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EXHIBIT 10.1
 
NUTRACEA
2010 Equity Incentive Plan
 
1.      PURPOSE. The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, and any Parents and Subsidiaries
that exist now or in the future, by offering them an opportunity to participate
in the Company’s future performance through the grant of Awards. Capitalized
terms not defined elsewhere in the text are defined in Section 24.
 
2.      SHARES SUBJECT TO THE PLAN.
 
2.1           Number of Shares Available. Subject to Sections 2.6 and 18 and any
other applicable provisions hereof, the total number of Shares reserved and
available for grant and issuance pursuant to this Plan is  25,000,000 Shares,
and such number will be subject to increase pursuant to the Automatic Annual
Increase as defined and provided in Section 2.4 below.
 
2.2           Lapsed, Returned Awards. Shares subject to Awards, and Shares
issued upon exercise of Awards, will again be available for grant and issuance
in connection with subsequent Awards under this Plan to the extent such Shares:
(i) are subject to issuance upon exercise of an Option granted under this Plan
but which cease to be subject to the Option for any reason other than exercise
of the Option; (ii) are subject to Awards granted under this Plan that are
forfeited or are repurchased by the Company at the original issue price;
(iii) are surrendered pursuant to an Exchange Program; or (iv) are subject to
Awards granted under this Plan that otherwise terminate without such Shares
being issued. Shares that have been issued under the Plan under any Award will
not be returned to the Plan and will not become available for future issuance
under the Plan; provided, however, that if Shares issued pursuant to Awards of
Restricted Stock or Stock Bonus Shares are repurchased by the Company at the
original issue price or are forfeited to the Company, then such Shares shall
become available for future grant under the Plan. Shares used to pay the
exercise price of an Award or to satisfy the tax withholding obligations related
to an Award will become available for future grant or sale under the Plan. To
the extent an Award under the Plan is paid out in cash rather than Shares, such
cash payment will not result in reducing the number of Shares available for
issuance under the Plan.
 
2.3           Minimum Share Reserve. At all times the Company shall reserve and
keep available a sufficient number of Shares as shall be required to satisfy the
requirements of all outstanding Awards granted under this Plan and all other
outstanding but unvested Awards granted under this Plan.
 
2.4           Automatic Share Reserve Increase. The number of Shares available
for grant and issuance under the Plan shall automatically be increased as
follows (“Automatic Annual Increase”): (i) on the first day of each January from
2011 through and including 2020, the number of Shares available for grant and
issuance under this Plan shall be automatically increased by 5% of the number of
shares of the Company’s Common Stock issued and outstanding on the preceding
December 31 (rounded to the nearest whole share); or (ii) a lesser number of
Shares as determined by the Board before the start of a calendar year for which
an increase applies.
 
2.5           Limitations. No more than 50,000,000 Shares shall be issued
pursuant to the exercise of ISOs.
 
2.6           Adjustment of Shares. If the number of outstanding Shares is
changed by a stock dividend, recapitalization, stock split, reverse stock split,
subdivision, combination, reclassification or similar change in the capital
structure of the Company, without consideration, then (a) the number of Shares
reserved for issuance and future grant under the Plan set forth in Section 2.1,
(b) the Exercise Prices of and number of Shares subject to outstanding Options,
(c) the number of Shares subject to other outstanding Awards, (d) the maximum
number of shares that may be issued as ISOs set forth in Section 2.5, (e)the
number of Shares that are granted as Options to Outside Directors as set forth
in Section 8 and (f) the maximum number of Shares that may be issued to an
individual or to a new Employee in any one calendar year set forth in Section 3,
shall be proportionately adjusted, subject to any required action by the Board
or the stockholders of the Company and in compliance with applicable securities
laws; provided that fractions of a Share will not be issued but will either be
replaced by a cash payment equal to the Fair market Value of such fraction of a
Share or will be rounded up (down in the case of ISOs) to the nearest whole
Share, as determined by the Committee; and provided further that the Exercise
Price of any Option may not be decreased to below the par value of the Shares.
 
3.      ELIGIBILITY. ISOs may be granted only to Employees. All other Awards may
be granted to Employees, Consultants, and Directors of the Company or any Parent
or Subsidiary of the Company; provided such Consultants, and Directors render
bona fide services not in connection with the offer and sale of securities in a
capital-raising transaction. No Participant will be eligible to receive more
than 5,000,000 Shares in any calendar year under this Plan pursuant to the grant
of Awards, except that new Employees of the Company or of a Parent or Subsidiary
of the Company (including new Employees who are also officers and directors of
the Company or any Parent or Subsidiary of the Company) are eligible to receive
up to a maximum of 10,000,000 Shares in the calendar year in which they commence
their employment.
 
 
 

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4.      ADMINISTRATION.
 
