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Exhibit 10.1
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EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into by and between NutraCea,
a California corporation (“NutraCea”), and Jerry Dale Belt (“Employee”),
effective as of June 8, 2010.  The parties agree as follows:

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.  Effective as of June 15, 2010
(“Effective Date”), Employee shall be employed as Chief Financial Officer, Chief
Accounting Officer and an Executive Vice President of NutraCea, reporting to the
Chief Executive Officer and the Chairman of the Audit Committee of NutraCea’s
Board of Directors (“Audit Committee”).  NutraCea reserves the exclusive right
to designate and modify Employee’s specific duties from time to time in any
manner consistent with Employee’s status as Chief Financial 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 shall devote
substantially all of Employee’s business time, attention, skill and experience
and shall apply Employee’s best efforts to the performance of Employee’s duties
and the business and affairs of NutraCea.  Employee may engage in charitable
activities and community affairs, and manage Employee’s personal investments and
affairs, so long as such activities do not, either individually or in the
aggregate, materially interfere with the proper performance of Employee’s duties
and responsibilities hereunder.  In addition, Employee may devote the necessary
time to his previous employer’s consulting projects, as reasonably required, in
order to appropriately transition his responsibilities to other project leaders
at his former employer. Employee will make every effort to handle all transition
related matters within thirty days of the Effective Date.

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 Chairman of the Audit Committee.

2.3            Rules. Employee shall be bound by all the policies, rules,
regulations, plans, programs, agreements and arrangements of NutraCea now in
force, and by all such other policies, rules, regulations, plans, programs,
agreements and arrangements as may be hereafter implemented (collectively,
“Company Arrangements”) and shall faithfully observe and abide by the same.   No
such policy, rule or regulation shall alter, modify or revoke the provisions of
this Agreement, including Employer’s right to terminate Employee’s employment
without cause pursuant to the terms of this Agreement.

 
2.4            Exclusive Services.  During the Term, 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 that is competitive with NutraCea’s business
operations; provided, however, that this provision shall not preclude or
prohibit Employee from holding or obtaining an indirect and passive beneficial
ownership, through a mutual fund or similar arrangement, of up to one percent of
any publicly-held company which is competitive with NutraCea as long as he does
not otherwise promote, participate or engage in the business operations of such
company.  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.

 
 

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2.5            Non-Solicitation.    To the fullest extent permissible under
applicable law, Employee agrees that both during the Term and for a period of
two (2) years following termination of this Agreement, Employee shall not take
any action to induce employees or independent contractors, or customers,
suppliers or vendors of NutraCea to sever their relationship with NutraCea and
accept an employment or an independent contractor relationship, or any other
applicable relationship with any other business.

2.6            Office Location. Employee shall primarily perform Employee’s
duties under this Agreement at NutraCea’s offices, but shall provide services at
such other locations as the Chief Executive Officer may designate from
time-to-time.

2.7            Bankruptcy.  Employee acknowledges that NutraCea has filed for
protection under Chapter 11 of the US Bankruptcy Code.  NutraCea’s Chapter 11
case, entitled In re NutraCea, a California corporation, Case No.
2:09-bk-28817-CGC (the “Bankruptcy Case”) is currently pending before the United
States Bankruptcy Court, District of Arizona-Phoenix Division (the "Bankruptcy
Court").

3.              Term and Termination; Payments upon Termination.

3.1            Term and Termination. Unless earlier terminated as described
below, NutraCea hereby employs the Employee under this Agreement for a period
commencing on the Effective Date and ending on June 1, 2014 (the “Term”).  The
period commencing on the Effective Date and ending on June 1, 2011, and each
succeeding twelve (12) month period during the Term, are each referred to herein
as a “Contract Year.”

