SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
SECOND
AMENDMENT TO EMPLOYMENT AGREEMENT
This
Second Amendment to Employment Agreement (this “Second
Amendment”)
is
executed as of July 18, 2008 by and among NUTRACEA, a California corporation
(“Employer”),
and
XXXX X. XXXX, an individual (“Employee”).
A. WHEREAS,
Employer, Employee and The RiceX Company, a Delaware corporation, are parties
to
that certain Employment Agreement dated as of October 20, 2003 (the
“Agreement”);
B. WHEREAS,
Employer, Employee and The RiceX Company are parties to that certain First
Amendment to Employment Agreement dated as of October 5, 2005;
C. WHEREAS,
Employer and Employee desire to amend the Agreement as set forth in this Second
Amendment;
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
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
July 21, 2008 and shall terminate on the earlier of (i) March 31, 2009, or
(ii)
upon Employer’s appointment of a successor chief financial officer, or (iii)
upon a Change of Control of Employer (as such term is defined below). Upon
termination of this Agreement, the Employment Severance Agreement, attached
hereto as Exhibit
A,
and the
Independent Contractor Agreement, attached hereto as Exhibit
B,
shall
immediately become effective; provided that such Employment Severance Agreement
and Independent Contractor Agreement shall not become effective and shall have
no force or effect if Employee resigns prior to the expiration of the term
set
forth in the first sentence of this Section 3. The parties agree to take all
actions necessary to accomplish the foregoing to effect and execute the
Employment Severance Agreement and the Independent Contractor Agreement. For
purposes of this Agreement, “Change of Control” of Employer is defined as the
date of (i) the consummation of a merger or consolidation of Employer with
any
other corporation or the acquisition of shares of stock in Employer by a third
party, which results in the voting securities of Employer outstanding
immediately prior thereto failing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the total voting power represented
by
the voting securities of Employer or such surviving entity outstanding
immediately after such merger or consolidation, or (ii) the consummation of
the
sale or disposition by Employer of all or substantially all of Employer's
assets.”
2. Affirmation.
In order
to induce each other to enter into this Second 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
Second 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 Second 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 Second Amendment, and shall faithfully
and timely discharge and perform each and every obligation of Company arising
under the Agreement, as amended by this Second Amendment.
4. Modification;
Interpretation.
Except
as expressly set forth in this Second Amendment, this Second 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 Second 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 Second Amendment.
[The
Remainder of this Page is Intentionally Left Blank -- Signature Page
Follows]
IN
WITNESS WHEREOF, the parties have executed this Second Amendment as of the
date
first set forth above.
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By:
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/s/ Xxxxxxx Xxxxx | /s/ Xxxx X. Xxxx | |
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Name: Xxxxxxx
Xxxxx
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XXXX
X. XXXX
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Title: Chief
Executive Officer
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EXHIBIT
A
EMPLOYMENT
SEVERANCE AGREEMENT
This
Employment Severance and Release Agreement (“Agreement”) is made by and between
NutraCea, with a principal business address at 0000 Xxxxx 00xx
Xxxxxx,
Xxxxxxx, XX 00000 and Xxxx X. Xxxx, an individual with principal address at
0000
Xxxxxx Xxxxx Xxx, Xxxxxxx Xxx, XX 00000 (“Employee”) as follows:
1. Separation
from Employment.
Employee’s employment with NutraCea terminated pursuant to the Employment
Agreement originally entered into on October 20, 2003, and amended pursuant
to
the First Amendment to Employment Agreement dated October 5, 2005, and the
Second Amendment to Employment Agreement dated July 19, 2008 (collectively
“Employment Agreement”). Such date of termination is referred to herein as the
“Termination Date”. This Agreement shall be effective as of such Termination
Date unless otherwise provided in the Employment Agreement.
2. Severance
Payments.
NutraCea does not have a policy or obligation to pay severance pay, but
nevertheless, agrees to make severance payments to Employee as set forth in
this
Section 2. Subject to and conditioned upon Employee’s compliance with each and
every obligation of Employee set forth herein, specifically including, without
limitation, Employee’s obligations of no disparagement, no solicitation,
non-interference, and confidentiality as set forth in Sections 9, 10 and 11
of
this Agreement, NutraCea
agrees to pay to Employee one lump sum severance payment equal to Employee’s
current annual salary, which is equal to the annual salary amount payable to
Employee pursuant to the Employment Agreement as in effect immediately prior
to
the Termination Date. (the “Severance Payment”). In addition to the Severance
Payment, NutraCea agrees to pay in full on or prior to the Termination Date,
the
car lease referenced on Exhibit
A
attached
hereto, and to assign to Employee the computer items referenced on Exhibit
A
attached
hereto.
2.1. Payments
Schedule; Withholding.
NutraCea shall pay Employee the Severance Payment in accordance with NutraCea’s
standard payroll practices. The severance payment shall be subject to the
customary withholding tax and other employment taxes as required with respect
to
compensation paid to its employees.
