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 TODD C. CROW, 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.
 
NUTRACEA
           
By:
/s/ Bradley Edson   /s/ Todd C. Crow
Name: Bradley Edson
 
TODD C. CROW
Title:    Chief Executive Officer
        
 

--------------------------------------------------------------------------------

EXHIBIT A
 
EMPLOYMENT SEVERANCE AGREEMENT

This Employment Severance and Release Agreement (“Agreement”) is made by and
between NutraCea, with a principal business address at 5090 North 40th Street,
Phoenix, AZ 85018 and Todd C. Crow, an individual with principal address at 8335
Walden Woods Way, Granite Bay, CA 95746 (“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:
 

 
(a)
his waiver and release does not apply to any rights or claims that may arise
after the execution date of this Agreement;

 

 
(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);

 

 
(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”).

 
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.

EMPLOYEE
 
/s/ Todd C. Crow
Todd C. Crow
 
NUTRACEA
 
/s/ Brad Edson 
Brad Edson, CEO

7

--------------------------------------------------------------------------------

EXHIBIT A

Car Lease

Computer Equipment

8

--------------------------------------------------------------------------------

EXHIBIT B

Assumed 
Options
 
Qualified
 
Date of
 
Expiration
 
Original
 
in RiceX
 
Number 
of
 
Board Date
 
Exercise
 
17-Jul-06
 
Cashless
     
Name
 
Non-Qualified
 
Warrant/Option
 
Date
 
Issuance
 
Merger
 
Shares
 
Approval
 
Price
 
Registration
 
Option
 
Vesting
 
Crow, Todd
   
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
)
Crow, Todd
   
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
)
Crow, Todd
   
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
)
Crow, Todd
   
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
)
Crow, Todd
   
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
)
Crow, Todd
   
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
)
Crow, Todd
   
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
)
Crow, Todd
   
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
                                                                               
                                         
Crow, Todd
   
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:

/s/ Brad Edson 
Bradley D. Edson, Chief Executive Officer

9

--------------------------------------------------------------------------------

EXHIBIT B
 
INDEPENDENT CONTRACTOR AGREEMENT

This Agreement is entered into between Nutracea, a California corporation with
principal offices at 5090 40th North Street, Suite 400, Phoenix, Arizona 85018
(“NutraCea” or “Company”) and Crow & Associates, LLC with principal address at
8335 Walden Woods Way, Granite Bay, CA 95746 (“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 Todd C. Crow, 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 Todd C. Crow, directly and/or through
Contractor or any other successor in interest, has not exercised (from the
options granted by NutraCea to Contractor or to Todd C. Crow) options to acquire
more than one hundred and ten thousand (110,000) shares of stock in NutraCea. If
Todd C. Crow 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 Todd
C. Crow’s 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 Todd C. Crow 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 Todd C. Crow 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, Title 17, United States 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.

NUTRACEA
 
Crow & Associates, LLC
     
/s/ Brad Edson 
 
/s/ Todd C. Crow
By: Brad Edson, CEO
 
by: Todd C. Crow

 
5

--------------------------------------------------------------------------------