3.1.1         Termination for Cause.  No termination of Employee’s employment
hereunder for Cause shall be effective unless NutraCea shall first have given
written notice to Employee (the “Cause Notice”) of its intention to terminate
Employee for Cause, such Cause Notice shall state the circumstances that
constitute the grounds on which the termination for Cause is based.  “Cause” for
termination of Employee’s employment shall mean the occurrence of any of the
following:

(a)            Employee breaches a material term of this Agreement, which breach
remains uncured for thirty (30) days after delivery of the Cause Notice (which
Cause Notice shall describe the breach in sufficient detail to allow Employee
the reasonable opportunity to cure the breach, if susceptible of being cured
within such thirty (30) day period);

(b)            Employee has been grossly negligent or engaged in material
willful or gross misconduct in the performance of Employee’s duties;

(c)            Employee has committed, as reasonably determined by the Board of
Directors of NutraCea (“Board”), or has been convicted by a court of law of
fraud, moral turpitude, embezzlement, theft, or similar criminal conduct, or any
felony;

(d)            Employee’s habitual misuse of alcohol, drugs, or any controlled
substance; or

(e)            Employee’s (i) breach of the Proprietary Information Agreement
attached hereto as Exhibit A or (ii) failure to comply with reasonable written
standards established by NutraCea for the performance of Employee’s duties
hereunder.

3.1.2         Termination for Good Reason.

(a)            Employee may terminate this Agreement for Good Reason, as defined
herein, subject to and provided that Employee complies with the requirements of
Section 3.1.2(b).  As used herein, “Good Reason” means (i) any material breach
by NutraCea of any provision of this Agreement; (ii) a material reduction of
Employee’s duties or responsibilities (or the assignment of duties or
responsibilities to Employee that are) not consistent or commensurate with
Employee’s position as Chief Financial Officer, but not including any reduction
in Employee’s duties during any investigation or proceedings initiated by
NutraCea pursuant to Section 3.1.1 with regard to a possible termination of
Employee for Cause; or (iii) any reduction of Employee’s Base Salary other than
as part of a general reduction of the salaries of all or substantially all
NutraCea employees.

 
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(b)            In order to terminate this Agreement for Good Reason, Employee
shall provide NutraCea with (i) written notice of the Good Reason (which notice
must be delivered within ninety (90) days following the date Employee first
learns of the occurrence of the event constituting Good Reason and which notice
shall describe the particulars of NutraCea’s breach in sufficient detail to
allow NutraCea reasonable opportunity to remedy or eliminate the Good Reason(s),
if susceptible of being remedied or eliminated); and (ii) thirty (30) days
within which to remedy or eliminate the Good Reason(s).  In the event that
Employee provides such notice and NutraCea fails to remedy or eliminate the Good
Reason(s) within such 30-day period, Employee shall be entitled to provide
NutraCea with written notice (of not less than fifteen (15) days) that Employee
is terminating this Agreement as a result of such Good Reason(s).

3.1.3         Voluntary Termination of Employment.  Employee agrees (a) to
provide at least one hundred and eighty (180) days prior written notice (a
“Voluntary Termination Notice”) of Employee’s intention to voluntarily terminate
Employee’s employment with  NutraCea for any reason other than Good Reason,
death or Disability (as defined below) (a “Voluntary Termination”) and (b) to
specify in such notice a fixed date for the Voluntary Termination.  A
termination of this Agreement by reason of Employee’s non-renewal shall be
deemed to be a Voluntary Termination.

3.2            Payments Upon Termination.

3.2.1         For Cause, Voluntary Termination, or Disability.  If NutraCea
terminates Employee’s employment for Cause, or if Employee terminates by
Voluntary Termination, or if either party terminates this Agreement due to
Employee’s Disability: (a) Employee shall be entitled to receive in a cash lump
sum payment (less normal and customary deductions and withholdings) an amount
equal to all accrued but unpaid compensation (including accrued but unused
vacation leave) as of the date of such termination (such payment shall be made
within the time period required by applicable law, but in no event later than
thirty (30) days following the date of termination); and (b) all unvested
portion of the Option (as defined below) shall terminate effective as of the
date of termination, and, subject to Section 4.3, all vested portions of the
Option shall remain outstanding and exercisable for ninety (90) days following
the date of termination.

