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
XXXX X. XXXX, an individual (“Employee”).
A. WHEREAS,
Company
and Employee are parties to that certain Employment Agreement dated as of
October 20, 2003 (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 first sentence thereof and adding the following
sentence:
“2.
Position;
Scope of Employment.
Employee shall have the position of Chief Financial Officer of Employer and
Company.
b. 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.”
c. Section
4.3, 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.”
d. Section
4.5, Accrued
Vacation Pay,
is
hereby added to the Agreement by adding the following paragraph:
“4.5.
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.”
e. Section
4.6, Closing
Bonus,
is
hereby added to the Agreement by adding the following paragraph:
“4.6.
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.”
f. 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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g. 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 Base
Salary by the new entity as Employee was employed with, or paid by, Employer,
then Employee shall receive a severance payment equal to two (2) years of
Employee’s Base Salary, or the balance remaining to be paid under the terms of
the Agreement, whichever is greater. 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
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(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.
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.”
h. Section
7.1., 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).”
i. All
restrictions placed upon Employee in Section 7., 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.
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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/
Xxxx X. Xxxx
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XXXX
X. XXXX
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THE
RICEX COMPANY
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By:
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/s/
Xxx Xxxxx
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Name:
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Xxx
Xxxxx
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Title:
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CEO
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