4.1           Committee Composition; Authority. This Plan will be administered
by the Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan except
however, the Board shall establish the terms for the grant of Awards to Outside
Directors. Without limiting the previous sentence, the Committee will have the
authority to:
 
(a) construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
 
(b) prescribe, amend and rescind rules and regulations relating to this Plan or
any Award;
 
(c) select persons to receive Awards;
 
(d) determine the form and terms and conditions, not inconsistent with the terms
of the Plan, of any Award granted hereunder. Such terms and conditions include,
but are not limited to, the exercise price, the time or times when Awards may be
exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such
factors as the Committee will determine;
 
(e) determine the number of Shares or other consideration subject to Awards;
 
(f) determine the Fair Market Value in good faith, if necessary;
 
(g) determine whether Awards will be granted singly, in combination with, in
tandem with, in replacement of, or as alternatives to, other Awards under this
Plan or any other incentive or compensation plan of the Company or any Parent or
Subsidiary of the Company;
 
(h) grant waivers of Plan or Award conditions;
 
(i) determine the vesting, exercisability and payment of Awards;
 
(j) correct any defect, supply any omission or reconcile any inconsistency in
this Plan, any Award or any Award Agreement;
 
(k) determine whether an Award has been earned;
 
(l) determine the terms and conditions of any, and to institute any, Exchange
Program;
 
(m) reduce or waive any criteria with respect to Performance Factors;
 
(n) adjust Performance Factors to take into account changes in law and
accounting or tax rules as the Committee deems necessary or appropriate to
reflect the impact of extraordinary or unusual items, events or circumstances to
avoid windfalls or hardships provided that such adjustments are consistent with
the regulations promulgated under Section 162(m) of the Code with respect to
persons whose compensation is subject to Section 162(m) of the Code; and
 
(o) make all other determinations necessary or advisable for the administration
of this Plan.
 
4.2           Committee Interpretation and Discretion. Any determination made by
the Committee with respect to any Award shall be made in its sole discretion at
the time of grant of the Award or, unless in contravention of any express term
of the Plan or Award, at any later time, and such determination shall be final
and binding on the Company and all persons having an interest in any Award under
the Plan. Any dispute regarding the interpretation of the Plan or any Award
Agreement shall be submitted by the Participant or Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and the Participant. The Committee may delegate to one or
more executive officers the authority to review and resolve disputes with
respect to Awards held by Participants who are not Insiders, and such resolution
shall be final and binding on the Company and the Participant.
 
 
 

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4.3           Section 162(m) of the Code and Section 16 of the Exchange Act.
When the Committee determines, at the Committee’s sole discretion, that it is
necessary or desirable for an Award to qualify as “performance-based
compensation” under Section 162(m) of the Code the Committee shall include at
least two persons who are “outside directors” (as defined under Section 162(m)
of the Code) and at least two (or a majority if more than two then serve on the
Committee) such “outside directors” shall approve the grant of such Award and
timely determine (as applicable) the Performance Period and any Performance
Factors upon which vesting or settlement of any portion of such Award is to be
subject. When required by Section 162(m) of the Code, prior to settlement of any
such Award at least two (or a majority if more than two then serve on the
Committee) such “outside directors” then serving on the Committee shall
determine and certify in writing the extent to which such Performance Factors
have been timely achieved and the extent to which the Shares subject to such
Award have thereby been earned. Awards granted to Insiders must be approved by
two or more “non-employee directors” (as defined in the regulations promulgated
under Section 16 of the Exchange Act).
 
4.4           Delegation to an Officer.  To the extent permissible by applicable
law, the Board may delegate to one or more Officers the authority to do one or
both of the following (i) designate Employees who are not Officers to be
recipients of Awards and the terms thereof, and (ii) determine the number of
shares of Common Stock to be subject to such Awards granted to such Employees;
provided, however, that the Board resolutions regarding such delegation shall
specify the total number of shares of Common Stock that may be subject to the
Awards granted by such Officer and that such Officer may not grant an Award to
himself or herself. Notwithstanding anything to the contrary in this Section
4.4, the Board may not delegate to an Officer authority to determine the Fair
Market Value pursuant to part (c) of the definition of Fair Market Value.  The
Board may delegate to one of more Officers the authority to renew and resolve
disputes with respect to Awards held by Participants who are not an officer or
director of the Company or any other person whose transactions in the Company’s
common stock are subject to Section 16 of the Exchange Act.
 
5.      OPTIONS. The Committee may grant Options to Participants and will
determine whether such Options will be Incentive Stock Options within the
meaning of the Code (“ISOs”) or Nonqualified Stock Options (“NQSOs”), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:
 
5.1           Option Grant. Each Option granted under this Plan will identify
the Option as an ISO or an NQSO. An Option may be, but need not be, awarded upon
satisfaction of such Performance Factors during any Performance Period as are
set out in advance in the Participant’s individual Award Agreement. If the
Option is being earned upon the satisfaction of Performance Factors, then the
Committee will: (x) determine the nature, length and starting date of any
Performance Period for each Option; and (y) select from among the Performance
Factors to be used to measure the performance, if any. Performance Periods may
overlap and Participants may participate simultaneously with respect to Options
that are subject to different performance goals and other criteria.
 