3.2.2         Without Cause, for Good Reason, or Death.

(a)            In the event Employee’s employment is terminated (i) by NutraCea
other than for Cause, (ii) by Employee for Good Reason, or (iii) due to
Employee’s death, Employee (or Employee’s estate or legal representative) shall
be entitled to: (A) a cash lump sum payment an amount equal to (1) all
previously accrued but unpaid  compensation (including accrued but unused
vacation leave) as of the date of such termination, (2) the Base Salary that
Employee would have been paid had he remained employed with NutraCea for the 180
day period beginning immediately after Employer gives notice to Employee of
Employee’s termination (the amount described in this Section 3.2.2(a)(A)(2), the
“Severance Payment”); and the payments due under Section 3.2.2(a)(A)(2) to be
made no later than ten (10) days following the effective date of a mutual
general release in a reasonable form prepared by NutraCea, and signed, by both
Employee and NutraCea; and (B) the Option (as defined below) shall remain
outstanding and exercisable for a period of ninety (90) days as provided in
NutraCea’s 2010 Equity Incentive Plan (“2010 Plan”) and the Option Agreement (as
defined below).

 
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(b)            For purposes of this Agreement, “Disability” shall mean that
Employee, due to a physical or mental disability, has been substantially unable
to perform Employee’s duties under this Agreement for a continuous period of
ninety (90) days or longer, or for one hundred and twenty (120) days or more in
any twelve (12) month period.

3.2.3         Section 409A.  Notwithstanding any provision of this Agreement to
the contrary, if Employee is a “specified employee” as defined in Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), he shall not be
entitled to any payments upon a termination of Employee’s employment under any
arrangement that constitutes “nonqualified deferred compensation” under Section
409A until the earlier of (i) the date which is six (6) months after Employee’s
separation from service (as such term is defined in Section 409A of the Code and
the regulations and other published guidance hereunder) for any reason other
than death, or (ii) the date of Employee’s death.  After the date of
termination, Employee shall have no duties or responsibilities that are
inconsistent with having a separation from service as of such date.  Any amounts
otherwise payable to Employee following a termination of employment that are not
so paid by reason of this Section 3.2.3 shall be paid promptly following, and in
any event within fifteen (15) days following, the date that is six (6) months
after Employee’s separation from service (or, if earlier, the date of Employee’s
death).

4.              Compensation; Benefits.

4.1            Base Salary.  Employee shall be paid at a rate which, on an
annualized basis, equals two hundred thirty thousand dollars ($230,000) per
year, as adjusted pursuant to this Section 4.1 (“Base Salary”).   The Base
Salary shall be subject to normal payroll withholdings and NutraCea’s standard
payroll practices. Employee’s Base Salary shall increase to two hundred fifty
thousand dollars ($255,000) per year effective as of January 1,
2011.  Thereafter, for each subsequent Contract Year, Employee’s Base Salary
shall be subject to increase as determined by the Board in its discretion.

4.2            Bonus

4.2.1         Annual Bonus Program.  Employee shall participate in any NutraCea
annual bonus program that is adopted by NutraCea and that is applicable to
senior officers of NutraCea (subject to the terms and conditions of any such
program).  Any such annual bonus program must be approved by the NutraCea
Compensation Committee and shall set forth objective criteria for bonus payments
based on the financial performance of NutraCea.  Such annual bonus program also
shall set forth a target bonus objective for Employee, which target bonus
initially shall be fifty percent (50%) of Employee’s Base Salary.  The actual
annual bonus amount, if any, shall be paid in accordance with the terms of such
program

4.2.2         Discretionary Bonus.  In addition, Employee shall be eligible for
an annual discretionary bonus as determined by the Board or the Compensation
Committee of the Board, after first obtaining the recommendations of such third
party compensation consultants as may be selected by NutraCea.  Such bonus may
be paid in cash or stock incentives or a combination of cash and stock
incentives.

