Document:

EX-10.2

Exhibit
    10.2

     

    PACIFIC
      ETHANOL, INC.

    RESTRICTED
      STOCK AGREEMENT

     

    THIS
      RESTRICTED STOCK AGREEMENT (this “Agreement”), dated and effective as of
      __________ (the “Grant Date”) by and between Pacific Ethanol, Inc., a Delaware
      corporation (the “Company”), and __________ (“Employee”), is entered into as
      follows:

     

    WHEREAS,
      the Company has established the Pacific Ethanol, Inc. 2006 Stock Incentive
      Plan
      (the “Plan”), a copy of which has previously been provided to Employee or is
      provided with this Agreement; and

     

    WHEREAS,
      the Compensation Committee of the Board of Directors of the Company (the
“Committee”) has determined that Employee be granted shares of the Company’s
      $.001 par value per share Common Stock (the “Restricted Stock”) subject to the
      restrictions stated below.

     

    Capitalized
      terms used but not otherwise defined herein shall have the respective meanings
      ascribed to them in the Plan. References herein to the Company shall also
      include, where and as applicable, any Parent or Subsidiary of the Company in
      the
      same manner used in the Plan.

     

    NOW,
      THEREFORE, the parties hereby agree as follows:

     

    1.  Grant
      of Restricted Stock.
      Subject
      to the terms and conditions of this Agreement and of the Plan, the Company
      hereby grants to Employee ***__________***
      shares
      of Restricted Stock. As soon as practicable, the Company shall cause the shares
      of Restricted Stock to be issued in Employee’s name. During the Restriction
      Period, the Restricted Stock shall be held in the custody of the Company or
      its
      designee for Employee’s account. The Restricted Stock shall be subject to, and
      shall bear appropriate legends with respect to, the restrictions described
      herein.

     

    2.  Vesting
      Schedule.
      

     

    (a)  The
      interest of Employee in the Restricted Stock shall vest as to ***__________***
      shares
      of Restricted Stock immediately on the Grant Date and, provided Employee remains
      continuously employed by the Company on a full time basis from the Grant Date
      through each subsequent vesting date, as to an additional ***__________***
      shares
      of such Restricted Stock on the first (1st)
      anniversary of the Grant Date and on each succeeding anniversary date, so as
      to
      be fully vested on the _____ (___) anniversary of the Grant Date. If a vesting
      date falls on a weekend or any other day on which the NASDAQ Stock Market
      (“NASDAQ”) is not open, vesting of the corresponding Restricted Stock shall
      occur on the next following NASDAQ trading day. Notwithstanding the foregoing,
      the interest of Employee in the Restricted Stock may vest as to one hundred
      percent (100%) of the then unvested Restricted Stock upon a Change in Control
      but only in accordance with the Plan.

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    (b)  Upon
      termination of the Restriction Period, the Company shall, as soon as practicable
      thereafter, deliver to Employee a certificate representing the Restricted Stock
      with respect to which such restrictions have lapsed. Employee may instruct
      the
      Company in writing to deliver vested shares of Restricted Stock to Employee’s
      broker or other designee; provided, that (x) as to the Restricted Stock that
      vests immediately on the Grant Date, Employee shall communicate such instruction
      in writing to the Chief Financial Officer of the Company within two (2) business
      days following the Grant Date, and (y) as to the Restricted Stock that may
      vest
      following the Grant Date, Employee shall communicate such instruction in writing
      to the Chief Financial Officer of the Company as to each subsequent vesting
      amount not more than thirty (30) business days and not less than five (5)
      business days prior to each subsequent vesting date. If Employee does not timely
      provide such instructions, the vested shares of Restricted Stock will be
      delivered to Employee personally or to Employee’s home or other address as set
      forth in the Company’s books and records.

     

    3.  Restrictions.

     

    (a)  No
      portion of the Restricted Stock or rights granted hereunder may be sold,
      transferred, assigned, pledged or otherwise encumbered or disposed of by
      Employee until such portion of the Restricted Stock becomes vested in accordance
      with Section 2
      of this
      Agreement. The period of time between the date hereof and the date Restricted
      Stock becomes vested is referred to herein as the “Restriction Period.”
In
      addition, none of the Restricted Stock, even if vested, may be sold or
      transferred in contravention of (i) any market blackout periods the Company
      may
      impose from time to time, or (ii) the Company’s insider trading policies to the
      extent applicable to Employee from time to time.

