Document:

Exhibit
10.5

 

EXECUTION COPY

 

EMPLOYMENT AGREEMENT

 

This
Employment Agreement (this “Agreement”) is entered into on March 15,
2010 to be effective as of the date of consummation of the Plan of
Reorganization (as defined below) (the “Effective Date”), by and among
Aventine Renewable Energy Holdings, Inc. (together with its successors and
assigns the “Company”) and Thomas Manuel (“Executive”).

 

WHEREAS,
the Company desires to employ Executive as Chief Executive Officer of the
Company after the consummation of the Company’s plan of reorganization under Section 1121
of Title 11 of the United States Code (the “Plan of Reorganization”);

 

WHEREAS,
Executive desires to accept such employment, subject to the terms and
provisions of this Agreement; and

 

WHEREAS,
this Agreement is expressly contingent upon the consummation of the Plan of
Reorganization;

 

NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
mutually acknowledged, the Company and Executive (collectively, the “Parties”)
agree as follows:

 

1.                                       Term of Employment. The Company hereby agrees
to employ Executive under this Agreement, and Executive hereby accepts such
employment, for the “Term of Employment” which shall commence as of the
Effective Date and shall end on December 31, 2012.

 

2.                                       Position, Duties and Responsibilities.

 

(a)                                  During the Term
of Employment, Executive shall serve as the Chief Executive Officer of the
Company; shall have all authorities, duties and responsibilities customarily
exercised by an individual serving in those positions in enterprises of a
similar size and structure; shall be assigned no authorities, duties or
responsibilities that are inconsistent with, or that impair his ability to
discharge, the foregoing authorities, duties and responsibilities; and shall
report solely and directly to the Board of Directors of the Company (the “Board”).

 

(b)                                 Executive shall
devote substantially all of his business time and efforts to the affairs of the
Company; provided, however, that while employed by the Company,
Executive may serve as a member of the board of directors of any for-profit
company with the consent of the Board (which will not be unreasonably
withheld).  In addition, without approval
of the Board, Executive may (i) serve on the boards of directors of any not-for-profit entity, (ii) serve in any
capacity with respect to any civic, educational, professional or charitable
organization, and (iii) manage his and his family’s personal investments.  Executive may also continue to provide
services as managing director of International Strategy Advisors and may retain
all compensation earned therefrom; provided, that such services do not materially
interfere or conflict with the performance of his duties to the Company or
create a business conflict with the Company.

 

(c)                                  Upon expiration
of the Term of Employment or the termination of Executive’s employment for any
reason, upon the request of the Board, Executive shall resign, in writing, from
any positions he then holds with the Company, including membership on any
boards.

 

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3.                                       Principal Place of Business.  Executive’s principal place of business, and
to the extent determined by Executive, the Company’s commodities operations and
other executive offices, shall be located in an office of the Company that the
Company will have established and staffed in Dallas, Texas prior to the
Effective Date.  Executive agrees to
travel on behalf of the Company as reasonably necessary to perform his duties
under this Agreement, including to the Company’s offices in Pekin, Illinois, to
which Executive acknowledges he may be required to travel on a regular
basis.  The Company will pay, or
reimburse Executive in accordance with Section 4(f) below, for all
reasonable and necessary costs in connection with such travel (including tax
gross-ups for any income tax Executive incurs in connection with such costs or
such gross-up).

 

4.                                       Compensation and Benefits.

 

(a)                                  Base Salary. Commencing as
of the Effective Date, the Company shall pay Executive an annualized Base
Salary of $500,000 (“Base Salary”), payable in accordance with the
regular payroll practices applicable to senior executives of the Company.  Executive’s Base Salary shall be reviewed by
the Board for possible increase no less frequently than annually during the
Term of Employment and any increased Base Salary shall constitute “Base Salary”
for purposes hereof.  The Base Salary
(including as increased pursuant to the preceding sentence) shall not be
decreased at any time during the Term of Employment.

 

(b)                                 Annual Bonus. Executive
will be entitled to receive an annual bonus each year during the Term of
Employment with a target equal to at least 125% of Executive’s Base Salary for
the applicable year (each a “Bonus”) based on reasonably attainable
goals as determined by the Board or its Compensation Committee after
consultation with Executive.  There will
also be threshold and maximum levels for achievement below and above target as
determined by the Board or its Compensation Committee after consultation with
Executive. Notwithstanding the foregoing, Executive’s Bonus for fiscal year
2010 will not be less than $250,000 (the “Guaranteed Bonus”).  Bonuses will be paid in accordance with the
Company’s bonus policy as in effect from time to time in the year following the
year for which the Bonus is earned, but in no event later than March 15 of
such following year.

 

(c)                                  Inducement
Bonus.  On the Effective Date, the
Company shall pay Executive a lump sum cash amount of $500,000.

 

(d)                                 Employee
Benefits. During the Term of Employment, Executive shall be
entitled to participate in all employee benefit plans and programs offered by
the Company to senior executives of the Company, and, subject to the
eligibility requirements for participation therein, any employee benefit plans
and programs which the Company may adopt from time to time generally for its
employees.

 

(e)                                  Vacations. During the
Term of Employment, Executive shall be entitled to four (4) weeks’ paid
vacation per year to be accrued and taken in accordance with the Company’s
normal vacation policies.

 

(f)                                    Legal Fees.  The Company shall either pay or reimburse
Executive (as elected by the Company) for all reasonable legal fees and
expenses incurred by Executive in connection 

 

2

 

with the negotiation and
drafting of this Agreement (including, the negotiation and preparation of the
Pre-Emergence and Post-Emergence term sheets) in accordance with the Company’s
expense reimbursement policies, and the Executive shall receive a gross-up
payment for any income tax Executive incurs in connection with such payment or
reimbursement and the gross-up.

 

(g)                                 Reimbursement
of Business and Other Expenses. During the Term of
Employment, Executive is authorized to incur reasonable expenses, including,
without limitation, expenses for travel, entertainment and other ordinary and necessary
activities, in carrying out his duties and responsibilities under this Agreement,
and the Company shall promptly reimburse him for all such expenses subject to
documentation and subject to the expense reimbursement policies of the Company
relating to expense reimbursement.

 

5.                                       Equity Arrangements.

 

(a)                                  Equity Awards.  On the Effective Date, the Company will grant
the following equity awards to Executive: 
(i) stock options to purchase 128,250 shares of the Company’s
common stock (the “Common Stock”) (the “Options”), (ii) 42,750
restricted shares of Common Stock (the “Restricted Stock”) and (iii) 128,250
restricted stock units (the “RSUs,” and together with the Options and
the Restricted Stock, the “Equity Awards”).  The Equity Awards shall be granted pursuant
to the Company’s 2010 Equity Incentive Plan (the “Incentive Plan”).  The Company will take such actions as are
necessary to provide that on, or as soon as reasonably practicable following,
the Effective Date, but in no event later than ninety (90) days following the
Effective Date, the shares of Common Stock available for awards under the
Incentive Plan, including under the Equity Awards, are fully registered for
resale on a Form S-8 or to the extent otherwise so registered in
connection with the general registration of Common Stock.  In the event such registration occurs
following the Effective Date it shall include a resale prospectus with regard
to the Restricted Stock.

 

(b)                                 Vesting.

 

(i)                                     Time-Based
Vesting. The Options and two thirds of the RSUs shall vest 25% on the
Effective Date, 25% on each of the first two anniversaries of the Effective
Date and 25% on December 31, 2012, the Restricted Stock shall vest 50% on
the Effective Date and 50% on the first anniversary thereof and the remaining
RSUs shall vest 50% on the second anniversary of the Effective Date and 50% on December 31,
2012, subject in all cases to Executive’s continuing employment with the
Company on such dates.

 

(ii)                                  Accelerated
Vesting.  Notwithstanding the foregoing,
in the event of (A) a Change in Control (as defined below) of the Company,
then 100% of the Equity Awards shall vest, and the Options will remain
exercisable for the remainder of the Option Term (as defined below), or (B) a
termination of Executive’s employment by the Company without Cause (as defined
below), or Executive’s resignation with Good Reason (as defined below), then
100% of the Equity Awards shall vest, and the Options will remain exercisable
for the applicable period set forth in Section 8(d)(iii).

 

(c)                                  Options.  The Options will have the following terms:

 

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(i)                                     Exercise Price.  The exercise price of each share of Common
Stock underlying an Option shall be equal to the per share fair market value of
the Common Stock on the Effective Date as determined by the Board in its sole
discretion in a manner that complies with the requirements of Section 409A
of Internal Revenue Code of 1986, as amended (“Code”), and the
regulations and guidance promulgated thereunder (“Code Section 409A”).

 

(ii)                                  Option Term. The term of
the Options shall expire ten (10) years following the Effective Date (the “Option
Term”).

 

(iii)                               Exercise.  To the extent vested, the Options may be
exercised by Executive in whole or in part at any time and from time to time
during the Option Term by giving written notice of exercise to the Company
specifying the number of shares of Common Stock to be acquired.  Such notice shall be accompanied by payment
in full of the purchase price as follows: (i) in cash or by check, bank
draft or money order payable to the order of the Company; (ii) through a
cashless exercise whereby the Company reduces the number of shares of Common
Stock issuable upon exercise with a value equal to the applicable exercise
price and withholding, (iii) solely to the extent permitted by applicable
law, if the Common Stock is then traded on a securities exchange or system in
the United States, through a procedure whereby Executive delivers irrevocable
instructions to a broker reasonably acceptable to the committee established
under the Incentive Plan (the “Committee”) to deliver promptly to the
Company an amount equal to the purchase price; or (iv) on such other terms
and conditions as may be acceptable to the Committee.

 

(iv)                              Post-Termination
Exercise Periods.  Any vested
Options held by Executive as of his termination shall remain exercisable for
the periods specified below under Sections 8(a)(vii), 8(c)(ii) or
8(d)(iii), as applicable.

 

(d)                                 RSUs.  The vested portion of the RSUs shall be
distributed to the Executive in shares of Common Stock on the earlier of (x) the
sixtieth (60th) day following
termination of the Executive’s employment or (y) the date on which a
Change in Control occurs.

 

6.                                       Termination of Employment. Executive’s employment
hereunder may be terminated during the Term of Employment under the following
circumstances and any such termination shall not be, nor deemed to be, a breach
of this Agreement:

 

(a)                                  Death. Executive’s
employment hereunder shall terminate automatically upon Executive’s death.

 

(b)                                 Disability.  The Company shall have the right to terminate
Executive’s employment hereunder for Disability by providing Executive with a
Notice of Termination (as defined below) at least thirty (30) days prior to
such termination.  For purposes of this
Agreement, “Disability” shall mean Executive’s becoming incapacitated by
reason of sickness, accident or other physical or mental incapacity and having
been unable to perform his normal duties for a period of six (6) consecutive
months as a result thereof.

 

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(c)                                  For Cause. The Company
shall have the right to terminate Executive’s employment for Cause by providing
Executive with a Notice of Termination. 
For purposes of this Agreement, “Cause” shall mean (i) willful
misconduct or gross negligence of a material nature by Executive in the
performance of his duties; (ii) Executive’s being convicted of, or
pleading guilty or nolo contendere
to a felony (other than a traffic violation); (iii) Executive’s willful
theft or embezzlement from the Company or its affiliates; (iv) willful and
substantial failure of Executive to perform his duties or any other material
breach by Executive of any material provision of this Agreement, which is not
cured (if curable) by Executive within thirty (30) days following his receipt
of written notice thereof.  For the
purposes of this definition, no act, or failure to act, on the part of
Executive shall be considered “willful,” unless done, or omitted to be done, by
him in bad faith and without reasonable belief that his action or omission was
in, or not opposed to, the best interest of the Company (including
reputationally).  Notwithstanding the
foregoing, the Company may not terminate Executive for Cause unless prior to
such termination: (x) Executive is given five (5) business days
written notice specifying the alleged Cause event and is entitled to appear
with counsel upon written request, made within five (5) business days of
receiving such notice, before a meeting of the full Board, which may be
telephonic, within a reasonable time after such request to present information
regarding his views on the Cause event, and (y) after such meeting or
Executive’s failure to request such a meeting, there is a majority vote of the
full Board (excluding Executive) to terminate Executive for Cause.  After providing the notice in foregoing
sentence, the Board may suspend Executive with full pay and benefits until a
final determination has been made in accordance with the procedures set forth
above.

 

(d)                                 Without Cause.  The Company shall have the right to terminate
Executive’s employment hereunder without Cause at any time by providing
Executive with a Notice of Termination.

 

(e)                                  By Executive
for Good Reason.  Executive
shall have the right to terminate his employment hereunder for Good Reason by
providing the Company with a Notice of Termination.  For purposes of this Agreement, Executive
shall have “Good Reason” to terminate his employment hereunder if,
without Executive’s written consent, any of the following events occurs that
are not cured by the Company within thirty (30) days of written notice
specifying the occurrence such Good Reason event, which notice shall be given
by Executive to the Company within ninety (90) days after the occurrence of the
Good Reason event: (i) a material diminution in Executive’s then
authority, duties or responsibilities; (ii) a material diminution in
Executive’s reporting requirements such that Executive is no longer reporting
to the Board; (iii) a material diminution in Executive’s Base Salary; (iv) a
relocation of Executive’s principal business location to a location outside of
Dallas, Texas; or (v) any material breach of this Agreement by the
Company.  Executive’s termination
hereunder for Good Reason shall not occur later than one hundred eighty (180)
days following the initial date on which the event Executive claims constitutes
Good Reason occurred.

 

(f)                                    By Executive
without Good Reason.  Executive
shall have the right to terminate his employment hereunder without Good Reason
by providing the Company with a Notice of Termination at least thirty (30) days
prior to such termination.

 

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(g)                                 Due to
Expiration of the Term of Employment.  The Term of Employment shall automatically
terminate upon the expiration of the Term of Employment in accordance with Section 1
hereof.

 

7.                                       Termination Procedure.

 

(a)                                  Notice of
Termination.  Any
termination of Executive’s employment by the Company or by Executive during the
Term of Employment (other than termination pursuant to Section 6(a)) shall
be communicated by written Notice of Termination to the other party hereto in
accordance with Section 14 hereof. 
For purposes of this Agreement, a “Notice of Termination” shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and, in the event of a termination under Sections 6(b), 6(c) or
6(e) above, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated.

 

(b)                                 Date of
Termination.  “Date of
Termination” shall mean (i) if Executive’s employment is terminated by
his death, the date of his death, (ii) if Executive’s employment is
terminated pursuant to Section 6(b), the thirty-first (31st) day after the Notice of
Termination is provided to Executive (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during the thirty (30) day period following the Notice of Termination), (iii) if
Executive’s employment is terminated pursuant to Section 6(f), the
thirty-first (31st) day after the
Notice of Termination is provided to the Company; and (iv) if Executive’s
employment is terminated for any other reason, the date the Notice of
Termination is given or any later date set forth in such Notice of Termination
as the effective date of termination.

 

8.                                       Compensation Upon Termination.  Upon the termination of Executive’s
employment, the Company shall provide Executive with the payments and benefits
set forth below.  The payments and
benefits described herein shall be in lieu of, and Executive hereby waives his
rights to receive, any other severance or termination benefits that Executive
may otherwise be eligible to receive under any policy, plan or program
maintained by the Company or as otherwise mandated by law (to the extent such
legal rights may be waived by Executive).

 

(a)                                  Death or
Disability.  If
Executive’s employment is terminated due to his death or is terminated by the
Company due to Disability during the Term of Employment:

 

(i)                                     the Company
shall pay to Executive (or his beneficiaries) any accrued but unpaid Base
Salary earned through the Date of Termination, payable in accordance with the
regular payroll practices applicable to senior executives of the Company;

 

(ii)                                  at the time
that the Bonus would otherwise be paid in accordance with Section 4(b) hereof,
the Company shall pay to Executive (or his beneficiaries) any earned but unpaid
Bonus in respect of any completed year preceding the year in which such
termination occurs (the “Accrued Bonus”);

 

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(iii)                               the Company
shall reimburse Executive pursuant to Section 4(f) for any business
expenses incurred through, but not reimbursed prior to, the Date of
Termination;

 

(iv)                              within ten (10) days
following the Date of Termination, the Company shall pay to Executive a payment
for his accrued but unused vacation through the Date of Termination;

 

(v)                                 the Company
shall pay or provide to Executive such vested accrued benefits, if any, as to
which Executive may be entitled under the Company’s employee benefit plans and
programs applicable to Executive as of the Date of Termination (other than any
severance pay plan), which shall be paid or provided in accordance with the
terms of the applicable plan or program (clauses (i) — (v) collectively
referred to as the “Accrued Obligations”);

 

(vi)                              Executive or
his beneficiary, legal representative or estate shall receive an amount equal
to the product of (x) and (y), where (x) is the Bonus, if any, that
would have been paid to Executive in respect of the year in which such
termination occurred, based on actual performance for the year of termination,
and (y) is a fraction, the numerator of which is the number of days
Executive was employed by the Company during the calendar year in which such
termination occurred and the denominator of which is the number of days in such
year (the “Pro Rata Bonus”), to be paid at such time as the Bonus would
have normally been paid pursuant to Section 4(b) hereof in respect of
the year in which such termination occurred; provided, that if such
termination occurs in fiscal year 2010, the amount of the Pro Rata Bonus will
not be less than the amount of the Guaranteed Bonus; and

 

(vii)                           All vested
stock options and other exercisable awards then held by Executive shall remain
exercisable for a period of one year following the Date of Termination and all
unvested equity awards held by Executive shall immediately be forfeited without
consideration.