2.2. Medical
and Health Benefits.
Employee will also be offered the opportunity for continued coverage under
NutraCea’s health insurance plans until March 31, 2009. Thereafter, NutraCea
shall reimburse employee for his subsequent COBRA payments made after March
31,
2009 and continuing for eighteen (18) months thereafter, unless during such
time, Employee becomes eligible to obtain coverage under Medicare Plans A and
B,
in which case, NutraCea shall be under no further obligation to reimburse
Employee for such COBRA payments. NutraCea’s insurance agent will send Employee
information regarding this coverage.
2.3 Stock
Option Grants. The
options, warrants and any other rights identified on Exhibit
B,
as
acknowledged and approved by the Company’s CEO will remain vested, or shall
become vested and capable of exercise pursuant to their terms, as provided
in
the stock option agreements delivered pursuant to NutraCea’s equity incentive
plans. All options assumed by NutraCea from RiceX identified on Exhibit B are
(1) approved to be exercisable using a cashless exercise (net exercise)
provision, provided this method of exercise is chosen by optionee as the method
of exercise; and (2) amended in the event the optionee dies or becomes disabled,
the expiration period shall be one year from the date of death or disability.
Additionally, the options which are scheduled to expire on October 4, 2008
shall
be amended to extend the expiration period three years from termination date.
The Company shall also waive all performance requirements for the option issued
to Employee on January 8, 2008.
1
2.4 Director
and Officer Insurance Indemnity.
NutraCea shall maintain current levels of officer’s insurance for the benefit of
Employee on the terms provided in the Indemnification Agreement between NutraCea
and Employee as in effect on the Termination Date.
3. Payment
of Salary. Employee’s
vacation and sick leave shall cease accruing on the Termination Date. Aside
from
the severance payments set forth in Section 2 of this Agreement, Employee
acknowledges and represents that NutraCea has paid all salary, wages, bonuses,
accrued vacation, commissions and any and all other benefits due to
Employee.
4. Business
Expenses.
Employee acknowledges and warrants to NutraCea that Employees has been
reimbursed for all business expenses, in accordance with NutraCea’s
reimbursement policy.
5. Release
of Liability.
Employee acknowledges that he enters this Agreement freely and voluntarily,
and
agrees as follows:
5.1 ADEA
Waiver. Employee
acknowledges that he is knowingly and voluntarily waiving and releasing any
rights Employee may have under the Age Discrimination in Employment Act of
1967,
as amended (“ADEA”). Employee also acknowledges that the consideration given for
the waiver and release pursuant to this Agreement is in addition to anything
of
value to which Employee was already entitled. Employee further acknowledges
that
he has been advised by this Agreement in writing, as required by the ADEA,
that:
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(a)
|
his
waiver and release does not apply to any rights or claims that may
arise
after the execution date of this Agreement;
|
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(b)
|
he
has the right to consult with an attorney prior to executing this
Agreement;
|
|
(c)
|
he
has twenty-one (21) days to consider this Agreement (although Employee
may
choose to waive this provision by voluntarily executing this Agreement
earlier);
|
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(d)
|
he
has seven (7) days following the execution of this Agreement to revoke
the
Agreement; and
|
|
(e)
|
this
Agreement will not be effective until the date upon which the revocation
period has expired, which will be the eighth day after this Agreement
is
executed by both parties (“Effective
Date”).
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5.2
Statutory Claims.
Employee acknowledges that Title VII of the Civil Rights Act of 1964, as
amended, the Civil Rights Act of 1991, the Americans With Disabilities Act,
the
Age Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973,
the Vietnam Era Veterans Readjustments Assistance Act of 1974, the Federal
Family and Medical Leave Act of 1993, the California Family Rights Act of 1991,
the Federal Family and Medical Leave Act of 1993, and the California Fair
Employment and Housing Act, as amended, and applicable provisions of
California's Labor Code provide the right to an employee to bring charges,
claims or complaints against an employer if Employee believes he has been
discriminated against on a number of bases, including race, ancestry, color,
religion, sex, marital status, national origin, age, status as a veteran of
the
Vietnam era, request or need for family or medical leave, physical or mental
disability, medical condition or sexual preference. Employee, with full
understanding of the rights afforded to him or her under these federal and
state
laws, agrees that he will not file, or cause to be filed against NutraCea,
any
charges, complaints, or actions based on any alleged violation of these federal
and state laws, or any successor or replacement federal or state laws. Employee
hereby waives any right to assert a claim for relief available under these
federal and state laws including, but not limited to, back pay, front pay,
attorneys’ fees, damages, consequential damages, punitive damages,
reinstatement, or injunctive relief, which Employee may otherwise recover based
on any alleged violation of these federal and state laws, or any successor
or
replacement federal or state laws.
