Appreciation Right exists with respect to less
      than
      the full number of Shares covered by a related Option, then an exercise or
      termination of such Option shall not reduce the number of Shares to which the
      Tandem Stock Appreciation Right applies until the number of Shares then
      exercisable under such Option equals the number of Shares to which the Tandem
      Stock Appreciation Right applies. Any Option related to a Tandem Stock
      Appreciation Right shall no longer be exercisable to the extent the Tandem
      Stock
      Appreciation Right has been exercised, and any Tandem Stock Appreciation Right
      shall no longer be exercisable to the extent the related Option has been
      exercised.

    (d)
      Restricted Stock Awards. The Committee is authorized to grant Restricted Stock
      Awards to any Eligible Person on the following terms and conditions:

    (i)
      Grant and Restrictions. Restricted Stock Awards shall be subject to such
      restrictions on transferability, risk of forfeiture and other restrictions,
      if
      any, as the Committee may impose, or as otherwise provided in this Plan,
      covering a period of time specified by the Committee (the “Restriction Period”).
      The terms of any Restricted Stock Award granted under the Plan shall be set
      forth in a written Award Agreement which shall contain provisions determined
      by
      the Committee and not inconsistent with the Plan. The restrictions may lapse
      separately or in combination at such times, under such circumstances (including
      based on achievement of performance goals and/or future service requirements),
      in such installments or otherwise, as the Committee may determine at the date
      of
      grant or thereafter. Except to the extent restricted under the terms of the
      Plan
      and any Award Agreement relating to a Restricted Stock Award, a Participant
      granted Restricted Stock shall have all of the rights of a shareholder,
      including the right to vote the Restricted Stock and the right to receive
      dividends thereon (subject to any mandatory reinvestment or other requirement
      imposed by the Committee). During the Restriction Period, subject to Section
      10(b) below, the Restricted Stock may not be sold, transferred, pledged,
      hypothecated, margined or otherwise encumbered by the Participant.

    (ii)
      Forfeiture. Except as otherwise determined by the Committee, upon termination
      of
      a Participant’s Continuous Service during the applicable Restriction Period, the
      Participant’s Restricted Stock that is at that time subject to a risk of
      forfeiture that has not lapsed or otherwise been satisfied shall be forfeited
      and reacquired by the Company; provided that the Committee may provide, by
      rule
      or regulation or in any Award Agreement, or may determine in any individual
      case, that forfeiture conditions relating to Restricted Stock Awards shall
      be
      waived in whole or in part in the event of terminations resulting from specified
      causes.

    (iii)
      Certificates for Stock. Restricted Stock granted under the Plan may be evidenced
      in such manner as the Committee shall determine. If certificates representing
      Restricted Stock are registered in the name of the Participant, the Committee
      may require that such certificates bear an appropriate legend referring to
      the
      terms, conditions and restrictions applicable to such Restricted Stock, that
      the
      Company retain physical possession of the certificates, and that the Participant
      deliver a stock power to the Company, endorsed in blank, relating to the
      Restricted Stock.

    (iv)
      Dividends and Splits. As a condition to the grant of a Restricted Stock Award,
      the Committee may require or permit a Participant to elect that any cash
      dividends paid on a Share of Restricted Stock be automatically reinvested in
      additional Shares of Restricted Stock or applied to the purchase of additional
      

     

    
      
        
        

      

      
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    Awards
      under the Plan. Unless otherwise determined by the Committee, Shares distributed
      in connection with a stock split or stock dividend, and other property
      distributed as a dividend, shall be subject to restrictions and a risk of
      forfeiture to the same extent as the Restricted Stock with respect to which
      such
      Shares or other property have been distributed.

    (e)
      Deferred Stock Award. The Committee is authorized to grant Deferred Stock
      Awards to any Eligible Person on the following terms and conditions:

    (i)
      Award and Restrictions. Satisfaction of a Deferred Stock Award shall occur
      upon
      expiration of the deferral period specified for such Deferred Stock Award by
      the
      Committee (or, if permitted by the Committee, as elected by the Participant).
      In
      addition, a Deferred Stock Award shall be subject to such restrictions (which
      may include a risk of forfeiture) as the Committee may impose, if any, which
      restrictions may lapse at the expiration of the deferral period or at earlier
      specified times (including based on achievement of performance goals and/or
      future service requirements), separately or in combination, in installments
      or
      otherwise, as the Committee may determine. A Deferred Stock Award may be
      satisfied by delivery of Shares, cash equal to the Fair Market Value of the
      specified number of Shares covered by the Deferred Stock, or a combination
      thereof, as determined by the Committee at the date of grant or thereafter.
      Prior to satisfaction of a Deferred Stock Award, a Deferred Stock Award carries
      no voting or dividend or other rights associated with Share ownership.

    (ii)
      Forfeiture. Except as otherwise determined by the Committee, upon termination
      of
      a Participant’s Continuous Service during the applicable deferral period or
      portion thereof to which forfeiture conditions apply (as provided in the Award
      Agreement evidencing the Deferred Stock Award), the Participant’s Deferred Stock
      Award that is at that time subject to a risk of forfeiture that has not lapsed
      or otherwise been satisfied shall be forfeited; provided that the Committee
      may
      provide, by rule or regulation or in any Award Agreement, or may determine
      in
      any individual case, that forfeiture conditions relating to a Deferred Stock
      Award shall be waived in whole or in part in the event of terminations resulting
      from specified causes, and the Committee may in other cases waive in whole
      or in
      part the forfeiture of any Deferred Stock Award.

    (iii)
      Dividend Equivalents. Unless otherwise determined by the Committee at date
      of
      grant, any Dividend Equivalents that are granted with respect to any Deferred
      Stock Award shall be either (A) paid with respect to such Deferred Stock Award
      at the dividend payment date in cash or in Shares of unrestricted stock having
      a
      Fair Market Value equal to the amount of such dividends, or (B) deferred with
      respect to such Deferred Stock Award and the amount or value thereof
      automatically deemed reinvested in additional Deferred Stock, other Awards
      or
      other investment vehicles, as the Committee shall determine or permit the
      Participant to elect.

