EMPLOYMENT AGREEMENT
EXHIBIT
10.56
This
Employment Agreement (“Agreement”) is entered into by and between NutraCea, a
California corporation with principal address at 1261 Hawk’s Xxxxxx
Xxxxx,
Xx
Xxxxxx Xxxxx, XX 00000 (“NutraCea”) and Xxxx Xxxxxxx, an individual residing at
______________________________
(“Employee”) effective as of __________________, 2006 (“Effective Date”), as
follows:
1. Employment.
NutraCea wishes to employ Employee and Employee agrees to provide services
for
NutraCea on the terms and conditions set forth below.
2. Employment;
Scope of
Employment.
Employee
shall act as the Senior Vice President of Sales of NutraCea. The duties of
Employee shall include but not be limited those duties set forth on the job
description attached hereto as Exhibit A. NutraCea
reserves the exclusive right to modify and designate Employee’s specific duties
from time to time in any manner consistent with Employee’s status as Senior Vice
President of Sales. In the event of a merger or acquisition of substantially
all
of the assets of NutraCea, a change of Employee’s title or supervisor shall not
be deemed a material alteration to
this
Agreement.
2.1 Best
Efforts; Full Working Time. Employee
agrees to devote his best efforts, attention, skill and experience to the
performance of Employee’s duties all in accordance with the provisions of this
Agreement. Employee shall apply his entire full working time to performing
these
services.
2.2 Supervision
and Direction of Services.
All of
Employee’s services shall be under the supervision and direction of the Chief
Executive Officer and President of NutraCea and
the
Board of Directors of NutraCea.
2.3 Rules. Employee
shall be bound by all the policies, rules and regulations of NutraCea now in
force and by all such other policies, rules and regulations in the normal course
of business as may be hereafter implemented and shall faithfully observe and
abide by the same.
2.4 Exclusive
Services.
During
the term of this Agreement and any extension of this Agreement, Employee shall
not, directly or indirectly, whether as a partner, employee, creditor, five
percent (5%) shareholder, independent contractor or otherwise, promote,
participate or engage in any activity or other business which NutraCea deems
in
its sole reasonable discretion to be competitive in any way with NutraCea’s
current or future business operations. Employee agrees that Employee shall
not
enter into an agreement to establish, form, contract with or become employed
by
a competing business of NutraCea while Employee is employed by NutraCea.
2.5 Non-Solicitation/Non-Compete.
2.5.1 Non-Solicitation.
To the
fullest extent permissible under applicable law, Employee agrees that both
during the term of this Agreement and for a period of two
(2)
years
following termination of this Agreement, Employee shall not take any action
to
induce employees or independent contractors of NutraCea to sever their
relationship with NutraCea and accept an employment or an independent contractor
relationship with any other business.
2.5.2 Non-Compete.
To the
fullest extent permissible under applicable law, Employee agrees to refrain
from, unless first obtaining NutraCea’s prior written consent, directly or
indirectly, engaging in, being employed by, being associated with, being under
contract with, owning, managing, operating, joining, controlling, or
participating in the ownership, management, operation, or control of, being
connected in any manner with, or having any interest in, any business, firm,
sole proprietorship, partnership or corporation that engages in substantially
the same business as NutraCea in the United States for a period of two (2)
years
after termination of this Agreement.
2.5.3
Separate
Covenants.
