FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This
First Amendment to Employment Agreement (this “First
Amendment”)
is
executed as of October 4, 2005 by and among NUTRACEA, a California corporation
(“Employer”),
THE
RICEX COMPANY, a Delaware corporation (“Company”),
and
XXX X. XXXXX, an individual (“Employee”).
A. WHEREAS,
Company
and Employee are parties to that certain Employment Agreement dated as of May
1,
2004 (the “Agreement”).
B. WHEREAS,
Company
has entered into that certain Agreement and Plan of Merger and Reorganization,
dated April 4, 2005, with Employer and Red Acquisition Corporation (the
“Merger
Agreement”).
C. WHEREAS,
as a
condition to the consummation of the transactions contemplated by the Merger
Agreement (the “Merger”),
Company has agreed to amend the Agreement.
D. WHEREAS,
contemporaneous to the effective time of the Merger, which shall be such time
as
Company files a Certificate of Merger with the Secretary of State of the State
of Delaware (the “Effective
Time”),
Company desires to assign to Employer, and Employer desires to assume from
Company, the Agreement, as amended by this First Amendment.
E. WHEREAS,
as
consideration for (i) entering into this First Amendment and (ii) Employee’s
continued employment with Employer following the Merger, Company has agreed
to,
and Employer has consented to, the payment by Company of a bonus to Employee,
which bonus shall be earned and payable immediately following the approval
of
the Merger by the stockholders of Company.
F. WHEREAS,
Employer, Company and Employee desire to amend the Agreement as set forth in
this First Amendment.
G. WHEREAS,
Employer, Company and Employee desire that this First Amendment shall become
effective only as of the Effective Time.
NOW,
THEREFORE,
in
consideration of the foregoing and the mutual covenants and agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
AMENDMENT
1. Amendment.
The
following paragraphs are amended and restated or added, as applicable, as
follows:
a. Section
2., Position;
Scope of Employment,
is
amended by deleting the entire paragraph thereof and adding the following
paragraph:
“2.
Position;
Scope of Employment.
Employee shall have the position of Chief Operating Officer for Employer and
for
the Company and its subsidiary, Food Extrusion Montana. Employee shall manage
the operations of Employer by directing and coordinating activities consistent
with established goals, objectives and policies. In performing the services
hereunder, Employee shall follow the direction set by the Chief Executive
Officer and Board of Directors of Employer, and shall implement such programs
as
he deems necessary to ensure attainment of Employer’s business plan for growth
and profit. Employee also shall provide direction and structure for all
operating units, shall participate in developing policy and strategic plans,
and
shall manage all activities associated with Employer’s production, engineering,
construction, quality assurance, logistics and research and
development.
b. Section
2.1., Time
and Effort,
is
amended by deleting the entire paragraph thereof and adding the following
paragraph:
“2.1.
Entire
Time and Effort.
Employee shall devote Employee’s full working time, attention, abilities, skill,
labor and efforts to the performance of Employee’s employment. Employee shall
not directly or indirectly (i) be substantially engaged in or concerned with
any
other duties or pursuits, (ii) render services to any third party for
compensation or other benefit, or (iii) engage in any other business activity
that will in any way interfere with the performance of Employee’s duties under
this Agreement, except with the prior written consent of Employer; provided,
however, that Employee may engage in charitable, philanthropic, educational,
religious, civic and similar such activities to the extent that such activities
do not unreasonably interfere with the performance of Employee’s duties under
this Agreement.”
c. Section
2.2, Other
Employment,
is
amended by deleting the entire paragraph thereof and adding the following
paragraph:
“2.2.
[Intentionally Omitted.]”
d. Section
3., Term
of Employment,
is
amended by deleting the entire paragraph thereof and adding the following
paragraph:
“3.
Term
of Employment.
Employee’s term of employment pursuant to this Agreement shall commence on the
Effective Time and shall terminate three (3) years from that date, unless
terminated earlier as provided herein. At the end of the initial three (3)-year
term, this Agreement shall automatically renew for an additional one (1)-year
term unless either party notifies the other party in writing ninety (90) days
prior to the expiration of the term of his or its intention not to renew this
Agreement.”
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e. Section
4., Compensation,
is
amended by deleting the entire paragraph thereof and adding the following
paragraph:
“4.
Compensation.
Employer shall pay employee the base pay (“Base
Salary”)
of One
Hundred Fifty Thousand Dollars ($150,000) per year, which shall take effect
as
of the Effective Time. Salary payments will be payable in periodic installments
in accordance with Employer’s pay schedule, but not less than twice per month.
The Base Salary shall be reviewed at least annually, and shall be adjusted
to
compensate for cost of living adjustments in the Sacramento metropolitan
area.”
f. Section
4.4, Automobile,
is
amended by adding the following sentence to the end of the existing
paragraph:
“Notwithstanding
the foregoing, Employer shall not be obligated to make any down payments for
the
purchase of any automobile by or on behalf of Employee.”
g. Section
4.8, Accrued
Vacation Pay,
is
hereby added to the Agreement by adding the following paragraph:
“4.8.
Accrued
Vacation Pay.
Immediately prior to the Effective Time, Company shall pay to Employee all
vacation pay due to Employee that has been accrued but unpaid up to and through
the Effective Time.”
h. Section
4.9, Closing
Bonus,
is
hereby added to the Agreement by adding the following paragraph:
“4.9.
Closing
Bonus.