2
5.3. Common
Law Claims. Employee
acknowledges that he may have certain common law rights to file a lawsuit
claiming wrongful discharge in violation of an express and/or implied contract
or in violation of a public policy. Employee expressly waives any and all tort
and/or contract claims that he may have against NutraCea for wrongful discharge,
misrepresentation, fraud, defamation, interference with prospective business
advantage, interference with contractual relationships, intentional and/or
negligent infliction of emotional distress, negligence, promissory estoppel,
and/or breach of the covenant of good faith and fair dealing.
5.4 General
Release.
Employee hereby irrevocably and unconditionally releases and forever discharges
NutraCea and all of its officers, agents, directors, supervisors, employees,
representatives, affiliates, related companies, and their successors and assigns
and all persons acting by, through, under or in concert with any of them from
any and all charges, complaints, grievances, claims, actions, and liabilities
of
any kind (including attorneys’ fees, interest, expenses and costs actually
incurred) of any nature whatsoever, known or unknown, suspected or unsuspected
(hereinafter referred to as “Claims”), which Employee has or may have in the
future, arising out of Employee’s employment with NutraCea. All such Claims are
forever barred by this Agreement and without regard to whether these Claims
are
based on any alleged breach of duty arising in contract or tort, any alleged
employment discrimination or other unlawful discriminatory act, or any claim
or
cause of action regardless of the forum in which it may be brought, including
without limitation, claims under the National Labor Relations Act (to the extent
permitted by law), Title VII of the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1964,
as
amended, the Americans With Disability Act, the Federal Family and Medical
Leave
Act of 1993, the Rehabilitation Act of 1973, the Vietnam Era Veterans
Readjustment Assistance Act of 1974, the California Family Rights Act of 1991,
the Federal Family and Medical Leave Act of 1993, and the California Fair
Employment and Housing Act, as amended, and applicable provisions of
California's Labor Code.
6. Confidential
Information.
Employee acknowledges that during the course of his duties with NutraCea, he
handled confidential information of NutraCea and its affiliates. Employee agrees
he will retain in the strictest confidence all confidential matters which relate
to NutraCea or its affiliates, including, without limitation, pricing lists,
business plans, financial projections and reports, business strategies, internal
operating procedures and other confidential business information from which
NutraCea derives an economic or competitive advantage or from which NutraCea
might derive such advantage in its business, whether or not labeled “secret” or
“confidential,” and not to disclose directly or indirectly or use by him in any
way, at any time, except as permitted by law.
7. Trade
Secrets.
Employee shall not disclose to any others or take or use for Employee’s own
purposes or purposes of any others at any time, any of NutraCea’s trade secrets,
including without limitation, confidential information; customer lists;
information concerning current or any future and proposed work, services or
products; or the fact that any such work, services or products are planned,
under consideration, or in production, as well as any description thereof.
Employee agrees that these restrictions shall also apply to (i) trade secrets
belonging to third parties in NutraCea’s possession and (ii) trade secrets
conceived, originated, discovered or developed by Employee during the term
of
his employment.
8. Inventions;
Ownership Rights.
Employee agrees that all ideas, techniques, inventions, systems, formulas,
discoveries, technical information, programs, prototypes and similar
developments (“Developments”) developed, created, discovered, made, written or
obtained by him or her in the course of or as a result, directly or indirectly,
of performance of his duties to NutraCea, and all related industrial property,
copyrights, patent rights, trade secrets and other forms of protection thereof,
shall be and remain the property of NutraCea. Employee agrees to execute or
cause to be executed such assignments and applications, registrations and other
documents and to take such other action as may be requested by NutraCea to
enable NutraCea to protect its rights to any such Developments.
3
9. No
Disparagement .
The
parties agree to treat each other respectfully and professionally and not
disparage the other party, or the other party’s officers, directors, employees,
shareholders and agents, in any manner likely to be harmful to them or their
business, business reputation or personal reputation; provided that both
Employee and NutraCea will respond accurately and fully to any question, inquiry
or request for information when required by the legal process.
10. Non-Interference;
No Solicitation.
Employee agrees not to unlawfully interfere with any of NutraCea’s contractual
obligations with others. Furthermore, Employee agrees during a period of two
(2)
years after the date of this Agreement, not to, without NutraCea’s express
written consent, on his behalf or on behalf of another: (i) contact with the
intent to solicit or solicit the business of any client, customer, creditor
or
licensee of NutraCea, or (ii) contact with the intent to solicit or solicit
employees of NutraCea to leave their employment, other than clerical employees.
Employee acknowledges that this Section 10 is a reasonable and necessary measure
deigned to protect the proprietary, confidential and trade secret information
of
NutraCea.
11. Confidentiality.
Employee
agrees that the terms of this Agreement including the payment hereunder are
confidential and he will not disclose the terms of the Agreement to anyone
except to a person who must know its terms for tax, financial or legal reasons.
The parties agree that violations of this Section, Section 9 “No Disparagement”
or Section 10 “Non-Interference; No Solicitation” are material breaches of this
Agreement.
12. Return
NutraCea Property.