Employee
acknowledges that the nature and periods of restrictions imposed by the
covenants contained herein are fair, reasonable, and that the Company would
sustain great and irreparable loss and damage if Employee in any manner were
to
breach any of such covenants. Accordingly,
in the event of an actual or threatened breach of the covenants by Employee,
in
addition to all other remedies which NutraCea may have, NutraCea shall be
entitled to enforce the specific performance of this Agreement and to seek
both
immediate, temporary and permanent injunctive relief (to the extent permitted
by
law) restraining such actual or threatened breach. Employee
waives any requirement that NutraCea post any bond or other security in order
to
obtain such injunctive relief. It is understood by and between the parties
hereto that the covenants contained in this Agreement shall be deemed to be
a
series of separate covenants, one for each line of business engaged in by
NutraCea. Each separate covenant shall hereinafter be referred to as “separate
covenant.” If any court or tribunal of competent jurisdiction shall refuse to
enforce one or more of the separate covenants because the time limit applicable
thereto is deemed unreasonable, it is expressly understood and agreed that
such
separate covenant or separate covenants shall not be void but that for the
purpose of such proceedings and such time limitation shall be deemed to be
reduced to the extent necessary to permit the enforcement of such separate
covenant or separate covenants. If any court or tribunal of competent
jurisdiction shall refuse to enforce any or all of the separate covenants
because, taken together, they are more extensive (whether as to geographic
area,
scope of business or otherwise) than is deemed to be reasonable, it is expressly
understood and agreed between the parties hereto that such separate covenant
or
separate covenants shall not be void but that for the purposes of such
proceedings, the restrictions contained therein (whether as to geographic area,
scope of business or otherwise) shall be deemed to be reduced to the extent
necessary to permit the enforcement of such separate covenant or separate
covenants.
2.6 Office
Location.
Employee
shall be based out of the Phoenix Metropolitan area, but it is understood and
acknowledged that the position entails substantial travel, primarily throughout
the United States of America including travel to and from the corporate
headquarters in El Dorado Hills, California.
3. Term
and Termination;
Payments upon Termination.
3.1 Term
and Termination. Unless
earlier terminated for Cause (as defined below), NutraCea
hereby employs the Employee
for a
period commencing upon the Effective
Date
and
ending twenty-four (24)
months following the
Effective Date,
unless
earlier terminated pursuant hereto
(the
“Term”).
The
term may be extended by mutual agreement of the parties on a month to month
basis.
3.1.1 Termination
for Cause.
For
purposes of this Section
3,
“Cause”
shall
be defined as the following:
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a.
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NutraCea
may immediately terminate Employee’s employment
pursuant to the terms of this Agreement for the
following reasons
by
giving written notice of the termination
to
Employee:
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i.
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Employee,
in the reasonable determination of the Board of Directors of NutraCea,
has
found the
Employee to be grossly negligent or engaged in material willful or
gross
misconduct in the performance of her duties; and only if the Board
has
filed a civil lawsuit for the same claim,
or
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ii.
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Employee
has been
convicted by
a court of law of
fraud, moral turpitude, embezzlement, theft, or dishonesty or other
criminal conduct; or
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iii.
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Employee
has taken other actions or omitted to take any actions such that
such
action or omissions constitute legal cause for termination under
California or Arizona law, as then in effect,
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b.
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NutraCea
may terminate Employee’s
employment pursuant to the terms of this Agreement upon Employee’s failure
to cure
the deficiency within ten
(10) days of receipt of written notice from NutraCea for the following
reasons:
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i.
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Employee
has materially breached the terms hereof;
or
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ii.
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Employee
has
failed to meet written standards (including but not limited for sales
performance standards) established
by NutraCea for the performance of duties
hereunder;
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3.2 Payments
Upon Termination.
3.2.1Termination
for Cause or Termination by Employee.
Following any termination by NutraCea
for Cause or by Employee for any reason,
Employee shall be entitled to receive in cash payment an amount equal to all
previously accrued but unpaid or unused compensation through the date of
termination, including but not limited to, salary and vacation pay and Employee
may retain the vested portion of any stock and options properly and duly granted
to Employee as of such date, subject and pursuant to the terms of any option
agreements or stock purchase agreements entered into between NutraCea and
Employee;
3.2.2 Termination
without Cause by NutraCea.
Following any termination by NutraCea
without Cause,
Employee shall be entitled to receive in cash payment an amount equal to all
previously accrued but unpaid or unused compensation, including but not limited
to, salary and vacation pay and a
lump
sum payment equal to Employee’s salary for the balance remaining of the term of
this Agreement pursuant to Section 3.1.
up to a
maximum of twelve (12) months. In addition, Employee may retain the vested
portion of any stock and options properly and duly granted to Employee as of
such date, subject and pursuant to the terms of any option agreements or stock
purchase agreements entered into between NutraCea and Employee;
3.2.3
Death
or Disability.
