EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into by and between NutraCea,
a California corporation with with principal offices at 5090 40th North Street,
Suite 400, Phoenix, Arizona 85018 (“NutraCea”) and Leo Gingras, 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;

 
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(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;

(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.
 
3.2.1For 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. 

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.

 
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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.
 
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.
 
 
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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 sue 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.)

 
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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.
 

  NutraCea       ____________________  
By: _________________________
  Title: ________________________           Employee: Leo Gingras      
_______________

          

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
 
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EXHIBIT A

OPTION AGREEMENT
 
 

 

 
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EXHIBIT B

PROPRIETARY RIGHTS AGREEMENT
 
 
 
 
 
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