Employee agrees that he will promptly, within two (2) business days, return
to
NutraCea, all NutraCea’s or its affiliates’ memoranda, notes, records, reports,
manuals, drawings, designs, computer files in any media and other documents
(including extracts and copies thereof) relating to NutraCea or its affiliates,
and all other property of NutraCea.
13. Actions
Contrary to Law.
Nothing
contained in this Agreement shall be construed to require the commission of
any
act contrary to law, and whenever there is any conflict between any provision
of
this Agreement and any statute, law, ordinance, or regulation, contrary to
which
the parties have no legal right to contract, then the latter shall prevail;
but
in such event, the provisions of this Agreement so affected shall be curtailed
and limited only to the extent necessary to bring it within legal
requirements.
14. Miscellaneous.
14.1 Notices.
All
notices to be given by either party to the other shall be in writing and may
be
transmitted by personal delivery, facsimile transmission, overnight courier
or
mail, registered or certified, postage prepaid with return receipt requested;
provided,
however,
that
notices of change of address or facsimile number shall be effective only upon
actual receipt by the other party. Notices shall be delivered at the addresses
set forth in the Preamble of this Agreement, unless changed as provided for
herein.
14.2 Entire
Agreement.
This
Agreement and any agreements incorporated herein by reference to the extent
that
they are consistent with this Agreement, supersede any all agreements, either
oral or written, between the parties hereto with respect to its subject matter.
Each party to this Agreement acknowledges that no representation, inducements,
promises, or agreements, orally or otherwise, have been made by any party or
anyone acting on behalf of any parties, which are not embodied herein, and
that
no other agreement, statement, or promise not contained in this Agreement shall
be valid or binding. Any modification of this Agreement will be effective only
if it is in writing and signed by both parties.
14.3 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California.
4
14.4 Jurisdiction
and Venue.
The
parties hereby consent to the exclusive jurisdiction of the state and federal
courts sitting in California in the venue of Sacramento County in any action
on
a claim arising out of, under or in connection with this Agreement or the
transactions contemplated by this Agreement, provided such claim is not required
to be arbitrated pursuant to Section 14.5. The parties further agree that
personal jurisdiction over them may be effected by notice as provided in Section
14.1, and that when so made shall be as if served upon them personally within
the State of California.
14.5 Arbitration.
Any
controversy, dispute or claim arising out of or relating to this Agreement,
performance hereunder or breach thereof, which cannot be amicably settled,
shall
be settled by arbitration conducted in Sacramento, California or such other
mutually agreed upon location. Said arbitration shall be conducted in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
(“AAA”) at a time and place within the above-referenced location as selected by
the arbitrator(s).
a. Initiation
of Arbitration.
After
seven (7) days prior written notice to the other, either party hereto may
formally initiate arbitration under this Agreement by filing a written request
therefore. NutraCea shall pay the appropriate filing fees.
b. Selection
of Arbitrator. The
selection of a neutral arbitrator shall be in accordance with the AAA Commercial
Arbitration Rules.
c. Discovery.
The
arbitrator shall permit adequate discovery.
d. Hearing
and Determination Dates.
The
hearing before the arbitrator shall occur within thirty (30) days from the
date
the matter is submitted to arbitration. Further, a determination by the
arbitrator shall be made within forty-five (45) days from the date the matter
is
submitted to arbitration. Thereafter, the arbitrator shall have fifteen (15)
days to provide the parties with his decision in writing. However, any failure
to meet the deadlines in this paragraph will not affect the validity of any
decision or award.
e. Damages.
The
arbitrator shall have the authority to award appropriate damages, including
injunctive relief, if requested.
f. Binding
Nature of Decision.
The
decision of the arbitrator shall be binding on the parties. Judgment thereon
shall be entered in a court of competent jurisdiction.
g. Injunctive
Actions.
Nothing
herein contained shall bar the right of either party to seek from the arbitrator
injunctive relief or other provisional remedies against threatened or actual
conduct that will cause loss or damages under the usual equity rules including
the applicable rules for obtaining preliminary injunctions and other provisional
remedies.
h. Fees
and Costs.
The
cost of arbitration, including the fees of the arbitrator, shall initially
be
borne by NutraCea; provided, the prevailing party (as determined by the
arbitrator) shall be entitled to recover all such costs allowed by law, in
addition to attorneys’ fees and other costs, in accordance with Section 14.6 of
this Agreement.
14.6 Attorneys’
Fees.
In the
event of any litigation, arbitration, or other proceeding arising out of this
Agreement, or the parties’ performance as outlined herein, the prevailing party
shall be entitled to an award of costs, including an award of reasonable
attorneys’ fees. Any judgment, order, or award entered in any such proceeding
shall designate a specific sum as such an award of attorneys’ fees and costs
incurred. This attorneys’ fee provision is intended to be severable from the
other provisions of this Agreement, shall survive any judgment or order entered
in any proceeding and shall not be deemed merged into any such judgment or
order, so that such further fees and costs as may be incurred in the enforcement
of an award or judgment or in defending it on appeal shall likewise be
recoverable by further order of a court or panel or in a separate action as
may
be appropriate.