4.3            Stock Option.  NutraCea shall grant to Employee, on the Effective
Date, a non-qualified option (“Option”) to purchase 2,500,000 shares of
NutraCea's common stock pursuant to the 2010 Plan.  The Option shall be subject
to the terms and conditions of the 2010 Plan and the standard form of option
agreement for the 2010 plan (“Option Agreement”). The per share exercise price
of the Option shall be $0.20, subject to adjustment for stock splits, stock
dividends and the like as provided in the 2010 Plan.  Subject to the 2010 Plan
and the Option Agreement, the shares subject to the Option shall vest as
follows:  (i) 500,000 of the shares shall vest on Employee’s first date of
employment as NutraCea’s Chief Financial Officer, (ii) 500,000 of the shares
shall vest on the Confirmation Date (as defined below) and (iii) 31,250 of the
shares shall vest each month after the Confirmation Date on the same day of the
month as the Confirmation Date, subject to Employee continuing to be an employee
of NutraCea through each such date. Employee may, from time to time and at
NutraCea’s sole discretion, be granted additional stock options. Any future
stock option grant shall require the approval of the Board or its Compensation
Committee and be subject to the terms and conditions of the corresponding option
agreements and equity incentive plans.  “Confirmation Date” shall mean the date
in which the Bankruptcy Court enters an order approving and confirming
NutraCea’s plan of reorganization for its Bankruptcy Case.

 
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4.4            Vacation and other Standard Benefits. Employee shall be entitled
to four (4) weeks of paid vacation time per year.  Employee may not accrue
vacation time in excess of such four (4) weeks 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.

4.5            Business Expenses.  Employee shall be reimbursed for reasonable
business expenses which he incurs in the performance of Employee’s duties
hereunder, in accordance with NutraCea’s standard reimbursement policies.

4.6            Inconsistencies.  In the event of any inconsistency between any
provision of this Agreement and any provision of any Company Arrangement, the
provisions of this Agreement shall control.

5.              Employee’s Representations.   Employee represents and warrants
to NutraCea that information provided by Employee about Employee to NutraCea in
connection with Employee’s employment and any supplemental information provided
to NutraCea is, to the best of Employee’s knowledge and information after good
faith diligence and investigation, complete, true and correct.   Employee has
not omitted any information that is necessary to evaluate the information
provided by Employee to NutraCea.  Employee shall promptly notify NutraCea of
any change in the accuracy or completeness of all such information.

6.              Trade Secrets.   Employee acknowledges that NutraCea has
expended substantial 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 A.  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, 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, 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 Arizona, excluding its conflict of laws rules, except as
such laws may be interpreted, enforced, or preempted by federal law.

8.2.           Entire Agreement.   This Agreement, the Proprietary Information
Agreement dated as of the Effective Date and described in Section 6 and the
Indemnification Agreement (as defined below) and the Option Agreement referenced
in Section 4.3, contain the entire agreement among the parties hereto with
respect to the subject matter hereof, and supersede all prior and
contemporaneous oral and written agreements, understandings and representations
among the parties.  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.

 
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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 on the signature page below 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 or other
tribunal (including an arbitrator) of competent jurisdiction to be illegal,
invalid or unenforceable, the legality, validity and enforceability of the
remaining parts, terms and provisions shall not be affected thereby, and said
illegal, unenforceable or invalid part, term or provision shall be deemed not to
be part of this Agreement.

8.5            Amendment.  The provisions of this Agreement may be modified at
any time by agreement of the parties; provided that such modification shall be
ineffective unless in writing and signed by the parties hereto.

8.6            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.

8.7            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.

8.8            Resolution of Disputes.

8.8.1         Resolution of Disputes.  NutraCea and Employee agree that, except
as otherwise provided herein, 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 Section 8.8.

8.8.2         Binding Arbitration.  The provisions of this Section 8.8 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
a 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.  Except as provided herein, the arbitration of any Dispute between the
parties to this Agreement shall be governed by the American Arbitration
Association (“AAA”) Commercial Arbitration Rules (the “AAA Rules”).