    (f)
      Bonus Stock and Awards in Lieu of Obligations. The Committee is
      authorized to grant Shares to any Eligible Persons as a bonus, or to grant
      Shares or other Awards in lieu of obligations to pay cash or deliver other
      property under the Plan or under other plans or compensatory arrangements,
      provided that, in the case of Eligible Persons subject to Section 16 of the
      Exchange Act, the amount of such grants remains within the discretion of the
      Committee to the extent necessary to ensure that acquisitions of Shares or
      other
      Awards are exempt from liability under Section 16(b) of the Exchange Act. Shares
      or Awards granted hereunder shall be subject to such other terms as shall be
      determined by the Committee.

    (g)
      Dividend Equivalents. The Committee is authorized to grant Dividend
      Equivalents to any Eligible Person entitling the Eligible Person to receive
      cash, Shares, other Awards, or other property equal in value to the dividends
      paid with respect to a specified number of Shares, or other periodic payments.
      Dividend Equivalents may be awarded on a free-standing basis or in connection
      with another Award. The Committee may provide that Dividend Equivalents shall
      be
      paid or distributed when accrued or shall be deemed to have been reinvested
      in
      additional Shares, Awards, or other investment vehicles, and subject to such
      restrictions on transferability and risks of forfeiture, as the Committee may
      specify.

    (h)
      Performance Awards. The Committee is authorized to grant Performance
      Awards to any Eligible Person payable in cash, Shares, or other Awards, on
      terms
      and conditions established by the Committee, subject to the provisions of
      Section 8 if and to the extent that the Committee shall, in its sole discretion,
      determine that an Award shall be subject to those provisions. The performance
      criteria to be achieved during any Performance Period and the length of the
      Performance Period shall be determined by the Committee upon the grant of each
      Performance Award; provided, however, that a Performance Period shall not be
      shorter than 12 months nor 

     

    
      
        
        

      

      
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    longer
      than five years. Except as provided in Section 9 or as may be provided in an
      Award Agreement, Performance Awards will be distributed only after the end
      of
      the relevant Performance Period. The performance goals to be achieved for each
      Performance Period shall be conclusively determined by the Committee and may
      be
      based upon the criteria set forth in Section 8(b), or in the case of an Award
      that the Committee determines shall not be subject to Section 8 hereof, any
      other criteria that the Committee, in its sole discretion, shall determine
      should be used for that purpose. The amount of the Award to be distributed
      shall
      be conclusively determined by the Committee. Performance Awards may be paid
      in a
      lump sum or in installments following the close of the Performance Period or,
      in
      accordance with procedures established by the Committee, on a deferred
      basis.

    (i)
      Other Stock-Based Awards. The Committee is authorized, subject to
      limitations under applicable law, to grant to any Eligible Person such other
      Awards that may be denominated or payable in, valued in whole or in part by
      reference to, or otherwise based on, or related to, Shares, as deemed by the
      Committee to be consistent with the purposes of the Plan. Other Stock-Based
      Awards may be granted to Participants either alone or in addition to other
      Awards granted under the Plan, and such Other Stock-Based Awards shall also
      be
      available as a form of payment in the settlement of other Awards granted under
      the Plan. The Committee shall determine the terms and conditions of such Awards.
      Shares delivered pursuant to an Award in the nature of a purchase right granted
      under this Section 6(i) shall be purchased for such consideration (including,
      without limitation, loans from the Company or a Related Entity provided that
      such loans are not in violation of the Sarbanes Oxley Act of 2002, or any rule
      or regulation adopted thereunder or any other applicable law) paid for at such
      times, by such methods, and in such forms, including, without limitation, cash,
      Shares, other Awards or other property, as the Committee shall determine.

    7.
Certain
      Provisions Applicable to Awards.

    (a)
      Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted
      under the Plan may, in the discretion of the Committee, be granted either alone
      or in addition to, in tandem with, or in substitution or exchange for, any
      other
      Award or any award granted under another plan of the Company, any Related
      Entity, or any business entity to be acquired by the Company or a Related
      Entity, or any other right of a Participant to receive payment from the Company
      or any Related Entity. Such additional, tandem, and substitute or exchange
      Awards may be granted at any time. If an Award is granted in substitution or
      exchange for another Award or award, the Committee shall require the surrender
      of such other Award or award in consideration for the grant of the new Award.
      In
      addition, Awards may be granted in lieu of cash compensation, including in
      lieu
      of cash amounts payable under other plans of the Company or any Related Entity,
      in which the value of Stock subject to the Award is equivalent in value to
      the
      cash compensation (for example, Deferred Stock or Restricted Stock), or in
      which
      the exercise price, grant price or purchase price of the Award in the nature
      of
      a right that may be exercised is equal to the Fair Market Value of the
      underlying Stock minus the value of the cash compensation surrendered (for
      example, Options or Stock Appreciation Right granted with an exercise price
      or
      grant price “discounted” by the amount of the cash compensation
      surrendered).

    (b)
      Term of Awards. The term of each Award shall be for such period as may be
      determined by the Committee; provided that in no event shall the term of any
      Option or Stock Appreciation Right exceed a period of ten years (or in the
      case
      of an Incentive Stock Option such shorter term as may be required under Section
      422 of the Code).

    (c)
      Form and Timing of Payment under Awards; Deferrals. Subject to the terms
      of the Plan and any applicable Award Agreement, payments to be made by the
      Company or a Related Entity upon the exercise of an Option or other Award or
      settlement of an Award may be made in such forms as the Committee shall
      determine, including, without limitation, cash, Shares, other Awards or other
      property, and may be made in a single payment or transfer, in installments,
      or
      on a deferred basis. Any installment or deferral provided for in the preceding
      sentence shall, however, be subject to the Company’s compliance with the
      provisions of the Sarbanes-Oxley Act of 2002, the rules and regulations adopted
      by the U.S. Securities and Exchange Commission thereunder, and all applicable
      rules of the Nasdaq Stock Market or any national securities exchange on which
      the Company’s securities are listed for trading and, if not listed for trading
      on either the Nasdaq Stock Market or a national securities exchange, then the
      rules of the Nasdaq Stock Market. The settlement of any Award may be
      accelerated, and cash paid in lieu of Shares in connection with such settlement,
      in the discretion of the Committee or upon occurrence of one or more specified
      events (in addition to a Change in Control). Installment or deferred payments
      may be required by the Committee (subject to Section 10(e) of the 

     

    
      
        
        

      

      
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    Plan,
      including the consent provisions thereof in the case of any deferral of an
      outstanding Award not provided for in the original Award Agreement) or permitted
      at the election of the Participant on terms and conditions established by the
      Committee. Payments may include, without limitation, provisions for the payment
      or crediting of a reasonable interest rate on installment or deferred payments
      or the grant or crediting of Dividend Equivalents or other amounts in respect
      of
      installment or deferred payments denominated in Shares.