5.2           Date of Grant. The date of grant of an Option will be the date on
which the Committee makes the determination to grant such Option, or a specified
future date. The Award Agreement and a copy of this Plan will be delivered to
the Participant within a reasonable time after the granting of the Option.
 
5.3           Exercise Period. Options may be exercisable within the times or
upon the conditions as set forth in the Award Agreement governing such Option;
provided, however, that no Option will be exercisable after the expiration of
ten (10) years from the date the Option is granted; and provided further that no
ISO granted to a person who, at the time the ISO is granted, directly or by
attribution owns more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any Parent or Subsidiary of the
Company (“Ten Percent Shareholder”) will be exercisable after the expiration of
five (5) years from the date the ISO is granted. The Committee also may provide
for Options to become exercisable at one time or from time to time, periodically
or otherwise, in such number of Shares or percentage of Shares as the Committee
determines.
 
5.4           Exercise Price. The Exercise Price of an Option will be determined
by the Committee when the Option is granted; provided that: (i) the Exercise
Price of an ISO will be not less than one hundred percent (100%) of the Fair
Market Value of the Shares on the date of grant and (ii) the Exercise Price of
any ISO granted to a Ten Percent Shareholder will not be less than one hundred
ten percent (110%) of the Fair Market Value of the Shares on the date of grant.
Payment for the Shares purchased must be made in accordance with Section 8 of
the Plan and the Award Agreement.
 
5.5      Method of Exercise. Any Option granted hereunder will be exercisable
according to the terms of the Plan and at such times and under such conditions
as determined by the Committee and set forth in the Award Agreement. An Option
may not be exercised for a fraction of a Share. An Option will be deemed
exercised when the Company receives: (i) notice of exercise (in such form as the
Committee may specify from time to time) from the person entitled to exercise
the Option, and (ii) full payment for the Shares with respect to which the
Option is exercised (together with applicable withholding taxes). Full payment
may consist of any consideration and method of payment authorized by the
Committee and permitted by the Award Agreement and the Plan. Shares issued upon
exercise of an Option will be issued in the name of the Participant. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder will exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
will issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 2.6 of the Plan. Exercising an Option in any manner will decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
 
 
 

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5.6           Change of Control Transactions.  Except as otherwise provided in
an Award Agreement for a particular Option, in the event of a Change of Control
Transaction, the vesting of all Options granted to employees pursuant to this
Section 5 shall accelerate and such Options will become exercisable in full
immediately prior to the consummation of the Change of Control Transaction at
such time and on such conditions as the Committee determines, and, unless
otherwise determine by the Board, if such Options are not exercised on or prior
to the consummation of the Change of Control Transaction, they shall terminate
immediately following the consummation of a Change of Control Transaction.
 
5.7           Termination. The exercise of an Option will be subject to the
following (except as may be otherwise provided in an Award Agreement):
 
(a) If the Participant is Terminated for any reason except for Cause or the
Participant’s death or Disability, then the Participant may exercise such
Participant’s Options only to the extent that such Options would have been
exercisable by the Participant on the Termination Date no later than three
(3) months after the Termination Date (or such shorter time period not less than
thirty (30) days or longer time period not exceeding five (5) years as may be
determined by the Committee, with any exercise beyond three (3) months after the
Termination Date deemed to be an NQSO), but in any event no later than the
expiration date of the Options.
 
(b) If the Participant is Terminated because of the Participant’s death (or the
Participant dies within three (3) months after a Termination other than for
Cause or because of the Participant’s Disability), then the Participant’s
Options may be exercised only to the extent that such Options would have been
exercisable by the Participant on the Termination Date and must be exercised by
the Participant’s legal representative, or authorized assignee, no later than
twelve (12) months after the Termination Date (or such shorter time period not
less than six (6) months or longer time period not exceeding five (5) years as
may be determined by the Committee), but in any event no later than the
expiration date of the Options.
 
(c) If the Participant is Terminated because of the Participant’s Disability,
then the Participant’s Options may be exercised only to the extent that such
Options would have been exercisable by the Participant on the Termination Date
and must be exercised by the Participant (or the Participant’s legal
representative or authorized assignee) no later than twelve (12) months after
the Termination Date (with any exercise beyond (a) three (3) months after the
Termination Date when the Termination is for a Disability that is not a
“permanent and total disability” as defined in Section 22(e)(3) of the Code, or
(b) twelve (12) months after the Termination Date when the Termination is for a
Disability that is a “permanent and total disability” as defined in
Section 22(e)(3) of the Code, deemed to be exercise of an NQSO), but in any
event no later than the expiration date of the Options.
 
(d) If the Participant is terminated for Cause, then Participant’s Options shall
expire on such Participant’s Termination Date, or at such later time and on such
conditions as are determined by the Committee, but in any no event later than
the expiration date of the Options.
 