5
14.7 Amendment,
Waiver.
No
amendment or variation of the terms of this Agreement shall be valid unless
made
in writing and signed by Employee and NutraCea. A waiver of any term or
condition of this Agreement shall not be construed as a general waiver by
NutraCea. Failure of either Employee or NutraCea to enforce any provision or
provisions of this Agreement shall not waive any enforcement of any continuing
breach of the same provision or provisions or any breach of any provision or
provisions of this Agreement.
14.8 Ambiguities.
This
Agreement shall not be subject to the rule that any ambiguities in the contract
are to be interpreted against the drafter of the Agreement.
14.9 Counterparts.
This
Agreement may be signed in one or more counterparts (by facsimile or otherwise),
all of which shall be treated as one and the same instrument.
14.10 Warranty.
Employee
warrants that he is executing this Agreement of his own free will, and knowingly
and voluntarily without any promises or representations other than those
contained in this Agreement.
[signature
page to follow]
6
The
undersigned have executed this Agreement as of the date first written
above.
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EMPLOYEE
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/s/
Xxxx
X. Xxxx
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Xxxx
X. Xxxx
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NUTRACEA
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/s/
Xxxx
Xxxxx
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Xxxx
Xxxxx, CEO
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7
EXHIBIT
A
Car
Lease
Computer
Equipment
8
EXHIBIT
B
|
Assumed
Options
|
Qualified
|
Date of
|
Expiration
|
Original
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in RiceX
|
Number
of
|
Board Date
|
Exercise
|
17-Jul-06
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Cashless
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|||||||||||||||||||||||||||
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Name
|
Non-Qualified
|
Warrant/Option
|
Date
|
Issuance
|
Merger
|
Shares
|
Approval
|
Price
|
Registration
|
Option
|
Vesting
|
||||||||||||||||||||||||||
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Xxxx, Xxxx
|
Option
|
04-May-96
|
04-Oct-08
|
60,000
|
(13,920.60
|
)
|
46,079
|
19-Jun-07
|
$
|
0.30
|
333-135814
|
Yes
|
Fully
Vested
|
(a
|
)
|
||||||||||||||||||||||
|
Xxxx,
Xxxx
|
Option
|
03-Jun-96
|
04-Oct-08
|
50,000
|
(11,600.50
|
)
|
38,399
|
19-Jun-07
|
$
|
0.30
|
333-135814
|
Yes
|
Fully
Vested
|
(a
|
)
|
||||||||||||||||||||||
|
Xxxx,
Xxxx
|
Option
|
01-Nov-99
|
01-Nov-09
|
900,000
|
(208,809.00
|
)
|
691,191
|
19-Jun-07
|
$
|
0.30
|
333-135814
|
Yes
|
Fully
Vested
|
(a
|
)
|
||||||||||||||||||||||
|
Xxxx,
Xxxx
|
Option
|
22-Feb-01
|
22-Feb-11
|
50,000
|
(11,600.50
|
)
|
38,399
|
19-Jun-07
|
$
|
0.30
|
333-135814
|
Yes
|
Fully
Vested
|
(a
|
)
|
||||||||||||||||||||||
|
Xxxx,
Xxxx
|
Option
|
22-Feb-01
|
22-Feb-11
|
100,000
|
(23,201.00
|
)
|
76,799
|
19-Jun-07
|
$
|
0.30
|
333-135814
|
Yes
|
Fully
Vested
|
(a
|
)
|
||||||||||||||||||||||
|
Xxxx,
Xxxx
|
Option
|
29-Jan-02
|
29-Jan-12
|
50,000
|
(11,600.50
|
)
|
38,399
|
19-Jun-07
|
$
|
0.30
|
333-135814
|
Yes
|
Fully
Vested
|
(a
|
)
|
||||||||||||||||||||||
|
Xxxx,
Xxxx
|
SOP02002
|
02-Jan-02
|
02-Jan-12
|
125,000
|
(29,001.25
|
)
|
95,998
|
19-Jun-07
|
$
|
0.30
|
333-135814
|
Yes
|
Fully
Vested
|
(a
|
)
|
||||||||||||||||||||||
|
Xxxx,
Xxxx
|
SOP05002
|
31-Mar-05
|
31-Mar-15
|
700,111
|
(162,432.75
|
)
|
537,678
|
19-Jun-07
|
$
|
0.30
|
333-135814
|
Yes
|
Fully
Vested
|
(a
|
)
|
||||||||||||||||||||||
|
Total
Assumed Options
|
2,035,111
|
(472,166.1
|
)
|
1,562,942
|
|||||||||||||||||||||||||||||||||
|
NutraCea
Issued Options
|
|||||||||||||||||||||||||||||||||||||
|
Xxxx,
Xxxx
|
SOP08003A
|
08-Jan-08
|
08-Jan-13
|
100,000
|
100,000
|
8-Jan-08
|
$
|
1.49
|
No
|
Yes
|
(b
|
)
|
(c
|
)
|
|||||||||||||||||||||||
|
Total
Options issued and held
|
1,662,942
|
||||||||||||||||||||||||||||||||||||
|
Notes:
|
(a)
The Company’s Board of Directors acknowledges and resolves to approve the
cashless exercise provision of said options in the event Employee
retirement, dies or becomes disabled before the expiration period,
which
has an extension date of 6/19/07 for the Assumed Options
|
|||||||||||||||||||||
|
(b)
NutraCea issued option shares which vest over one year as follows:
50%
shall vest depending on revenue 50% shall vest depending on net income
of
the Company.