    (d)
      Exemptions from Section 16(b) Liability. It is the intent of the Company
      that the grant of any Awards to or other transaction by a Participant who is
      subject to Section 16 of the Exchange Act shall be exempt from Section 16
      pursuant to an applicable exemption (except for transactions acknowledged in
      writing to be non-exempt by such Participant). Accordingly, if any provision
      of
      this Plan or any Award Agreement does not comply with the requirements of Rule
      16b-3 then applicable to any such transaction, such provision shall be construed
      or deemed amended to the extent necessary to conform to the applicable
      requirements of Rule 16b-3 so that such Participant shall avoid liability under
      Section 16(b).

    8.
Code
      Section 162(m) Provisions.

    (a)
      Covered Employees. The Committee, in its discretion, may determine at the
      time an Award is granted to an Eligible Person who is, or is likely to be,
      as of
      the end of the tax year in which the Company would claim a tax deduction in
      connection with such Award, a Covered Employee, that the provisions of this
      Section 8 shall be applicable to such Award.

    (b)
      Performance Criteria. If an Award is subject to this Section 8, then the
      lapsing of restrictions thereon and the distribution of cash, Shares or other
      property pursuant thereto, as applicable, shall be contingent upon achievement
      of one or more objective performance goals.

    Performance
      goals shall be objective and shall otherwise meet the requirements of Section
      162(m) of the Code and regulations thereunder including the requirement that
      the
      level or levels of performance targeted by the Committee result in the
      achievement of performance goals being “substantially uncertain.” One or more of
      the following business criteria for the Company, on a consolidated basis, and/or
      for Related Entities, or for business or geographical units of the Company
      and/or a Related Entity (except with respect to the total shareholder return
      and
      earnings per share criteria), shall be used by the Committee in establishing
      performance goals for such Awards: (1) earnings per share; (2) revenues or
      margins; (3) cash flow; (4) operating margin; (5) return on net assets,
      investment, capital, or equity; (6) economic value added; (7) direct
      contribution; (8) net income; pretax earnings; earnings before interest and
      taxes; earnings before interest, taxes, depreciation and amortization; earnings
      after interest expense and before extraordinary or special items; operating
      income; income before interest income or expense, unusual items and income
      taxes, local, state or federal and excluding budgeted and actual bonuses which
      might be paid under any ongoing bonus plans of the Company; (9) working capital;
      (10) management of fixed costs or variable costs; (11) identification or
      consummation of investment opportunities or completion of specified projects
      in
      accordance with corporate business plans, including strategic mergers,
      acquisitions or divestitures; (12) total shareholder return; and (13) debt
      reduction. Any of the above goals may be determined on an absolute or relative
      basis or as compared to the performance of a published or special index deemed
      applicable by the Committee including, but not limited to, the Standard &
Poor’s 500 Stock Index or a group of companies that are comparable to the
      Company. The Committee may exclude the impact of an event or occurrence which
      the Committee determines should appropriately be excluded, including without
      limitation (i) restructurings, discontinued operations, extraordinary items,
      and
      other unusual or non-recurring charges, (ii) an event either not directly
      related to the operations of the Company or not within the reasonable control
      of
      the Company’s management, or (iii) a change in accounting standards required by
      generally accepted accounting principles.

    (c)
      Performance Period; Timing For Establishing Performance Goals.
      Achievement of performance goals in respect of such Performance Awards shall
      be
      measured over a Performance Period no shorter than 12 months and no longer
      than
      five years, as specified by the Committee. Performance goals shall be
      established not later than 90 days after the beginning of any Performance Period
      applicable to such Performance Awards, or at such other date as may be required
      or permitted for “performance-based compensation” under Code Section
      162(m).

    (d)
      Adjustments. The Committee may, in its discretion, reduce the amount of a
      settlement otherwise to be made in connection with Awards subject to this
      Section 8, but may not exercise discretion to increase any such amount payable
      to a Covered Employee in respect of an Award subject to this Section 8. The
      Committee shall 

     

    
      
        
        

      

      
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    specify
      the
      circumstances in which such Awards shall be paid or forfeited in the event
      of
      termination of Continuous Service by the Participant prior to the end of a
      Performance Period or settlement of Awards.

    (e)
      Committee Certification. No Participant shall receive any payment under
      the Plan unless the Committee has certified, by resolution or other appropriate
      action in writing, that the performance criteria and any other material terms
      previously established by the Committee or set forth in the Plan, have been
      satisfied to the extent necessary to qualify as “performance based compensation”
under Code Section 162(m).

    9.
Change
      in Control.

    (a)
      Effect of “Change in Control.” Subject to Section 9(a)(iv), and if
      and only to the extent provided in the Award Agreement, or to the extent
      otherwise determined by the Committee, upon the occurrence of a “Change in
      Control,” as defined in Section 9(b):

    (i)
      Any Option or Stock Appreciation Right that was not previously vested and
      exercisable as of the time of the Change in Control, shall become immediately
      vested and exercisable, subject to applicable restrictions set forth in Section
      10(a) hereof.

    (ii)
      Any restrictions, deferral of settlement, and forfeiture conditions applicable
      to a Restricted Stock Award, Deferred Stock Award or an Other Stock-Based Award
      subject only to future service requirements granted under the Plan shall lapse
      and such Awards shall be deemed fully vested as of the time of the Change in
      Control, except to the extent of any waiver by the Participant and subject
      to
      applicable restrictions set forth in Section 10(a) hereof.

    (iii)
      With respect to any outstanding Award subject to achievement of performance
      goals and conditions under the Plan, the Committee may, in its discretion,
      deem
      such performance goals and conditions as having been met as of the date of
      the
      Change in Control.