5.8           Limitations on Exercise. The Committee may specify a minimum
number of Shares that may be purchased on any exercise of an Option, provided
that such minimum number will not prevent any Participant from exercising the
Option for the full number of Shares for which it is then exercisable.
 
5.9           Limitations on ISOs. With respect to Awards granted as ISOs, to
the extent that the aggregate Fair Market Value of the Shares with respect to
which such ISOs are exercisable for the first time by the Participant during any
calendar year (under all plans of the Company and any Parent or Subsidiary)
exceeds one hundred thousand dollars ($100,000), such Options will be treated as
NQSOs. For purposes of this Section 5.8, ISOs will be taken into account in the
order in which they were granted. The Fair Market Value of the Shares will be
determined as of the time the Option with respect to such Shares is granted. In
the event that the Code or the regulations promulgated thereunder are amended
after the Effective Date to provide for a different limit on the Fair Market
Value of Shares permitted to be subject to ISOs, such different limit will be
automatically incorporated herein and will apply to any Options granted after
the effective date of such amendment.
 
5.10           Modification, Extension or Renewal. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant’s rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code. Subject to Section 15 of this Plan, by written notice to affected
Participants, the Committee may reduce the Exercise Price of outstanding Options
without the consent of such Participants; provided, however, that the Exercise
Price may not be reduced below the Fair Market Value on the date the action is
taken to reduce the Exercise Price.
 
 
 

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5.11           No Disqualification. Notwithstanding any other provision in this
Plan, no term of this Plan relating to ISOs will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
 
6.       RESTRICTED STOCK AWARDS.
 
6.1           Awards of Restricted Stock. A Restricted Stock Award is an offer
by the Company to sell to a Participant Shares that are subject to restrictions
(“Restricted Stock”). The Committee will determine to whom an offer will be
made, the number of Shares the Participant may purchase, the Purchase Price, the
restrictions under which the Shares will be subject and all other terms and
conditions of the Restricted Stock Award, subject to the Plan.
 
6.2           Restricted Stock Purchase Agreement. All purchases under a
Restricted Stock Award will be evidenced by an Award Agreement. Except as may
otherwise be provided in an Award Agreement, a Participant accepts a Restricted
Stock Award by signing and delivering to the Company an Award Agreement with
full payment of the Purchase Price, within thirty (30) days from the date the
Award Agreement was delivered to the Participant. If the Participant does not
accept such Award within thirty (30) days, then the offer of such Restricted
Stock Award will terminate, unless the Committee determines otherwise.
 
6.3           Purchase Price. The Purchase Price for a Restricted Stock Award
will be determined by the Committee and may be less than Fair Market Value on
the date the Restricted Stock Award is granted. Payment of the Purchase Price
must be made in accordance with Section 8 of the Plan, and the Award Agreement.
 
6.4           Terms of Restricted Stock Awards. Restricted Stock Awards will be
subject to such restrictions as the Committee may impose or are required by law.
These restrictions may be based on completion of a specified number of years of
service with the Company or upon completion of the performance goals based upon
the Performance Factors, if any, during any Performance Period as set out in
advance in the Participant’s Award Agreement. Prior to the grant of a Restricted
Stock Award, the Committee shall: (a) determine the nature, length and starting
date of any Performance Period for the Restricted Stock Award; (b) select from
among the Performance Factors to be used to measure performance goals, if any;
and (c) determine the number of Shares that may be awarded to the Participant.
Performance Periods may overlap and a Participant may participate simultaneously
with respect to Restricted Stock Awards that are subject to different
Performance Periods and having different performance goals and other criteria.
 
6.5           Termination of Participant. Except as may be set forth in the
Participant’s Award Agreement, vesting ceases on such Participant’s Termination
Date (unless determined otherwise by the Committee).
 
7.       STOCK BONUS AWARDS.
 
7.1           Awards of Stock Bonuses. A Stock Bonus Award is an award to an
eligible person of Shares (which may consist of Restricted Stock) for services
to be rendered or for past services already rendered to the Company or any
Parent or Subsidiary. All Stock Bonus Awards shall be made pursuant to an Award
Agreement. No payment from the Participant will be required for Shares awarded
pursuant to a Stock Bonus Award.
 
7.2           Terms of Stock Bonus Awards. The Committee will determine the
number of Shares to be awarded to the Participant under a Stock Bonus Award and
any restrictions thereon. These restrictions may be based upon completion of a
specified number of years of service with the Company or upon satisfaction of
performance goals based on Performance Factors during any Performance Period as
set out in advance in the Participant’s Stock Bonus Agreement. If the Stock
Bonus Award is to be earned upon the satisfaction of performance goals, the
Committee shall: (a) determine the nature, length and starting date of any
Performance Period for the Stock Bonus Award; (b) select from among the
Performance Factors to be used to measure performance goals; and (c) determine
the number of Shares that may be awarded to the Participant. Performance Periods
may overlap and a Participant may participate simultaneously with respect to
Stock Bonus Awards that are subject to different Performance Periods and
different performance goals and other criteria.
 