 

(b)                                 Termination by
the Company for Cause.  If
Executive’s employment is terminated by the Company for Cause during the Term
of Employment:

 

(i)                                     the Company
shall pay or provide to Executive the Accrued Obligations (other than the Accrued
Bonus) at the times, and subject to the same conditions, as provided in Section 8(a) hereof;
and

 

(ii)                                  all equity
awards held by Executive, whether or not vested and exercisable, shall
immediately be forfeited without consideration.

 

(c)                                  Termination by
Executive without Good Reason.  If Executive’s employment is terminated by
Executive other than for Good Reason during the Term of Employment:

 

(i)                                     the Company
shall pay or provide to Executive the Accrued Obligations (other than the
Accrued Bonus) at the times, and subject to the same conditions, as provided in
Section 8(a) hereof; and

 

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(ii)                                  all vested
stock options and other exercisable awards then held by Executive shall remain
exercisable for a period of ninety (90) days following the Date of Termination
and all unvested equity awards held by Executive shall immediately be forfeited
without consideration.

 

(d)                                 Termination
without Cause or for Good Reason. In the event that
Executive’s employment under this Agreement is terminated by the Company
without Cause or by Executive for Good Reason during the Term of Employment:

 

(i)                                     the Company
shall pay or provide to Executive the Accrued Obligations at the times, and
subject to the same conditions, as provided in Section 8(a) hereof;

 

(ii)                                  subject to
Executive’s signing (and not revoking) a general release of claims in the form
attached hereto as Exhibit A (with such changes as may be necessary
for changes in applicable law) within twenty-one (21) days or forty-five (45)
days, which ever period is required under ADEA (as defined in Exhibit A)
following such termination (the “Release”):

 

(A)                              the Company
shall pay Executive the Pro Rata Bonus at such time as the Bonus would have
normally been paid pursuant to Section 4(b) hereof in respect of the
year in which such termination occurred; provided, that if such
termination occurs in fiscal year 2010, the amount of the Pro Rata Bonus will
not be less than the amount of the Guaranteed Bonus;

 

(B)                                within sixty
(60) days following the Date of Termination, the Company shall pay to Executive
a lump sum severance payment equal to the sum of the remaining Base Salary plus
target Bonus that Executive would have otherwise been entitled to receive from
the Date of Termination through the end of the Term of Employment (including
any Bonus for such period that would otherwise be payable after the end of the
Term of Employment); and

 

(C)                                the Company
shall pay the costs of continued group life, medical, dental, and vision
insurance coverage for Executive and his dependents under the plans and
programs in which Executive participated immediately prior to the Date of
Termination, or materially equivalent plans and programs maintained by the
Company in replacement thereof, for a period of eighteen (18) months following
the Date of Termination (the “Coverage Period”); provided, that in the event the medical, dental, and
vision plans under which Executive and
his dependents were receiving benefits immediately prior to the Date of Termination,
or any applicable replacement plan or program, is not fully-insured, then in
lieu of the foregoing, if Executive timely elects coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) and
timely pays the monthly premiums for such COBRA coverage, then the Company shall reimburse Executive
during the Coverage Period for the amount of such monthly premium that is in
excess of the active employee rate (excluding, for purposes of
calculating cost, an employee’s ability to pay premiums with pre-tax dollars), on a tax grossed-up basis to the extent such
monthly premium is taxable 

 

8

 

to Executive, payable
on the first Company payroll date in each month following the Date of
Termination; and

 

(iii)                               all outstanding
equity awards held by Executive will become fully vested and all stock options
and other exercisable awards will become immediately exercisable and will
remain exercisable for a period following the Date of Termination of (x) ninety
(90) days following a termination by Executive for Good Reason and (y) twelve
(12) months following a termination by the Company without Cause.

 

(e)                                  Termination due
to Expiration of the Term of Employment.  If Executive’s employment hereunder
terminates due to the expiration of the Term of Employment in accordance with Section 1:

 

(i)                                     the Company
shall pay to Executive the Accrued Obligations at the times, and subject to the
same conditions, as provided in Section 8(a) hereof; and

 

(ii)                                  subject to
Executive’s signing (and not revoking) the Release within twenty-one (21) days
following such termination, the Company shall pay the costs of continued group
life, medical, dental, and vision insurance coverage for Executive and his
dependents under the plans and programs in which Executive participated
immediately prior to the Date of Termination, or materially equivalent plans
and programs maintained by the Company in replacement thereof, for a period of
eighteen (18) months following the Date of Termination (the “Expiration
Coverage Period”); provided,
that in the event the medical, dental, and vision plans under which Executive and his dependents
were receiving benefits immediately prior to the Date of Termination, or any
applicable replacement plan or program, is not fully-insured, then in lieu of
the foregoing, if Executive timely elects COBRA coverage and timely pays
the monthly premiums for such COBRA coverage, then the Company shall reimburse Executive during the Coverage Period
for the amount of such monthly premium that is in excess of the active employee
rate (excluding, for purposes of calculating cost, an employee’s ability
to pay premiums with pre-tax dollars), on
a tax grossed-up basis to the extent such monthly premium is taxable to Executive,
payable on the first Company payroll date in each month following the Date of
Termination; and

 

(iii)                               all vested
stock options and other exercisable awards then held by Executive shall remain
exercisable for a period of twelve (12) months following the Date of
Termination and all unvested equity awards held by Executive shall immediately
be forfeited without consideration.

 

(f)                                    No Mitigation;
No Off-Set.   Executive will not be required to seek other
employment or attempt to reduce any payments due to Executive under this Section 8,
and any compensation (in whatever form) earned by Executive from any subsequent
employment will not offset or reduce the Company’s severance obligations under
this Section 8 following Executive’s termination.  The Company’s obligation to pay Executive any
payments under this Section 8 will not be subject to set-off, counterclaim
or recoupment of amounts owed by Executive to the Company.

 

9

 

(g)           Change in Control/Golden
Parachute Considerations.  All
equity awards held by Executive shall vest upon the occurrence of a Change in
Control of the Company.  If Executive
becomes entitled to any payments and/or benefits that constitute “parachute payments”
within the meaning of Section 280G(b)(2) of the Code, and as a result
becomes subject to the excise tax under Section 4999 of the Code, the
provisions of Exhibit B attached hereto shall apply and are
incorporated herein.

 

For
purposes of this Agreement, a “Change in Control” shall mean the
occurrence of any of the following events subsequent to the Effective
Date:  (i) any person, other than an
exempt person (which includes the Company and its subsidiaries and employee
benefit plans), becoming a beneficial owner of 50% or more of the shares of
common stock or equity interests or voting stock or equity interests of the
Company then outstanding; (ii) the consummation of a reorganization,
merger or consolidation in which existing Company stockholders or members own
less than 50% of the equity of the resulting company; (iii) the
consummation of the sale or other disposition of all or substantially all of
the assets of the Company; or (iv) during any 12-month period and provided
no other corporation is a majority shareholder of the Company,  individuals who on the Effective Date,
constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority thereof, provided that any person becoming a
director subsequent to the Effective Date, whose election or nomination for
election was approved by a vote of at least a majority of the directors
comprising the Incumbent Board shall be considered a member of the Incumbent
Board.  Notwithstanding anything herein
to the contrary, the determination as to whether a “Change in Control” as
defined herein has occurred shall be determined in accordance with the
requirements of Code Section 409A and shall be intended to constitute a “change
in control event” within the meaning of Code Section 409A, except to that
the extent the provisions herein are more restrictive than the requirements of
Code Section 409A.

 

9.             Indemnification/Directors
and Officers Liability Insurance. The Company will indemnify
Executive to the fullest extent permitted by law and its bylaws (including
advancement of legal fees) for any action or inaction of Executive while
serving as an officer or director of the Company.  The Company will cover Executive under its
directors and officers liability insurance and its defamation policies both
during and, while potential liability exists, after Executive’s termination of
employment.  The provisions of this Section 9
shall survive the termination of Executive’s employment with the Company.

 

10.           Restrictive
Covenants.

 

(a)           Acknowledgments.  Executive acknowledges that:  (i) as a result of Executive’s
employment by the Company, Executive has obtained and will obtain Confidential
Information (as defined below); (ii) the Confidential Information has been
developed and created by the Company and its affiliates at substantial expense
and the Confidential Information constitutes valuable proprietary assets; (iii) the
Company and its affiliates will suffer substantial damage and irreparable harm
which will be difficult to compute if, during the Term of Employment and
thereafter, Executive should enter a Competitive Business (as defined herein)
in violation of the provisions of this Agreement; (iv) the nature of the
Company’s and its affiliates’ business is such that it could be conducted any
where in the world and that it is not limited to a geographic scope or region; (v) the
Company and its affiliates will suffer substantial damage which will be
difficult to compute if, during the Term of Employment or thereafter, Executive
should solicit or 

 

10

 

interfere with the Company’s
or its affiliates’ employees or should divulge Confidential Information
relating to the business of the Company and its affiliates; (vi) the
provisions of this Agreement are reasonable and necessary for the protection of
the business of the Company and its affiliates; (vi) the Company would not
have hired or continued to employ Executive or grant the equity awards and
other benefits contemplated under this Agreement unless he agreed to be bound
by the terms hereof; and (vii) the provisions of this Agreement will not
preclude Executive from other gainful employment. “Competitive Business”
means any business, partnership, enterprise, association or activity that is
actively involved in the business of producing and/or marketing ethanol and
ethanol co-products; provided, that a Competitive Business shall not
include a separate non-competitive subsidiary or division related to a company
that is otherwise a Competitive Business if Executive is employed solely to
perform services for such non-competitive subsidiary or division and does not
engage in, assist, or have any material involvement with any aspect of such
company’s competitive business. “Confidential Information” as used in this
Agreement shall mean any and all confidential and/or proprietary knowledge,
data, or information of the Company or any affiliate, including, without
limitation, any: (A) trade secrets, drawings, inventions, methodologies,
mask works, ideas, processes, formulas, source and object codes, data,
programs, software source documents, works of authorship, know-how,
improvements, discoveries, developments, designs and techniques, and all other
work product of the Company or any affiliate, whether or not patentable or
registrable under trademark, copyright, patent or similar laws; (B) information
regarding plans for research, development, new service offerings and/or
products, marketing, advertising and selling, distribution, business plans,
business forecasts, budgets and unpublished financial statements, licenses,
prices and costs, suppliers, customers or distribution arrangements; (C) any
information regarding the skills and compensation of employees, suppliers,
agents, and/or independent contractors of the Company or any affiliate; (D) concepts
and ideas relating to the development and distribution of content in any medium
or to the current, future and proposed products or services of the Company or
any affiliate; or (E) any other information, data or the like that is
labeled confidential or orally disclosed to Executive as confidential.

 

(b)           Confidentiality.  In consideration of the benefits provided for
under this Agreement, Executive agrees not to, at any time, either during the
Term of Employment or thereafter, divulge, use, publish or in any other manner
reveal, directly or indirectly, to any person, firm, corporation or any other
form of business organization or arrangement and keep in the strictest
confidence any Confidential Information, except (i) in the good faith
performance of Executive’s duties hereunder, (ii) with the Company’s
express written consent, (iii) to the extent that any such information is
in or becomes in the public domain or the relevant trade or industry other than
as a result of Executive’s breach of any of obligations hereunder, or (iv) where
required to be disclosed by court order, subpoena or other government process
and in such event, Executive shall cooperate with the Company in attempting to
keep such information confidential.  Upon
the request of the Company, Executive agrees to promptly deliver to the Company
the originals and all copies, in whatever medium, of all such Confidential
Information.

 

(c)           Non-Compete.  In consideration of the benefits provided for
in this Agreement, Executive covenants and agrees that during Executive’s
employment and for a period of twelve (12) months thereafter, Executive shall
not, directly or indirectly for or on behalf of himself or any other person or
entity (i) engage in any Competitive Business or (ii) participate or
invest in, provide to, or assist (whether as owner, part-owner, shareholder,
member, partner, director, 

 

11

 

officer, trustee, employee,
agent or consultant, or in any other capacity) any Competitive Business; provided
that neither (i) nor (ii) shall be violated if Executive is employed
by an entity in a senior executive position and a subsidiary or division of
such entity is engaged in a Competitive Business that is not in material competition
with the Company and Executive is not directly involved in the daily operations
of such subsidiary or division.  For the
avoidance of doubt, nothing in this Section 10 shall not preclude
Executive from trading ethanol-related commodities; provided; that such
activity does not have a material adverse effect on the Company.  The restrictions set forth in this Section 10(c) shall
not apply in the event of a termination of Executive’s employment by the
Company without Cause or by Executive for Good Reason, in each case, if
Executive provides a written waiver to the Company of his right to all
severance benefits, including equity acceleration (but other than the Accrued
Obligations) within sixty (60) business days following such termination.  The restrictions set forth in this Section 10(c) shall
not limit Executive’s right to own not more than 5% of any of the debt or
equity securities of any business organization that is then filing reports with
the Securities and Exchange Commission pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended, or any compensatory equity
securities that Executive receives in connection with services provided or to
be provided.

 

(d)           Non-Solicitation of
Employees.  During
Executive’s employment and for a period of twelve (12) months thereafter,
Executive will not directly or indirectly for or on behalf of himself or any
other person or entity (i) solicit, recruit, hire, endeavor to entice away
from the Company, or otherwise interfere with the Company’s relationship with,
any of its current employees, or anyone who was employed by or engaged to
provide exclusive services to the Company at any time during the six (6) months
prior to Executive’s Date of Termination, and (ii) endeavor to entice away
from or otherwise interfere with, the Company’s relationship with any persons
or entities that were investors, suppliers, clients, customers or licensees of
the Company at any time during the six (6) months prior to Executive’s
Date of Termination; provided that the foregoing shall not be violated
by general advertising nor by serving as a reference upon request.

 

(e)           Post-Employment Property.  The parties agree that any work of
authorship, invention, design, discovery, development, technique, improvement,
source code, hardware, device, data, apparatus, practice, process, method or
other work product whatever (whether patentable or subject to copyright, or
not, and hereinafter collectively called “discovery”) related to training or
marketing methods and techniques that Executive, either solely or in
collaboration with others,  has made or
may make, discover, invent, develop, perfect, or reduce to practice during the
term of his employment, whether or not during regular business hours and
created, conceived or prepared on the Company’s or any affiliates’ premises or
otherwise shall be the sole and complete property of the Company and/or its
affiliates.  More particularly, and
without limiting the foregoing, Executive agrees that all of the foregoing and
any (i) inventions (whether patentable or not, and without regard to
whether any patent therefor is ever sought), (ii) marks, names, or logos
(whether or not registrable as trade or service marks, and without regard to
whether registration therefor is ever sought), (iii) works of authorship
(without regard to whether any claim of copyright therein is ever registered),
and (iv) trade secrets, ideas, and concepts ((i) - (iv) collectively,
“Intellectual Property Products”) created, conceived, or prepared on the
Company’s or any affiliates’ premises or otherwise, whether or not during
normal business hours, shall perpetually and throughout the world be the
exclusive property of the Company and/or its affiliates, as the case may be, as
shall all tangible media (including, but not limited to, 

 

12

 

papers, computer media of
all types, and models) in which such Intellectual Property Products shall be
recorded or otherwise fixed.  Executive
further agrees promptly to disclose in writing and deliver to the Company all
Intellectual Property Products created during his engagement by the Company,
whether or not during normal business hours. 
Executive agrees that all works of authorship created by Executive
during his engagement by the Company shall be works made for hire of which the
Company or its affiliates is the author and owner of copyright. To the extent
that any competent decision-making authority should ever determine that any
work of authorship created by Executive during his engagement by the Company is
not a work made for hire, Executive hereby assigns all right, title and
interest in the copyright therein, in perpetuity and throughout the world, to
the Company.  To the extent that this Agreement
does not otherwise serve to grant or otherwise vest in the Company or its
affiliates all rights in any Intellectual Property Product created by Executive
during his engagement by the Company, or within three (3) months
thereafter, Executive hereby assigns all right, title and interest therein, in
perpetuity and throughout the world, to the Company.  Executive agrees to execute, immediately upon
the Company’s reasonable request and without charge, any further assignments,
applications, conveyances or other instruments, at any time after execution of
this Agreement, whether or not Executive is engaged by the Company at the time
such request is made, in order to permit the Company, its affiliates and/or
their respective assigns to protect, perfect, register, record, maintain, or
enhance their rights in any Intellectual Property Product; provided, that,
the Company shall bear the cost of any such assignments, applications or
consequences.   Upon termination of
Executive’s employment with the Company for any reason whatsoever, and at any
earlier time the Company so requests, Executive will immediately deliver to the
custody of the person designated by the Company all originals and copies of any
documents and other property of the Company in Executive’s possession, under
Executive’s control or to which he may have access.