 
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8.8.3         Appointment of Arbitrator.  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 from the AAA list of labor and employment
arbitrators a single arbitrator, who must be a licensed attorney; if the parties
fail to do so within such thirty (30) day period, an arbitrator shall be
selected in accordance with the AAA Rules.

8.8.4         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.

8.8.5         Location of Arbitration.  Any arbitration hearing shall be
conducted in Phoenix, Arizona.

8.8.6         Applicable Law.  The law applicable to the arbitration of any
Dispute shall be, as provided in Section 8.1 and the Federal Arbitrator Act
(Title 9, U.S. Code, Section 1 et Seq.).

8.8.7         Arbitration Procedures.  In addition to any of the procedures or
processes available under the AAA Rules, the parties shall be entitled to
conduct discovery sufficient to adequately arbitrate their claims and/or
defenses, including access to relevant documents and witnesses, as determined by
the arbitrator(s).  In addition, either party may choose, at that party’s
discretion, to request that the arbitrator(s) resolve any dispositive motions
prior to the taking of evidence on the merits of the Dispute.  In the event a
party to the arbitration requests that the arbitrator(s) resolve a dispositive
motion, the arbitrator(s) shall receive and consider any written or oral
arguments regarding the dispositive motion, and shall receive and consider any
evidence specifically relating thereto, and shall render a decision thereon,
before hearing any evidence on the merits of the Dispute.

8.8.8         Scope of Arbitrators’ Award or Decision.  NutraCea and Employee
agree that if the arbitrator(s) find any Disputed claim to be meritorious, the
arbitrator(s) 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 arbitrator(s) shall be a
reasoned opinion in writing citing facts and law and shall be specific enough to
permit limited judicial review if necessary.

8.8.9         Costs of Arbitration; Attorneys’ Fees.  NutraCea and Employee
agree that  the arbitrator(s), in their discretion and consistent with
applicable law, may award to the prevailing party the costs 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.

8.8.10       Acknowledgment of Consent to Arbitration.  NOTICE:  BY EXECUTING
THIS AGREEMENT THE PARTIES AGREE TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS
INCLUDED IN THE “RESOLUTION OF DISPUTES” PROVISION DECIDED BY NEUTRAL
ARBITRATION AS PROVIDED HEREIN AND WAIVE ANY RIGHTS THEY MAY HAVE TO HAVE THE
DISPUTE DECIDED BY A JUDGE OR A JURY.  BY EXECUTING THIS AGREEMENT, THE PARTIES
WAIVE THEIR JUDICIAL RIGHTS TO APPEAL.  IF EITHER PARTY REFUSES TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, SUCH PARTY MAY BE COMPELLED TO
ARBITRATE.  THE PARTIES’ AGREEMENT TO THIS ARBITRATION PROVISION IS
VOLUNTARY.  THE PARTIES REPRESENT THAT THEY HAVE READ AND UNDERSTAND THE
FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN
THIS PROVISION TO NEUTRAL ARBITRATION.

 
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8.10          Exhibits. All exhibits to which reference is made are deemed
incorporated in this Agreement whether or not actually attached.

[Signature Page Follows]

 
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The parties hereto have executed and delivered this Agreement as of the date
first-above written.

COMPANY:
 
EMPLOYEE:
         
NUTRACEA,
     
a California corporation
                      /s/ W. John Short   /s/ Jerry Dale Belt  
By:      W John Short
 
By:      Jerry Dale Belt
         
Title:  Chairman & CEO
 
Address:
     
                 
 
Address: 6720 N Scottsdale Rd, Suite 390
     
                 Scottsdale, AZ 85260
     

[Signature Page to Employment Agreement]

 
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EXHIBIT A

PROPRIETARY INFORMATION AGREEMENT

NutraCea, a California corporation ("Company"), and
________________________________ an individual ("Employee"), agree as follows:

Employment

Employee acknowledges that the obligations of Employee set forth in this
Agreement are a condition of Employee's employment with Company and are agreed
to by Employee in consideration of such employment.  The parties agree that this
Agreement shall not in any way affect the employer/employee relationship of the
parties other than as specifically set forth in this Agreement, including
without limitation the ability of Company to terminate Employee’s employment at
will (unless otherwise provided in a written agreement, properly signed by
Company).