7.3           Form of Payment to Participant. Payment may be made in the form of
cash, whole Shares, or a combination thereof, based on the Fair Market Value of
the Shares earned under a Stock Bonus Award on the date of payment, as
determined in the sole discretion of the Committee.
 
7.4           Termination of Participation. Except as may be set forth in the
Participant’s Award Agreement, vesting ceases on such Participant’s Termination
Date (unless determined otherwise by the Committee).
 
8.       PAYMENT FOR SHARE PURCHASES. Payment from a Participant for Shares
purchased pursuant to this Plan may be made in cash or by check or, where
expressly approved for the Participant by the Committee and where permitted by
law (and to the extent not otherwise set forth in the applicable Award
Agreement):
 
 
 

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(a) by cancellation of indebtedness of the Company to the Participant;
 
(b) by surrender of shares of the Company held by the Participant that have a
Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Award will be exercised or settled;
 
(c) by waiver of compensation due or accrued to the Participant for services
rendered or to be rendered to the Company or a Parent or Subsidiary of the
Company;
 
(d) by consideration received by the Company pursuant to a broker-assisted
and/or same day sale (or other) cashless exercise program implemented by the
Company in connection with the Plan;
 
(e) by any combination of the foregoing; or
 
(f) by any other method of payment as is permitted by applicable law.
 
9.       AUTOMATIC GRANTS TO OUTSIDE DIRECTORS.
 
9.1      Eligibility. Outside Directors are eligible for Options granted
pursuant to this Section 9. Notwithstanding the foregoing, this Section 9 does
not limit the ability of the Committee to grant discretionary Awards to Outside
Directors.
 
9.2      Annual Grant. On the first business day of each calendar year, each
Outside Director will be granted an Option to purchase two hundred fifty
thousand (250,000) Shares, or such lesser number of Shares as determined by the
Board.  Any Outside Director that is initially appointed or elected to the Board
following the first business day of a calendar year shall receive, on the date
of such appointment or election, an Option to purchase a pro-rata number of the
250,000 Shares based on the number of months remaining in the calendar year from
the date of such appointment or election (an “Appointment Grant”).  Each Option
granted pursuant to this Section 9.2 shall be called an “Annual Grant”.
 
9.3      Vesting and Exercisability.
 
(a) Vesting. Annual Grants shall vest and become exercisable as to 1/12 of the
total Shares subject to the Annual Grant on each monthly anniversary of the date
of grant, such that Annual Grants are fully vested and exercisable on first
anniversary of the date of grant, so long as the Outside Director continuously
remains a Director, Consultant or Employee of the Company.  Notwithstanding the
above, Appointment Grants shall vest monthly in equal amounts over the remaining
months in the calendar year they were granted so as to be fully vested by the
end of the calendar year.
 
(b) Change of Control Transactions.  In the event of a Change of Control
Transaction, the vesting of all Options granted to Outside Directors pursuant to
this Section 9 shall accelerate and such Options will become exercisable in full
immediately prior to the consummation of the Change of Control Transaction at
such time and on such conditions as the Committee determines, and if such
Options are not exercised on or prior to the consummation of the Change of
Control Transaction, they shall terminate immediately following the consummation
of the Change of Control Transaction.
 
9.4      Form of Option Grant. Each Option granted under this Section 9 shall be
a NQSO and shall be evidenced by a Outside Director Stock Option Grant Agreement
in such form as the Committee shall from time to time approve and which shall
comply with and be subject to the terms and conditions of this Plan.
 
9.5      Exercise Price. The Exercise Price per Share of each Option granted
under this Section 9 shall be the Fair Market Value of the Share on the date the
Option is granted.
 
9.6      Termination of Option. Except as provided in Section 9.3(b) or this
Section 9.6, each Option granted under this Section 9 shall expire ten
(10) years after its date of grant. The date on which the Outside Director
ceases to be a member of the Board, a Consultant or Employee of the Company
shall be referred to as the “Outside Director Termination Date” for purposes of
this Section 9.6. An Option may be exercised after the Outside Director
Termination Date only as set forth below:
 
(a) Termination Generally. If the Outside Director ceases to be a member of the
Board, Consultant or Employee of the Company for any reason except death or
Disability, each Annual Grant, to the extent then vested pursuant to Section 9.3
above, then held by such Outside Director may be exercised by the Outside
Director (or his or her legal representative) within three (3) months after the
Outside Director Termination Date, but in no event later than the expiration
date for the Annual Grant.
 
(b) Death. If the Outside Director ceases to be a member of the Board,
Consultant or Employee of the Company because of his or her death, then each
Annual Grant, to the extent then vested pursuant to Section 9.3 above, then held
by such Outside Director, may be exercised by the Outside Director or his or her
legal representative within twelve (12) months after the Outside Director
Termination Date, but in no event later than the expiration date for the Annual
Grant.
 