|
||||||||||||||||||||||
|
(c)
In the event that the Employee retires, dies or becomes disabled,
the
expiration period extension shall apply and the Company shall use
its best
efforts to amend performance criteria, adjust the vesting period
and
include underlying shares in its next registration
|
||||||||||||||||||||||
|
EACH
OF THE ABOVE OPTIONS ARE APPROVED TO BE EXERCISED USING A "CASHLESS
EXERCISE" (IF EMPLOYEE ELECTS THAT METHOD OF
PAYMENT).
|
||||||||||||||||||||||
Approved
By:
9
EXHIBIT
B
INDEPENDENT
CONTRACTOR AGREEMENT
This
Agreement is entered into between Nutracea, a California corporation with
principal offices at 0000 00xx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000
(“NutraCea” or “Company”) and Crow & Associates, LLC with principal address
at 0000 Xxxxxx Xxxxx Xxx, Xxxxxxx Xxx, XX 00000 (“Contractor”). The parties
agree as follows:
1. Engagement;
Duties.
Subject
to the terms and conditions of this Agreement, the Company hereby engages the
Contractor as an independent contractor to advise the Company and its personnel
on accounting systems, practices, and policies; review and advise the Company
and its personnel on the appropriate accounting for transactions, and the
preparation and filing of all financial statements as required by the Company’s
internal requirements and reporting obligations pursuant to the Securities
and
Exchange Commission rules and regulations governing public companies; and report
to the Chief Executive Officer on accounting systems, finance, and reports
filed
by the Company (collectively “Services”), and the Contractor hereby accepts such
engagement. For purposes of intellectual property protection under this
Agreement, the Company is the commissioning party. Contractor shall report
to
the Company’s Chief Executive Officer with respect to performance of
Services.
2. Term;
Compensation.
This
Agreement shall commence as and when provided in the Employment Agreement
between the Company and Xxxx X. Xxxx, the principal of Contractor, originally
entered into on October 20, 2003, and amended pursuant to the First Amendment
to
Employment Agreement dated October 5, 2005, and the Second Amendment to
Employment Agreement dated July 19, 2008, which date is referred to herein
as
the “Effective Date”. This Agreement shall govern the parties’ relationship and
shall terminate by its terms upon the first to occur of (i) the eighteenth
(18)
month following the Effective Date, or (ii) a Change of Control (as defined
below), unless (iii) earlier terminated as provided in this Agreement
(“Termination Date”). For Services performed, NutraCea shall pay Contractor a
gross amount of $15,000 per month, due the first day of the month for the first
twelve (12) months following the Effective Date. NutraCea shall pay Contractor
a
gross amount of $7,500 for the remaining six (6) months of the term of this
Agreement, provided that Xxxx X. Xxxx, directly and/or through Contractor or
any
other successor in interest, has not exercised (from the options granted by
NutraCea to Contractor or to Xxxx X. Xxxx) options to acquire more than one
hundred and ten thousand (110,000) shares of stock in NutraCea. If Xxxx X.
Xxxx
and/or Contractor (directly and/or through any successor) has exercised options
to acquire more than one hundred and ten thousand (110,000) shares of stock
in
NutraCea, this Agreement shall terminate the earlier of (i) twelve (12) months
following the Effective Date or (ii) at the time of exercise. Upon a termination
of this Agreement due to a Change of Control, NutraCea shall pay to Contractor
all amounts payable hereunder for the balance of the full eighteen (18) month
term. Such
unpaid balance shall be payable in a one lump sum within 30 days of the Change
of Control event. This
Agreement also shall terminate prior to its Termination Date immediately upon
and by reason of Xxxx
X.
Xxxx’x
death
or Permanent Disability, in which event the Company shall pay to the Contractor
the unpaid balance of any compensation owed to the Contractor pursuant to the
terms hereof. Such unpaid balance shall be payable in a one lump sum within 30
days of death or disability event. All
payments to Contractor under this Agreement will be by bank check and in United
States dollars.
1
For
purposes of this Agreement, “Change of Control” of NutraCea is defined as the
date of (i) the consummation of a merger or consolidation of NutraCea with
any
other corporation or the acquisition of shares of stock in NutraCea by a third
party, either of which results in the voting securities of NutraCea outstanding
immediately prior thereto failing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity) more
than
fifty percent (50%) of the total voting power represented by the voting
securities of NutraCea or such surviving entity outstanding immediately after
such merger or consolidation or acquisition, or (ii) the consummation of the
sale or disposition by NutraCea of all or substantially all of NutraCea's
assets.