    (iv)
      Notwithstanding the foregoing, if in the event of a Change in Control the
      successor company assumes or substitutes for an Option, Stock Appreciation
      Right, Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award,
      then each outstanding Option, Stock Appreciation Right, Restricted Stock Award,
      Deferred Stock Award or Other Stock-Based Award shall not be accelerated as
      described in Sections 9(a)(i), (ii) and (iii). For the purposes of this Section
      9(a)(iv), an Option, Stock Appreciation Right, Restricted Stock Award, Deferred
      Stock Award or Other Stock-Based Award shall be considered assumed or
      substituted for if following the Change in Control the award confers the right
      to purchase or receive, for each Share subject to the Option, Stock Appreciation
      Right, Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award
      immediately prior to the Change in Control, the consideration (whether stock,
      cash or other securities or property) received in the transaction constituting
      a
      Change in Control by holders of Shares for each Share held on the effective
      date
      of such transaction (and if holders were offered a choice of consideration,
      the
      type of consideration chosen by the holders of a majority of the outstanding
      shares); provided, however, that if such consideration received in the
      transaction constituting a Change in Control is not solely common stock of
      the
      successor company or its parent or subsidiary, the Committee may, with the
      consent of the successor company or its parent or subsidiary, provide that
      the
      consideration to be received upon the exercise or vesting of an Option, Stock
      Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other
      Stock-Based Award, for each Share subject thereto, will be solely common stock
      of the successor company or its parent or subsidiary substantially equal in
      fair
      market value to the per share consideration received by holders of Shares in
      the
      transaction constituting a Change in Control. The determination of such
      substantial equality of value of consideration shall be made by the Committee
      in
      its sole discretion and its determination shall be conclusive and binding.

    (b)
      Definition of “Change in Control.” Unless otherwise specified in
      an Award Agreement, a “Change in Control” shall mean the occurrence of any of
      the following:

    (i)
      The acquisition by any Person of Beneficial Ownership (within the meaning of
      Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%)
      of either (A) the then outstanding shares of common stock of the Company (the
      “Outstanding Company Common Stock”) or (B) the combined voting power of the then
      outstanding voting securities of the Company entitled to vote generally in
      the
      election of directors (the “Outstanding Company Voting Securities) (the
      foregoing Beneficial Ownership hereinafter being referred to as a “Controlling
      Interest”); provided, however, that for purposes

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    of
      this Section 9(b), the following acquisitions shall not constitute or result in
      a Change of Control: (v) any acquisition directly from the Company; (w) any
      acquisition by the Company; (x) any acquisition by any Person that as of the
      Effective Date owns Beneficial Ownership of a Controlling Interest; (y) any
      acquisition by any employee benefit plan (or related trust) sponsored or
      maintained by the Company or any Subsidiary; or (z) any acquisition by any
      corporation pursuant to a transaction which complies with clauses (A), (B)
      and
      (C) of subsection (iii) below; or

    (ii)
      During any period of two (2) consecutive years (not including any period prior
      to the Effective Date) individuals who constitute the Board on the Effective
      Date (the “Incumbent Board”) cease for any reason to constitute at least a
      majority of the Board; provided, however, that any individual becoming a
      director subsequent to the Effective Date whose election, or nomination for
      election by the Company’s shareholders, was approved by a vote of at least a
      majority of the directors then comprising the Incumbent Board shall be
      considered as though such individual were a member of the Incumbent Board,
      but
      excluding, for this purpose, any such individual whose initial assumption of
      office occurs as a result of an actual or threatened election contest with
      respect to the election or removal of directors or other actual or threatened
      solicitation of proxies or consents by or on behalf of a Person other than
      the
      Board; or

    (iii)
      Consummation of a reorganization, merger, statutory share exchange or
      consolidation or similar corporate transaction involving the Company or any
      of
      its Subsidiaries, a sale or other disposition of all or substantially all of
      the
      assets of the Company, or the acquisition of assets or stock of another entity
      by the Company or any of its Subsidiaries (each a “Business Combination”), in
      each case, unless, following such Business Combination, (A) all or substantially
      all of the individuals and entities who were the Beneficial Owners,
      respectively, of the Outstanding Company Common Stock and Outstanding Company
      Voting Securities immediately prior to such Business Combination beneficially
      own, directly or indirectly, more than fifty percent (50%) of the then
      outstanding shares of common stock and the combined voting power of the then
      outstanding voting securities entitled to vote generally in the election of
      directors, as the case may be, of the corporation resulting from such Business
      Combination (including, without limitation, a corporation which as a result
      of
      such transaction owns the Company or all or substantially all of the Company’s
      assets either directly or through one or more subsidiaries) in substantially
      the
      same proportions as their ownership, immediately prior to such Business
      Combination, of the Outstanding Company Common Stock and Outstanding Company
      Voting Securities, as the case may be, (B) no Person (excluding any employee
      benefit plan (or related trust) of the Company or such corporation resulting
      from such Business Combination or any Person that as of the Effective Date
      owns
      Beneficial Ownership of a Controlling Interest) beneficially owns, directly
      or
      indirectly, fifty percent (50%) or more of the then outstanding shares of common
      stock of the corporation resulting from such Business Combination or the
      combined voting power of the then outstanding voting securities of such
      corporation except to the extent that such ownership existed prior to the
      Business Combination and (C) at least a majority of the members of the Board
      of
      Directors of the corporation resulting from such Business Combination were
      members of the Incumbent Board at the time of the execution of the initial
      agreement, or of the action of the Board, providing for such Business
      Combination; or

    (iv)
      Approval by the shareholders of the Company of a complete liquidation or
      dissolution of the Company.

    10.
General
      Provisions.

    (a)
      Compliance with Legal and Other Requirements. The Company may, to the
      extent deemed necessary or advisable by the Committee, postpone the issuance
      or
      delivery of Shares or payment of other benefits under any Award until completion
      of such registration or qualification of such Shares or other required action
      under any federal or state law, rule or regulation, listing or other required
      action with respect to any stock exchange or automated quotation system upon
      which the Shares or other Company securities are listed or quoted, or compliance
      with any other obligation of the Company, as the Committee, may consider
      appropriate, and may require any Participant to make such representations,
      furnish such information and comply with or be subject to such other conditions
      as it may consider appropriate in connection with the issuance or delivery
      of
      Shares or payment of other benefits in compliance with applicable laws, rules,
      and regulations, listing requirements, or other obligations.