Immediately following the approval of the merger effected pursuant to that
certain Agreement and Plan of Merger and Reorganization, dated as of April
4,
2005, by and between Employer, Red Acquisition Corporation, the wholly-owned
subsidiary of Employer and Company by the stockholders of Company, Company
shall
pay to Employee a bonus of $50,000, net of any federal, state or local
withholding or other taxes or charges.”
i. Section
5.3(B) is amended by deleting the entire paragraph thereof and adding the
following paragraph:
“(B)
If
Employee is terminated by Employer without cause, Employer shall pay to Employee
as liquidated damages, and in lieu of any and all other claims that Employee
may
have against Employer, an amount equal to the greater of (i) the monthly Base
Salary multiplied by the number of months remaining on the term of this
Agreement, and (ii) one (1) year of Base Salary, but in no event shall severance
pay exceed three (3) years of Base Salary, regardless of the
term.”
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j. Section
5.3(C) is amended by deleting the entire paragraph thereof and adding the
following paragraph:
“(C)
If
Employee is terminated as the result of a Change in Control (as defined below)
and Employee is not employed in the same capacity or being paid the same salary
by the new entity as Employee was employed with, or paid by, Employer, then
Employee shall receive a severance payment of one hundred eighty thousand
dollars ($180,000). In addition, if Employee is terminated as the result of
a
Change in Control and Employee is not employed in the same capacity by the
new
entity, Employer agrees to continue Employee’s medical and dental insurance
benefits as provided during Employee’s employment with Employer for a period of
two (2) years from the effective date of the Change in Control, except as
provided below in Section 5.3(C)(1) and Section 5.3(C)(2). For the purposes
of
this Agreement, a “Change in Control” means:
(1) a
merger
or acquisition in which Employer is not the surviving entity, except for (a)
a
transaction the principal purpose of which is to change the state of Employer’s
incorporation, or (b) a transaction in which Employer’s stockholders immediately
prior to such transaction hold, immediately after such transaction, at least
50%
of the voting power of the surviving entity;
(2) a
stockholder approved sale, transfer or other disposition of all or substantially
all of the assets of Employer;
(3) a
transfer of all or substantially all of Employer’s assets pursuant to a
partnership or joint venture agreement or similar arrangement where Employer’s
resulting interest is less than fifty percent (50%);
(4) any
reverse merger in which Employer is the surviving entity but in which fifty
percent (50%) or more of Employer’s outstanding voting stock is transferred to
holders different from those who held the stock immediately prior to such
merger;
(5) on
or
after the date hereof, a change in ownership of Employer through an action
or
series of transactions, such that any person is or becomes the beneficial owner,
directly or indirectly, of securities of Employer representing fifty percent
(50%) or more of the voting power of Employer’s outstanding securities;
or
(6) a
majority of the members of the Board of Directors are replaced during any twelve
(12) month period by directors whose appointment or election is not endorsed
by
a majority of the members of the Board of the Directors prior to the date of
such appointment of election.
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Notwithstanding
the foregoing, the transactions effected pursuant to, or required by, that
certain Agreement and Plan of Merger and Reorganization, dated as of April
4,
2005, by and between Employer, Red Acquisition Corporation, the wholly-owned
subsidiary of Employer and Company, shall not constitute a Change in
Control.”
k. Section
6.1., Confidential
Information,
is
amended by deleting the first sentence and replacing it with the following
sentence:
“Employee
agrees not to disclose to any others, or take or use for Employee’s own purposes
or purposes of any others, during the term of this Agreement or at any time
thereafter, any of Employer’s Confidential Information (as defined
below).”
l.
All
restrictions placed upon Employee in Section 6., Proprietary
Information; Confidentiality,
of the
Agreement with respect to “Confidential Information” shall be deemed to apply to
Confidential Information of the Employer and Employer’s direct or indirect
subsidiaries.
2. Affirmation.
In order
to induce each other to enter into this First Amendment, the parties hereby
confirm that all terms and provisions of the Agreement have been and continue
to
be in all respects in full force and effect, and no violation of the terms
and
conditions of the Agreement has occurred.
3. Effective
Date; Assignment and Assumption.
This
First Amendment shall become effective only upon the Effective Time. Effective
immediately from and after the Effective Time, (i) all of Company’s right, title
and interest in and to the Agreement, as amended by this First Amendment, shall
be deemed to have been assigned, granted, bargained, transferred, conveyed,
set
over and delivered unto Employer, and (ii) Employer shall be deemed to have
assumed the Agreement, as amended by this First Amendment, and shall faithfully
and timely discharge and perform each and every obligation of Company arising
under the Agreement, as amended by this First Amendment.
4. Modification;
Interpretation.
Except
as expressly set forth in this First Amendment, this First Amendment shall
not
alter, amend, or otherwise modify the terms and provisions of the Agreement.
From and after the Effective Time, all references in the Agreement to “the
Agreement,” “this Agreement” or any similar reference shall refer to the
Agreement as amended by this First Amendment. From and after the Effective
Time,
all references in the Agreement to “Employer,” or any similar reference shall
refer to NutraCea, a California corporation. Capitalized terms not otherwise
defined herein shall have the respective meanings ascribed to them in the
Agreement or the Merger Agreement.
5. Approval
by Company’s Board of Directors.
Company
hereby represents that its Board of Directors has duly approved the terms of
this First Amendment.
[The
Remainder of this Page is Intentionally Left Blank -- Signature Page
Follows]
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IN
WITNESS WHEREOF, the parties have executed this First Amendment as of the date
first set forth above.
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By:
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/s/
Xxxx Xxxxx
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Name:
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Xxxx
Xxxxx
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Title:
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President
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/s/Xxx
X. Xxxxx
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XXX
X. XXXXX
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||||
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THE
RICEX COMPANY
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By:
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/s/
Xxxx Xxxx
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Name:
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Xxxx
Xxxx
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Title:
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CFO
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