     

    (b)  The
      vesting schedule requires Employee’s continued service as a full-time employee
      of the Company during the applicable vesting periods as a condition to the
      vesting of the Restricted Stock and the rights and benefits under this
      Agreement. If Employee’s employment with the Company is terminated for any
      reason, whether voluntarily or involuntarily, the balance of the Restricted
      Stock subject to the provisions of this Agreement which has not vested at the
      time of Employee’s termination of employment shall be forfeited by Employee
      without payment of any consideration by the Company and neither Employee nor
      any
      successor, heir, assign or personal representative of Employee shall have any
      right, title or interest in or to the forfeited Restricted Stock or the
      certificates evidencing them, and the Company shall direct its transfer agent
      of
      the Common Stock to make the appropriate entries in its records showing the
      cancellation of the certificate or certificates for such Restricted Stock.
      Service as an employee for only a portion of a vesting period, even if a
      substantial portion, will not entitle Employee to any proportionate vesting
      of
      the Restricted Stock allocated to that period or avoid or mitigate the
      forfeiture of and vesting in Employee’s Restricted Stock that will occur upon
      the cessation of Employee’s service as an employee of the Company.

     

    4.  Shareholder
      Rights.
      During
      the Restriction Period, Employee shall have all the rights of a shareholder
      with
      respect to the Restricted Stock except for the right to transfer the Restricted
      Stock, as set forth in Section 3
      of this
      Agreement. Accordingly, Employee shall have the right to vote the Restricted
      Stock and to receive any cash dividends paid to or made with respect to the
      Restricted Stock; provided, however, that dividends paid, if any, with respect
      to that Restricted Stock which has not vested at the time of the dividend
      payment shall be held in the custody of the Company and shall be subject to
      the
      same restrictions that apply to the corresponding Restricted Stock.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    5.  Changes
      in Common Stock.
      If any
      change is made to the Common Stock by reason of any stock split, stock dividend,
      recapitalization, combination of shares, exchange of shares or other change
      affecting the outstanding Common Stock as a class without the Company’s receipt
      of consideration, appropriate adjustments shall be made by the Plan
      Administrator to (i) the maximum number and/or class of securities issuable
      under the Plan, (ii) the maximum number and/or class of securities for
      which any one person may be granted Awards under the Plan per calendar year,
      (iii) the number and/or class of securities and the exercise or base price
      per
      share (or any other cash consideration payable per share) in effect under each
      outstanding Award under the Discretionary Grant Program, and (iv) the number
      and/or class of securities subject to each outstanding Award under the Stock
      Issuance Program and the cash consideration (if any) payable per share
      thereunder. To the extent such adjustments are to be made to outstanding Awards,
      those adjustments shall be effected in a manner that shall preclude the
      enlargement or dilution of rights and benefits under those Awards. The
      adjustments determined by the Plan Administrator shall be final, binding and
      conclusive.

     

    6.  Taxes.

     

    (a)  Employee
      will recognize ordinary income for federal income tax purposes on each date
      the
      Restricted Stock subject to Employee award vests, whether pursuant to the normal
      vesting schedule above or the acceleration provisions of this Agreement that
      may
      apply. The amount of Employee’s taxable income on each such vesting date will be
      equal to the fair market value per share of Common Stock on the date of vesting
      times the number of shares of Restricted Stock which vest on that
      date.

     