     

    
      
        
        

      

      
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    (b)
      Limits on Transferability; Beneficiaries. No Award or other right or
      interest granted under the Plan shall be pledged, hypothecated or otherwise
      encumbered or subject to any lien, obligation or liability of such Participant
      to any party, or assigned or transferred by such Participant otherwise than
      by
      will or the laws of descent and distribution or to a Beneficiary upon the death
      of a Participant, and such Awards or rights that may be exercisable shall be
      exercised during the lifetime of the Participant only by the Participant or
      his
      or her guardian or legal representative, except that Awards and other rights
      (other than Incentive Stock Options and Stock Appreciation Rights in tandem
      therewith) may be transferred to one or more Beneficiaries or other transferees
      during the lifetime of the Participant, and may be exercised by such transferees
      in accordance with the terms of such Award, but only if and to the extent such
      transfers are permitted by the Committee pursuant to the express terms of an
      Award Agreement (subject to any terms and conditions which the Committee may
      impose thereon). A Beneficiary, transferee, or other person claiming any rights
      under the Plan from or through any Participant shall be subject to all terms
      and
      conditions of the Plan and any Award Agreement applicable to such Participant,
      except as otherwise determined by the Committee, and to any additional terms
      and
      conditions deemed necessary or appropriate by the Committee.

    (c)
      Adjustments.

    (i)
      Adjustments to Awards. In the event that any extraordinary dividend or other
      distribution (whether in the form of cash, Shares, or other property),
      recapitalization, forward or reverse split, reorganization, merger,
      consolidation, spin-off, combination, repurchase, share exchange, liquidation,
      dissolution or other similar corporate transaction or event affects the Shares
      and/or such other securities of the Company or any other issuer such that a
      substitution, exchange, or adjustment is determined by the Committee to be
      appropriate, then the Committee shall, in such manner as it may deem equitable,
      substitute, exchange or adjust any or all of (A) the number and kind of Shares
      which may be delivered in connection with Awards granted thereafter, (B) the
      number and kind of Shares by which annual per-person Award limitations are
      measured under Section 5 hereof, (C) the number and kind of Shares subject
      to or
      deliverable in respect of outstanding Awards, (D) the exercise price, grant
      price or purchase price relating to any Award and/or make provision for payment
      of cash or other property in respect of any outstanding Award, and (E) any
      other
      aspect of any Award that the Committee determines to be appropriate.

    (ii)
      Adjustments in Case of Certain Corporate Transactions. In the event of any
      merger, consolidation or other reorganization in which the Company does not
      survive, or in the event of any Change in Control, any outstanding Awards may
      be
      dealt with in accordance with any of the following approaches, as determined
      by
      the agreement effectuating the transaction or, if and to the extent not so
      determined, as determined by the Committee: (a) the continuation of the
      outstanding Awards by the Company, if the Company is a surviving corporation,
      (b) the assumption or substitution for, as those terms are defined in Section
      9(b)(iv) hereof, the outstanding Awards by the surviving corporation or its
      parent or subsidiary, (c) full exercisability or vesting and accelerated
      expiration of the outstanding Awards, or (d) settlement of the value of the
      outstanding Awards in cash or cash equivalents or other property followed by
      cancellation of such Awards (which value, in the case of Options or Stock
      Appreciation Rights, shall be measured by the amount, if any, by which the
      Fair
      Market Value of a Share exceeds the exercise or grant price of the Option or
      Stock Appreciation Right as of the effective date of the transaction). The
      Committee shall give written notice of any proposed transaction referred to
      in
      this Section 10(c)(ii) a reasonable period of time prior to the closing date
      for
      such transaction (which notice may be given either before or after the approval
      of such transaction), in order that Participants may have a reasonable period
      of
      time prior to the closing date of such transaction within which to exercise
      any
      Awards that are then exercisable (including any Awards that may become
      exercisable upon the closing date of such transaction). A Participant may
      condition his exercise of any Awards upon the consummation of the
      transaction.

    (iii)
      Other Adjustments. The Committee (and the Board if and only to the extent such
      authority is not required to be exercised by the Committee to comply with
      Section 162(m) of the Code) is authorized to make adjustments in the terms
      and
      conditions of, and the criteria included in, Awards (including Performance
      Awards, or performance goals relating thereto) in recognition of unusual or
      nonrecurring events (including, without limitation, acquisitions and
      dispositions of businesses and assets) affecting the Company, any Related Entity
      or any business unit, or the financial statements of the Company or any Related
      Entity, or in response to changes in applicable laws, regulations, accounting
      principles, tax rates and regulations or business conditions or in view of
      the
      Committee’s assessment of the business strategy of the Company, any Related
      Entity or business unit thereof, performance of comparable organizations, 

     

    
      
        
        

      

      
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    economic
      and business conditions, personal performance of a Participant, and any other
      circumstances deemed relevant; provided that no such adjustment shall be
      authorized or made if and to the extent that such authority or the making of
      such adjustment would cause Options, Stock Appreciation Rights, Performance
      Awards granted pursuant to Section 8(b) hereof to Participants designated by
      the
      Committee as Covered Employees and intended to qualify as “performance-based
      compensation” under Code Section 162(m) and the regulations thereunder to
      otherwise fail to qualify as “performance-based compensation” under Code Section
      162(m) and regulations thereunder.

    (d)
      Taxes. The Company and any Related Entity are authorized to withhold from
      any Award granted, any payment relating to an Award under the Plan, including
      from a distribution of Shares, or any payroll or other payment to a Participant,
      amounts of withholding and other taxes due or potentially payable in connection
      with any transaction involving an Award, and to take such other action as the
      Committee may deem advisable to enable the Company or any Related Entity and
      Participants to satisfy obligations for the payment of withholding taxes and
      other tax obligations relating to any Award. This authority shall include
      authority to withhold or receive Shares or other property and to make cash
      payments in respect thereof in satisfaction of a Participant’s tax obligations,
      either on a mandatory or elective basis in the discretion of the
      Committee.