 

(f)            Non-Disparagement. Executive
acknowledges and agrees that during and for a period of three (3) years
following the Term of Employment, he will not defame or publicly criticize the
Company and/or its affiliates and their respective officers, directors,
partners, executives or agents with the intent to damage the services,
business, integrity, veracity or personal or professional reputation of any
such party in either a professional or personal manner.  In addition, the Company acknowledges and
agrees that during and for a period of three (3) years following the Term
of Employment, the Company will not defame or publicly criticize Executive with
the intent to damage the services, business, integrity, veracity or personal or
professional reputation of Executive in either a professional or personal
manner.  Notwithstanding the foregoing,
nothing in this Section 10(f) shall prevent any person from making
any truthful statement to the extent (i) necessary to rebut any untrue
public statements made by another party; (ii) necessary with respect to
any litigation, arbitration or mediation involving this Agreement, including,
but not limited to, the enforcement of this Agreement; (iii) required by
law or by any court, arbitrator, mediator or administrative or legislative body
(including any committee thereof) with jurisdiction over such person; or (iv) made as good faith competitive statements in the
ordinary course of business.

 

(g)           Enforcement.  If Executive commits a breach of any of the
provisions of this Section 10 or the Company commits a breach of Section 10(g),
the Company or Executive, as applicable, shall have the right and remedy to
have the provision specifically enforced by any court having jurisdiction.  Executive acknowledges and agrees that the
services being rendered 

 

13

 

hereunder to the Company are
of a special, unique and extraordinary character and that any such breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company and the Company acknowledges and agrees that
any such breach will cause irreparable injury to Executive and that money
damages will not provide an adequate remedy to Executive.  Such right and remedy shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
or Executive at law or in equity.

 

(h)           Blue Pencil.  If, at any time, the provisions of this Section 10
shall be determined to be invalid or unenforceable under any applicable law, by
reason of being vague or unreasonable as to area, duration or scope of
activity, this Agreement shall be considered divisible and shall become and be
immediately amended to only such area, duration and scope of activity as shall
be determined to be reasonable and enforceable by the court or other body
having jurisdiction over the matter and Executive and the Company agree that
this Agreement as so amended shall be valid and binding as though any invalid
or unenforceable provision had not been included herein.

 

(i)            EXECUTIVE ACKNOWLEDGES THAT
HE HAS CAREFULLY READ THIS SECTION 10 AND HAS HAD THE OPPORTUNITY TO
REVIEW ITS PROVISIONS WITH ANY ADVISORS AS HE CONSIDERED NECESSARY AND THAT
EXECUTIVE UNDERSTANDS THIS AGREEMENT’S CONTENTS AND SIGNIFIES SUCH
UNDERSTANDING AND AGREEMENT BY SIGNING BELOW.

 

11.           Assignability.  This Agreement may only be assigned
to an acquiror of all or substantially all of the Company’s business that
agrees in writing to assume the Company’s obligations under this Agreement.

 

12.           Representation. Executive represents and warrants to the
Company, and Executive acknowledges that the Company has relied on such
representations and warranties in employing Executive, that neither Executive’s
duties as an employee of the Company nor his performance of this Agreement will
breach any other agreement to which Executive is a party and that he has not
entered into, and will not enter into, any agreement, either oral or written,
in conflict herewith.  The Company represents
and warrants to Executive that all necessary corporate actions for the approval
of this Agreement have been taken such that, upon the Company’s execution of
this Agreement, this Agreement will constitute a legal, valid and binding
obligation of the Company.

 

13.           Resolution of Disputes.  Any dispute concerning the validity,
interpretation, enforcement, or breach of this Agreement, or otherwise arising
between the parties, shall (except to the extent otherwise provided in Section 10(g) with
respect to certain requests for injunctive relief) be submitted to binding
arbitration before the American Arbitration Association (“AAA”) for
resolution.  Such arbitration shall be
conducted in Dallas, Texas, and the arbitrator will apply New York law,
including federal law as applied in New York courts.  The arbitration shall be conducted in
accordance with the AAA’s Commercial Arbitration Rules, as modified by the
terms set forth in this Agreement.  The
arbitration will be conducted by a single arbitrator, who shall be an attorney
who specializes in the field of employment law and shall have prior experience
arbitrating employment disputes.  The
award of the arbitrator shall be final and binding on the parties, and judgment
on the award may be confirmed and entered in any court 

 

14

 

having
jurisdiction.  The arbitration shall be
conducted on a strictly confidential basis except to the extent necessary to
enforce any judgment, and neither the Company nor Executive shall not disclose
the existence of a claim, the nature of a claim, any documents, exhibits, or
information exchanged or presented in connection with any such a claim, or the
result of any arbitration (collectively, “Arbitration Materials”), to
any third party, with the sole exception of such Parties legal counsel, who
also shall be bound by all confidentiality terms of this Agreement.  In the event of any court proceeding to
challenge or enforce an arbitrator’s award, the parties hereby consent to the
exclusive jurisdiction of the state and federal courts in Dallas, Texas and
agree to venue in that jurisdiction.  The
parties agree to take all steps necessary to protect the confidentiality of the
Arbitration Materials in connection with any such proceeding, agree to file all
Confidential Information (and documents containing Confidential Information)
under seal to the extent possible and agree to the entry of an appropriate
protective order encompassing the confidentiality terms of this Agreement.  Each party agrees (a) to pay its own
costs and fees in connection with any arbitration of a dispute arising under
this Agreement, and any court proceeding arising therefrom, regardless of
outcome and (b) that the arbitration costs and other joint expenses shall
be borne equally by the Parties.

 

14.           Notices.  Any notice, consent, demand, request or other
communication given to a person in connection with this Agreement (a “Notice”)
shall be in writing and delivered in person, by facsimile transmission (with a
Notice contemporaneously given by another method specified in this Section 14),
by overnight courier service or by postage prepaid mail with a return receipt
requested, at the following locations (or to such other address as either party
may have furnished to the other in writing by like Notice).  All such Notices shall be deemed to have been
given and effective upon receipt (or refusal of receipt).

 

If
to the Company:               [                      ]

Attn: 
[                    ]

Facsimile: 
[                    ]

 

If to Executive:                      To the address of his
principal residence as it appears in the Company’s records, with a copy to him
(during the Term of Employment) at the Company’s principal executive office and
with a copy to:

 

Proskauer
LLP

1585
Broadway

New
York, NY 10036

Attn:  Michael S. Sirkin, Esq.

Facsimile:  212-969-2900

 

15.           Miscellaneous.

 

(a)           Entire Agreement.  This Agreement, and the exhibits attached
hereto, contain the entire understanding and agreement among the Parties
concerning the subject matter hereof and supersede all prior agreements, term
sheets, understandings, discussions, negotiations and undertakings, whether
written or oral, among them with respect thereto.

 

15

 

(b)           Severability.  In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable for any
reason, in whole or in part, the remaining provisions of this Agreement shall
be unaffected thereby and shall remain in full force and effect to the fullest extent
permitted by law so as to achieve the purposes of this Agreement.

 

(c)           Amendment or Waiver.  No provision in this Agreement may be amended
unless such amendment is set forth in a writing that specifically identifies
the provision being amended and that is signed by the Parties.  No waiver by any person of any breach of any
condition or provision contained in this Agreement shall be deemed a waiver of
any similar or dissimilar condition or provision at the same or any prior or
subsequent time.  To be effective, any
waiver must be set forth in a writing that specifically refers to the condition
or provision that is being waived and is signed by the waiving person.

 

(d)           Headings.  The headings of the Sections and sub-sections
contained in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any provision of this
Agreement.

 

(e)           Beneficiaries/References.  Executive shall be entitled, to the extent
permitted under applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit under this Agreement
following Executive’s death by giving the Company written notice thereof.  In the event of Executive’s death or a
judicial determination of his incompetence, references in this Agreement to
Executive shall be deemed, where appropriate, to refer to his beneficiary,
transferee, estate or other legal representative.

 

(f)            Survivorship.  Except as otherwise set forth in this
Agreement, the respective rights and obligations of the Parties hereunder shall
survive any termination of Executive’s employment under this Agreement.

 

(g)           Withholding Taxes.  The Company may withhold from any amounts or
benefits payable under this Agreement any taxes that are required to be withheld
pursuant to any applicable law or regulation.

 

(h)           409A Provisions.

 

(i)            Notwithstanding anything
herein to the contrary, this Agreement is intended to be interpreted and
applied so that the payments and benefits set forth herein either shall either
be exempt from the requirements of Code Section 409A, or shall comply with
the requirements of Code Section 409A, and, accordingly, to the maximum
extent permitted, this Agreement shall be interpreted to be exempt from or in
compliance with Code Section 409A.

 

(ii)           If Executive notifies the
Company (with specificity as to the reason therefor) that Executive believes
that any provision of this Agreement (or of any award of compensation or
benefit, including equity compensation or benefits provided herein or at any
time during his employment with the Company) would cause the Executive to incur
any additional tax or interest under Code Section 409A or the Company
independently makes such determination, the Company shall, after consulting
with Executive, reform such provision (or award of compensation or benefit) to
attempt to comply with or be 

 

16

 

exempt from Code Section 409A
through good faith modifications to the minimum extent reasonably
appropriate.  To the extent that any
provision hereof (or award of compensation or benefit) is modified in order to
comply with Code Section 409A, such modification shall be made in good
faith and shall, to the maximum extent reasonably possible, maintain the
original intent and economic benefit to Executive and the Company without
violating the provisions of Section 409A.

 

(iii)          Notwithstanding any
provision in this Agreement or elsewhere to the contrary, if on his Date of
Termination Executive is deemed to be a “specified employee” within the meaning
of Code Section 409A and using the identification methodology
selected by the Company from time to time, or if none, the default methodology
under Code Section 409A, any payments or benefits due upon a
termination of Executive’s employment under any arrangement that constitutes a “deferral
of compensation” within the meaning of Code Section 409A (whether under
this Agreement, any other plan, program, payroll practice or any equity grant)
and which do not otherwise qualify under the exemptions under Treas. Regs. Section 1.409A-1
(including without limitation, the short-term deferral exemption and the
permitted payments under Treas. Regs. Section 1.409A-1(b)(9)(iii)(A)),
shall be delayed and paid or provided to Executive in a lump sum (whether they
would have otherwise been payable in a single sum or in installments in the
absence of such delay) with interest at the prime rate as published in the Wall
Street Journal on the first business day on or following the Date of
Termination, on the earlier of (i) the date which is six (6) months
and one (1) day after Executive’s separation from service (as such term is
defined in Code Section 409A) for any reason other than death, and (ii) the
date of Executive’s death, and any remaining payments and benefits shall be
paid or provided in accordance with the normal payment dates specified for such
payment or benefit.

 

(iv)          Notwithstanding anything in
this Agreement or elsewhere to the contrary, a termination of employment shall
not be deemed to have occurred for purposes of any provision of this Agreement
providing for the payment of any amounts or benefits that constitute “non-qualified
deferred compensation” within the meaning of Code Section 409A upon or
following a termination of Executive’s employment unless such termination is
also a “separation from service” within the meaning of Code Section 409A
and, for purposes of any such provision of this Agreement, references to a “termination,”
“termination of employment” or like terms shall mean “separation from service”
and the date of such separation from service shall be the Date of Termination
for purposes of any such payment or benefits.

 

(v)           Each payment under this
Agreement or otherwise (including any installment payments) shall be treated as
a separate payment for purposes of Code Section 409A.

 

(vi)          In no event may Executive,
directly or indirectly, designate the calendar year of any payment to be made
under this Agreement or otherwise which constitutes a “deferral of compensation”
within the meaning of Code Section 409A.

 

17

 

(vii)         All expenses or other
reimbursements paid pursuant to Section 4(g) hereof or otherwise that
are taxable income to Executive shall in no event be paid later than the end of
the calendar year next following the calendar year in which Executive incurs
such expense or pays such related tax. 
With regard to any provision herein that provides for reimbursement of
costs and expenses or in-kind benefits, except as permitted by Code Section 409A,
(i) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, (ii) the amount of expenses
eligible for reimbursement, of in-kind benefits, provided during any taxable
year shall not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be
violated without regard to expenses reimbursed under any arrangement covered by
Internal Revenue Code Section 105(b) solely because such expenses are
subject to a limit related to the period the arrangement is in effect and (iii) such
payments shall be made on or before the last day of Executive’s taxable year
following the taxable year in which the expense occurred.  Any tax gross-up payment as provided herein
shall be made in any event no later than the end of the calendar year
immediately following the calendar year in which Executive remits the related
taxes, and any reimbursement of expenses incurred due to a tax audit or
litigation shall be made no later than the end of the calendar year immediately
following the calendar year in which the taxes that are the subject of the
audit or litigation are remitted to the taxing authority, or, if no taxes are
to be remitted, the end of the calendar year following the calendar year in
which the audit or litigation is completed.

 

(i)            Governing Law.  This Agreement shall be governed, construed,
performed and enforced in accordance with its express terms, and otherwise in
accordance with the laws of the State of New York, without reference to
principles of conflict of laws.

 

(j)            Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed to be one and the same instrument.

 

(k)           Effectiveness Contingent
Upon Emergence. This Agreement shall become effective only upon
the consummation of the Plan of Reorganization. 
In the event the Plan of Reorganization is terminated prior to the
consummation thereof in accordance with its terms for whatever reason, this
Agreement shall become null and void.

 

(l)            Joint Drafting.  The Company and Executive acknowledge and
agree that this Agreement was jointly drafted by the Company on the one side
and by Executive on the other side. 
Neither party, nor any party’s counsel, shall be deemed the drafter of
this Agreement in any proceeding that may hereafter arise between them.

 

18

 

[SIGNATURE PAGE FOLLOWS]

 

19

 

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

 

 

	
   

  	
  Aventine
  Renewable Energy Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Eugene
  Davis

  
	
   

  	
  Name:
  Eugene Davis

  
	
   

  	
  Title:
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Thomas Manuel

  
	
   

  	
  Thomas
  Manuel

  

 

 

 

EXHIBIT A

 

GENERAL RELEASE

 

1.             Termination of Employment.  Thomas Manuel (the “Executive”)
acknowledges that Executive’s last day of employment with Aventine Renewable
Energy Holdings, Inc. (together with its successors and assigns the “Company”)
is [                              ]
(the “Termination Date”).

 

2.             Consideration.  In accordance with the Employment Agreement
by and between the Company and Executive, dated March 15, 2010 (the “Employment
Agreement”), a copy of which is attached hereto and incorporated herewith,
the Company agrees to provide the consideration set forth in Section 8([d][e])(ii) of the Employment
Agreement in exchange for this General Release.