 
 

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(c) Disability. If the Outside Director ceases to be a member of the Board,
Consultant or Employee of the Company because of his or her Disability, then
each Annual Grant, to the extent then vested pursuant to Section 9.3 above, then
held by such Outside Director, may be exercised by the Outside Director or his
or her legal representative within twelve (12) months after the Outside Director
Termination Date, but in no event later than the expiration date for the Annual
Grant.
 
10.            WITHHOLDING TAXES.
 
10.1           Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy applicable
federal, state, local and international withholding tax requirements prior to
the delivery of Shares pursuant to exercise or settlement of any Award. Whenever
payments in satisfaction of Awards granted under this Plan are to be made in
cash, such payment will be net of an amount sufficient to satisfy applicable
federal, state, local and international withholding tax requirements.
 
10.2           Stock Withholding. The Committee, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may require or
permit a Participant to satisfy such tax withholding obligation, in whole or in
part by (without limitation) (i) paying cash, (ii) electing to have the Company
withhold otherwise deliverable cash or Shares having a Fair Market Value equal
to the minimum statutory amount required to be withheld, or (iii) delivering to
the Company already-owned Shares having a Fair Market Value equal to the minimum
statutory amount required to be withheld. The Fair Market Value of the Shares to
be withheld or delivered will be determined as of the date that the taxes are
required to be withheld.
 
11.            TRANSFERABILITY. Unless determined otherwise by the Committee, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution.
If the Committee makes an Award transferable, such Award will contain such
additional terms and conditions as the Committee deems appropriate. All Awards
shall be exercisable: (i) during the Participant’s lifetime only by (A) the
Participant, or (B) the Participant’s guardian or legal representative; and
(ii) after the Participant’s death, by the legal representative of the
Participant’s heirs or legatees.
 
12.            PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.
 
12.1           Voting and Dividends. No Participant will have any of the rights
of a shareholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a shareholder and have all the rights of a shareholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that
are repurchased at the Participant’s Purchase Price or Exercise Price, as the
case may be, pursuant to Section 12.2.
 
12.2           Restrictions on Shares. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) a right to repurchase (a
“Right of Repurchase”) a portion of any or all Unvested Shares held by a
Participant following such Participant’s Termination at any time within ninety
(90) days after the later of the Participant’s Termination Date and the date the
Participant purchases Shares under this Plan, for cash and/or cancellation of
purchase money indebtedness, at the Participant’s Purchase Price or Exercise
Price, as the case may be.
 
13.            CERTIFICATES. All certificates for Shares or other securities
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed or
quoted.
 
14.            ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant’s Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of the Participant’s obligation to
the Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company will have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant’s Shares or other collateral. In connection with any pledge of
the Shares, the Participant will be required to execute and deliver a written
pledge agreement in such form as the Committee will from time to time approve.
The Shares purchased with the promissory note may be released from the pledge on
a pro rata basis as the promissory note is paid.
 
 
 

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15.            REPRICING; EXCHANGE AND BUYOUT OF AWARDS. The Committee may
reprice Options without prior stockholder approval. The Committee may, at any
time or from time to time authorize the Company, in the case of an Option
exchange, and with the consent of the respective Participants (unless not
required pursuant to Section 5.9 of the Plan), to pay cash or issue new Awards
in exchange for the surrender and cancellation of any, or all, outstanding
Awards. The Committee may reduce the Exercise Price of outstanding Options
without the consent of affected Participants by a written notice to them;
provided, however, that the Exercise Price may not be reduced below the minimum
Exercise Price necessary to avoid treatment as a “deferral of compensation”
under Section 409A of the Code.
 
16.            SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not
be effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other provision in this Plan, the Company will have no obligation to issue
or deliver certificates for Shares under this Plan prior to: (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable; and/or (b) completion of any registration or other qualification
of such Shares under any state or federal law or ruling of any governmental body
that the Company determines to be necessary or advisable. The Company will be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.
 
17.            NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award
granted under this Plan will confer or be deemed to confer on any Participant
any right to continue in the employ of, or to continue any other relationship
with, the Company or any Parent or Subsidiary of the Company or limit in any way
the right of the Company or any Parent or Subsidiary of the Company to terminate
Participant’s employment or other relationship at any time.
 
18.            CORPORATE TRANSACTIONS.
 
18.1           Assumption or Replacement of Awards by Successor. In the event of
a Corporate Transaction any or all outstanding Awards may be assumed or replaced
by the successor corporation, which assumption or replacement shall be binding
on all Participants. In the alternative, the successor corporation may
substitute equivalent Awards or provide substantially similar consideration to
Participants as was provided to stockholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue, in
place of outstanding Shares of the Company held by the Participant,
substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Participant. In the event such successor
or acquiring corporation (if any) refuses to assume, convert, replace or
substitute Awards, as provided above, pursuant to a Corporate Transaction, then
notwithstanding any other provision in this Plan to the contrary, such Awards
will expire on such transaction at such time and on such conditions as the Board
will determine; the Board (or, the Committee, if so designated by the Board)
may, in its sole discretion, accelerate the vesting of such Awards in connection
with a Corporate Transaction. In addition, in the event such successor or
acquiring corporation (if any) refuses to assume, convert, replace or substitute
Awards, as provided above, pursuant to a Corporate Transaction, the Committee
will notify the Participant in writing or electronically that such Award will be
exercisable for a period of time determined by the Committee in its sole
discretion, and such Award will terminate upon the expiration of such period.
Awards need not be treated similarly in a Corporate Transaction.
 