    (e)
      Changes to the Plan and Awards. The Board may amend, alter, suspend,
      discontinue or terminate the Plan, or the Committee’s authority to grant Awards
      under the Plan, without the consent of shareholders or Participants, except
      that
      any amendment or alteration to the Plan shall be subject to the approval of
      the
      Company’s shareholders not later than the annual meeting next following such
      Board action if such shareholder approval is required by any federal or state
      law or regulation (including, without limitation, Rule 16b-3 or Code Section
      162(m)) or the rules of any stock exchange or automated quotation system on
      which the Shares may then be listed or quoted), and the Board may otherwise,
      in
      its discretion, determine to submit other such changes to the Plan to
      shareholders for approval; provided that, without the consent of an affected
      Participant, no such Board action may materially and adversely affect the rights
      of such Participant under any previously granted and outstanding Award. The
      Committee may waive any conditions or rights under, or amend, alter, suspend,
      discontinue or terminate any Award theretofore granted and any Award Agreement
      relating thereto, except as otherwise provided in the Plan; provided that,
      without the consent of an affected Participant, no such Committee or the Board
      action may materially and adversely affect the rights of such Participant under
      such Award.

    (f)
      Limitation on Rights Conferred under Plan. Neither the Plan nor any
      action taken hereunder shall be construed as (i) giving any Eligible Person
      or
      Participant the right to continue as an Eligible Person or Participant or in
      the
      employ or service of the Company or a Related Entity; (ii) interfering in any
      way with the right of the Company or a Related Entity to terminate any Eligible
      Person’s or Participant’s Continuous Service at any time, (iii) giving an
      Eligible Person or Participant any claim to be granted any Award under the
      Plan
      or to be treated uniformly with other Participants and Employees, or (iv)
      conferring on a Participant any of the rights of a shareholder of the Company
      unless and until the Participant is duly issued or transferred Shares in
      accordance with the terms of an Award.

    (g)
      Unfunded Status of Awards; Creation of Trusts. The Plan is intended to
      constitute an “unfunded” plan for incentive and deferred compensation. With
      respect to any payments not yet made to a Participant or obligation to deliver
      Shares pursuant to an Award, nothing contained in the Plan or any Award shall
      give any such Participant any rights that are greater than those of a general
      creditor of the Company; provided that the Committee may authorize the creation
      of trusts and deposit therein cash, Shares, other Awards or other property,
      or
      make other arrangements to meet the Company’s obligations under the Plan. Such
      trusts or other arrangements shall be consistent with the “unfunded” status of
      the Plan unless the Committee otherwise determines with the consent of each
      affected Participant. The trustee of such trusts may be authorized to dispose
      of
      trust assets and reinvest the proceeds in alternative investments, subject
      to
      such terms and conditions as the Committee may specify and in accordance with
      applicable law.

    (h)
      Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board
      nor its submission to the shareholders of the Company for approval shall be
      construed as creating any limitations on the power of the Board or a committee
      thereof to adopt such other incentive arrangements as it may deem desirable
      including incentive arrangements and awards which do not qualify under Section
      162(m) of the Code.

    (i)
      Payments in the Event of Forfeitures; Fractional Shares. Unless otherwise
      determined by the Committee, in the event of a forfeiture of an Award with
      respect to which a Participant paid cash or other 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    consideration,
      the Participant shall be repaid the amount of such cash or other consideration.
      No fractional Shares shall be issued or delivered pursuant to the Plan or any
      Award. The Committee shall determine whether cash, other Awards or other
      property shall be issued or paid in lieu of such fractional shares or whether
      such fractional shares or any rights thereto shall be forfeited or otherwise
      eliminated.

    (j)
      Governing Law. The validity, construction and effect of the Plan, any
      rules and regulations under the Plan, and any Award Agreement shall be
      determined in accordance with the laws of the State of Delaware without giving
      effect to principles of conflict of laws, and applicable federal law.

    (k)
      Non-U.S. Laws. The Committee shall have the authority to adopt such
      modifications, procedures, and subplans as may be necessary or desirable to
      comply with provisions of the laws of foreign countries in which the Company
      or
      its Subsidiaries may operate to assure the viability of the benefits from Awards
      granted to Participants performing services in such countries and to meet the
      objectives of the Plan.

    (l)
      Plan Effective Date and Shareholder Approval; Termination of Plan. The
      Plan shall become effective on the Effective Date, subject to subsequent
      approval, within 12 months of its adoption by the Board, by shareholders of
      the
      Company eligible to vote in the election of directors, by a vote sufficient
      to
      meet the requirements of Code Sections 162(m) (if applicable) and 422, Rule
      16b-3 under the Exchange Act (if applicable), applicable requirements under
      the
      rules of any stock exchange or automated quotation system on which the Shares
      may be listed or quoted, and other laws, regulations, and obligations of the
      Company applicable to the Plan. Awards may be granted subject to shareholder
      approval, but may not be exercised or otherwise settled in the event the
      shareholder approval is not obtained. The Plan shall terminate at the earliest
      of (a) such time as no Shares remain available for issuance under the Plan,
      (b)
      termination of this Plan by the Board, or (c) the tenth anniversary of the
      Effective Date. Awards outstanding upon expiration of the Plan shall remain
      in
      effect until they have been exercised or terminated, or have expired.

     

    
      
        
        

      

      
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    Non-Qualified
      Stock Option Agreement

    Issued
      to:      ________________

    
       

      1.    Grant
        of Option.
        Xethanol Corporation (the “Company”)
        hereby
        grants, as of ____________,
        _______
        (“Date
        of Grant”),
        to
__________________
        (the
        “Optionee”)
        an
        option (the “Option”)
        to
        purchase up to _________
        shares
        (the
“Shares”) of the Company’s common stock, par value $.001 per share (the “Common
        Stock”), at an exercise price per share equal to $______
        (the
        “Exercise
        Price”).
        The
        Option has been granted on the terms and subject to the conditions set forth
        herein. The Option is being issued pursuant to the Company’s 2005 Incentive
        Compensation Plan (the “Plan”),
        which
        is incorporated herein by reference for all purposes. The Optionee hereby
        acknowledges receipt of a copy of the Plan and agrees to be bound by all
        of the
        terms and conditions hereof and thereof and all applicable laws and regulations.
        The Option is a Non-Qualified Stock Option, and not an Incentive Stock Option.
        