    (b)  Employee
      shall be liable for any and all taxes, including withholding taxes, arising
      out
      of this grant or the vesting of Restricted Stock hereunder. Employee may elect
      to satisfy such withholding tax obligation by (i) having the Company retain
      Restricted Stock having a fair market value equal to the Company’s minimum
      withholding obligation, or (ii) making a cash payment to the Company in an
      amount equal to the Company’s minimum withholding obligation; provided, that (x)
      as to the Restricted Stock that vests immediately on the Grant Date, Employee
      shall make and communicate such election in writing in the attached Notice
      of
      Election to the Chief Financial Officer of the Company within two (2) business
      days following the Grant Date, and (y) as to the Restricted Stock that may
      vest
      following the Grant Date, Employee shall make and communicate such election
      in
      writing in the attached Notice of Election to the Chief Financial Officer of
      the
      Company as to each subsequent vesting amount not more than thirty (30) business
      days and not less than five (5) business days prior to each subsequent vesting
      date. If Employee elects to pay the applicable minimum withholding amount in
      cash, then Employee shall make such payment within two (2) business days
      following the Grant Date or the applicable subsequent vesting date. If Employee
      (A) fails to make and communicate such election in writing in the attached
      Notice of Election to the Chief Financial Officer of the Company within the
      applicable time period, or (B) elects to make a cash payment of the minimum
      withholding amount and Employee fails to make such payment within two (2)
      business days following the Grant Date or the applicable subsequent vesting
      date, then the Company’s minimum withholding tax obligations shall be satisfied
      by the Company withholding a number of shares of Restricted Stock that would
      otherwise vest and be delivered to Employee under this Agreement that the
      Company determines has a fair market value sufficient to meet such obligations.
      The Company shall not be required to deliver any Restricted Stock or to
      recognize any purported transfer of shares of the Restricted Stock until such
      withholding obligations are satisfied. Employee is ultimately liable and
      responsible for all taxes owed by Employee in connection with Employee’s
      Restricted Stock, regardless of any action the Company takes with respect to
      any
      tax withholding obligations that arise in connection with the Restricted Stock.
      The Company makes no representation or undertaking regarding the treatment
      of
      any tax withholding in connection with the grant, issuance, vesting or
      settlement of the Restricted Stock or the subsequent sale of any of the shares
      of Restricted Stock. The Company does not commit and is under no obligation
      to
      structure the Restricted Stock award or program to reduce or eliminate
      Employee’s tax liability. The Company shall not be required to issue or deliver
      to Employee fractional shares of Restricted Stock upon withholding of any shares
      of Restricted Stock to cover the minimum withholding tax, or otherwise, and
      any
      fractional share amounts shall be paid to Employee by the Company solely in
      cash
      based on the pro rata fair market value of such fractional share amounts on
      the
      date of vesting.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    7.  Securities
      Law Compliance.
      The
      Company will use its reasonable commercial efforts to assure that all Restricted
      Stock issued pursuant to this Agreement is registered under the federal
      securities laws. However, no Restricted Stock will be issued pursuant to
      Employee’s award if such issuance would otherwise constitute a violation of any
      applicable federal or state securities laws or regulations or the requirements
      of The NASDAQ Global Market and any stock exchange or other market on which
      the
      Common Stock is then quoted or listed for trading. The inability of the Company
      to obtain approval from any regulatory body having authority deemed by the
      Company to be necessary to the lawful issuance of any Restricted Stock hereunder
      shall defer the Company’s obligation with respect to the issuance of such
      Restricted Stock until such approval has been obtained.

     

    8.  Miscellaneous.

     

    (a)  The
      grant
      of Restricted Stock or another award to an Employee in any one year, or at
      any
      time, does not obligate the Company to make a grant in any future year or in
      any
      given amount and should not create an expectation that the Company might make
      a
      grant in any future year or in any given amount.

     

    (b)  The
      Company shall not be required (i) to transfer on its books any shares of
      Restricted Stock which shall have been sold or transferred in violation of
      any
      of the provisions set forth in this Agreement, or (ii) to treat as owner of
      such
      shares or to accord the right to vote as such owner or to pay dividends to
      any
      transferee to whom such shares shall have been so transferred.

     

    (c)  The
      parties agree to execute such further instruments and to take such action as
      may
      reasonably be necessary to carry out the intent of this Agreement.

     

    (d)  Any
      notice required or permitted hereunder shall be given in writing and shall
      be
      deemed effectively given upon delivery to Employee at Employee’s address then on
      file with the Company.

     

    (e)  This
      Agreement shall not be construed so as to grant Employee any right to remain
      in
      the employ of the Company. 

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (f)  The
      parties agree that neither the Company nor any of its affiliates shall have
      any
      further obligation to Employee relating to the grant of stock or other incentive
      compensation except as stated herein.

     

    (g)  This
      Agreement and the Plan constitute the entire agreement of the parties with
      respect to the subject matter hereof. This Agreement may not be amended except
      with the consent of the Committee and by a written instrument duly executed
      by
      the Company and Employee.

     

    (h)  This
      Agreement shall be binding upon and shall inure to the benefit of the parties
      hereto and their heirs, personal representatives, successors and assigns. The
      terms of this Agreement shall in all respects be subject to the terms of the
      Plan. Employee hereby agrees to accept as binding, conclusive and final all
      decisions and interpretations of the Committee upon any questions arising under
      the Plan or this Agreement.

     

    (i)  The
      interpretation, performance and enforcement of this Agreement shall be governed
      by the laws of the State of Delaware without resort to that State’s
      conflicts-of-laws rules.

     

    (j)  This
      Agreement shall not in any way affect the right of the Company to adjust,
      reclassify, reorganize or otherwise make changes in its capital or business
      structure or to merge, consolidate, dissolve, liquidate or sell or transfer
      all
      or any part of its business or assets.