 

3.             Full Release.  Executive, for himself, his heirs, executors,
administrators, successors and assigns (hereinafter collectively referred to as
the “Releasors”), hereby fully releases and discharges the Company, its
parents, subsidiaries, affiliates, insurers, successors, and assigns, and their
respective officers, directors, employees, related parties and agents (all such
persons, firms, corporations and entities being deemed beneficiaries hereof and
are referred to herein as the “Related Parties”) from any and all
actions, causes of action, claims, obligations, costs, losses, liabilities, damages
and demands of whatsoever character, whether or not known, suspected or
claimed, which the Releasors have, from the beginning of time through the date
of this General Release, against the Related Parties arising out of or in any
way related to Executive’s employment with the Company or the termination of
his employment with the Company. 
Notwithstanding anything herein to the contrary, this General Release
shall not (i) apply to any benefits due to Executive under this General
Release or otherwise under Section 8 of the Employment Agreement,
including without limitation, your right to a gross-up payment under Section 8(g) and
Exhibit B of the Employment Agreement; (ii) apply to Executive’s
rights to indemnification from the Company or rights to be covered under any
applicable insurance policy with respect to any liability Executive incurred or
might incur as an employee, officer or director of the Company or a fiduciary
of any Company benefit plan including, without limitation, Executive’s
rights under Section 9 of the Employment Agreement; (iii) impair
any vested benefits Executive may have, as of the Termination Date, under any
other employee benefit plans and programs applicable to Executive as of the
Termination Date; and (iv) impair your rights to any continuation of
medical coverage, pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended.

 

4.             Waiver of
Rights Under All Applicable Statutes, Contract And Common Law.  Executive understands that this General
Release waives all claims and rights Executive may have under certain
applicable federal, state and local statutory and regulatory laws, as each may
be amended from time to time, including but not limited to, the Age
Discrimination in Employment Act (including the Older Workers Benefit
Protection Act) (“ADEA”), Title VII of the Civil Rights Act; the
Employee Retirement Income Security Act of 1974; the Equal Pay Act; the
Rehabilitation Act of 1973; the Americans with Disabilities Act; the Americans
with Disabilities Amendment Act, the Worker Adjustment and Retraining
Notification Act; the Family and Medical Leave Act, and all other statutes,
regulations, contracts, common law, and other laws in any and all
jurisdictions.

 

 

5.             Informed and Voluntary
Signature.  No promise
or inducement has been made other than those set forth in this General
Release.  This General Release is
executed by Executive without reliance on any representation by the Company or
any of its agents.  Executive states that
that he is fully competent to manage his business affairs and understands that
he is waiving legal rights by signing this General Release.  Executive hereby acknowledges that he has
carefully read this General Release and has had the opportunity to thoroughly
discuss the terms of this General Release with legal counsel of his
choosing.  Executive hereby acknowledges
that he fully understands the terms of this General Release and its final and
binding effect and that he affixes his signature hereto voluntarily and of his
own free will.

 

6.             Waiver of Rights Under the
Age Discrimination Act. 
Executive understands that this General Release, and the release
contained herein, waives all of his claims and rights under the ADEA. The
waiver of Executive’s rights under the ADEA does not extend to claims or rights
that might arise after the date this General Release is executed.  All or part of the consideration to be paid
to Executive are in addition to any sums to which Executive would be entitled
without signing this General Release. For a period of seven (7) days
following execution of this General Release, Executive may revoke the terms of
this General Release by a written document received by the Employer no later
than 11:59 p.m. of the seventh day following Executive’s execution of this General Release.  This General Release will not be effective
until said revocation period has expired without a revocation by Executive (the
“Effective Date”). Executive acknowledges that he has been given up to
[21/45](1) days to decide whether to sign this General Release. Executive
has been advised to consult with an attorney prior to executing this General
Release and has been given a full and fair opportunity to do so.

 

7.             Covenant Not To
Sue.  Except for an action brought to
enforce this General Release or challenge the validity of the ADEA waiver,
Executive agrees to refrain from filing or otherwise initiating any action,
lawsuit, charge, claim, demand, grievance, arbitration or other legal action
against the Company or Related Parties over matters released or waived herein,
and agrees that he will refrain from participating in any action, complaint,
charge, claim, demand, grievance, arbitration or other legal action initiated
or pursued by any individual, group of individuals, partnership, corporation or
other entity against Executive and/or the Related Parties over matters released
or waived herein, except as required by law. 
Notwithstanding the foregoing, nothing in this General Release shall
interfere with Executive’s right to file a charge with or participate in an
investigation or proceeding by the Equal Employment Opportunity Commission or
other federal or state regulatory or law enforcement agency.  However, the consideration provided to
Executive under this General Release shall be the sole relief provided for the
released claims. Executive will not be entitled to recover and Executive agrees
to waive any monetary benefits or other recovery in connection with any such
charge or proceeding, without regard to who has brought such charge or
proceeding.

 

8.             Litigation And
Regulatory Cooperation. 
Executive shall (a) reasonably cooperate with the Company and/or
Related Parties in the defense or prosecution of any claims or actions now in
existence or that may be brought in the future against or on behalf of the
Company and/or Related Parties that relate to events or occurrences that
transpired while Executive was employed by the Company and (b) reasonably
cooperate with the Company in connection with any 

 

(1) Insert 45 days in
the event of a layoff of two or more employees.

 

 

investigation or review by any federal, state, or
local regulatory authority as any such investigation or review relates to
events or occurrences that transpired while Executive was employed by the
Company; provided, that the forgoing shall not apply if the interests of the
Company and Executive are adverse.  Any
request for such cooperation shall take into account Executive’s other personal
and business commitments.  For any such
cooperation that Executive provides after December 31, 2012, the Company
shall pay Executive a per diem fee for such cooperation (calculated as
one-fifth the weekly gross Base Salary at the rate in effect immediately prior
to the Termination Date), paid on the last day of the month following the month
in which such fee was earned.  The
Company shall reimburse the Executive for all reasonable out-of-pocket expenses
incurred by him in connection with providing such cooperation, and for legal fees to the extent Executive in good
faith reasonably believes that he needs the advice of his own counsel.  Executive’s entitlement to reimbursement of
such costs and expenses, including legal fees, pursuant to this Section 8,
shall in no way affect Executive’s rights, if any, to be indemnified and/or
advanced expenses under law or in accordance with the Company’s by-laws.  Any reimbursement of expenses pursuant to
this Section 8 shall be made in the manner set forth in Sections 4(g) and
15(h)(vii) of the Employment Agreement.

 

9.             Reaffirmation
of Continuing Obligations Under Employment Agreement And Applicable Law.  Nothing in this General Release is intended
to replace, supersede or supplant Executive’s independent and obligations under
the Employment Agreement that specifically continue following a termination of
his employment.  By executing this
General Release, Executive hereby acknowledges and reaffirms all such
continuing obligations under the Employment Agreement and applicable law,
including but not limited to his obligations set forth in Section 10 of
the Employment Agreement, entitled “Restrictive Covenants.”  These obligations include, without
limitation, Executive’s agreements concerning Confidential Information,
non-competition and non-solicitation.

 

10.           No Admission of Liability.  This General Release shall not in any way be
considered or construed as an admission by the Company of any improper actions
or liability whatsoever as to Executive or any other person.

 

11.           Miscellaneous.

 

(a)           This General Release shall
be governed in all respects by the laws of the State of New York without regard
to the principles of conflict of law.

 

(b)           In the event that any one or
more of the provisions of this General Release is held to be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining provisions
will not in any way be affected or impaired thereby. Moreover, if any one or
more of the provisions contained in this General Release is held to be
excessively broad as to duration, scope, activity or subject, such provisions
will be construed by limiting and reducing them so as to be enforceable to the
maximum extent compatible with applicable law.

 

(c)           This General Release may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

 

 

(d)           The paragraph headings used
in this General Release are included solely for convenience and shall not
affect or be used in connection with the interpretation of this General
Release.

 

(e)           This General Release and the
Employment Agreement represent the entire agreement between the parties with
respect to the subject matter hereto and may not be amended except in a writing
signed by the Company and Executive.

 

(f)            This General Release shall
be binding on the executors, heirs, administrators, successors and assigns of
Executive and the successors and assigns of the Related Parties and the
Releasors and shall inure to the benefit of the respective executors, heirs,
administrators, successors and assigns of the Related Parties and the
Releasors.

 

[signature
page follows]

 

 

IN WITNESS WHEREOF, the parties hereto have
executed this General Release on this        day
of
                              .

 

 

	
   

  	
  Aventine
  Renewable Energy Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Eugene Davis

  
	
   

  	
  Name:
  Eugene Davis

  
	
   

  	
  Title:
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Thomas Manuel

  
	
   

  	
  Thomas Manuel

  

 

 

EXHIBIT B

 

PARACHUTE
TAX INDEMNITY PROVISIONS

 

This
Exhibit B sets forth the terms and provisions applicable to Executive
pursuant to the provisions of the Section 8(g) of the Agreement.  This Exhibit B shall be subject in all
respects to the terms and conditions of the Agreement.  Capitalized terms used without definition in
this Exhibit B shall have the meanings set forth in the Agreement.

 

(i)            In the event that Executive shall become entitled to
payments and/or benefits provided by the Agreement or any other amounts to (or
for the benefit of) Executive that constitute “parachute payments,” as such
term is defined under Section 280G of the Code, as a result of a change in
ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company (collectively, the “Company
Payments”), and such Company Payments will be subject to the tax (the “Excise
Tax”) imposed by Section 4999 of the Code (and similar tax, if any,
that may hereafter be imposed by any taxing authority), the Company shall pay
to Executive at the time specified in clause (v) below an additional
amount (the “Gross-Up Payment”) such that the net amount retained by
Executive from the Company Payments together with the Gross-Up Payment, after
deduction of any Excise Tax on the Company Payments and any U.S. federal,
state, and local income or payroll tax upon the Gross-Up Payment provided for
by this clause (i), but before deduction for any U.S. federal, state, and local
income or payroll tax on the Company Payments, shall be equal to the Company
Payments.

 

(ii)           Notwithstanding the foregoing provisions of this Exhibit B
to the contrary, if it shall be determined that Executive is entitled to a
Gross-Up Payment, but the Company Payments do not exceed 110% of the greatest
amount (the “Reduced Amount”) that could be paid to Executive such that
the receipt of the Company Payments would not give rise to any Excise Tax, then
no Gross-Up Payment shall be made to Executive and the Company Payments, in the
aggregate, shall be reduced to the Reduced Amount.  Any such reduction shall be made in the
following order:  any cash severance
Executive is entitled to receive (starting with the last payment due), then
other cash amounts Executive is entitled to receive that are considered
parachute payments under Section 280G of the Code (starting with the last
payment due), then any stock options that have exercise prices higher than the
then fair market value price of the stock (based on the latest vesting
tranches), then restricted stock and restricted stock units based on the last
ones scheduled to be distributed and then other stock options based on the
latest vesting tranches.  In the event
that the Internal Revenue Service or court ultimately makes a determination
that the “excess parachute payments” plus the “base amount” is an amount other
than as determined initially, an appropriate adjustment shall be made with regard
to the Gross-Up Payment or Reduced Amount, as applicable, to reflect the final
determination and the resulting impact on whether this clause (ii) applies.

 

1

 

(iii)          For purposes of determining whether any of the
Company Payments and Gross-Up Payment (collectively, the “Total Payments”)
will be subject to the Excise Tax and the amount of such Excise Tax:

 

(A)  the Total Payments
shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of
the Code, and all “parachute payments” in excess of the “base amount” (as
defined under Section 280G(b)(3) of the Code) shall be treated as
subject to the Excise Tax, unless and except to the extent that, in the opinion
of the Company’s independent certified public accountants appointed prior to
any change in ownership (as defined under Section 280G(b)(2) of the
Code) or a certified public accountant
appointed following a change in ownership that is mutually acceptable to the
Company and Executive, or tax counsel selected by such accountants or
the Company (the “Accountants”) such Total Payments (in whole or in
part):  (1) do not constitute “parachute
payments,” (2) represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4) of the Code in
excess of the “base amount” or (3) are otherwise not subject to the Excise
Tax; and

 

(B) the value of any
non-cash benefits or any deferred payment or benefit shall be determined by the
Accountants in accordance with the principles of Section 280G of the Code.

 

In
the event that the Accountants are serving as accountants or auditors for the
individual, entity or group effecting the change in control (within the meaning
of Section 280G of the Code), Executive may appoint another nationally
recognized accounting firm to make the determinations hereunder (which
accounting firm shall then be referred to as the “Accountants” hereunder).  All determinations hereunder shall be made by
the Accountants which shall provide detailed supporting calculations both to
the Company and Executive at such time as it is requested by the Company or
Executive.  The determination of the
Accountants, subject to the adjustments provided below, shall be final and
binding upon the Company and Executive.

 

(iv)          For purposes of determining the amount of the
Gross-Up Payment, Executive’s marginal blended actual rates of federal, state
and local income taxation in the calendar year in which the change in ownership
or effective control that subjects Executive to the Excise Tax occurs shall be
used.  In the event that the Excise Tax
is subsequently determined by the Accountants to be less than the amount taken
into account hereunder at the time the Gross-Up Payment is made, Executive
shall repay to the Company, at the time that the amount of such reduction in
Excise Tax is finally determined, the portion of the prior Gross-Up Payment
attributable to such reduction (plus the portion of the Gross-Up Payment
attributable to the Excise Tax and U.S. federal, state and local income tax
imposed on the portion of the Gross-Up Payment being repaid by Executive if
such repayment results in a reduction in Excise Tax or a U.S. federal, state
and local income tax deduction). 
Notwithstanding the foregoing, in the event that any portion of the
Gross-Up Payment to be refunded to the Company has been 

 

2

 

paid
to any U.S. federal, state and local tax authority, repayment thereof (and
related amounts) shall not be required until actual refund or credit of such
portion has been made to Executive. 
Executive and the Company shall mutually agree upon the course of action
to be pursued (and the method of allocating the expense thereof) if Executive’s
claim for refund or credit is denied.  In
the event that the Excise Tax is later determined by the Accountants or the
Internal Revenue Service (or other taxing authority) to exceed the amount taken
into account hereunder at the time the Gross-Up Payment is made (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest or penalties
payable with respect to such excess) promptly after the amount of such excess
is finally determined.

 

(v)           The Gross-Up Payment or portion thereof provided for
in clause (iv) above shall be paid not later than the sixtieth (60th) day following an event
occurring which subjects Executive to the Excise Tax; provided, however, that
if the amount of such Gross-Up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to Executive on such
day an estimate, as determined in good faith by the Accountants, of the minimum
amount of such payments and shall pay the remainder of such payments (together
with interest at the rate provided in Section 1274(b)(2)(B) of the
Code), subject to further payments pursuant to clause (iv) above, as soon
as the amount thereof can reasonably be determined, but in no event later than
the seventy-fifth (75th) day after the
occurrence of the event subjecting Executive to the Excise Tax.  Subject to clauses (iv) and (ix) of
this Exhibit B, in the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to Executive, payable on the fifth (5th) day after demand by the
Company (together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code).

 

(vi)          In the event of any controversy with the Internal
Revenue Service (or other taxing authority) with regard to the Excise Tax,
Executive shall permit the Company to control issues related to the Excise Tax
(at its expense), provided that such issues do not potentially materially
adversely affect Executive, but Executive shall control any other issues.  In the event that the issues are
interrelated, Executive and the Company shall in good faith cooperate so as not
to jeopardize resolution of either issue, but if the parties cannot agree,
Executive shall make the final determination with regard to the issues.  In the event of any conference with any
taxing authority as to the Excise Tax or associated income taxes, Executive
shall permit the representative of the Company to accompany Executive, and
Executive and Executive’s representative shall cooperate with the Company and
its representative.

 

(vii)         The Company shall be responsible for all charges of
the Accountants.

 

(viii)        The Company and Executive shall promptly deliver to
each other copies of any written communications, and summaries of any verbal
communications, with any taxing authority regarding the Excise Tax covered by
this Exhibit B.

 

3

 

(ix)           Nothing in this Exhibit B is intended to
violate the Sarbanes-Oxley Act of 2002 and to the extent that any advance or
repayment obligation hereunder would do so, such obligation shall be modified
so as to make the advance a nonrefundable payment to Executive and the
repayment obligation null and void.

 

(x)            Notwithstanding the foregoing, any payment or
reimbursement made pursuant to this Exhibit B shall be made in any event
no later than the end of the calendar year immediately following the calendar
year in which Executive remits the related taxes, and any reimbursement of
expenses incurred due to a tax audit or litigation shall be made no later than
the end of the calendar year immediately following the calendar year in which
the taxes that are the subject of the audit or litigation are remitted to the
taxing authority, or, if no taxes are to be remitted, the end of the calendar
year following the calendar year in which the audit or litigation is completed.

 

(xi)           The provisions of this Exhibit B shall survive
the termination of Executive’s employment with the Company for any reason and
any amount payable under this Exhibit B shall be subject to the provisions
of Section 15(h) of the Agreement.