       

      2.    Definitions.
        Unless
        otherwise provided herein, capitalized terms used herein and not otherwise
        defined herein shall have the meanings attributed thereto in the
        Plan.

       

      3.    Exercise
        Schedule.
        Subject
        to the provisions of Sections 6 or 9 of this Agreement and of the Plan, the
        Option is exercisable in installments as provided below, which shall be
        cumulative. To the extent that the Option has become exercisable with respect
        to
        any Shares as provided below, the Option may thereafter be exercised by the
        Optionee, in whole or in part, at any time and from time to time prior to
        the
        expiration of the Option as provided herein. The following table indicates
        each
        date (each, a “Vesting
        Date”)
        upon
        which the Optionee shall be entitled to first exercise the Option with respect
        to the Shares indicated beside the date, provided that the Continuous Service
        of
        the Optionee continues through the applicable Vesting Date:

       

      Number
        of Shares   Vesting
        Date

       

      The
        Option shall vest incrementally on each Vesting Date and shall not
        proportionately or partially vest during the period prior to any Vesting
        Date
        except as otherwise specifically provided herein. 

       

      4.    Method
        of Exercise.
        

       

      (a)    The
        vested portion of this Option shall be exercisable in whole or in part by
        written notice which shall state the election to exercise the Option and
        the
        number of Shares for which the Option is being exercised and, unless the
        issuance of the Shares upon the exercise of the Option has been registered
        under
        the Securities Act of 1933, as amended (the “Securities Act”), the written
        notice of exercise shall include such representations, warranties and agreements
        as the Company may reasonably require to the effect that the Shares are being
        purchased for investment only and without any present intention to sell or
        otherwise distribute such Shares and that such Shares will not be disposed
        of in
        transactions which, in the opinion of counsel to the Company, would violate
        the
        registration provisions of the Securities Act and the rules and regulations
        thereunder. The certificate issued to evidence such Shares shall bear
        appropriate legends summarizing these restrictions on the disposition thereof.
        Such written notice shall be signed by the Optionee and shall be delivered
        to
        the Company in the manner set forth in Section 14. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b)    The
        written notice shall be accompanied by payment of an amount equal to the
        product
        of (i) the Exercise Price multiplied by (ii) the number of Shares for which
        the
        Option is then being exercised, plus the amount of the withholding taxes
        estimated in accordance with Section 5 to be due upon the purchase of such
        number of Shares, unless the Committee shall have consented to the making
        of
        other arrangements with the Optionee. Payment of the Exercise Price for the
        Shares upon any exercise of the Option shall be by certified check or by
        the
        surrender of that number of whole shares of Common Stock with a Fair Market
        Value (as of the date of exercise) as shall equal the Exercise Price of the
        Option. 

       

      (c)    Delivery
        of the notice of exercise shall constitute an irrevocable election to purchase
        the Shares specified in the notice, and the date on which the Company receives
        the notice accompanied by payment in full of the Exercise Price for the Shares
        covered by the notice and the applicable withholding taxes shall be the date
        as
        of which the Shares so purchased shall be deemed to have been
        issued.

       

      (d)    Notwithstanding
        anything to the contrary herein, the Option shall not be exercisable if the
        Company, at any time and in its sole discretion, shall determine that (a)
        the
        listing, registration or qualification of any Shares otherwise deliverable
        upon
        such exercise, upon any securities exchange or under any state or Federal
        law,
        or (b) the consent or approval of any regulatory body, is necessary or desirable
        in connection with such exercise. In such event, such exercise shall be held
        in
        abeyance and shall not be effective unless and until such listing, registration,
        qualification or approval shall have been effected or obtained free of any
        conditions not acceptable to the Company.

       

      5.    Withholding
        Taxes.

       

      (a)    At
        the
        time of the exercise of all or any part of this Option, the Optionee shall
        pay
        to the Company (or otherwise make arrangements satisfactory to the Committee
        for
        the payment of) the amount of the Federal, state and local and foreign income
        and employment taxes required, in the Company’s sole judgment, to be collected
        or withheld with respect to the exercise of the Option. Such amount shall
        be
        paid to the Company in cash or by the surrender of that number of whole shares
        of Common Stock with a Fair Market Value (as of the date of exercise) as
        shall
        equal but not exceed the minimum statutory amounts required to be collected
        or
        withheld by the Company with respect to the exercise of the Option.

       

      (b)    At
        the
        time of any “disqualifying disposition” (as defined in Treas. Reg. Section
        1.421-2(b)) of the Shares acquired upon exercise of this Option, the Optionee
        shall pay to the Company (or otherwise make arrangements satisfactory to
        the
        Committee for the payment of the amount of the Federal, state and local and
        foreign income and employment taxes required, in the Company’s sole judgment, to
        be collected or withheld with respect to the disqualifying disposition of
        the
        Shares acquired upon exercise of the Option. Such amount shall be paid to
        the
        Company in cash or by the surrender of that number of whole shares of Common
        Stock with a Fair Market Value (as of the date of exercise) as shall equal
        but
        not exceed the minimum statutory amounts required to be collected or withheld
        by
        the Company with respect to the exercise of the Option.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      6.    Termination
        of Option.