     

    9.  Mandatory
      Arbitration.
      ANY AND
      ALL DISPUTES OR CONTROVERSIES BETWEEN EMPLOYEE AND THE COMPANY OR BETWEEN THE
      COMPANY AND EMPLOYEE ARISING OUT OF, RELATING TO OR OTHERWISE CONNECTED WITH
      THIS AGREEMENT OR THE AWARD OF RESTRICTED STOCK EVIDENCED HEREBY OR THE
      VALIDITY, CONSTRUCTION, PERFORMANCE OR TERMINATION OF THIS AGREEMENT SHALL
      BE
      SETTLED EXCLUSIVELY BY BINDING ARBITRATION TO BE HELD IN FRESNO COUNTY,
      CALIFORNIA. THE ARBITRATION PROCEEDINGS SHALL BE GOVERNED BY (I) THE NATIONAL
      RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES THEN IN EFFECT OF THE AMERICAN
      ARBITRATION ASSOCIATION, AND (II) THE FEDERAL ARBITRATION ACT. THE ARBITRATOR
      SHALL HAVE THE SAME, BUT NO GREATER, REMEDIAL AUTHORITY AS WOULD A COURT HEARING
      THE SAME DISPUTE. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE
      AND
      BINDING ON THE PARTIES TO THE ARBITRATION AND SHALL BE IN LIEU OF THE RIGHTS
      THOSE PARTIES MAY OTHERWISE HAVE TO A JURY TRIAL; PROVIDED, HOWEVER, THAT SUCH
      DECISION SHALL BE SUBJECT TO CORRECTION, CONFIRMATION OR VACATION IN ACCORDANCE
      WITH THE PROVISIONS AND STANDARDS OF APPLICABLE LAW GOVERNING THE JUDICIAL
      REVIEW OF ARBITRATION AWARDS. THE
      ARBITRATOR SHALL ISSUE A WRITTEN DECISION THAT REVEALS THE ESSENTIAL FINDINGS
      AND CONCLUSIONS ON WHICH THE DECISION IS BASED, AND THE ARBITRATOR’S DECISION
      SHALL BE SUBJECT TO SUCH JUDICIAL REVIEW AS IS PROVIDED BY LAW. THE COMPANY
      SHALL PAY ANY ARBITRATION FILING FEE, AND WILL BEAR ALL OTHER COSTS OF
      ARBITRATION, INCLUDING FEES FOR THE SERVICES OF THE ARBITRATOR AND ANY COURT
      REPORTER ORDERED BY THE ARBITRATOR. EACH PARTY SHALL BEAR ITS, HIS OR HER OWN
      COSTS OF LEGAL REPRESENTATION; PROVIDED, HOWEVER, IF ANY PARTY PREVAILS ON
      A
      CLAIM ENTITLING THE PREVAILING PARTY TO ATTORNEYS’ FEES AND/OR COSTS PURSUANT TO
      ANY APPLICABLE EMPLOYMENT OR CIVIL RIGHTS STATUTE, THE ARBITRATOR MAY AWARD
      REASONABLE FEES AND/OR COSTS TO THE PREVAILING PARTY IN ACCORDANCE WITH SUCH
      CLAIM. JUDGMENT
      SHALL BE ENTERED ON THE ARBITRATOR’S DECISION IN ANY COURT HAVING JURISDICTION
      OVER THE SUBJECT MATTER OF SUCH DISPUTE OR CONTROVERSY. NOTWITHSTANDING THE
      FOREGOING, EITHER PARTY MAY IN AN APPROPRIATE MATTER APPLY TO A COURT PURSUANT
      TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1281.8, OR ANY COMPARABLE
      STATUTORY PROVISION OR COMMON LAW PRINCIPLE, FOR PROVISIONAL RELIEF, INCLUDING
      A
      TEMPORARY RESTRAINING ORDER OR A PRELIMINARY INJUNCTION. TO THE EXTENT PERMITTED
      BY LAW, THE PROCEEDINGS AND RESULTS, INCLUDING THE ARBITRATOR’S DECISION, SHALL
      BE KEPT CONFIDENTIAL TO THE EXTENT PERMITTED BY APPLICABLE LAW.

     

    10.  Remaining
      Terms.
      The
      remaining terms and conditions of Employee’s award are governed by the Plan, and
      Employee’s award is also subject to all interpretations, amendments, rules,
      regulations and decisions that may from time to time be adopted under the Plan.
      The General Plan Description, which is the official prospectus summarizing
      the
      principal features of the Plan, has previously been provided to Grantee or
      is
      provided with this Agreement.

     

    (Signature
      page follows.)

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the undersigned have executed this Agreement effective on
      the
      date first set above.

    
      	
               

              COMPANY:

            	
               

              PACIFIC
                ETHANOL, INC.,

              a
                Delaware corporation

               

               

              By:
                
                

              

            

    

     

    I,
      the
      undersigned Employee, hereby acknowledge receiving, reading and understanding
      the General Plan Description, which is the official prospectus summarizing
      the
      principal features of the Plan, this Agreement and the Plan itself. I further
      acknowledge and accept the foregoing terms and conditions of the Restricted
      Stock award evidenced hereby. I also acknowledge and agree that the foregoing
      sets forth the entire understanding between the Company and me regarding my
      entitlement to receive the shares of the Company’s Common Stock subject to such
      award and supersedes all prior oral and written agreements on that
      subject.