 

4Exhibit
10.6

 

EXECUTION
COPY

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement
(this “Agreement”) is entered into on March 15, 2010 to be
effective as of the date of consummation of the Plan of Reorganization (as
defined below) (the “Effective Date”), by and among Aventine Renewable
Energy Holdings, Inc. (together with its successors and assigns the “Company”)
and Ben Borgen (“Executive”).

 

WHEREAS, the Company
desires to employ Executive as Senior Vice President, Commodity Risk Management
of the Company after the consummation of the Company’s plan of reorganization
under Section 1121 of Title 11 of the United States Code (the “Plan of
Reorganization”);

 

WHEREAS, Executive
desires to accept such employment, subject to the terms and provisions of this
Agreement; and

 

WHEREAS, this Agreement
is expressly contingent upon the consummation of the Plan of Reorganization;

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the receipt of which is mutually
acknowledged, the Company and Executive (collectively, the “Parties”)
agree as follows:

 

1.             Term of
Employment. The Company
hereby agrees to employ Executive under this Agreement, and Executive hereby
accepts such employment, for the “Term of Employment” which shall
commence as of the Effective Date and shall end on December 31, 2012.

 

2.             Position, Duties and Responsibilities.

 

(a)           During
the Term of Employment, Executive shall serve as the Senior Vice President,
Commodity Risk Management of the Company; shall have all authorities, duties
and responsibilities customarily exercised by an individual serving in those
positions in enterprises of a similar size and structure; shall be assigned no
authorities, duties or responsibilities that are inconsistent with, or that
impair his ability to discharge, the foregoing authorities, duties and
responsibilities; and shall report directly to the Chief Executive Officer of
the Company (the “CEO”).

 

(b)           Executive
shall devote substantially all of his business time and efforts to the affairs
of the Company; provided, however, that while employed by the
Company, Executive may serve as a member of the board of directors of any
for-profit company with the consent of the Board of Directors of the Company the
“Board”) (which will not be unreasonably withheld).  In addition, without approval of the Board,
Executive may (i) serve on the boards of
directors of any
not-for-profit entity, (ii) serve
in any capacity with respect to any civic, educational, professional or
charitable organization, and (iii) manage his and his
family’s personal investments.  Executive
may also continue to provide services as managing director of International
Strategy Advisors and may retain all compensation earned therefrom; provided,
that such services do not materially
interfere or conflict with the performance of his duties to the Company or
create a business conflict with the Company.

 

1

 

(c)           Upon
expiration of the Term of Employment or the termination of Executive’s
employment for any reason, Executive shall resign, in writing, from any
positions he then holds with the Company, including membership on any boards.

 

3.             Principal Place
of Business.  Executive’s principal place of business shall
be located in an office of the Company in Dallas, Texas.  Executive agrees to travel on behalf of the
Company as reasonably necessary to perform his duties under this Agreement,
including to the Company’s offices in Pekin, Illinois, to which Executive
acknowledges he may be required to travel on a regular basis.  The Company will pay, or reimburse Executive
in accordance with Section 4(f) below, for all reasonable and
necessary costs in connection with such travel.

 

4.             Compensation
and Benefits.

 

(a)           Base
Salary. Commencing as of the Effective Date, the Company shall pay
Executive an annualized Base Salary of $400,000 (“Base Salary”), payable
in accordance with the regular payroll practices applicable to senior
executives of the Company.  Executive’s
Base Salary shall be reviewed by the Board for possible increase no less
frequently than annually during the Term of Employment and any increased Base
Salary shall constitute “Base Salary” for purposes hereof.  The Base Salary (including as increased pursuant
to the preceding sentence) shall not be decreased at any time during the Term
of Employment.

 

(b)           Annual
Bonus. Executive will be entitled to receive an annual bonus each year
during the Term of Employment (the “Bonus”) with a target equal to at
least 100% of Executive’s Base Salary for the applicable year based on
reasonably attainable goals as determined by the Board or its Compensation
Committee.  In addition, Executive shall be
afforded the opportunity to earn an incentive bonus of up to another 100% of
the Executive’s Base Salary each year during the Term based on attainment of
extraordinary performance metrics determined by the CEO and approved by the
Board or its Compensation Committee (the “Incentive Bonus”).  Bonuses will be paid in accordance with the
Company’s bonus policy as in effect from time to time, but in no event later
than 21⁄2 months after the fiscal year in which it is earned.

 

(c)           Inducement
Bonus.  On the first payday following
the Effective Date on which the Executive is paid his Base Salary, he shall
receive an additional payment in consideration of his commencement of
employment with the Company in the amount of $120,000.

 

(d)           Employee
Benefits. During the Term of Employment, Executive shall be entitled to
participate in all employee benefit plans and programs offered by the Company
to senior executives of the Company, and, subject to the eligibility
requirements for participation therein, any employee benefit plans and programs
which the Company may adopt from time to time generally for its employees.

 

(e)           Vacations.
During the Term of Employment, Executive shall be entitled to four (4) weeks
of paid vacation per year to be accrued and taken in accordance with the
Company’s normal vacation policies.

 

2

 

(f)            Legal
Fees.  The Company shall either pay
or reimburse Executive (as elected by the Company) for all reasonable legal
fees and expenses incurred by Executive in connection with the negotiation and
drafting of this Agreement.

 

(g)           Reimbursement
of Business and Other Expenses. During the Term of Employment, Executive is
authorized to incur reasonable expenses, including, without limitation, expenses
for travel, entertainment and other ordinary and necessary activities, in carrying out his duties and responsibilities under this
Agreement, and the Company shall promptly reimburse him for all such expenses
subject to documentation and subject to the expense reimbursement policies of
the Company relating to expense reimbursement.

 

5.             Equity
Arrangements.

 

(a)           Equity
Awards.  On the Effective Date, the
Company will grant the following equity awards to Executive:  (i) stock options to purchase 51,300
shares of the Company’s common stock (the “Common Stock”) (the “Options”)
and (ii) 55,576 restricted shares of Common Stock (the “Restricted
Stock,” and together with the Options, the “Equity Awards”).  The Equity Awards shall be granted pursuant
to an equity incentive plan (the “Incentive Plan”) that the Company will
establish and maintain during the Term of Employment, the terms of which (other
than as set forth in this Agreement) shall be subject to the approval of the
Board or its Compensation Committee and which shall reserve for grant to the
Company’s employees 855,000 shares of Common Stock.  The Company will take such actions as are
necessary to provide that (i) as of the Effective Date the Incentive Plan
will be effective and (ii) as soon as reasonably practicable that the
shares of Common Stock available for awards under the Incentive Plan are fully
registered for resale on a Form S-8 or to the extent otherwise so
registrable in connection with the general registration of Common Stock.

 

(b)           Vesting.  Fifty (50%) percent of the Options and Fifty (50%) percent of the Restricted Stock will vest in the three
equal installments on each of the first two anniversaries of the Effective Date
and December 31, 2012, subject to Executive’s continuing employment with
the Company.  Fifty
(50%)
percent of the Options and Fifty
(50%)
percent of the Restricted Stock will vest subject to the attainment of
reasonable performance criteria to be determined by the Board.  Notwithstanding the
foregoing, in the event of (A) a Change of Control (as defined below) of
the Company, then 100% of the Equity Awards shall vest, and the Options will
remain exercisable for the remainder of the Option Term (as defined below), or (B) a
termination of Executive’s employment by the Company without Cause (as defined
below), or Executive’s resignation with Good Reason (as defined below), then
100% of the Equity Awards shall vest, and the Options will remain exercisable
for the applicable period set forth in Section 9(d)(iii).  Any vested Options held by Executive as of
his termination shall remain exercisable for the applicable periods specified
below under Section 9.  The Options
shall expire ten (10) years following the Effective Date (the “Option
Term”).

 

(c)           Exercise
Price.  The exercise price of each
share of Common Stock underlying an Option shall be equal to the per share fair
market value of the Common Stock on the Effective Date, as determined by the
Board in its sole discretion, in a manner that complies with the requirements
of Section 409A of Internal Revenue Code of 1986, as amended (“Code”),
and the regulations and guidance promulgated thereunder (“Code Section 409A”).

 

3

 

(d)           Method
of Exercise.  To the extent vested,
the Options may be exercised by Executive in whole or in part at any time and
from time to time during the Option Term by giving written notice of exercise
to the Company specifying the number of shares of Common Stock to be
acquired.  Such notice shall be
accompanied by payment in full of the purchase price as follows: (i) in
cash or by check, bank draft or money order payable to the order of the
Company; (ii) through a cashless exercise whereby the Company reduces the
number of shares of Common Stock issuable upon exercise with a value equal to
the applicable exercise price and withholding, (iii) solely to the extent
permitted by applicable law, if the Common Stock is then traded on a securities
exchange or system in the United States, through a procedure whereby Executive
delivers irrevocable instructions to a broker reasonably acceptable to the
committee established under the Incentive Plan (the “Committee”) to
deliver promptly to the Company an amount equal to the purchase price; or (iv) on
such other terms and conditions as may be acceptable to the Committee.

 

6.             Call/Sale
Participation/Piggy-Back Rights.  In the event that, as of the Effective Date, the Common
Stock is not traded on a securities exchange or system, then the provisions of
this Section 6 shall apply to any Common Stock acquired by or granted to
Executive under any equity award granted to Executive by the Company until the
Common Stock is so traded.  Other than as
specifically provided in this Agreement, the Executive’s right to transfer
shares of Common Stock acquired by or granted to Executive under any equity
award granted to Executive by the Company shall not be limited nor shall such
shares be subject to any claw-back provision or be subject to forfeiture due to
a breach of Section 11.

 

(a)           Call
Right.  In the event of Executive’s
termination for Cause, the Company shall have a call right on any shares of
Common Stock acquired by or granted to Executive under any equity award granted
to Executive by the Company then held by Executive at a price per share equal
to the lower of the per share fair market value as of the purchase date, as
determined by the Board in its sole discretion, and the price paid by Executive
for each share of Common Stock; provided; that shares of Common Stock
granted as restricted shares shall be forfeited automatically and without
consideration on a termination for Cause. 
For the avoidance of doubt, the Company will not have any call right
upon a termination other than for Cause in respect of Executive’s shares of
Common Stock.

 

(b)           Sale
Participation.  If the event of a
sale or other disposition of all or substantially all the Common Stock to a
third party whether by stock sale, merger or otherwise, Executive agrees to
reasonably participate in such transaction with respect to the Equity Awards
and sell, exchange or transfer such Equity Awards on a commercially reasonable
basis to the third party and the Company agrees to take all commercially
reasonable steps to facilitate such participation.

 

(c)           Piggyback
Registration Rights.  Executive will
be entitled to standard “piggyback” registration rights.

 

(d)           Initial
Public Offering.  All transfer
restrictions, call rights, sale participation rights and obligation under this Section 6
shall terminate on the earlier of a public offering of the Common Stock or the
listing of the Common Stock on a securities exchange or system.

 

4

 

7.             Termination of Employment.
Executive’s employment hereunder may be terminated during the Term of
Employment under the following circumstances and any such termination shall not
be, nor deemed to be, a breach of this Agreement:

 

(a)           Death.
Executive’s employment hereunder shall terminate automatically upon Executive’s
death.

 

(b)           Disability.  The Company shall have the right to terminate
Executive’s employment hereunder for Disability by providing Executive with a
Notice of Termination (as defined below) at least thirty (30) days prior to
such termination.  For purposes of this
Agreement, “Disability” shall mean Executive’s becoming incapacitated by
reason of sickness, accident or other physical or mental incapacity and having
been unable to perform his normal duties for a period of six (6) consecutive
months as a result thereof.

 

(c)           For
Cause. The Company shall have the right to terminate Executive’s employment
for Cause by providing Executive with a Notice of Termination.  For purposes of this Agreement, “Cause”
shall mean (i) willful misconduct or gross negligence of a material nature
by Executive in the performance of his duties; (ii) Executive’s being
convicted of, or pleading guilty or nolo contendere to a
felony (other than a traffic violation); (iii) Executive’s willful theft
or embezzlement from the Company or its affiliates; (iv) willful and
substantial failure of Executive to perform his duties or any other material
breach by Executive of any material provision of this Agreement, which is not
cured (if curable) by Executive within thirty (30) days following his receipt
of written notice thereof.  For the
purposes of this definition, no act, or failure to act, on the part of
Executive shall be considered “willful,” unless done, or omitted to be done, by
him in bad faith and without reasonable belief that his action or omission was
in, or not opposed to, the best interest of the Company (including
reputationally).  Notwithstanding the
foregoing, the Company may not terminate Executive for Cause unless prior to
such termination: (x) Executive is given five (5) business days
written notice specifying the alleged Cause event and is entitled to appear
with counsel upon written request, made within five (5) business days of
receiving such notice, before a meeting of the full Board, which may be
telephonic, within a reasonable time after such request to present information
regarding his views on the Cause event, and (y) after such meeting or
Executive’s failure to request such a meeting, there is a majority vote of the
full Board (excluding Executive) to terminate Executive for Cause.  After providing the notice in foregoing
sentence, the Board may suspend Executive with full pay and benefits until a
final determination has been made in accordance with the procedures set forth
above.

 

(d)           Without
Cause.  The Company shall have the
right to terminate Executive’s employment hereunder without Cause at any time
by providing Executive with a Notice of Termination.

 

(e)           By
Executive for Good Reason.  Executive
shall have the right to terminate his employment hereunder for Good Reason by
providing the Company with a Notice of Termination.  For purposes of this Agreement, Executive
shall have “Good Reason” to terminate his employment hereunder if,
without Executive’s written consent, any of the following events occurs that
are not cured by the Company within thirty (30) days of written notice
specifying the occurrence such Good Reason event, which notice shall be given
by Executive to the Company 

 

5

 

within
ninety (90) days after the occurrence of the Good Reason event: (i) a
material diminution in Executive’s then authority, duties or responsibilities; (ii) a
material diminution in Executive’s Base Salary; (iii) a relocation of
Executive’s principal business location to a location outside of Dallas, Texas;
or (vi) any material breach of this Agreement by the Company.  Executive’s termination hereunder for Good
Reason shall not occur later than one hundred eighty (180) days following the
initial date on which the event Executive claims constitutes Good Reason
occurred.

 

(f)            By
Executive without Good Reason. 
Executive shall have the right to terminate his employment hereunder without
Good Reason by providing the Company with a Notice of Termination at least
thirty (30) days prior to such termination.

 

(g)           Due
to Expiration of the Term of Employment. 
The Term of Employment shall automatically terminate upon the expiration
of the Term of Employment in accordance with Section 1 hereof.

 

8.             Termination
Procedure.

 

(a)           Notice
of Termination.  Any termination of
Executive’s employment by the Company or by Executive during the Term of
Employment (other than termination pursuant to Section 7(a)) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 15 hereof. 
For purposes of this Agreement, a “Notice of Termination” shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and, in the event of a termination under Section 7(b),
7(c) or 7(e) above, shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated.

 

(b)           Date
of Termination.  “Date of
Termination” shall mean (i) if Executive’s employment is terminated by
his death, the date of his death, (ii) if Executive’s employment is
terminated pursuant to Section 7(b), the thirty-first (31st) day after the Notice of Termination is provided to
Executive (provided that Executive shall not have returned to the substantial
performance of his duties on a full-time basis during the thirty (30) day
period following the Notice of Termination), (iii) if Executive’s
employment is terminated pursuant to Section 7(f), the thirty-first (31st) day after the Notice of Termination is provided to the
Company; and (iv) if Executive’s employment is terminated for any other
reason, the date the Notice of Termination is given or any later date set forth
in such Notice of Termination as the effective date of termination.

 

9.             Compensation
Upon Termination.  Upon the termination of Executive’s
employment, the Company shall provide Executive with the payments and benefits
set forth below.  The payments and
benefits described herein shall be in lieu of, and Executive hereby waives his
rights to receive, any other severance or termination benefits that Executive
may otherwise be eligible to receive under any policy, plan or program
maintained by the Company or as otherwise mandated by law (to the extent such
legal rights may be waived by Executive).

