EMPLOYMENT AGREEMENT
EXHIBIT
10.31
This
Employment Agreement (“Agreement”) is entered into by and between NutraCea, a
California corporation with with principal offices at 0000 00xx
Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (“NutraCea”) and Xxx Xxxxxxx, an
individual residing at _________
(“Employee”) effective as of January 8, 2008 (“Effective Date”), as
follows:
RECITALS
A. NutraCea
previously employed Employee pursuant to the terms of an employment letter
dated
February 7, 2007 and executed by Employee February 8, 2007 (“Letter Agreement”).
Employee commenced employment with NutraCea March 15, 2007.
B.
The
parties desire to set forth more fully the terms and conditions of Employee’s
employment. The terms of this Agreement supersede and replace in its entirety
the terms of the Letter Agreement.
AGREEMENT
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 Chief Operating Officer of NutraCea. 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 Chief Operating Officer.
No modification or change of Employee’s responsibilities and/or duties shall
modify, change or revoke any provision of 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 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 as may be hereafter
implemented and shall faithfully observe and abide by the same. No such policy,
rule or regulation shall alter, modify or revoke Employee’s status as an at-will
employee or any other provision of this Agreement.
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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,
shareholder, independent contractor or otherwise, promote, participate or engage
in any activity or other business which NutraCea deems in its sole 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.
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) year 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.
2.6 Office
Location.
Employee
shall primarily perform his duties under this Agreement at NutraCea’s offices,
and at such other locations as the Chief Executive Officer may designate from
time-to-time.
3. Term
and Termination; Payments upon Termination.
3.1 Term
and Termination.
Unless
earlier terminated for Cause (as defined below), Nutracea hereby employees
the
Employee for a period commencing upon the Effective Date and ending on ________,
2010 (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.
“Cause”
for termination of Employee’s employment shall mean the occurrence of any of the
following:
(a) Employee
has materially breached the terms hereof;
(b) Employee,
in the reasonable determination of the Board of Directors of NutraCea has been
grossly negligent or engaged in material willful or gross misconduct in the
performance of his duties;
(c) has
failed to meet written standards established by NutraCea for the performance
of
duties hereunder;
(d) Employee
has committed, as determined by the Board of Directors of NutraCea, or has
been
convicted of fraud, moral turpitude, embezzlement, theft, or dishonesty or
other
criminal conduct;
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(e) Employee
has taken other actions or omitted to take any actions such that such action
or
omissions constitute legal cause for termination under California law, as then
in effect; or
(f) Habitual
misuse of alcohol or any non prescribed drug.
3.2 Payments
Upon Termination.
3.2.1
For
Cause.
Following any termination by the Company for 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, vacation pay
and
Employee may retain the vested portion of any stock and stock options properly
and duly granted to Employee as of such date, subject and pursuant to the terms
of the stock option agreements or stock purchase agreements entered into between
NutraCea and Employee, which grant NutraCea certain repurchase
rights.
3.2.2 Without
Cause.
Following any termination by the Company without Cause, Employee (or Employee’s
estate) 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, vacation pay and Employee may retain the vested portion of any
stock
and stock options properly and duly granted to Employee as of such date, subject
and pursuant to the terms of the stock option agreements or stock purchase
agreements entered into between NutraCea and Employee, which grant NutraCea
certain repurchase rights. In addition, Employee shall be entitled to receive
severance payments equal in the aggregate to twelve (12) months of Employee’s
salary, reduced only by disability payments received by Employee from long
term
disability insurance maintained by the Company, which payments shall be made
at
regular payroll intervals.
Employee’s
Initials ___________
4. Compensation;
Benefits.
4.1 Salary.
Employee
shall be paid at a rate, which if annualized, equals two hundred twenty thousand
dollars ($220,000) per year subject to normal payroll withholdings and
NutraCea’s standard payroll practices. Commencing on the second anniversary of
the Effective Date of this Agreement, Employee’s salary shall be increased
annually by a cost of living factor equal to the percentage of such salary
that
is equal to the percentage increase in the published Consumer Price Index
selected by NutraCea (“CPI”) for such year over the same CPI for the previous
year of the term.
4.2 Bonus.
Employee
shall be eligible to participate in any NutraCea bonus program that is
applicable to officers of NutraCea as may be
adopted
and in effect from time to time (subject to the terms and conditions of any
such
program). In addition, Employee shall be eligible for an annual discretionary
bonus as approved by the Chief Executive Officer of NutraCea after review and
approval by the NutraCea compensation committee and/or its Board of
Directors.
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4.3 Stock
Options.
NutraCea previously granted to Employee, as of Employee’s February 8, 2007
initial employment date, a nonqualified stock option to purchase 250,000 shares
of NutraCea’s common stock pursuant to the terms and conditions of the NutraCea
Equity Incentive Plan and an associated Nonqualified Stock Option Agreement.
Such option is subject to the vesting schedule set forth therein. Employee
may,
from time to time and at NutraCea’s sole discretion, be granted additional stock
options. All option grants shall be subject to Board of Directors (and/or its
compensation committee) approval and to the terms and conditions of the
corresponding Option Agreements.
4.4 Car
Allowance.
Employer will provide Employee with an automobile allowance in the amount of
$850 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.
4.5. Vacation
and other Standard Benefits.
Employee
shall be entitled to four (4) weeks of paid vacation time per year of Employee’s
employment. 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 shall be entitled to health
benefits in accordance with NutraCea’s standard policies. In addition, Employee
is 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.
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.
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.
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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 dated ____________ described
in
Section 6 and the Option Agreement referenced in Section 4.2 contain the entire
Agreement among the parties and supersede the Letter Agreement and 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 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.
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8.5 Attorneys’
Fees.
If the
services of an attorney are used 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 sought to enforce or
interpret any provision of this Agreement or the rights and duties of any person
in relation thereto, the prevailing party shall be entitled to reasonable
attorneys’ fees, costs and other expenses, in addition to any other relief to
which such party may be entitled. Any award of damages by any court or
arbitration as a result of the breach of this Agreement or any of its provisions
shall include an award of prejudgment interest from the date of the breach
at
the maximum amount of interest allowed by law.
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 NutraCea or Employee
hereunder.
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.
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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 selected by NutraCea and Employee.
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.
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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/she 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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NutraCea
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| ___________________________________ | ||
| By: | ||
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Title:
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| Employee: Xxx Xxxxxxx | ||
| ____________________________________ | ||
[SIGNATURE
PAGE TO EMPLOYMENT AGREEMENT]
8
EXHIBIT
A
OPTION
AGREEMENT
9
EXHIBIT
B
PROPRIETARY
RIGHTS AGREEMENT
10