    
      	
               

               

               

              EMPLOYEE:

            	
               

               

               

               

                

              

              Print:
                
                

              

            

    

     

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

     

    NOTICE
      OF
      ELECTION

     

    Chief
      Financial Officer

    Pacific
      Ethanol, Inc.

     

    Re: Notice
      of Election As to Manner of Payment of Minimum Withholding Tax

     

    
      	1.  	
              The
                undersigned Employee has been granted shares of Restricted Stock
                of
                Pacific Ethanol, Inc., a Delaware corporation (the
                “Company”).

            

    

     

    
      	2.  	
              The
                undersigned Employee hereby elects to (check
                one):

            

    

     

    _____
      pay
      the minimum withholding tax in cash with respect to shares of Restricted Stock;
      or

     

    _____
      have shares of Restricted Stock withheld by the Company to cover the minimum
      withholding tax.

     

    
      	3.  	
              The
                foregoing election is with respect to the following Grant Date or
                vesting
                date (check one):

            

    

     

    _____
      October 4, 2006 (Grant Date)

    _____
      October 4, 2007

    _____
      October 4, 2008

    _____
      October 4, 2009

    _____
      October 4, 2010

    _____
      October 4, 2011

     

    
      	4.  	
              If
                the undersigned Employee has elected to pay to the Company the minimum
                withholding tax in cash with respect to shares of Restricted Stock,
                the
                undersigned Employee shall make such payment to the Company within
                two (2)
                business days following the Grant Date or the subsequent vesting
                date (as
                applicable). If the undersigned Employee fails to make payment within
                such
                period, then the Company’s minimum withholding tax obligations shall be
                satisfied by the Company withholding a number of shares of Restricted
                Stock that would otherwise vest and be delivered to Employee that
                the
                Company determines has a fair market value sufficient to meet such
                obligations. 

            

    

     

    
      	5.  	
              The
                terms and conditions of Company’s grant of Restricted Stock are governed
                solely by the Restricted Stock Agreement and the
                Plan.

            

    

    
      	
               

              Dated:_________________________

            	
               

              EMPLOYEE

            
	 	 ___________________________________
	 	
               

              Print:_____________________________________

            

    

    
 

    -7-Form of Restricted Stock Agr

Exhibit
    10.3

     

    PACIFIC
      ETHANOL, INC.

    RESTRICTED
      STOCK AGREEMENT

     

    THIS
      RESTRICTED STOCK AGREEMENT (this “Agreement”), dated and effective as of
      __________ (the “Grant Date”) by and between Pacific Ethanol, Inc., a Delaware
      corporation (the “Company”), and __________ (“Grantee”), is entered into as
      follows:

     

    WHEREAS,
      the Company has established the Pacific Ethanol, Inc. 2006 Stock Incentive
      Plan
      (the “Plan”), a copy of which has previously been provided to Grantee or is
      provided with this Agreement; and

     

    WHEREAS,
      the Compensation Committee of the Board of Directors of the Company (the
“Committee”) has determined that Grantee be granted shares of the Company’s
      $.001 par value per share Common Stock (the “Restricted Stock”) subject to the
      restrictions stated below.

     

    Capitalized
      terms used but not otherwise defined herein shall have the respective meanings
      ascribed to them in the Plan. References herein to the Company shall also
      include, where and as applicable, any Parent or Subsidiary of the Company in
      the
      same manner used in the Plan.

     

    NOW,
      THEREFORE, the parties hereby agree as follows:

     

    1. Grant
      of Restricted Stock.
      Subject
      to the terms and conditions of this Agreement and of the Plan, the Company
      hereby grants to Grantee ***__________***
      shares
      of Restricted Stock. As soon as practicable, the Company shall cause the shares
      of Restricted Stock to be issued in Grantee’s name. During the Restriction
      Period, the Restricted Stock shall be held in the custody of the Company or
      its
      designee for Grantee’s account. The Restricted Stock shall be subject to, and
      shall bear appropriate legends with respect to, the restrictions described
      herein.

     

    2. Vesting
      Schedule.
      

     

    (a) The
      interest of Grantee in the Restricted Stock shall vest as to ***__________***
      shares
      of Restricted Stock immediately on the Grant Date and, provided Grantee remains
      continuously in the service of the Company as a member of its board of directors
      from the Grant Date through each subsequent vesting date, as to an additional
      ***__________***
      shares
      of Restricted Stock on the first (1st)
      anniversary of the Grant Date and on each succeeding anniversary date, so as
      to
      be fully vested on the _____ (___) anniversary of the Grant Date. If a vesting
      date falls on a weekend or any other day on which the NASDAQ Stock Market
      (“NASDAQ”) is not open, vesting of the corresponding Restricted Stock shall
      occur on the next following NASDAQ trading day. Notwithstanding the foregoing,
      the interest of Grantee in the Restricted Stock may vest as to one hundred
      percent (100%) of the then unvested Restricted Stock upon a Change in Control
      but only in accordance with the Plan. 