 

(a)           Death
or Disability.  If Executive’s
employment is terminated due to his death or is terminated by the Company due to
Disability during the Term of Employment:

 

6

 

(i)            the
Company shall pay to Executive (or his beneficiaries) any accrued but unpaid
Base Salary earned through the Date of Termination, payable in accordance with
the regular payroll practices applicable to senior executives of the Company;

 

(ii)           at
the time that the Bonus would otherwise be paid in accordance with Section 4(b) hereof,
the Company shall pay to Executive (or his beneficiaries) any earned but unpaid
Bonus in respect of any completed year preceding the year in which such
termination occurs (the “Accrued Bonus”);

 

(iii)          the
Company shall reimburse Executive pursuant to Section 4(f) for any
business expenses incurred through, but not reimbursed prior to, the Date of
Termination;

 

(iv)          within
ten (10) days following the Date of Termination, the Company shall pay to
Executive a payment for his accrued but unused vacation through the Date of
Termination;

 

(v)           the
Company shall pay or provide to Executive such vested accrued benefits, if any,
as to which Executive may be entitled under the Company’s employee benefit
plans and programs applicable to Executive as of the Date of Termination (other
than any severance pay plan), which shall be paid or provided in accordance
with the terms of the applicable plan or program (clauses (i) — (v) collectively
referred to as the “Accrued Obligations”);

 

(vi)          Executive
or his beneficiary, legal representative or estate shall receive an amount
equal to the product of (x) and (y), where (x) is the Bonus, if any,
that would have been paid to Executive in respect of the year in which such
termination occurred, based on actual performance for the year of termination,
and (y) is a fraction, the numerator of which is the number of days
Executive was employed by the Company during the calendar year in which such
termination occurred and the denominator of which is the number of days in such
year (the “Pro Rata Bonus”), to be paid at such time as the Bonus would
have normally been paid pursuant to Section 4(b) hereof in respect of
the year in which such termination occurred; and

 

(vii)         All
vested stock options and other exercisable awards then held by Executive shall
remain exercisable for a period of one year following the Date of Termination
and all unvested equity awards held by Executive shall immediately be forfeited
without consideration.

 

(b)           Termination
by the Company for Cause.  If
Executive’s employment is terminated by the Company for Cause during the Term
of Employment:

 

(i)            the
Company shall pay or provide to Executive the Accrued Obligations (other than
the Accrued Bonus) at the times, and subject to the same conditions, as
provided in Section 9(a) hereof; and

 

7

 

(ii)           all
equity awards held by Executive, whether or not vested and exercisable, shall
immediately be forfeited without consideration.

 

(c)           Termination
by Executive without Good Reason.  If
Executive’s employment is terminated by Executive other than for Good Reason
during the Term of Employment:

 

(i)            the
Company shall pay or provide to Executive the Accrued Obligations (other than
the Accrued Bonus) at the times, and subject to the same conditions, as
provided in Section 9(a) hereof; and

 

(ii)           all
vested stock options and other exercisable awards then held by Executive shall
remain exercisable for a period of ninety (90) days following the Date of
Termination and all unvested equity awards held by Executive shall immediately
be forfeited without consideration.

 

(d)           Termination
without Cause or for Good Reason. In the event that Executive’s employment
under this Agreement is terminated by the Company without Cause or by Executive
for Good Reason during the Term of Employment:

 

(i)            the
Company shall pay or provide to Executive the Accrued Obligations at the times,
and subject to the same conditions, as provided in Section 9(a) hereof;

 

(ii)           subject
to Executive’s signing (and not revoking) a general release of claims in the
form attached hereto as Exhibit A (with such changes as may be
necessary for changes in applicable law) within twenty-one (21) days or
forty-five (45) days, which ever period is required under ADEA (as defined in Exhibit A)
following such termination (the “Release”):

 

(A)          the Company shall pay Executive the Pro Rata Bonus at such
time as the Bonus would have normally been paid pursuant to Section 4(b) hereof
in respect of the year in which such termination occurred;

 

(B)   within sixty (60) days following the Date of Termination, the
Company shall pay to Executive a lump sum severance payment equal to the sum of
the Base Salary and target Bonus; provided that if Date of Termination occurs provided,
that, if the termination of your employment occurs less than sixty (60)
days preceding the end of a calendar year and the effective date of the Release
would occur before January 1 of the subsequent calendar year, payment
shall be made on January 2 of such subsequent calendar year; and

 

(C)           the Company shall pay the costs of continued group life,
medical, dental, and vision insurance coverage for Executive and his dependents
under the plans and programs in which Executive participated immediately prior
to the Date of Termination, or materially equivalent plans and programs
maintained by the Company in replacement thereof, for a period of twelve (12)
months following the Date of Termination (the “Coverage Period”); provided, that in the event the medical,
dental, and 

 

8

 

vision plans
under which Executive and his dependents were receiving benefits immediately
prior to the Date of Termination, or any applicable replacement plan or
program, is not fully-insured, then in lieu of the foregoing, if Executive
timely elects coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”) and timely pays the monthly premiums
for such COBRA coverage, then the Company
shall reimburse Executive during the Coverage Period for the amount of such
monthly premium that is in excess of the active employee rate (excluding,
for purposes of calculating cost, an employee’s ability to pay premiums with
pre-tax dollars), on a tax grossed-up
basis to the extent such monthly premium is taxable to Executive, payable on
the first Company payroll date in each month following the Date of Termination;
and

 

(iii)          all
outstanding equity awards held by Executive will become fully vested and all
stock options and other exercisable awards will become immediately exercisable
and will remain exercisable for a period following the Date of Termination of (x) ninety
(90) days following a termination by Executive for Good Reason and (y) twelve
(12) months following a termination by the Company without Cause.

 

(e)           Termination
due to Expiration of the Term of Employment.  If Executive’s employment hereunder
terminates due to the expiration of the Term of Employment in accordance with Section 1:

 

(i)            the
Company shall pay to Executive the Accrued Obligations at the times, and
subject to the same conditions, as provided in Section 9(a) hereof;
and

 

(ii)           subject
to Executive’s signing (and not revoking) the Release, the Company shall pay
the costs of continued group life, medical, dental, and vision insurance
coverage for Executive and his dependents under the plans and programs in which
Executive participated immediately prior to the Date of Termination, or
materially equivalent plans and programs maintained by the Company in
replacement thereof, for a period of twelve (12) months following the Date of
Termination (the “Expiration Coverage Period”); provided, that in the event the medical, dental, and
vision plans under which Executive and
his dependents were receiving benefits immediately prior to the Date of
Termination, or any applicable replacement plan or program, is not fully-insured,
then in lieu of the foregoing, if Executive timely elects COBRA coverage and
timely pays the monthly premiums for such COBRA coverage, then the Company shall reimburse Executive
during the Coverage Period for the amount of such monthly premium that is in
excess of the active employee rate (excluding, for purposes of
calculating cost, an employee’s ability to pay premiums with pre-tax dollars), on a tax grossed-up basis to the extent such
monthly premium is taxable to Executive, payable on the first Company payroll
date in each month following the Date of Termination; and

 

(iii)          all
vested stock options and other exercisable awards then held by Executive shall
remain exercisable for a period of twelve (12) months following the Date of
Termination and all unvested equity awards held by Executive shall immediately
be forfeited without consideration.

 

9

 

(f)            No
Mitigation; No Off-Set.   Executive will not be
required to seek other employment or attempt to reduce any payments due to
Executive under this Section 9, and any compensation (in whatever form)
earned by Executive from any subsequent employment will not offset or reduce
the Company’s severance obligations under this Section 9 following
Executive’s termination.  The Company’s
obligation to pay Executive any payments under this Section 9 will not be
subject to set-off, counterclaim or recoupment of amounts owed by Executive to
the Company.

 

(g)           Change
of Control/Golden Parachute Considerations. 
All equity awards held by Executive shall vest upon the occurrence of a
Change in Control of the Company.  If
Executive becomes entitled to any payments and/or benefits that constitute “parachute
payments” within the meaning of Section 280G(b)(2) of the Code, and
as a result becomes subject to the excise tax under Section 4999 of the
Code, the provisions of Exhibit B attached hereto shall apply and are
incorporated herein.

 

For purposes of this Agreement, a “Change
in Control” shall mean the occurrence of any of the following events
subsequent to the Effective Date:  (i) any
person, other than an exempt person (which includes the Company and its
subsidiaries and employee benefit plans), becoming a beneficial owner of 50% or
more of the shares of common stock or equity interests or voting stock or
equity interests of the Company then outstanding; (ii) the consummation of
a reorganization, merger or consolidation in which existing Company
stockholders or members own less than 50% of the equity of the resulting
company; (iii) the consummation of the sale or other disposition of all or
substantially all of the assets of the Company; or (iv) during any
12-month period and provided no other corporation is a majority shareholder of
the Company,  individuals who on the
Effective Date, constitute the Board (the “Incumbent Board”) cease for
any reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the Effective Date, whose election or
nomination for election was approved by a vote of at least a majority of the
directors comprising the Incumbent Board shall be considered a member of the
Incumbent Board.  Notwithstanding
anything herein to the contrary, the determination as to whether a “Change in
Control” as defined herein has occurred shall be determined in accordance with
the requirements of Code Section 409A and shall be intended to constitute
a “change in control event” within the meaning of Code Section 409A,
except to that the extent the provisions herein are more restrictive than the
requirements of Code Section 409A.

 

10.           Indemnification/Directors
and Officers Liability Insurance.
The Company will indemnify Executive to the fullest extent permitted by law and
its bylaws (including advancement of legal fees) for any action or inaction of
Executive while serving as an officer or director of the Company.  The Company will cover Executive under its
directors and officers liability insurance and its defamation policies both
during and, while potential liability exists, after Executive’s termination of
employment.  The provisions of this Section 10
shall survive the termination of Executive’s employment with the Company.

 

11.           Restrictive
Covenants.

 

(a)           Acknowledgments.  Executive acknowledges that:  (i) as a result of Executive’s employment
by the Company, Executive has obtained and will obtain Confidential Information
(as defined below); (ii) the Confidential Information has been developed
and created by the

 

10

 

Company
and its affiliates at substantial expense and the Confidential Information
constitutes valuable proprietary assets; (iii) the Company and its
affiliates will suffer substantial damage and irreparable harm which will be
difficult to compute if, during the Term of Employment and thereafter,
Executive should enter a Competitive Business (as defined herein) in violation
of the provisions of this Agreement; (iv) the nature of the Company’s and
its affiliates’ business is such that it could be conducted anywhere in the
world and that it is not limited to a geographic scope or region; (v) the
Company and its affiliates will suffer substantial damage which will be
difficult to compute if, during the Term of Employment or thereafter, Executive
should solicit or interfere with the Company’s or its affiliates’ employees or
should divulge Confidential Information relating to the business of the Company
and its affiliates; (vi) the provisions of this Agreement are reasonable
and necessary for the protection of the business of the Company and its
affiliates; (vi) the Company would not have hired or continued to employ
Executive or grant the equity awards and other benefits contemplated under this
Agreement unless he agreed to be bound by the terms hereof; and (vii) the
provisions of this Agreement will not preclude Executive from other gainful
employment. “Competitive Business” means any
business, partnership, enterprise, association or activity that is actively
involved in the business of producing and/or marketing ethanol and ethanol
co-products, or any other activity or business in which the Company was
engaged, or had taken material steps to engage in, at the time of Executive’s
termination or in the twelve (12) months period immediately prior thereto. “Confidential
Information” as used in this Agreement shall mean any and all confidential
and/or proprietary knowledge, data, or information of the Company or any
affiliate, including, without limitation, any: (A) trade secrets,
drawings, inventions, methodologies, mask works, ideas, processes, formulas,
source and object codes, data, programs, software source documents, works of
authorship, know-how, improvements, discoveries, developments, designs and
techniques, and all other work product of the Company or any affiliate, whether
or not patentable or registrable under trademark, copyright, patent or similar
laws; (B) information regarding plans for research, development, new
service offerings and/or products, marketing, advertising and selling,
distribution, business plans, business forecasts, budgets and unpublished
financial statements, licenses, prices and costs, suppliers, customers or
distribution arrangements; (C) any information regarding the skills and
compensation of employees, suppliers, agents, and/or independent contractors of
the Company or any affiliate; (D) concepts and ideas relating to the
development and distribution of content in any medium or to the current, future
and proposed products or services of the Company or any affiliate; or (E) any
other information, data or the like that is labeled confidential or orally
disclosed to Executive as confidential.

 

(b)           Confidentiality.  In consideration of the benefits provided for
under this Agreement, Executive agrees not to, at any time, either during the Term
of Employment or thereafter, divulge, use, publish or in any other manner
reveal, directly or indirectly, to any person, firm, corporation or any other
form of business organization or arrangement and keep in the strictest
confidence any Confidential Information, except (i) in the good faith
performance of Executive’s duties hereunder, (ii) with the Company’s
express written consent, (iii) to the extent that any such information is
in or becomes in the public domain or the relevant trade or industry other than
as a result of Executive’s breach of any of obligations hereunder, or (iv) where
required to be disclosed by court order, subpoena or other government process
and in such event, Executive shall cooperate with the Company in attempting to
keep such information confidential.  Upon
the request of the Company, Executive agrees to promptly deliver to the Company
the originals and all copies, in whatever medium, of all such Confidential
Information.

 

11

 

(c)           Non-Compete.  In consideration of the benefits provided for
in this Agreement, Executive covenants and agrees that during Executive’s
employment and during the Restrictive Period (as defined below), Executive will not, directly or indirectly for or on behalf of himself
or any other person or entity (i) engage
in any Competitive Business (as defined below) or (ii) participate or
invest in, provide or facilitate the provision of financing to, or assist
(whether as owner, part-owner, shareholder, member, partner, director, officer,
trustee, employee, agent or consultant, or in any other capacity) any
Competitive Business (as defined below). 
For the avoidance of doubt, this covenant shall not preclude Executive from trading
ethanol-related commodities; provided that such activity does not have a
material and adverse effect on the Company.

 

“Restrictive Period” shall mean the
period of Executive’s employment with the Company and (i) in the event of
termination of Executive’s employment by the Company for Cause or without Cause
or by the Executive for Good Reason, the 12-month period thereafter or (ii) in
the event of termination of Executive’s employment by the Executive without
Good Reason or upon Expiration of the Term, the period of up to 12 months
following Executive’s employment for which the Company elects (pursuant to 15
days advance written notice) to pay Executive the pro rata portion of the
Non-Compete Amount.  “Non-Compete Amount”
shall mean the sum of Executive’s Base salary and the average of the Annual
Bonuses earned under Section 5 during his Employment; provided that if any
such termination occurs before the completion of the first Annual Bonus period,
the Annual Bonus amount will be deemed to be the Target Bonus.  The noncompetition covenant in this Section 11(c) will
not apply in the event of a termination without Cause or for Good Reason if
Executive provides a written waiver to the Company of his right to all
severance benefits, including equity acceleration (but other than the Accrued
Amounts) within five business days following such termination.  The
restrictions set forth in this Section 11(c) shall not limit
Executive’s right to own not more than 5% of any of the debt or equity
securities of any business organization that is then filing reports with the
Securities and Exchange Commission pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended, or any compensatory equity
securities that Executive receives in connection with services provided or to
be provided.

 

(d)           Non-Solicitation
of Employees.  During Executive’s
employment and for a period of twelve (12) months thereafter, Executive will
not directly or indirectly for or on behalf of himself or any other person or
entity (i) solicit, recruit, hire, endeavor to entice away from the
Company, or otherwise interfere with the Company’s relationship with, any of
its current employees, or anyone who was employed by or engaged to provide
exclusive services to the Company at any time during the twelve (12) months
prior to Executive’s Date of Termination, and (ii) endeavor to entice away
from or otherwise interfere with, the Company’s relationship with any persons
or entities that were investors, suppliers, clients, customers or licensees of
the Company at any time during the twelve (12) months prior to Executive’s Date
of Termination; provided that the foregoing shall not be violated by
general advertising nor by serving as a reference upon request.