For
purposes of this Agreement, “Permanent
Disability”
means
any physical or mental impairment that (i) is diagnosed by a duly licensed
physician as provided for in the following sentence and (ii) renders Xxxx X.
Xxxx unable to perform the essential functions of the Services under the terms
of this Agreement for a period of two consecutive months or an aggregate of
60
days in any period of 365 consecutive days, either with or without reasonable
accommodation. At the Company’s request, the Contractor shall cause Xxxx X. Xxxx
to submit to an examination by a duly licensed physician who is mutually
acceptable to the Company and the Contractor for the purpose of ascertaining
the
existence of a Permanent Disability, and to authorize the physician to release
the results of the examination to the Company.
3. Expenses.
Company
shall reimburse Contractor for all business costs and expenses incurred by
Contractor and requested by Company in performance of Contractor’s obligations
set forth in this Agreement in accordance with Company’s standard reimbursement
and approval policies. Reasonable expenses will be billed to the Company and
the
Company will reimburse such approved out-of-pocket expenses. Notwithstanding
the
foregoing, expenses for the time spent by the Contractor in traveling to and
from Company facilities will not be reimbursable.
4. Confidentiality.
The
Contractor acknowledges that during the engagement Contractor will have access
to and become acquainted with various trade secrets, inventions, intellectual
property, innovations, source code, processes, information, records and
specifications owned or licensed by the Company and/or used by the Company
in
connection with the operation of its business including, without limitation,
the
Company’s business and product processes, methods, customer lists, Company login
identifications, passwords, accounts and procedures. The Contractor (on behalf
of itself and its principal) agrees that Contractor will not disclose any of
the
aforesaid, directly or indirectly, or use any of them in any manner, either
during the term of this Agreement or at any time thereafter, except as required
in the course of this engagement with the Company. All files, records,
documents, blueprints, specifications, computer files, information, letters,
notes, media lists, original artwork/creations, notebooks, and similar items
relating to the business of the Company, whether prepared by the Contractor
or
otherwise coming into Contractor’s possession, will remain the exclusive
property of the Company. The Contractor will not retain any copies of the
foregoing without the Company’s prior written permission. Upon the expiration or
earlier termination of Contractor’s engagement pursuant to this Agreement, or
whenever requested by the Company, the Contractor will immediately deliver
to
the Company all such files, records, documents, specifications, information,
and
other items in Contractor’s possession or under Contractor’s control.
2
5. Intellectual
Property Rights in Works of Authorship.
Contractor acknowledges and agrees that any inventions and intellectual property
rights arising from the Services that qualify as works of authorship belong
to
the Company and are “works made for hire” as defined in section 101 et seq. of
the United States Copyright Act, Xxxxx 00, Xxxxxx Xxxxxx Code (“Copyright Act”).
In the event that the inventions and intellectual property rights arising from
the Services (or any portion thereof) which qualify as works of authorship
are
not “works made for hire” as defined in the Copyright Act, Contractor hereby
assigns all right, title and interest in and to the inventions and intellectual
property rights arising from the Services (or any portion thereof) to the
Company and Contractor will execute and deliver any and all documents, including
but not limited to short form assignments, determined by the Company to be
necessary to perfect its right, title and interest in and to the inventions
and
intellectual property rights arising from the Services (or any portion thereof),
as well as all intellectual property rights embodied in or pertaining in any
way
to the inventions and intellectual property rights arising from the Services
(or
any portion thereof). If during the term of this Agreement, Contractor
incorporates into Services an invention or other work of authorship previously
owned by Contractor, or in which Contractor has an interest, (“Prior
Invention”), the Company is hereby granted and will have a non-exclusive,
royalty-free, irrevocable, perpetual, worldwide and assignable license to use,
modify, display, reproduce and distribute such
Prior Invention as part of the Company’s products, related documentation
or service
offerings. The Company will be the sole author and owner of any and all
inventions and works of authorship created pursuant to this Agreement and the
parties do not intend to be joint authors in any works of authorship or
inventions created pursuant to this Agreement. In addition, during the term
of
this Agreement, Contractor has no and shall not assert any ownership interest
to
the business names and/or trademarks of the Company.
6.
Conflicts
of Interest; Non-hire Provision.
The
Contractor represents that Contractor is free to enter into this Agreement
and
that this engagement does not violate the terms of any agreement between the
Contractor and any third party. Further, the Contractor, in rendering
Contractor’s duties will not utilize any invention, discovery, development,
improvement, innovation, or trade secret in which Contractor does not have
a
proprietary interest. During the term of this Agreement, the Contractor will
devote as much of Contractor’s productive time, energy and abilities to the
performance of Contractor’s duties hereunder as is necessary to perform the
required duties in a timely and productive manner.