Upon the
death or disability of Employee, Employee or Employee’s estate shall be entitled
to and NutraCea shall pay Employee
or Employee’s estate any accrued but unpaid amounts due to Employee under the
terms of this Agreement through
the date
of death or disability (For purposes of this Section, “disability” shall mean
that for a period of three (3) months in any 12-month period the Employee is
incapable of substantially fulfilling her duties because of physical, mental
or
emotional incapacity from injury, sickness or disease.
| Employee’s Initials __________ | NutraCea’s Initials ___________ |
4. Compensation;
Benefits.
4.1 Salary.
Employee
shall be paid at a rate, which if annualized, equals one hundred fifty thousand
dollars ($150,000)
per
year subject to normal payroll withholdings and NutraCea’s standard payroll
practices. On a yearly basis, Employee’s salary shall be adjusted to compensate
for cost of living adjustments in the Sacramento metropolitan area.
4.2 Options.
4.2.1 Option
Grant.
Subject
to approval by the Board of Directors of NutraCea, NutraCea shall grant to
Employee options to purchase up to Five
Hundred Thousand (500,000) shares of NutraCea’s restricted common stock (the
“Option”). Such Option shall be subject to the terms and conditions of a stock
option agreement (“Stock Option Agreement”) between NutraCea and Employee. The
Exercise Price (as defined in the Stock Option Agreement) shall be equal to
the
greater of (i) one dollar ($1.00)
per share; or (ii) the closing bid price of NutraCea’s common stock on the date
of grant as reported on the over-the-counter bulletin board.
[4.2.2 Acceleration
of Vesting.
Subject to the Stock Option Agreement, upon any Change of Control (as defined
below) of NutraCea, one hundred percent (100%) of the shares subject to the
Option shall vest and become exercisable. Thereafter, the Option will continue
to be subject to the terms and provisions of the Stock Option Agreement. For
purposes of this Agreement, “Change of Control” of NutraCea is defined as the
date of the consummation of a merger or consolidation of NutraCea with any
other
corporation 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 the date of the consummation of the sale or
disposition by NutraCea of all or substantially all of NutraCea's
assets.]
4.2.3
Lock-Up.
In
addition to the terms set forth in this Section 4.2 and the standard provisions
set forth in the Stock Option Agreement, Employee agrees to a lock-up provision
prohibiting Employee from selling the common stock obtained by Employee upon
exercise of the Option until after December 31, 2007, unless the express written
consent of NutraCea is first obtained. Employee’s Stock Option Agreement shall
contain restrictions upon Employee selling such common stock in accordance
with
the terms of this Section.
4.3 Vacation
and other Standard Benefits.
Employee
shall initially be entitled to three (3) weeks of paid vacation time per year
for the first year of employment and four (4) weeks of paid vacation time during
Employees second year of employment and thereafter. Employee may not accrue
vacation time in excess of such four (4) week maximum. Accrual of vacation
time
shall be subject to the terms and conditions of NutraCea’s vacation policy.
Employee and Employee’s immediate family shall be entitled to health benefits in
accordance with NutraCea’s standard policies. In addition, Employee shall
be
entitled
to paid holidays, sick leave and other benefits in accordance with NutraCea’s
standard policies. Employee shall be reimbursed for reasonable business
expenses, subject to prior approval by NutraCea in accordance with NutraCea’s
standard policies for employees and conditioned upon Employee’s prior
presentation to NutraCea’s accounting department of appropriate receipts or such
other verification of expenses as NutraCea may require from time to time. Any
air travel that is business-related domestically will be booked at economy
class, but can be upgraded to a higher class at Employee’s option and Employee’s
sole expense. Any international travel will be booked in business class. Hotel
accommodations will be booked in reasonable accommodations, as deemed
appropriate in the sole discretion of NutraCea. Employee shall also be entitled
to participate in NutraCea’s 401(k) program pursuant to the eligibility
conditions of the Company’s plan.