Term

The term of this Agreement shall commence on the date hereof and shall continue
for the duration of Employees employment with Company.

Confidential Information

Employee agrees not to disclose to any others, or take or use for Employee's own
purposes or purposes of any others, during the term of this Agreement or at any
time thereafter, any of Company's Confidential Information (as defined
below).  Employee agrees that these restrictions shall also apply to:

 
1.
Confidential Information belonging to third parties in Company's possession,

 
2.
Confidential Information belonging to any parent or subsidiary of the Company
and,

 
3.
Confidential Information conceived, originated, discovered or developed by
Employee during the term of this Agreement.

"Confidential Information" means any Company proprietary information, technical
data, trade secrets or know-how, including, but not limited to, research,
product plans, products, services, customer lists and customers, markets,
software, developments, inventions, processes, formulas, technologies, designs,
drawings, engineering, marketing, finances or other business information
disclosed to Employee by Company, either directly or indirectly, in writing,
orally or by drawings, or by observation of products.  Confidential Information
does not include any of the foregoing items which has become publicly known and
made generally available through no wrongful act of Employee.  Employee further
agrees not to improperly use or disclose or bring onto the premises of Company
any trade secrets of another person or entity during the term of this
Agreement.  Employee recognizes that the Company has received and in the future
will receive from third parties their confidential or proprietary information
subject to a duty to the Company, to maintain the confidentiality of such
information and to use it only for certain limited purposes.  Employee agrees to
hold all such confidential or proprietary information in the strictest
confidence and not to disclose it to any person, firm or corporation, or to use
it, except as necessary, in carrying out Employee’s work for the Company
consistent with the Company's agreement with such third party.

 
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Inventions

For purposes of this Agreement, "Invention" shall mean any new inventions,
improvements, machines, manufactures, methods, processes, uses, apparatuses,
compositions of matter, designs, original works of authorship, formulas,
databases, computer programs or software, or configurations of any kind,
discovered, conceived, developed, made, or produced or any improvements to them,
and shall not be limited to the definition of an invention contained in the
United States Patent Laws.

 
1.
Assignment of Inventions.  Employee assigns to Company all of Employee's
interest in all ideas and Inventions, whether or not patentable, copyrightable
or protectable as trade secrets, made or conceived by Employee, solely or
jointly with any others, during the term of Employee's employment with Company,
except for any idea or Invention for which no equipment, supplies, time,
facilities or trade secret information of Company was used and that was
developed entirely upon Employee's own time, and does not relate either to the
business of Company or Company's actual or demonstrably anticipated research or
development.  All ideas and Inventions hereby assigned are referred to as
“Assigned Inventions”.  Employee agrees to promptly disclose all Assigned
Inventions in writing to Company, to assist Company in preparing patent
applications and assignments for those Inventions and to vest title to those
Inventions in Company, all at Company's expense, but for no consideration to
Employee in addition to Employee's salary or wages.  If Company requires
Employee's assistance under this Section after termination of Employee's
employment, Employee shall be compensated for Employee's time actually spent in
providing that assistance at any hourly rate equivalent to Employee's salary or
wages during Employee's last period of employment by Company.

 
2.
Prior Inventions.  Employee has attached as Exhibit A, a list of any Inventions
belonging to Employee prior to employment with Company ("Prior Inventions"),
that relate to the business of Company or Company's actual or demonstrably
anticipated research or development and that are not assigned to Company
hereunder.  If no such list is attached, Employee represents that there are no
such Prior Inventions.  If in the course of employment with Company, Employee
incorporates into a Company product, process or machine a Prior Invention owned
by Employee or in which Employee has an interest, Company is hereby granted and
shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide and
assignable license to make, have made, modify, sublicense, use and sell such
Prior Invention as part of or in connection with such product, process or
machine.