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    (b) Upon
      termination of the Restriction Period, the Company shall, as soon as practicable
      thereafter, deliver to Grantee a certificate representing the Restricted Stock
      with respect to which such restrictions have lapsed. Grantee may instruct the
      Company in writing to deliver vested shares of Restricted Stock to Grantee’s
      broker or other designee; provided, that (x) as to the Restricted Stock
      that vests immediately on the Grant Date, Grantee shall communicate such
      instruction in writing to the Chief Financial Officer of the Company within
      two
      (2) business days following the Grant Date, and (y) as to the Restricted Stock
      that may vest following the Grant Date, Grantee shall communicate such
      instruction in writing to the Chief Financial Officer of the Company as to
      each
      subsequent vesting amount not more than thirty (30) business days and not less
      than five (5) business days prior to each subsequent vesting date. If Grantee
      does not timely provide such instructions, the vested shares of Restricted
      Stock
      will be delivered to Grantee personally or to Grantee’s home or other address as
      set forth in the Company’s books and records.

     

    3. Restrictions.
      

     

    (a) No
      portion of the Restricted Stock or rights granted hereunder may be sold,
      transferred, assigned, pledged or otherwise encumbered or disposed of by Grantee
      until such portion of the Restricted Stock becomes vested in accordance with
      Section 2
      of this
      Agreement. The period of time between the date hereof and the date Restricted
      Stock becomes vested is referred to herein as the “Restriction Period.”
In
      addition, none of the Restricted Stock, even if vested, may be sold or
      transferred in contravention of (i) any market blackout periods the Company
      may
      impose from time to time, or (ii) the Company’s insider trading policies to the
      extent applicable to Grantee from time to time.

     

    (b) The
      vesting schedule requires Grantee’s continued service as a member of the board
      of directors of the Company during the applicable vesting periods as a condition
      to the vesting of the Restricted Stock and the rights and benefits under this
      Agreement. If Grantee’s service as a member of the board of directors of the
      Company is terminated for any reason, whether voluntarily or involuntarily,
      the
      balance of the Restricted Stock subject to the provisions of this Agreement
      which has not vested at the time of Grantee’s termination of service shall be
      forfeited by Grantee without payment of any consideration by the Company and
      neither Grantee nor any successor, heir, assign or personal representative
      of
      Grantee shall have any right, title or interest in or to the forfeited
      Restricted Stock or the certificates evidencing them, and the Company shall
      direct its transfer agent of the Common Stock to make the appropriate entries
      in
      its records showing the cancellation of the certificate or certificates for
      such
      Restricted Stock. Service as a member of the board of directors of the Company
      for only a portion of a vesting period, even if a substantial portion, will
      not
      entitle Grantee to any proportionate vesting of the Restricted Stock allocated
      to that period or avoid or mitigate the forfeiture of and vesting in Grantee’s
      Restricted Stock that will occur upon the cessation of Grantee’s service as a
      member of the board of directors of the Company.

     

    4. Shareholder
      Rights.
      During
      the Restriction Period, Grantee shall have all the rights of a shareholder
      with
      respect to the Restricted Stock except for the right to transfer the Restricted
      Stock, as set forth in Section 3
      of this
      Agreement. Accordingly, Grantee shall have the right to vote the Restricted
      Stock and to receive any cash dividends paid to or made with respect to the
      Restricted Stock; provided, however, that dividends paid, if any, with respect
      to that Restricted Stock which has not vested at the time of the dividend
      payment shall be held in the custody of the Company and shall be subject to
      the
      same restrictions that apply to the corresponding Restricted Stock.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    5. Changes
      in Common Stock.
      If any
      change is made to the Common Stock by reason of any stock split, stock dividend,
      recapitalization, combination of shares, exchange of shares or other change
      affecting the outstanding Common Stock as a class without the Company’s receipt
      of consideration, appropriate adjustments shall be made by the Plan
      Administrator to (i) the maximum number and/or class of securities issuable
      under the Plan, (ii) the maximum number and/or class of securities for
      which any one person may be granted Awards under the Plan per calendar year,
      (iii) the number and/or class of securities and the exercise or base price
      per
      share (or any other cash consideration payable per share) in effect under each
      outstanding Award under the Discretionary Grant Program, and (iv) the number
      and/or class of securities subject to each outstanding Award under the Stock
      Issuance Program and the cash consideration (if any) payable per share
      thereunder. To the extent such adjustments are to be made to outstanding Awards,
      those adjustments shall be effected in a manner that shall preclude the
      enlargement or dilution of rights and benefits under those Awards. The
      adjustments determined by the Plan Administrator shall be final, binding and
      conclusive.