       

      (a)    Any
        unexercised portion of the Option shall automatically and without notice
        terminate and become null and void at the time of the earliest to occur of
        the
        following:

       

      (i)    
the
        fifth
        (5th) anniversary of the date as of which the Option is granted [Insert:
“the
        tenth (10th) anniversary” if this Option is being granted for service as a
        director] for any reason other than (A) by the Company for Cause or (B) by
        reason of the Optionee’s Disability or death; or

       

      (ii)    immediately
        upon the termination of the Optionee’s Continuous Service with the Company for
        Cause; or

       

      (iii)   twelve
        months after the date on which the Optionee’s Continuous Service with the
        Company is terminated by reason of a Disability; or

       

      (iv)   twelve
        months after the date of termination of the Optionee’s Continuous Service with
        the Company by reason of the Optionee’s death (or, if later, three months after
        the date on which the Optionee shall die if such death shall occur during
        the
        one-year period specified in paragraph (iii) of this Section 6); or

       

      (b)    To
        the
        extent not previously exercised, (i) the Option shall terminate immediately
        in
        the event of (1) the liquidation or dissolution of the Company, or (2) any
        reorganization, merger, consolidation or other form of corporate transaction
        in
        which the Company does not survive or the outstanding shares of Common Stock
        are
        converted into or exchanged for securities issued by another entity, or an
        affiliate of such successor or acquiring entity, unless the successor or
        acquiring entity, or an affiliate of such successor or acquiring entity,
        assumes
        the Option or substitutes an equivalent option or right pursuant to Section
        10(c) of the Plan, and (ii) the Committee in its sole discretion may by written
        notice (“cancellation
        notice”)
        cancel, effective upon the consummation of any corporate transaction described
        in Subsection 8(b)(i) of the Plan in which the Company does survive, the
        Option
        (or portion thereof) that remains unexercised on such date. The Committee
        shall
        give written notice of any proposed transaction referred to in this Section
        6(b)
        a reasonable period of time prior to the closing date for such transaction
        (which notice may be given either before or after approval of such transaction),
        in order that the Optionee may have a reasonable period of time prior to
        the
        closing date of such transaction within which to exercise the Option if and
        to
        the extent that it then is exercisable (including any portion of the Option
        that
        may become exercisable upon the closing date of such transaction). The Optionee
        may condition his exercise of the Option upon the consummation of a transaction
        referred to in this Section 6(b).

       

      7.    Transferability.
        The
        Option granted hereby is not transferable otherwise than by will or under
        the
        applicable laws of descent and distribution, and during the lifetime of the
        Optionee the Option shall be exercisable only by the Optionee. To exercise
        the
        Option upon the Optionee’s death, the persons who acquire the right to exercise
        the Option must prove to the Committee's satisfaction that they have duly
        acquired the Option and that they have paid (or have provided for payment
        of)
        any taxes, such as estate, transfer, inheritance or death taxes, payable
        with
        respect to the Option or to the Shares to which it relates. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      8.    No
        Rights of Stockholders.
        Neither
        the Optionee nor any personal representative (or beneficiary) shall be, or
        shall
        have any of the rights and privileges of, a stockholder of the Company with
        respect to any Shares issuable upon the exercise of the Option, in whole
        or in
        part, prior to the issuance thereof.

       

      9.    Acceleration
        of Exercisability of Option. 

       

      This
        Option shall become immediately fully exercisable, prior to the Vesting Date
        as
        disclosed in Section 3 herein, in the event that:

       

      (a)    Prior
        to
        the termination of the Option pursuant to Section 6 hereof, and during the
        Optionee’s Continuous Service, any transaction or series of transactions
        constituting a Change in Control is consummated.

       

      (b)    The
        termination of the Optionee’s Continuous Service by the Company is without
        Cause.

       

      10.   No
        Right to Continued Employment.
        Neither
        the Option nor this Agreement shall confer upon the Optionee any right to
        continued employment or service with the Company.

       

      11.   Law
        Governing.
        This
        Agreement shall be governed in accordance with and governed by the internal
        laws
        of the State of Delaware. 

       

      12.   Interpretation
        / Provisions of Plan Control.
        This
        Agreement is subject to all the terms, conditions, and provisions of the
        Plan,
        including, without limitation, the amendment provisions thereof, and to such
        rules, regulations and interpretations relating to the Plan adopted by the
        Committee as may be in effect from time to time. If and to the extent that
        this
        Agreement conflicts or is inconsistent with the terms, conditions and provisions
        of the Plan, the Plan shall control, and this Agreement shall be deemed to
        be
        modified accordingly. The Optionee accepts the Option subject to all the
        terms,
        conditions and provisions of the Plan and this Agreement.

       

      13.   Notices.
        Any
        notice under this Agreement shall be in writing and shall be deemed to have
        been
        duly given when delivered personally or when deposited in the United States
        mail, registered, postage prepaid, and addressed in the case of the Company,
        to
        the Company’s Chief Financial Officer at 1185 Avenue of the Americas,
        20th
        Floor,
        New York, New York 10036, or if the Company should move its principal office,
        to
        such principal office, and, in the case of the Optionee, to the Optionee’s last
        permanent address as shown on the Company’s records, subject to the right of
        either party to designate some other addresses at any time hereafter in a
        notice
        satisfying the requirements of this Section. 

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the undersigned have executed this Agreement
        as of the ____ day of ____________
        _______.

       

      COMPANY:

       

      
        	 	 	 
	 	XETHANOL
                CORPORATION
	 
 	 
 	 
 
	 	By:  	 
	 	
                

                Lawrence
                  Bellone

                Chief
                  Financial Officer

              
	 	 

      

       

      The
        Optionee acknowledges receipt of a copy of the Plan and represents that he
        or
        she has reviewed the Plan and this Option Agreement in their entirety, is
        familiar with and understands their terms, conditions and provisions, and
        hereby
        accepts this Option subject to all of the terms, conditions and provisions
        of
        the Plan and the Option Agreement. 

       

      

      
        	 	 	 
	Dated:                                               
                ,               
                	OPTIONEE:
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name: 
	 	 

      

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      SUBSCRIPTION
        FORM

       

      (To
        be
        executed only upon exercise of Option)

      

       

      
        	
              	To:	
                Xethanol
                  Corporation

                 

                
                  1185
                    Ave. of the Americas, 20th
                    Floor

                   

                  New
                    York, New York 10036

                

              

      

       

      The
        undersigned, pursuant to the provisions set forth in the attached Option
        agreement, hereby irrevocably elects to purchase ________ shares of Xethanol
        Corporation Common Stock covered by such Option and herewith makes payment
        of
        $___________, representing the full purchase price for such shares at the
        price
        per share provided for in such Option.

       

       

      
        	Dated:
                ____________,
                _______ 	Name:
                	 
	 	 	 
	 	Signature:	 
	 	 	 
	 	Address:
                	 
	 	 	 
	 	 	 

      

       

             

      
        
          
          

        

        
          6

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