4.4 Bonuses.
Employee
from time to time may receive bonuses
at the sole discretion
of the CEO/President of NutraCea and on such terms and conditions as the
CEO/President may establish. Any such bonus shall be subject to approval and
ratification by
the
Compensation Committee of the
Board of Directors
of NutraCea.
4.5 Car
Allowance. Employer
shall provide Employee with an automobile allowance in the amount of $600.00
per
month. 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.
5. Employment
Information.
Employee represents and warrants to NutraCea that information provided by
Employee in connection with Employee’s employment and any supplemental
information provided to NutraCea is complete, true and materially correct in
all
respects. Employee has not omitted any information that is or may reasonably
be
considered necessary or useful to evaluate the information provided by Employee
to NutraCea. Employee shall immediately notify NutraCea in writing of any change
in the accuracy or completeness of all such information.
6. Trade
Secrets
and
Confidential Information.
Employee acknowledges that NutraCea has gone to great time and expense to
develop customers and to develop procedures and processes for development of
products and services and the sales of products and services. Such procedures
and processes in addition to various other types of proprietary information
are
included as part of the “confidential information” described in the “Proprietary
Information Agreement” attached hereto as Exhibit B. Employee has previously
executed the Proprietary Information Agreement or agrees to execute NutraCea’s
Proprietary Information Agreement contemporaneously with the execution of this
Agreement and employment. Employee
further agrees to execute, deliver and perform, during the Term of Employee’s
employment with Employer and thereafter, any other reasonable confidentiality
and non-disclosure agreements concerning Employer and any of its affiliates
and
its business and products, which Employer promulgates for other key employees
and executives.
7. Remedies
for Breach of Covenant Regarding Confidentiality.
The
parties agree that the breach by Employee of any covenants contained in Sections
2.4, 2.5, 5 and 6 will result in immediate and irreparable injury to NutraCea.
In the event of any breach by Employee of the covenants contained in Sections
2.4, 2.5, 5 or 6, NutraCea shall be entitled to seek recourse through all
available legal and equitable remedies necessary or useful to prevent any
likelihood of immediate or irreparable injury to NutraCea. The parties agree
that, in the case of such a breach or threat of breach by Employee of any of
the
provisions of such Sections, NutraCea may take any appropriate legal action,
including without limitation action for injunctive relief, consisting of orders
temporarily restraining and preliminarily and permanently enjoining such actual
or threatened breach.
8. Miscellaneous.
8.1 Choice
of Law, Jurisdiction, Venue.
The
rights and obligations of the parties and the interpretation and performance
of
this Agreement shall be governed by the laws of California, excluding its
conflict of laws rules. The exclusive jurisdiction and venue of any legal action
brought by either party under this Agreement shall be in the County of
Sacramento, California.
8.2. Entire
Agreement.
This
Agreement, the Proprietary Information Agreement described in Section 6 and
the
Stock Option Agreement referenced in Section 4.2 contain the entire Agreement
among the parties and supersede all prior and contemporaneous oral and written
agreements, understandings and representations among the parties, including
without limitation any offer letter. There are no representations, agreements,
arrangements, or understandings, whether oral or written, between or among
the
parties relating to the subject matter of this Agreement that are not fully
expressed herein and therein.
8.3 Notices.
Any
notice under this Agreement shall be in writing, and any written notice or
other
document shall be deemed to have been duly given (i) on the date of personal
service on the parties, (ii) on the third business day after mailing, if the
document is mailed by registered or certified mail, (iii) one (1) day after
being sent by professional or overnight courier or messenger service
guaranteeing one-day delivery, with receipt confirmed by the courier, or (iv)
on
the date of transmission if sent by telegram, telex, telecopy or other means
of
electronic transmission resulting in written copies, with receipt confirmed.
Any
such notice shall be delivered or addressed to the parties at the addresses
set
forth above or at the most recent address specified by the addressee through
written notice under this provision. Failure to conform to the requirement
that
mailings be done by registered or certified mail shall not defeat the
effectiveness of notice actually received by the addressee.