     

    6. Taxes.

     

    (a) Grantee
      will recognize ordinary income for federal income tax purposes on each date
      the
      Restricted Stock subject to Grantee award vests, whether pursuant to the normal
      vesting schedule above or the acceleration provisions of this Agreement that
      may
      apply. The amount of Grantee’s taxable income on each such vesting date will be
      equal to the fair market value per share of Common Stock on the date of vesting
      times the number of shares of Restricted Stock which vest on that
      date.

     

    (b) Grantee
      shall be liable for any and all taxes arising out of this grant or the vesting
      of Restricted Stock hereunder. The Company makes no representation or
      undertaking regarding the tax treatment to Grantee in connection with the grant,
      issuance, vesting or settlement of the Restricted Stock or the subsequent sale
      of any of the shares of Restricted Stock. The Company does not commit and is
      under no obligation to structure the Restricted Stock award or program to reduce
      or eliminate Grantee’s tax liability.

     

    7. Securities
      Law Compliance.
      The
      Company will use its reasonable commercial efforts to assure that all Restricted
      Stock issued pursuant to this Agreement is registered under the federal
      securities laws. However, no Restricted Stock will be issued pursuant to
      Grantee’s award if such issuance would otherwise constitute a violation of any
      applicable federal or state securities laws or regulations or the requirements
      of The NASDAQ Global Market and any stock exchange or other market on which
      the
      Common Stock is then quoted or listed for trading. The inability of the Company
      to obtain approval from any regulatory body having authority deemed by the
      Company to be necessary to the lawful issuance of any Restricted Stock hereunder
      shall defer the Company’s obligation with respect to the issuance of such
      Restricted Stock until such approval has been obtained.

     

    8. Miscellaneous.

     

    (a) The
      grant
      of Restricted Stock or another award to a Grantee in any one year, or at any
      time, does not obligate the Company to make a grant in any future year or in
      any
      given amount and should not create an expectation that the Company might make
      a
      grant in any future year or in any given amount.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (b) The
      Company shall not be required (i) to transfer on its books any shares of
      Restricted Stock which shall have been sold or transferred in violation of
      any
      of the provisions set forth in this Agreement, or (ii) to treat as owner of
      such
      shares or to accord the right to vote as such owner or to pay dividends to
      any
      transferee to whom such shares shall have been so transferred.

     

    (c) The
      parties agree to execute such further instruments and to take such action as
      may
      reasonably be necessary to carry out the intent of this Agreement.

     

    (d) Any
      notice required or permitted hereunder shall be given in writing and shall
      be
      deemed effectively given upon delivery to Grantee at Grantee’s address then on
      file with the Company.

     

    (e) This
      Agreement shall not be construed so as to grant Grantee any right to remain
      in
      the service of the Company. 

     

    (f) The
      parties agree that neither the Company nor any of its affiliates shall have
      any
      further obligation to Grantee relating to the grant of stock or other incentive
      compensation except as stated herein.

     

    (g) This
      Agreement and the Plan constitute the entire agreement of the parties with
      respect to the subject matter hereof. This Agreement may not be amended except
      with the consent of the Committee and by a written instrument duly executed
      by
      the Company and Grantee.

     

    (h) This
      Agreement shall be binding upon and shall inure to the benefit of the parties
      hereto and their heirs, personal representatives, successors and assigns. The
      terms of this Agreement shall in all respects be subject to the terms of the
      Plan. Grantee hereby agrees to accept as binding, conclusive and final all
      decisions and interpretations of the Committee upon any questions arising under
      the Plan or this Agreement.

     

    (i) The
      interpretation, performance and enforcement of this Agreement shall be governed
      by the laws of the State of Delaware without resort to that State’s
      conflicts-of-laws rules.

     