 
3.
Records of Inventions.  Employee agrees to keep and maintain adequate and
current written records of all Inventions of Employee during the term of
employment with Company.  Such records shall be in the form of notes, sketches,
drawings, and any other format that may be specified by Company, and shall be
available to and remain the sole property of Company at all times.

 
4.
Works for Hire.  Employee acknowledges and agrees that any copyrightable works
prepared by Employee within the scope of Employee’s employment are “works for
hire” under the Copyright Act and that the Company will be considered the author
and owner or such copyrightable works.  Employee agrees that all Inventions
that:

 
a.
Are developed using equipment, supplies, facilities or trade secrets of the
Company,

 
b.
Result from work performed by Employee for the Company, or,

 
c.
Relate to the Company’s business or current or anticipated research and
development will be the sole and exclusive property of the Company and are
hereby irrevocably assigned by Employee to the Company.

 
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5.
Assignment of Other Rights.  In addition to the foregoing assignment of
Inventions to the Company, Employee hereby irrevocably transfers and assigns to
the Company:

 
a.
All worldwide patents, patent applications, copyrights, mask works, trade
secrets and other intellectual property rights in any Invention: and,

 
b.
Any and all “Moral Rights” (as defined below) that Employee may have in or with
respect to any Invention.

Employee also hereby forever waives and agrees never to assert any and all Moral
Rights Employee may have in or with respect to any Inventions, even after
termination of Employee’s work on behalf of the Company.  “Moral Rights” mean
any rights to claim authorship of an Invention, to object to or prevent the
modification of any Invention, or to withdraw from circulation or control the
publication or distribution of any Invention, and any similar right, existing
under judicial or statutory law of any country in the world, or under any
treaty, regardless or whether or not such right is denominated or generally
referred to as a “moral right”.

Return of Property

Employee agrees that upon termination of employment with Company, Employee will
deliver to Company all devices, records, data, disks, computer files, notes,
reports, proposals, lists, correspondence, specifications, drawings, blueprints,
sketches, materials, equipment, other documents or property, or reproductions of
any aforementioned items developed by Employee pursuant to employment with
Company or otherwise belonging to Company, its successors or assigns.  In the
event of the termination of Employee’s employment, Employee agrees to sign and
deliver the "Termination Certification" attached hereto as Exhibit B.

Notification of New Employer

Company shall have the right to notify any future employers of Employee of
Employee's rights and obligations under this Agreement.

Other Agreements

Employee represents that the performance of all the terms of this Agreement will
not breach any agreement to keep in confidence proprietary information acquired
by Employee in confidence or in trust prior to employment with
Company.  Employee has not and shall not enter into any oral or written
agreement in conflict with this Agreement.

Equitable Remedies

Employee agrees that it would be impossible or inadequate to measure and
calculate Company's damages from any breach of the covenants set forth in this
Agreement.  Accordingly, Company shall have available, in addition to any other
right or remedy available under law or equity, the right to obtain any
injunction from a court of competent jurisdiction restraining such breach or
threatened breach and to specific performance of any such provision of this
Agreement.  Employee further agrees that no bond or other security shall be
required in obtaining such equitable relief and consents to the issuance of such
injunction and to the ordering of specific performance.

Miscellaneous

 
1.
Attorneys' Fees; Prejudgment Interest; Governing Laws.  If the services of an
attorney are required by any party to secure the performance hereof 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 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 following judicial remedy 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.  The rights and obligations of the
parties and the interpretation and performance of this Agreement shall be
governed by the law of Arizona, excluding its conflict of laws rules.

 
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2.
Amendment; Waiver.  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 parties against whom enforcement of the modification or discharge is
sought.  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 either of that term or condition as it applies on a
subsequent occasion or of any other term or condition.

 
3.
Entire Agreement.  This document and any written employment agreement between
Employee and Company constitute the entire agreement between the parties
regarding the subject matter, all oral agreements being merged herein, and
supersedes all prior representations.  There are no representations, agreements,
arrangements, or understandings, oral or written, between or among the parties
relating to the subject matter of this Agreement that are not fully expressed
herein.