8.4 Severability.
NutraCea and Employee agree that should any provision of this Agreement be
declared or be determined by any court of competent jurisdiction to be illegal,
invalid or unenforceable, the legality, validity and enforceability of the
remaining parts, terms and provisions shall not be affected thereby, and said
illegal, unenforceable or invalid part, term or provision shall be deemed not
to
be part of this Agreement.
8.5 Legal
Fees.
Each
party will bear its own legal fees relating to the negotiation of this Agreement
and related documents.
8.6 Amendment.
The
provisions of this Agreement may be modified at any time by agreement of the
parties. Any such agreement hereafter made shall be ineffective to modify this
Agreement in any respect unless in writing and signed by the party against
whom
enforcement of the modification or discharge is sought.
8.7 No
Transfer or Assignment; No Third-Party Beneficiaries.
The
rights of Employee hereunder have been granted by NutraCea with the
understanding that this Agreement is personal to, and shall be performed by
Employee individually. This Agreement is not transferable or assignable by
Employee in any manner. No person or entity other than NutraCea and Employee
shall have any rights whatsoever under this Agreement. No person or entity
other
than NutraCea or Employee shall have any right to enforce any provision of
this
Agreement, or to recover damages on account of the breach of this Agreement.
No
heir, successor or assign of Employee, whether voluntarily or by operation
of
law, shall have or succeed to any rights of Employee hereunder. NutraCea may
assign this Agreement in the event of a merger or acquisition.
8.8 Waiver.
Any of
the terms or conditions of this Agreement may be waived at any time by the
party
entitled to the benefit thereof, but no such waiver shall affect or impair
the
right of the waiving party to require observance, performance or satisfaction
of
that term or condition as it applies on a subsequent occasion or of any other
term or condition.
8.9 Resolution
of Disputes.
8.9.1 Resolution
of Disputes.
NutraCea and Employee agree that any claim or controversy arising out of or
pertaining to this Agreement or the termination of Employee's employment,
including but not limited to, claims of wrongful treatment or termination
allegedly resulting from discrimination, harassment or retaliation on the basis
of race, sex, age, national origin, ancestry, color, religion, marital status,
status as a veteran of the Vietnam era, physical or mental disability, medical
condition, or any other basis prohibited by law ("Dispute") shall be resolved
by
binding arbitration as provided in this paragraph. The parties agree that no
party shall have the right to xxx any other party regarding a Dispute except
as
provided in this paragraph.
8.9.2
Binding
Arbitration.
Any
Dispute between the parties shall be submitted to, and conclusively determined
by, binding arbitration in accordance with this paragraph. The provisions of
this paragraph shall not preclude any party from seeking injunctive or other
provisional or equitable relief in order to preserve the status quo of the
parties pending resolution of the Dispute, and the filing of an action seeking
injunctive or other provisional relief shall not be construed as a waiver of
that party's arbitration rights. The arbitration of any Dispute between the
parties to this Agreement shall be governed by the provisions of the California
Arbitration Act. (California Code of Civil Procedure section 1280, et seq.,
including the provision of California Code of Civil Procedure section 1283.05.)
8.9.3 Appointment
of Arbitrator.
The
arbitrator shall be a neutral arbitrator mutually selected by NutraCea and
Employee from the American Arbitration Association and will be governed by
the
rules of the Association. Within thirty (30) days of service of a demand for
arbitration by either party to this Agreement, the parties shall endeavor in
good faith to select a single arbitrator. If they fail to do so within that
time
period, each party shall have an additional period of fifteen (15) days in
which
to appoint an arbitrator and those arbitrators within fifteen (15) days shall
select an additional arbitrator. If any party fails to appoint an arbitrator
or
if the arbitrators initially selected by the parties fail to appoint an
additional arbitrator within the time specified herein, any party may apply
to
have an arbitrator appointed for the party who has failed to appoint, or to
have
the additional arbitrator appointed, by the presiding judge for the Superior
Court, Sacramento County, California. If the presiding judge, acting in his
or
her personal capacity, is unable or unwilling to appoint the additional
arbitrator, that arbitrator shall be selected in accordance with California
Code
of Civil Procedure section 1281.6.