 

(e)           Post-Employment
Property.  The parties agree that any
work of authorship, invention, design, discovery, development, technique,
improvement, source code, hardware, device, data, apparatus, practice, process,
method or other work product whatever (whether patentable or subject to
copyright, or not, and hereinafter collectively called “discovery”) related 

 

12

 

to
training or marketing methods and techniques that Executive, either solely or
in collaboration with others,  has made
or may make, discover, invent, develop, perfect, or reduce to practice during
the term of his employment, whether or not during regular business hours and
created, conceived or prepared on the Company’s or any affiliates’ premises or
otherwise shall be the sole and complete property of the Company and/or its
affiliates.  More particularly, and
without limiting the foregoing, Executive agrees that all of the foregoing and
any (i) inventions (whether patentable or not, and without regard to
whether any patent therefor is ever sought), (ii) marks, names, or logos
(whether or not registrable as trade or service marks, and without regard to
whether registration therefor is ever sought), (iii) works of authorship
(without regard to whether any claim of copyright therein is ever registered),
and (iv) trade secrets, ideas, and concepts ((i) - (iv) collectively,
“Intellectual Property Products”) created, conceived, or prepared on the
Company’s or any affiliates’ premises or otherwise, whether or not during
normal business hours, shall perpetually and throughout the world be the
exclusive property of the Company and/or its affiliates, as the case may be, as
shall all tangible media (including, but not limited to, papers, computer media
of all types, and models) in which such Intellectual Property Products shall be
recorded or otherwise fixed.  Executive
further agrees promptly to disclose in writing and deliver to the Company all
Intellectual Property Products created during his engagement by the Company,
whether or not during normal business hours. 
Executive agrees that all works of authorship created by Executive
during his engagement by the Company shall be works made for hire of which the
Company or its affiliates is the author and owner of copyright. To the extent
that any competent decision-making authority should ever determine that any
work of authorship created by Executive during his engagement by the Company is
not a work made for hire, Executive hereby assigns all right, title and
interest in the copyright therein, in perpetuity and throughout the world, to the
Company.  To the extent that this
Agreement does not otherwise serve to grant or otherwise vest in the Company or
its affiliates all rights in any Intellectual Property Product created by
Executive during his engagement by the Company, or within three (3) months
thereafter, Executive hereby assigns all right, title and interest therein, in
perpetuity and throughout the world, to the Company.  Executive agrees to execute, immediately upon
the Company’s reasonable request and without charge, any further assignments,
applications, conveyances or other instruments, at any time after execution of
this Agreement, whether or not Executive is engaged by the Company at the time
such request is made, in order to permit the Company, its affiliates and/or
their respective assigns to protect, perfect, register, record, maintain, or
enhance their rights in any Intellectual Property Product; provided, that,
the Company shall bear the cost of any such assignments, applications or
consequences.   Upon termination of
Executive’s employment with the Company for any reason whatsoever, and at any
earlier time the Company so requests, Executive will immediately deliver to the
custody of the person designated by the Company all originals and copies of any
documents and other property of the Company in Executive’s possession, under
Executive’s control or to which he may have access.

 

(f)            Non-Disparagement.
Executive acknowledges and agrees that during and for a period of three (3) years
following the Term of Employment, he will not defame or publicly criticize the
Company and/or its affiliates and their respective officers, directors,
partners, executives or agents with the intent to damage the services,
business, integrity, veracity or personal or professional reputation of any such
party in either a professional or personal manner.  In addition, the Company acknowledges and
agrees that during and for a period of three (3) years following the Term
of Employment, the Company will not defame or publicly criticize Executive 

 

13

 

with
the intent to damage the services, business, integrity, veracity or personal or
professional reputation of Executive in either a professional or personal
manner.  Notwithstanding the foregoing,
nothing in this Section 11(f) shall prevent any person from making
any truthful statement to the extent (i) necessary to rebut any untrue
public statements made by another party; (ii) necessary with respect to
any litigation, arbitration or mediation involving this Agreement, including,
but not limited to, the enforcement of this Agreement or (iii) required by
law or by any court, arbitrator, mediator or administrative or legislative body
(including any committee thereof) with jurisdiction over such person.

 

(g)           Enforcement.  If Executive commits a breach of any of the
provisions of this Section 11 or the Company commits a breach of Section 11(g),
the Company or Executive, as applicable, shall have the right and remedy to
have the provision specifically enforced by any court having jurisdiction.  Executive acknowledges and agrees that the
services being rendered hereunder to the Company are of a special, unique and
extraordinary character and that any such breach will cause irreparable injury
to the Company and that money damages will not provide an adequate remedy to
the Company and the Company acknowledges and agrees that any such breach will
cause irreparable injury to Executive and that money damages will not provide
an adequate remedy to Executive.  Such
right and remedy shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company or Executive at law or in equity.

 

(h)           Blue
Pencil.  If, at any time, the
provisions of this Section 11 shall be determined to be invalid or
unenforceable under any applicable law, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Agreement shall be
considered divisible and shall become and be immediately amended to only such
area, duration and scope of activity as shall be determined to be reasonable
and enforceable by the court or other body having jurisdiction over the matter
and Executive and the Company agree that this Agreement as so amended shall be
valid and binding as though any invalid or unenforceable provision had not been
included herein.

 

(i)            EXECUTIVE
ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS SECTION 11 AND HAS HAD THE
OPPORTUNITY TO REVIEW ITS PROVISIONS WITH ANY ADVISORS AS HE CONSIDERED
NECESSARY AND THAT EXECUTIVE UNDERSTANDS THIS AGREEMENT’S CONTENTS AND
SIGNIFIES SUCH UNDERSTANDING AND AGREEMENT BY SIGNING BELOW.

 

12.           Assignability.  This
Agreement may only be assigned to an acquiror of all or substantially all of
the Company’s business that agrees in writing to assume the Company’s
obligations under this Agreement.

 

13.           Representation. Executive represents and warrants to the Company, and
Executive acknowledges that the Company has relied on such representations and
warranties in employing Executive, that neither Executive’s duties as an
employee of the Company nor his performance of this Agreement will breach any
other agreement to which Executive is a party and that he has not entered into,
and will not enter into, any agreement, either oral or written, in conflict
herewith.  The Company represents and
warrants to Executive that all necessary corporate actions for the approval of
this Agreement have been taken such that, upon the 

 

14

 

Company’s execution of this Agreement,
this Agreement will constitute a legal, valid and binding obligation of the
Company.

 

14.           Resolution of
Disputes.  Any dispute concerning the validity,
interpretation, enforcement, or breach of this Agreement, or otherwise arising
between the parties, shall (except to the extent otherwise provided in Section 11(g) with
respect to certain requests for injunctive relief) be submitted to binding
arbitration before the American Arbitration Association (“AAA”) for
resolution.  Such arbitration shall be
conducted in Dallas, Texas, and the arbitrator will apply New York law,
including federal law as applied in New York courts.  The arbitration shall be conducted in
accordance with the AAA’s Commercial Arbitration Rules, as modified by the
terms set forth in this Agreement.  The
arbitration will be conducted by a single arbitrator, who shall be an attorney
who specializes in the field of employment law and shall have prior experience
arbitrating employment disputes.  The
award of the arbitrator shall be final and binding on the parties, and judgment
on the award may be confirmed and entered in any court having
jurisdiction.  The arbitration shall be
conducted on a strictly confidential basis except to the extent necessary to
enforce any judgment, and neither the Company nor Executive shall not disclose
the existence of a claim, the nature of a claim, any documents, exhibits, or
information exchanged or presented in connection with any such a claim, or the
result of any arbitration (collectively, “Arbitration Materials”), to
any third party, with the sole exception of such Parties legal counsel, who
also shall be bound by all confidentiality terms of this Agreement.  In the event of any court proceeding to
challenge or enforce an arbitrator’s award, the parties hereby consent to the
exclusive jurisdiction of the state and federal courts in Dallas, Texas and
agree to venue in that jurisdiction.  The
parties agree to take all steps necessary to protect the confidentiality of the
Arbitration Materials in connection with any such proceeding, agree to file all
Confidential Information (and documents containing Confidential Information)
under seal to the extent possible and agree to the entry of an appropriate
protective order encompassing the confidentiality terms of this Agreement.  Each party agrees (a) to pay its own
costs and fees in connection with any arbitration of a dispute arising under
this Agreement, and any court proceeding arising therefrom, regardless of
outcome and (b) that the arbitration costs and other joint expenses shall
be borne equally by the Parties.

 

15.           Notices.  Any notice,
consent, demand, request or other communication given to a person in connection
with this Agreement (a “Notice”) shall be in writing and delivered in
person, by facsimile transmission (with a Notice contemporaneously given by
another method specified in this Section 15), by overnight courier service
or by postage prepaid mail with a return receipt requested, at the following
locations (or to such other address as either party may have furnished to the
other in writing by like Notice).  All
such Notices shall be deemed to have been given and effective upon receipt (or
refusal of receipt).

 

	
  If to the Company:

  	
  Principal Place of
  Business

  
	
   

  	
  Attn:  Chief Executive Officer

  
	
   

  	
  Facsimile:

  
	
   

  	
   

  
	
  If to Executive:

  	
  To the address of his
  principal residence as it appears in the Company’s records, with a copy to
  him (during the Term of Employment).

  

 

15

 

16.           Miscellaneous.

 

(a)           Entire
Agreement.  This Agreement, and the
exhibits attached hereto, contain the entire understanding and agreement among
the Parties concerning the subject matter hereof and supersede all prior
agreements, term sheets, understandings, discussions, negotiations and
undertakings, whether written or oral, among them with respect thereto.

 

(b)           Severability.  In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable for any
reason, in whole or in part, the remaining provisions of this Agreement shall
be unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law so as to achieve the purposes of this Agreement.

 

(c)           Amendment
or Waiver.  No provision in this
Agreement may be amended unless such amendment is set forth in a writing that
specifically identifies the provision being amended and that is signed by the
Parties.  No waiver by any person of any
breach of any condition or provision contained in this Agreement shall be
deemed a waiver of any similar or dissimilar condition or provision at the same
or any prior or subsequent time.  To be
effective, any waiver must be set forth in a writing that specifically refers
to the condition or provision that is being waived and is signed by the waiving
person.

 

(d)           Headings.  The headings of the Sections and sub-sections
contained in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any provision of this
Agreement.

 

(e)           Beneficiaries/References.  Executive shall be entitled, to the extent
permitted under applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit under this Agreement
following Executive’s death by giving the Company written notice thereof.  In the event of Executive’s death or a
judicial determination of his incompetence, references in this Agreement to
Executive shall be deemed, where appropriate, to refer to his beneficiary,
transferee, estate or other legal representative.

 

(f)            Survivorship.  Except as otherwise set forth in this
Agreement, the respective rights and obligations of the Parties hereunder shall
survive any termination of Executive’s employment under this Agreement.

 

(g)           Withholding
Taxes.  The Company may withhold from
any amounts or benefits payable under this Agreement any taxes that are
required to be withheld pursuant to any applicable law or regulation.

 

(h)           409A
Provisions.

 

(i)            Notwithstanding
anything herein to the contrary, this Agreement is intended to be interpreted
and applied so that the payments and benefits set forth herein either shall
either be exempt from the requirements of Code Section 409A, or shall
comply with the requirements of Code Section 409A, and, accordingly, to
the maximum 

 

16

 

extent
permitted, this Agreement shall be interpreted to be exempt from or in
compliance with Code Section 409A.

 

(ii)           If
Executive notifies the Company (with specificity as to the reason therefor)
that Executive believes that any provision of this Agreement (or of any award
of compensation or benefit, including equity compensation or benefits provided
herein or at any time during his employment with the Company) would cause the
Executive to incur any additional tax or interest under Code Section 409A
or the Company independently makes such determination, the Company shall, after
consulting with Executive, reform such provision (or award of compensation or
benefit) to attempt to comply with or be exempt from Code Section 409A
through good faith modifications to the minimum extent reasonably
appropriate.  To the extent that any
provision hereof (or award of compensation or benefit) is modified in order to
comply with Code Section 409A, such modification shall be made in good
faith and shall, to the maximum extent reasonably possible, maintain the
original intent and economic benefit to Executive and the Company without
violating the provisions of Section 409A.

 

(iii)          Notwithstanding
any provision in this Agreement or elsewhere to the contrary, if on his Date of
Termination Executive is deemed to be a “specified employee” within the meaning
of Code Section 409A and
using the identification methodology selected by the Company from time to time,
or if none, the default methodology under Code Section 409A, any payments or benefits due upon a termination of
Executive’s employment under any arrangement that constitutes a “deferral of
compensation” within the meaning of Code Section 409A (whether under this
Agreement, any other plan, program, payroll practice or any equity grant) and
which do not otherwise qualify under the exemptions under Treas. Regs. Section 1.409A-1
(including without limitation, the short-term deferral exemption and the
permitted payments under Treas. Regs. Section 1.409A-1(b)(9)(iii)(A)),
shall be delayed and paid or provided to Executive in a lump sum (whether they
would have otherwise been payable in a single sum or in installments in the
absence of such delay) with interest at the prime rate as published in the Wall
Street Journal on the first business day on or following the Date of
Termination, on the earlier of (i) the date which is six (6) months
and one (1) day after Executive’s separation from service (as such term is
defined in Code Section 409A) for any reason other than death, and (ii) the
date of Executive’s death, and any remaining payments and benefits shall be
paid or provided in accordance with the normal payment dates specified for such
payment or benefit.

 

(iv)          Notwithstanding
anything in this Agreement or elsewhere to the contrary, a termination of
employment shall not be deemed to have occurred for purposes of any provision
of this Agreement providing for the payment of any amounts or benefits that
constitute “non-qualified deferred compensation” within the meaning of Code Section 409A
upon or following a termination of Executive’s employment unless such
termination is also a “separation from service” within the meaning of Code Section 409A
and, for purposes of any such provision of this Agreement, references to a “termination,”
“termination of employment” or like terms shall mean “separation from service”
and the date of such separation from service shall be the Date of Termination
for purposes of any such payment or benefits.

 

17

 

(v)           Each
payment under this Agreement or otherwise (including any installment payments)
shall be treated as a separate payment for purposes of Code Section 409A.

 

(vi)          In
no event may Executive, directly or indirectly, designate the calendar year of
any payment to be made under this Agreement or otherwise which constitutes a “deferral
of compensation” within the meaning of Code Section 409A.

 

(vii)         All
expenses or other reimbursements paid pursuant to Section 4(g) hereof
or otherwise that are taxable income to Executive shall in no event be paid
later than the end of the calendar year next following the calendar year in
which Executive incurs such expense or pays such related tax.  With regard to any provision herein that
provides for reimbursement of costs and expenses or in-kind benefits, except as
permitted by Code Section 409A, (i) the right to reimbursement or
in-kind benefits shall not be subject to liquidation or exchange for another
benefit, (ii) the amount of expenses eligible for reimbursement, of
in-kind benefits, provided during any taxable year shall not affect the
expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other taxable year, provided that
the foregoing clause (ii) shall not be violated without regard to expenses
reimbursed under any arrangement covered by Internal Revenue Code Section 105(b) solely
because such expenses are subject to a limit related to the period the
arrangement is in effect and (iii) such payments shall be made on or
before the last day of Executive’s taxable year following the taxable year in
which the expense occurred.  Any tax
gross-up payment as provided herein shall be made in any event no later than
the end of the calendar year immediately following the calendar year in which
Executive remits the related taxes, and any reimbursement of expenses incurred
due to a tax audit or litigation shall be made no later than the end of the
calendar year immediately following the calendar year in which the taxes that
are the subject of the audit or litigation are remitted to the taxing
authority, or, if no taxes are to be remitted, the end of the calendar year
following the calendar year in which the audit or litigation is completed.

 

(i)            Governing
Law.  This Agreement shall be
governed, construed, performed and enforced in accordance with its express
terms, and otherwise in accordance with the laws of the State of New York,
without reference to principles of conflict of laws.

 

(j)            Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed to be one and the same instrument.

 

(k)           Effectiveness
Contingent Upon Emergence. This Agreement shall become effective only upon
the consummation of the Plan of Reorganization. 
In the event the Plan of Reorganization is terminated prior to the
consummation thereof in accordance with its terms for whatever reason, this
Agreement shall become null and void.

 

(l)            Joint
Drafting.  The Company and Executive
acknowledge and agree that this Agreement was jointly drafted by the Company on
the one side and by Executive on the other

 

18

 

side.  Neither party, nor any party’s counsel, shall
be deemed the drafter of this Agreement in any proceeding that may hereafter
arise between them.

 

[SIGNATURE PAGE
FOLLOWS]

 

19

 

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

 

 

	
   

  	
  Aventine Renewable
  Energy Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Thomas Manuel

  
	
   

  	
  Name: Thomas Manuel

  
	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Ben Borgen

  
	
   

  	
  Ben Borgen

  

 

20

 

EXHIBIT
A

 

GENERAL RELEASE

 

1.             Termination
of Employment.  Ben Borgen (the “Executive”)
acknowledges that Executive’s last day of employment with Aventine Renewable
Energy Holdings, Inc. (together with its successors and assigns the “Company”)
is [                              ]
(the “Termination Date”).

 

2.             Consideration.  In accordance with the Employment Agreement
by and between the Company and Executive, dated March 15, 2010 (the “Employment
Agreement”), a copy of which is attached hereto and incorporated herewith,
the Company agrees to provide the consideration set forth in Section 9([d][e])(ii) of the Employment
Agreement in exchange for this General Release.