 
4.
Succession.  Subject to the provisions otherwise contained in this Agreement,
this Agreement shall inure to the benefit of and be binding on the heirs,
successors and assigns of the respective parties hereto.

 
5.
Severability.  If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of the
Agreement which can be given effect without the invalid provision shall continue
in full force and effect and shall in no way be impaired or invalidated.

 
6.
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:

 
a.
On the date of personal service on the parties,

 
b.
On the third business day after mailing, if the document is mailed by registered
or certified mail,

 
c.
One day after being sent by professional or overnight courier or messenger
service guaranteeing one-day delivery, with receipt confirmed by the courier, or

 
d.
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 below 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.

 
7.
No Duty to Employ.  Employee understands that this Agreement does not constitute
a contract of employment or obligate the Company to employ Employee for any
stated period of time.  This Agreement shall be effective as of the first day of
Employee’s employment by the Company.

 
8.
Counterparts.  This Agreement may be executed in one or more counterparts, each
of which shall constitute an original but all of which taken together shall
constitute one and the same instrument.

[SIGNATURE PAGE TO FOLLOW]

 
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In witness whereof, the parties have executed this Proprietary Information
Agreement as of the date set forth below.

COMPANY:
EMPLOYEE:
       
NUTRACEA,
   
a California corporation
         
/s/ W. John Short
/s/ Jerry Dale Belt
 
By:   W. John Short
   
Title:   Chairman & CEO
Address:
       
Address:
         
6720 N Scottsdale Rd, Suite 390
   
Scottsdale, AZ  85253
   

[Signature Page to Proprietary Information Agreement]

 
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Logo [logo1.jpg]
 
EXHIBIT A

PROPRIETARY INFORMATION AGREEMENT
PRIOR INVENTIONS

________
No inventions or improvements

________
Document below and attach an additional sheet(s) as needed

       
Employee Name (please print)
                             
Employee Signature
 
Date
 

Title Date Identifying Number or Brief Description:

 
 

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Logo [logo1.jpg]
 
EXHIBIT B

PROPRIETARY INFORMATION AGREEMENT
TERMINATION CERTIFICATION

This is to certify that I do not have in my possession, nor have I failed to
return, any devices, records, data, disks, computer files, notes, reports,
proposals, lists, correspondence, specifications, drawings, blueprints,
sketches, materials, equipment, other documents or property, or reproductions of
any aforementioned items developed by me pursuant to employment with NutraCea or
otherwise belonging to NutraCea, its successors or assigns or any parent or
subsidiary of NutraCea.

I further certify that I have complied with all the terms of NutraCea's
Proprietary Information Agreement signed by me, including the reporting of any
inventions and original works of authorship (as defined therein), conceived or
made by me (solely or jointly with others) covered by that agreement.

I further agree that, in compliance with the Proprietary Information Agreement,
I will preserve as confidential all trade secrets, confidential knowledge, data
or other proprietary information relating to products, processes, know-how,
designs, formulas, developmental or experimental work, computer programs, data
bases, other original works of authorship, customer lists, business plans,
financial information or other subject matter pertaining to any business of
NutraCea, any parent or subsidiary of NutraCea, or any of its respective
employees, clients, consultants or licensees.

I further agree that for twenty four (24) months from this date, I will not:

 
a.
Hire any employees of NutraCea, or

 
b.
Directly or indirectly, solicit, induce, recruit or encourage any NutraCea
employee, consultant, vendor, supplier, customer or client to sever its
relationship with NutraCea or accept an employment, consultant or other business
relationship with any other business.

COMPANY:
 
EMPLOYEE:
         
NUTRACEA,
     
a California corporation
                     
By:
     
Title:
 
Address:
         
Address:
             
6720 N Scottsdale Rd, Suite 390
     
Scottsdale, AZ  85253
     

Date:
   
Date:
   

 
 

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