    (j) This
      Agreement shall not in any way affect the right of the Company to adjust,
      reclassify, reorganize or otherwise make changes in its capital or business
      structure or to merge, consolidate, dissolve, liquidate or sell or transfer
      all
      or any part of its business or assets.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    9. Mandatory
      Arbitration.
      ANY AND
      ALL DISPUTES OR CONTROVERSIES BETWEEN GRANTEE AND THE COMPANY OR BETWEEN THE
      COMPANY AND GRANTEE ARISING OUT OF, RELATING TO OR OTHERWISE CONNECTED WITH
      THIS
      AGREEMENT OR THE AWARD OF RESTRICTED STOCK EVIDENCED HEREBY OR THE VALIDITY,
      CONSTRUCTION, PERFORMANCE OR TERMINATION OF THIS AGREEMENT SHALL BE SETTLED
      EXCLUSIVELY BY BINDING ARBITRATION TO BE HELD IN FRESNO COUNTY, CALIFORNIA.
      THE
      ARBITRATION PROCEEDINGS SHALL BE GOVERNED BY (I) THE NATIONAL RULES FOR THE
      RESOLUTION OF COMMERCIAL DISPUTES THEN IN EFFECT OF THE AMERICAN ARBITRATION
      ASSOCIATION, AND (II) THE FEDERAL ARBITRATION ACT. THE ARBITRATOR SHALL HAVE
      THE
      SAME, BUT NO GREATER, REMEDIAL AUTHORITY AS WOULD A COURT HEARING THE SAME
      DISPUTE. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE AND BINDING
      ON THE PARTIES TO THE ARBITRATION AND SHALL BE IN LIEU OF THE RIGHTS THOSE
      PARTIES MAY OTHERWISE HAVE TO A JURY TRIAL; PROVIDED, HOWEVER, THAT SUCH
      DECISION SHALL BE SUBJECT TO CORRECTION, CONFIRMATION OR VACATION IN ACCORDANCE
      WITH THE PROVISIONS AND STANDARDS OF APPLICABLE LAW GOVERNING THE JUDICIAL
      REVIEW OF ARBITRATION AWARDS. THE
      ARBITRATOR SHALL ISSUE A WRITTEN DECISION THAT REVEALS THE ESSENTIAL FINDINGS
      AND CONCLUSIONS ON WHICH THE DECISION IS BASED, AND THE ARBITRATOR’S DECISION
      SHALL BE SUBJECT TO SUCH JUDICIAL REVIEW AS IS PROVIDED BY LAW. EACH PARTY
      SHALL
      BEAR ITS, HIS OR HER OWN COSTS OF LEGAL REPRESENTATION; PROVIDED, HOWEVER,
      IF
      ANY PARTY PREVAILS ON A CLAIM ENTITLING THE PREVAILING PARTY TO ATTORNEYS’ FEES
      AND/OR COSTS PURSUANT TO ANY APPLICABLE EMPLOYMENT OR CIVIL RIGHTS STATUTE,
      THE
      ARBITRATOR MAY AWARD REASONABLE FEES AND/OR COSTS TO THE PREVAILING PARTY IN
      ACCORDANCE WITH SUCH CLAIM. JUDGMENT
      SHALL BE ENTERED ON THE ARBITRATOR’S DECISION IN ANY COURT HAVING JURISDICTION
      OVER THE SUBJECT MATTER OF SUCH DISPUTE OR CONTROVERSY. NOTWITHSTANDING THE
      FOREGOING, EITHER PARTY MAY IN AN APPROPRIATE MATTER APPLY TO A COURT PURSUANT
      TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1281.8, OR ANY COMPARABLE
      STATUTORY PROVISION OR COMMON LAW PRINCIPLE, FOR PROVISIONAL RELIEF, INCLUDING
      A
      TEMPORARY RESTRAINING ORDER OR A PRELIMINARY INJUNCTION. TO THE EXTENT PERMITTED
      BY LAW, THE PROCEEDINGS AND RESULTS, INCLUDING THE ARBITRATOR’S DECISION, SHALL
      BE KEPT CONFIDENTIAL TO THE EXTENT PERMITTED BY APPLICABLE LAW.

     

    10. Remaining
      Terms.
      The
      remaining terms and conditions of Grantee’s award are governed by the Plan, and
      Grantee’s award is also subject to all interpretations, amendments, rules,
      regulations and decisions that may from time to time be adopted under the Plan.
      The General Plan Description, which is the official prospectus summarizing
      the
      principal features of the Plan, has previously been provided to Grantee or
      is
      provided with this Agreement.

     

    (Signature
      page follows.)

     

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
 

    IN
      WITNESS WHEREOF, the undersigned have executed this Agreement effective on
      the
      date first set above.

    
      	
               

              COMPANY:

            	
               

              PACIFIC
                ETHANOL, INC.,

              a
                Delaware corporation

               

               

              By:
                _______________________________________________

            

    

     

    I,
      the
      undersigned Grantee, hereby acknowledge receiving, reading and understanding
      the
      General Plan Description, which is the official prospectus summarizing the
      principal features of the Plan, this Agreement and the Plan itself. I further
      acknowledge and accept the foregoing terms and conditions of the Restricted
      Stock award evidenced hereby. I also acknowledge and agree that the foregoing
      sets forth the entire understanding between the Company and me regarding my
      entitlement to receive the shares of the Company’s Common Stock subject to such
      award and supersedes all prior oral and written agreements on that
      subject.

    
      	
               

               

               

              GRANTEE:

            	
               

               

               

              ___________________________________________

              Print:_____________________________________________

            

    

    
 

     

    -6-

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