 

3.             Full Release.  Executive, for himself, his heirs, executors,
administrators, successors and assigns (hereinafter collectively referred to as
the “Releasors”), hereby fully releases and discharges the Company, its
parents, subsidiaries, affiliates, insurers, successors, and assigns, and their
respective officers, directors, employees, related parties and agents (all such
persons, firms, corporations and entities being deemed beneficiaries hereof and
are referred to herein as the “Related Parties”) from any and all
actions, causes of action, claims, obligations, costs, losses, liabilities,
damages and demands of whatsoever character, whether or not known, suspected or
claimed, which the Releasors have, from the beginning of time through the date
of this General Release, against the Related Parties arising out of or in any
way related to Executive’s employment with the Company or the termination of
his employment with the Company. 
Notwithstanding anything herein to the contrary, this General Release
shall not (i) apply to any benefits due to Executive under this General
Release or otherwise under Section 9 of the Employment Agreement,
including without limitation, your right to a gross-up payment under Section 9(g) and
Exhibit B of the Employment Agreement; (ii) apply to Executive’s
rights to indemnification from the Company or rights to be covered under any
applicable insurance policy with respect to any liability Executive incurred or
might incur as an employee, officer or director of the Company or a fiduciary of any Company benefit
plan including, without limitation, Executive’s rights under Section 10
of the Employment Agreement; (iii) impair any vested benefits Executive may have, as of the
Termination Date, under any other employee benefit plans and programs
applicable to Executive as of the Termination Date; and (iv) impair your
rights to any continuation of medical coverage, pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended.

 

4.             Waiver of Rights Under All
Applicable Statutes, Contract And Common Law.  Executive understands that this General
Release waives all claims and rights Executive may have under certain
applicable federal, state and local statutory and regulatory laws, as each may
be amended from time to time, including but not limited to, the Age
Discrimination in Employment Act (including the Older Workers Benefit
Protection Act) (“ADEA”), Title VII of the Civil Rights Act; the
Employee Retirement Income Security Act of 1974; the Equal Pay Act; the
Rehabilitation Act of 1973; the Americans with Disabilities Act; the Americans
with Disabilities Amendment Act, the Worker Adjustment and Retraining
Notification Act; the Family and Medical Leave Act, and all other statutes,
regulations, contracts, common law, and other laws in any and all
jurisdictions.

 

21

 

5.             Informed
and Voluntary Signature.  No promise
or inducement has been made other than those set forth in this General
Release.  This General Release is
executed by Executive without reliance on any representation by the Company or
any of its agents.  Executive states that
that he is fully competent to manage his business affairs and understands that
he is waiving legal rights by signing this General Release.  Executive hereby acknowledges that he has
carefully read this General Release and has had the opportunity to thoroughly
discuss the terms of this General Release with legal counsel of his
choosing.  Executive hereby acknowledges
that he fully understands the terms of this General Release and its final and
binding effect and that he affixes his signature hereto voluntarily and of his
own free will.

 

6.             Waiver
of Rights Under the Age Discrimination Act. 
Executive understands that this General Release, and the release
contained herein, waives all of his claims and rights under the ADEA. The
waiver of Executive’s rights under the ADEA does not extend to claims or rights
that might arise after the date this General Release is executed.  All or part of the consideration to be paid
to Executive are in addition to any sums to which Executive would be entitled without
signing this General Release. For a period of seven (7) days following
execution of this General Release, Executive may revoke the terms of this
General Release by a written document received by the Employer no later than
11:59 p.m. of the seventh day following Executive’s
execution of this General Release.  This
General Release will not be effective until said revocation period has expired
without a revocation by Executive (the “Effective Date”). Executive
acknowledges that he has been given up to [21/45](1) days to decide
whether to sign this General Release. Executive has been advised to consult
with an attorney prior to executing this General Release and has been given a
full and fair opportunity to do so.

 

7.             Covenant Not To Sue.  Except for an action brought to enforce this
General Release or challenge the validity of the ADEA waiver, Executive agrees
to refrain from filing or otherwise initiating any action, lawsuit, charge,
claim, demand, grievance, arbitration or other legal action against the Company
or Related Parties over matters released or waived herein, and agrees that he
will refrain from participating in any action, complaint, charge, claim,
demand, grievance, arbitration or other legal action initiated or pursued by
any individual, group of individuals, partnership, corporation or other entity
against Executive and/or the Related Parties over matters released or waived
herein, except as required by law. 
Notwithstanding the foregoing, nothing in this General Release shall
interfere with Executive’s right to file a charge with or participate in an
investigation or proceeding by the Equal Employment Opportunity Commission or
other federal or state regulatory or law enforcement agency.  However, the consideration provided to
Executive under this General Release shall be the sole relief provided for the
released claims. Executive will not be entitled to recover and Executive agrees
to waive any monetary benefits or other recovery in connection with any such
charge or proceeding, without regard to who has brought such charge or
proceeding.

 

8.             Litigation And Regulatory
Cooperation.  Executive shall (a) reasonably
cooperate with the Company and/or Related Parties in the defense or prosecution
of any claims or actions now in existence or that may be brought in the future
against or on behalf of the Company and/or Related Parties that relate to
events or occurrences that transpired while Executive was employed by the
Company and (b) reasonably cooperate with the Company in connection with
any 

 

(1) Insert 45 days in the event of a layoff of
two or more employees.

 

22

 

investigation
or review by any federal, state, or local regulatory authority as any such
investigation or review relates to events or occurrences that transpired while
Executive was employed by the Company; provided, that the forgoing shall not
apply if the interests of the Company and Executive are adverse.  Any request for such cooperation shall take
into account Executive’s other personal and business commitments.  For any such cooperation that Executive
provides after December 31, 2012, the Company shall pay Executive a per
diem fee for such cooperation (calculated as one-fifth the weekly gross Base
Salary at the rate in effect immediately prior to the Termination Date), paid
on the last day of the month following the month in which such fee was
earned.  The Company shall reimburse the
Executive for all reasonable out-of-pocket expenses incurred by him in
connection with providing such cooperation.

 

9.             Reaffirmation of Continuing
Obligations Under Employment Agreement And Applicable Law.  Nothing in this General Release is intended
to replace, supersede or supplant Executive’s independent and obligations under
the Employment Agreement that specifically continue following a termination of
his employment.  By executing this
General Release, Executive hereby acknowledges and reaffirms all such
continuing obligations under the Employment Agreement and applicable law,
including but not limited to his obligations set forth in Section 11 of
the Employment Agreement, entitled “Restrictive Covenants.”  These obligations include, without
limitation, Executive’s agreements concerning Confidential Information,
non-competition and non-solicitation.

 

10.           No Admission of Liability.  This General Release shall not in any way be
considered or construed as an admission by the Company of any improper actions
or liability whatsoever as to Executive or any other person.

 

11.           Miscellaneous.

 

(a)           This General Release shall be
governed in all respects by the laws of the State of New York without regard to
the principles of conflict of law.

 

(b)           In the event that any one or more of
the provisions of this General Release is held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby. Moreover, if
any one or more of the provisions contained in this General Release is held to
be excessively broad as to duration, scope, activity or subject, such
provisions will be construed by limiting and reducing them so as to be
enforceable to the maximum extent compatible with applicable law.

 

(c)           This General Release may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

 

(d)           The paragraph headings used in this
General Release are included solely for convenience and shall not affect or be
used in connection with the interpretation of this General Release.

 

(e)           This General Release and the
Employment Agreement represent the entire agreement between the parties with
respect to the subject matter hereto and may not be amended except in a writing
signed by the Company and Executive.

 

23

 

(f)            This General Release shall be
binding on the executors, heirs, administrators, successors and assigns of
Executive and the successors and assigns of the Related Parties and the
Releasors and shall inure to the benefit of the respective executors, heirs,
administrators, successors and assigns of the Related Parties and the
Releasors.

 

[signature page follows]

 

24

 

IN WITNESS WHEREOF, the parties hereto have executed this General Release on
this        day of
                              .

 

 

	
   

  	
  Aventine Renewable
  Energy Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Ben Borgan

  

 

25

 

EXHIBIT
B

 

PARACHUTE TAX INDEMNITY PROVISIONS

 

This Exhibit B sets
forth the terms and provisions applicable to Executive pursuant to the
provisions of the Section 9(g) of the Agreement.  This Exhibit B shall be subject in all
respects to the terms and conditions of the Agreement.  Capitalized terms used without definition in
this Exhibit B shall have the meanings set forth in the Agreement.

 

(i)            In the event that Executive shall
become entitled to payments and/or benefits provided by the Agreement or any
other amounts to (or for the benefit of) Executive that constitute “parachute
payments,” as such term is defined under Section 280G of the Code, as a
result of a change in ownership or effective control of the Company or in the
ownership of a substantial portion of the assets of the Company (collectively,
the “Company Payments”), and such Company Payments will be subject to
the tax (the “Excise Tax”) imposed by Section 4999 of the Code (and
similar tax, if any, that may hereafter be imposed by any taxing authority),
the Company shall pay to Executive at the time specified in clause (v) below
an additional amount (the “Gross-Up Payment”) such that the net amount
retained by Executive from the Company Payments together with the Gross-Up
Payment, after deduction of any Excise Tax on the Company Payments and any U.S.
federal, state, and local income or payroll tax upon the Gross-Up Payment
provided for by this clause (i), but before deduction for any U.S. federal,
state, and local income or payroll tax on the Company Payments, shall be equal
to the Company Payments.

 

(ii)           Notwithstanding the foregoing
provisions of this Exhibit B to the contrary, if it shall be determined
that Executive is entitled to a Gross-Up Payment, but the Company Payments do
not exceed 110% of the greatest amount (the “Reduced Amount”) that could
be paid to Executive such that the receipt of the Company Payments would not
give rise to any Excise Tax, then no Gross-Up Payment shall be made to
Executive and the Company Payments, in the aggregate, shall be reduced to the
Reduced Amount.  Any such reduction shall
be made in 

 

26

 

the following
order:  any cash severance Executive is
entitled to receive (starting with the last payment due), then other cash
amounts Executive is entitled to receive that are considered parachute payments
under Section 280G of the Code (starting with the last payment due), then
any stock options that have exercise prices higher than the then fair market
value price of the stock (based on the latest vesting tranches), then
restricted stock and restricted stock units based on the last ones scheduled to
be distributed and then other stock options based on the latest vesting
tranches.  In the event that the Internal
Revenue Service or court ultimately makes a determination that the “excess
parachute payments” plus the “base amount” is an amount other than as
determined initially, an appropriate adjustment shall be made with regard to
the Gross-Up Payment or Reduced Amount, as applicable, to reflect the final
determination and the resulting impact on whether this clause (ii) applies.

 

(iii)          For purposes of determining whether
any of the Company Payments and Gross-Up Payment (collectively, the “Total
Payments”) will be subject to the Excise Tax and the amount of such Excise
Tax:

 

(A)  the Total Payments shall be treated as “parachute
payments” within the meaning of Section 280G(b)(2) of the Code, and
all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of
the Code) shall be treated as subject to the Excise Tax, unless and except to
the extent that, in the opinion of the Company’s independent certified public
accountants appointed prior to any change in ownership (as defined under Section 280G(b)(2) of
the Code) or a certified public accountant
appointed following a change in ownership that is or tax counsel
selected by such accountants or the Company (the “Accountants”) such
Total Payments (in whole or in part):  (1) do
not constitute “parachute payments,” (2) represent reasonable compensation
for services actually rendered within the meaning of Section 280G(b)(4) of
the Code in excess of the “base amount” or (3) are otherwise not subject
to the Excise Tax; and

 

(B) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Accountants in
accordance with the principles of Section 280G of the Code.  

 

In the event that
the Accountants are serving as accountants or auditors for the individual,
entity or group effecting the change in control (within the meaning of Section 280G
of the Code), Executive may appoint another nationally recognized accounting
firm to make the determinations hereunder (which accounting firm shall then be
referred to as the “Accountants” hereunder). 
All determinations hereunder shall be made by the Accountants which
shall provide detailed supporting calculations both to the Company and
Executive at such time as it is requested by the Company or Executive.  The determination of the Accountants, subject
to the adjustments provided below, shall be final and binding upon the Company
and Executive.

 

(iv)          For purposes of determining the amount
of the Gross-Up Payment, Executive’s marginal blended actual rates of federal,
state and local income taxation in the calendar year in which the change in
ownership or effective control that subjects Executive to the Excise Tax occurs
shall be used.  In the event that the
Excise Tax is subsequently determined by the Accountants to be less than the
amount taken into account hereunder at the time the Gross-

 

27

 

Up Payment is
made, Executive shall repay to the Company, at the time that the amount of such
reduction in Excise Tax is finally determined, the portion of the prior
Gross-Up Payment attributable to such reduction (plus the portion of the
Gross-Up Payment attributable to the Excise Tax and U.S. federal, state and
local income tax imposed on the portion of the Gross-Up Payment being repaid by
Executive if such repayment results in a reduction in Excise Tax or a U.S.
federal, state and local income tax deduction). 
Notwithstanding the foregoing, in the event that any portion of the
Gross-Up Payment to be refunded to the Company has been paid to any U.S. federal,
state and local tax authority, repayment thereof (and related amounts) shall
not be required until actual refund or credit of such portion has been made to
Executive.  Executive and the Company
shall mutually agree upon the course of action to be pursued (and the method of
allocating the expense thereof) if Executive’s claim for refund or credit is
denied.  In the event that the Excise Tax
is later determined by the Accountants or the Internal Revenue Service (or
other taxing authority) to exceed the amount taken into account hereunder at
the time the Gross-Up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-Up
Payment), the Company shall make an additional Gross-Up Payment in respect of
such excess (plus any interest or penalties payable with respect to such
excess) promptly after the amount of such excess is finally determined.

 

(v)           The Gross-Up Payment or portion
thereof provided for in clause (iv) above shall be paid not later than the
sixtieth (60th) day following an event occurring which
subjects Executive to the Excise Tax; provided, however, that if the amount of
such Gross-Up Payment or portion thereof cannot be finally determined on or
before such day, the Company shall pay to Executive on such day an estimate, as
determined in good faith by the Accountants, of the minimum amount of such
payments and shall pay the remainder of such payments (together with interest
at the rate provided in Section 1274(b)(2)(B) of the Code), subject
to further payments pursuant to clause (iv) above, as soon as the amount
thereof can reasonably be determined, but in no event later than the
seventy-fifth (75th) day after the occurrence of the event
subjecting Executive to the Excise Tax. 
Subject to clauses (iv) and (ix) of this Exhibit B, in
the event that the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall constitute a loan
by the Company to Executive, payable on the fifth (5th) day after demand by the
Company (together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code).

 

(vi)          In the event of any controversy with
the Internal Revenue Service (or other taxing authority) with regard to the
Excise Tax, Executive shall permit the Company to control issues related to the
Excise Tax (at its expense), provided that such issues do not potentially
materially adversely affect Executive, but Executive shall control any other
issues.  In the event that the issues are
interrelated, Executive and the Company shall in good faith cooperate so as not
to jeopardize resolution of either issue, but if the parties cannot agree,
Executive shall make the final determination with regard to the issues.  In the event of any conference with any
taxing authority as to the Excise Tax or associated income taxes, Executive
shall permit the representative of the Company to accompany Executive, and
Executive and Executive’s representative shall cooperate with the Company and
its representative.

 

(vii)         The Company shall be responsible for
all charges of the Accountants.

 

28

 

(viii)        The Company and Executive shall promptly
deliver to each other copies of any written communications, and summaries of
any verbal communications, with any taxing authority regarding the Excise Tax
covered by this Exhibit B.

 

(ix)           Nothing in this Exhibit B is
intended to violate the Sarbanes-Oxley Act of 2002 and to the extent that any
advance or repayment obligation hereunder would do so, such obligation shall be
modified so as to make the advance a nonrefundable payment to Executive and the
repayment obligation null and void.

 

(x)            Notwithstanding the foregoing, any
payment or reimbursement made pursuant to this Exhibit B shall be made in
any event no later than the end of the calendar year immediately following the
calendar year in which Executive remits the related taxes, and any
reimbursement of expenses incurred due to a tax audit or litigation shall be
made no later than the end of the calendar year immediately following the
calendar year in which the taxes that are the subject of the audit or
litigation are remitted to the taxing authority, or, if no taxes are to be
remitted, the end of the calendar year following the calendar year in which the
audit or litigation is completed.

 

(xi)           The provisions of this Exhibit B
shall survive the termination of Executive’s employment with the Company for
any reason and any amount payable under this Exhibit B shall be subject to
the provisions of Section 16(h) of the Agreement.

 

29

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