The
Contractor is expressly free to perform services for other parties during the
term of this Agreement, subject to Contractor’s duty of confidentiality under
this Agreement. During the term of this Agreement and for a period of one (1)
year following any termination, the Contractor (directly or indirectly through
any affiliate or principal) will not, directly or indirectly solicit, divert,
take away or encourage to leave the Company, any employee, consultant,
contractor or customer of the Company, notwithstanding that such employee,
consultant, contractor or customer may have been originally obtained or
recruited through the efforts of Contractor.
3
7. Independent
Contractor.
This
Agreement will not render the Contractor an employee, partner, agent of, or
joint venturer with the Company for any purpose and Contractor does not have
the
authority to bind the Company in any manner. The Contractor is and will remain
an independent contractor in Contractor’s relationship to the Company. The
Contractor will have no claim against the Company hereunder or otherwise for
vacation pay, sick leave, retirement benefits, social security, worker’s
compensation, health or disability benefits, unemployment insurance benefits,
or
employee benefits of any kind.
8. Taxes.
Contractor will be responsible for payment of all taxes and insurance applicable
under existing laws, including, but not limited to, social security taxes,
and
federal and state and city income taxes (but excluding any taxes on the net
income of Company). Contractor warrants that he will make all necessary payments
due appropriate governmental agencies to comply with the foregoing and defend,
indemnify and hold harmless Company and the officers, directors, employees,
agents, Affiliates and representatives of Company against any and all claims,
demands, causes of action, damages, losses, liabilities, costs or expenses
that
may arise out of breach of the foregoing. In the event of any such claim, demand
or cause of action, Contractor will immediately reimburse Company for the
ongoing costs of any defense, settlement or judgment incurred by
Company.
9.Workers
Compensation and Other Insurance.
Contractor agrees to provide workers compensation insurance, if and as may
be
required by law, for Contractor and for Contractor’s employees and agents and
agrees to hold harmless and indemnify the Company for any and all claims arising
out of any injury, disability or death of Contractor or any of Contractor’s
employees or agents. The Company will not carry liability insurance for the
Contractor relative to any service that Contractor performs for the
Company.
10. Successors
and Assigns.
All of
the provisions of this Agreement will be binding upon and inure to the benefit
of the parties hereto and their respective heirs, if any, successors, and
assigns.
11. Choice
of Law.
The
laws of the State of Arizona, without reference to conflict of law provisions,
will govern the validity of this Agreement, the construction of its terms and
the interpretation of the rights and duties of the parties hereto.
12. Headings.
Section
headings are not to be considered a part of this Agreement and are not intended
to be a full and accurate description of the contents hereof.
4
13. Waiver.
Waiver
by one party hereto or breach of any provision of this Agreement by the other
will not operate or be construed as a continuing waiver.
14. Assignment.
The
Contractor shall not assign any of Contractor’s rights under this Agreement, or
delegate the performance of any of Contractor’s duties hereunder, without the
prior written consent of the Company.
15. Notices.
Any and
all notices, demands, or other communications required or desired to be given
hereunder by any party will be in writing and will be validly given or made
to
another party if personally served, or if deposited in the United States mail,
certified or registered, postage prepaid, return receipt requested. If such
notice or demand is served personally, notice will be deemed constructively
made
at the time of such personal service. If such notice, demand or other
communication is given by mail, such notice will be conclusively deemed given
five days after deposit thereof in the United States mail addressed to the
party
to whom such notice, demand or other communication is to be given at the above
address. Any party hereto may change its address for purposes of this paragraph
by written notice given in the manner provided above.
16. Modification
or Amendment.
No
amendment, change or modification of this Agreement will be valid unless in
writing signed by the parties hereto.
17. Entire
Understanding.
This
document and any exhibit attached constitute the entire understanding and
agreement of the parties, and any and all prior agreements, understandings,
and
representations are hereby terminated and canceled in their entirety and are
of
no further force and effect.
18. Unenforceability
of Provisions.
If any
provision of this Agreement, or any portion thereof, is held to be invalid
and
unenforceable, then the remainder of this Agreement will nevertheless remain
in
full force and effect.
19. Attorneys’
Fees.
If the
services of an attorney are required by any party to secure the performance
of
this Agreement or otherwise upon the breach or default of another party to
this
Agreement, or if any judicial remedy or arbitration is necessary to enforce
or
interpret any provision of this Agreement or the rights and duties of any person
in relation thereto, the prevailing party will be entitled to attorneys’ fees,
costs and other expenses, in addition to any other relief to which such party
may be entitled. Any award of damages following judicial remedy or arbitration
as a result of the breach of this Agreement or any of its provisions will
include an award of prejudgment interest from the date of the breach at the
maximum amount of interest allowed by law.
|
Crow
& Associates, LLC
|
||
|
/s/
Xxxx
Xxxxx
|
/s/
Xxxx X. Xxxx
|
|
|
By:
Xxxx Xxxxx, CEO
|
by:
Xxxx X. Xxxx
|
5