8.9.4 Initiation
of Arbitration.
In the
case of any Dispute between the parties to this Agreement, either party shall
have the right to initiate the binding arbitration process provided for in
this
paragraph by serving upon the other party a demand for arbitration within the
statutory time period from the date the Dispute first arose.
8.9.5
Location
of Arbitration.
Any
arbitration hearing shall be conducted in Sacramento County,
California.
8.9.6
Applicable
Law.
The law
applicable to the arbitration of any Dispute shall be the law of the State
of
California, excluding its conflicts of law rules.
8.9.7
Arbitration
Procedures.
Except
as otherwise provided in this paragraph, the arbitration shall be governed
by
the California Arbitration Act (Code Civ. Proc., § 1280 et seq.). The parties
shall be entitled to conduct discovery sufficient to adequately arbitrate their
claims or defenses, including access to essential documents and witnesses,
as
determined by the arbitrator and subject to limited judicial review. In
addition, either party may choose, at that party’s discretion, to request that
the arbitrators resolve any dispositive motions prior to the taking of evidence
on the merits of the Dispute. By way of example, such dispositive motions would
include, but not be limited to, those which would entitle a party to summary
judgment or summary adjudication of issues pursuant to Code of Civil Procedure
section 437c or resolution of a special defense as provided for at Code of
Civil
Procedure section 597. In the event a party to the arbitration requests that
the
arbitrators resolve a dispositive motion, the arbitrators shall receive and
consider any written or oral arguments regarding the dispositive motion, and
shall receive and consider any evidence specifically relating thereto, and
shall
render a decision thereon, before hearing any evidence on the merits of the
Dispute.
8.9.8
Scope
of Arbitrators' Award or Decision.
NutraCea and Employee agree that if the arbitrators find any Disputed claim
to
be meritorious, the arbitrators shall have the authority to order all forms
of
legal and/or equitable relief that would otherwise be available in court and
that is appropriate to the claim. Any decision or award by the arbitrators
shall
be in writing and shall be specific enough to permit limited judicial review
if
necessary.
8.9.9 Costs
of Arbitration; Attorneys’ Fees.
NutraCea shall bear any costs of arbitration that are over and above costs
that
would be incurred by Employee had he not been required to arbitrate the Dispute,
but instead had been free to bring the action in court. Each party shall bear
its own attorneys’ fees. However, NutraCea and Employee agree that the
arbitrators, in their discretion and consistent with applicable law, may award
to the prevailing party the costs and attorneys’ fees incurred by that party in
participating in the arbitration process as long as they do not exceed those
that would be incurred by Employee in a court action.
8.9.10 Acknowledgment
of Consent to Arbitration.
NOTICE:
BY EXECUTING THIS AGREEMENT EMPLOYEE AGREES TO HAVE ANY DISPUTE ARISING OUT
OF
THE MATTERS INCLUDED IN THE "RESOLUTION OF DISPUTES" PROVISION DECIDED BY
NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND EMPLOYEE WAIVES ANY RIGHTS
EMPLOYEE MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL.
BY EXECUTING THIS AGREEMENT EMPLOYEE WAIVES EMPLOYEE’S JUDICIAL RIGHTS TO
APPEAL. IF EMPLOYEE REFUSES TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS
PROVISION, EMPLOYEE MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE. EMPLOYEES AGREEMENT TO THIS ARBITRATION
PROVISION IS VOLUNTARY. BY EXECUTING THIS AGREEMENT EMPLOYEE IS INDICATING
THAT
EMPLOYEE HAS READ AND UNDERSTOOD THE FOREGOING AND AGREES TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THIS ARBITRATION OF DISPUTES PROVISION
TO
NEUTRAL ARBITRATION.
8.10 Exhibits.
All
exhibits to which reference is made are deemed incorporated in this Agreement
whether or not actually attached.
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Employee:
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[SIGNATURE
PAGE TO EMPLOYMENT AGREEMENT]
EXHIBIT
A
JOB
DESCRIPTION
EXHIBIT
B
PROPRIETARY
RIGHTS AGREEMENT