Notwithstanding anything to the contrary in this Section 18.1, the Committee, in
its sole discretion, may grant Awards that provide for acceleration upon a
Corporate Transaction or in other events in the specific Award Agreements.
 
18.2           Assumption of Awards by the Company. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either; (a) granting an Award under this Plan in substitution of
such other company’s award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the Purchase Price or the Exercise Price, as the case may be, and
the number and nature of Shares issuable upon exercise or settlement of any such
Award will be adjusted appropriately pursuant to Section 424(a) of the Code).
 
18.3           Outside Directors’ Awards. Notwithstanding any provision to the
contrary herein, in the event of a Change of Control Transaction, the vesting of
all Awards granted to Outside Directors shall accelerate and such Awards shall
become exercisable (as applicable) in full prior to the consummation of such
event at such times and on such conditions as the Committee determines.
 
 
 

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19.            ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall be submitted
for the approval of the Company’s shareholders, consistent with applicable laws,
within twelve (12) months before or after the date this Plan is adopted by the
Board.
 
20.            TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will become effective on the Effective Date and will terminate
ten (10) years from the date this Plan is adopted by the Board. This Plan and
all Awards granted hereunder shall be governed by, and construed in accordance
with, the laws of the State of California.
 
21.            AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend this Plan in any respect, including, without limitation,
amendment of any form of Award Agreement or instrument to be executed pursuant
to this Plan; provided, however, that the Board will not, without the approval
of the shareholders of the Company, amend this Plan in any manner that requires
such shareholder approval; provided further, that a Participant’s Award shall be
governed by the version of this Plan then in effect at the time such Award was
granted.
 
22.            NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by
the Board, the submission of this Plan to the shareholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock awards and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.
 
23.            INSIDER TRADING POLICY. Each Participant who receives an Award
shall comply with any policy adopted by the Company from time to time covering
transactions in the Company’s securities by Employees, officers and/or directors
of the Company.
 
24.            DEFINITIONS. As used in this Plan, and except as elsewhere
defined herein, the following terms will have the following meanings:
 
“Award” means any award under the Plan, including any Option, Restricted Stock
or Stock Bonus.
 
“Award Agreement” means, with respect to each Award, the written or electronic
agreement between the Company and the Participant setting forth the terms and
conditions of the Award, which shall be in substantially a form (which need not
be the same for each Participant) that the Committee has from time to time
approved, and will comply with and be subject to the terms and conditions of
this Plan.
 
“Board” means the Board of Directors of the Company.
 
“Cause” means (a) the commission of an act of theft, embezzlement, fraud,
dishonesty, (b) a breach of fiduciary duty to the Company or a Parent or
Subsidiary, (c) a failure to materially perform the customary duties of
Employee’s employment, (d) any unauthorized use or disclosure by the Participant
of confidential information or trade secrets of the Company, or (e) any
intentional misconduct by a Participant that adversely affects the business or
affairs of the Company in a material manner. The foregoing definition shall not
be deemed to be inclusive of all the acts or omissions which the Company may
consider as grounds for the dismissal or discharge of a Participant.
 
“Change of Control Transaction” means the occurrence of any of the following
events: (i) any “person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of
the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company’s then-outstanding voting securities; (ii) the consummation of
the sale or disposition by the Company of all or substantially all of the
Company’s assets; or (iii) the consummation of a merger or consolidation of the
Company or a subsidiary with another corporation or any other entity, other than
a merger or consolidation which results in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving
entity or its parent outstanding immediately after such merger or consolidation.
 
“Code” means the United States Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder.
 
“Committee” means the Compensation Committee of the Board or those persons to
whom administration of the Plan, or part of the Plan, has been delegated as
permitted by law.
 
“Company” means NutraCea, a California corporation, or any successor
corporation.
 
“Consultant” means any person, including an advisor or independent contractor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.
 
 
 

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“Corporate Transaction” means (a) a merger or consolidation in which the Company
is not the surviving corporation, (b) a dissolution or liquidation of the
Company, (c) the sale of substantially all of the assets of the Company, (d) a
merger in which the Company is the surviving corporation but after which the
stockholders of the Company immediately prior to such merger (other than any
stockholder that merges, or which owns or controls another corporation that
merges, with the Company in such merger) cease to own their shares or other
equity interest in the Company; or (e) any other transaction which qualifies as
a “corporate transaction” under Section 424(a) of the Code wherein the
stockholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company).
 
“Director” means a member of the Board.
 
“Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code, provided, however, that except with respect to Awards granted as
ISOs, the Committee in its discretion may determine whether a total and
permanent disability exists in accordance with non-discriminatory and uniform
standards adopted by the Committee from time to time, whether temporary or
permanent, partial or total, as determined by the Committee.
 
“Effective Date” means the date of the Plan’s adoption by the Board.
 
“Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a
Director nor payment of a director’s fee by the Company will be sufficient to
constitute “employment” by the Company.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Exercise Price” means the price at which a holder of an Option may purchase the
Shares issuable upon exercise of an Option.
 
“Exchange Program” means a program pursuant to which outstanding Awards are
surrendered, cancelled or exchanged for cash, the same type of Award or a
different Award (or combination thereof).
 
“Fair Market Value” means, as of any date, the value of a share of the Company’s
Common Stock determined as follows:
 
(a) if such Common Stock is publicly traded and is then listed on a national
securities exchange or quoted on the OTC Bulletin Board, its closing price on
the date of determination on the OTC Bulletin Board or the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
as applicable, as reported in The Wall Street Journal or such other source as
the Board or the Committee deems reliable;
 
(b) if such Common Stock is publicly traded but is neither listed nor admitted
to trading on a national securities exchange or on the OTC Bulletin Board, the
average of the closing bid and asked prices on the date of determination as
reported in The Wall Street Journal or such other source as the Board or the
Committee deems reliable; or
 
(c) if none of the foregoing is applicable, by the Board or the Committee in
good faith and by taking into account such factors as may be required by
applicable law.
 
“Insider” means an officer or director of the Company or any other person whose
transactions in the Company’s Common Stock are (or would be if the Company’s
Shares are not then publicly traded) subject to Section 16 of the Exchange Act.
 
“Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.
 
“Option” means an award of an option to purchase Shares pursuant to Section 5 or
Section 9.
 
“Outside Director” means a Director who is not an Employee of the Company or any
Parent or Subsidiary.
 
“Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of such corporations other than the
Company owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
 
“Participant” means an Employee, Consultant or Director (including Outside
Directors) who receives an Award under this Plan.
 
 
 

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“Performance Factors” means the factors selected by the Committee, which may
include, but are not limited to the, the following measures (whether or not in
comparison to other peer companies) to determine whether the performance goals
established by the Committee and applicable to Awards have been satisfied:
 
·    
Net revenue and/or net revenue growth;

·    
Earnings per share and/or earnings per share growth;

·    
Earnings before income taxes and amortization and/or earnings before income
taxes and amortization growth;

·    
Operating income and/or operating income growth;

·    
Net income and/or net income growth;

·    
Total stockholder return and/or total stockholder return growth;

·    
Return on equity;

·    
Operating cash flow return on income;

·    
Adjusted operating cash flow return on income;

·    
Economic value added;

·    
Individual business objectives; and

·    
Company specific operational metrics.

 
“Performance Period” means the period of service determined by the Committee,
not to exceed five (5) years, during which years of service or performance is to
be measured for the Award.
 
“Plan” means this NutraCea 2010 Equity Incentive Plan.
 
“Purchase Price” means the price to be paid for Shares acquired under the Plan,
other than Shares acquired upon exercise of an Option.
 
“Restricted Stock Award” means an award of Shares pursuant to Section 6 of the
Plan, or issued pursuant to the early exercise of an Option.
 
“SEC” means the United States Securities and Exchange Commission.
 
“Securities Act” means the United States Securities Act of 1933, as amended.
 
“Shares” means shares of the Company’s Common Stock as adjusted pursuant to
Sections 2 and 18, and any successor security.
 
“Stock Bonus” means an Award granted pursuant to Section 7 of the Plan.
 
“Subsidiary” means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
 
“Termination” or “Terminated” means, for purposes of this Plan with respect to a
Participant, that the Participant has for any reason ceased to provide services
as an employee, officer, director, consultant, independent contractor or advisor
to the Company or a Parent or Subsidiary of the Company. An employee will not be
deemed to have ceased to provide services in the case of (i) sick leave,
(ii) military leave, or (iii) any other leave of absence approved by the
Committee; provided, that such leave is for a period of not more than 90 days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute or unless provided otherwise pursuant to formal policy adopted from
time to time by the Company and issued and promulgated to employees in writing.
In the case of any employee on an approved leave of absence, the Committee may
make such provisions respecting suspension of vesting of the Award while on
leave from the employ of the Company or a Parent or Subsidiary of the Company as
it may deem appropriate, except that in no event may an Award be exercised after
the expiration of the term set forth in the applicable Award Agreement. The
Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the “Termination Date”).
 
“Unvested Shares” means Shares that have not yet vested or are subject to a
right of repurchase in favor of the Company (or any successor thereto).
 
 

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