EXHIBIT 4.49

THIS OPTION HAS BEEN ISSUED PURSUANT TOEXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, ASAMENDED (THE "ACT"), AND THE QUALIFICATION REQUIREMENTS OF APPLICABLESTATE SECURITIES LAWS (THE "LAWS"). IT IS UNLAWFUL TO EXERCISE, SELL, PLEDGE OR OTHERWISE DISPOSE OF THISOPTION, OR ANY INTEREST THEREIN, OR RECEIVE ANY CONSIDERATION THEREFOR, IN THEABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND QUALIFICATIONUNDER THE LAWS, UNLESS EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATIONREQUIREMENTS ARE AVAILABLE.

THIS OPTION MAY BE EXERCISED ONLYIN ACCORDANCE WITH THE TERMS OF THIS STOCK OPTION AGREEMENT.

 

THERICEX COMPANY

BOARDMEMBER - NONSTATUTORY STOCK OPTION AGREEMENT

 

             TheRiceX Company, a Delaware corporation (the "Company"), hereby grantsto Kenneth Miller (the "Optionee"), an option (the"Option") to purchase a total of 50,000 shares of common stock, parvalue $.001, of the Company (the "Common Stock") at an exercise price(the "Exercise Price") equal to $0.39 per share, which is equal tothe fair market value of the Company's Common Stock on the date of the grant,in all respects subject to the terms, definitions and provisions of thisNonstatutory Stock Option Agreement (the "Agreement").

             1.          Nature of the Option.  The Option is intended to be a nonstatutoryoption and not an incentive stock option within the meaning of Section422 of the Internal Revenue Code of 1986, as amended (the "Code").

             2.          Payment of Exercise Price.

                           (a)         Method of Payment.  Payment of the Exercise Price for sharespurchased upon exercise of the Option shall be made (i) by delivery to theCompany of cash or a check to the order of the Company in an amount equal tothe purchase price of such shares; (ii) subject to the consent of theCompany, by delivery to the Company of shares of Common Stock of the Companythen owned by the Optionee having a fair market value equal in amount to thepurchase price of such shares in accordance with Section 2(b); or,(iii) by any other means approved by the Board of Directors and which isconsistent with applicable laws and regulations (including, without limitation,the provisions of Rule 16b-3 under the Securities Exchange Act of 1934 andRegulation T promulgated by the Federal Reserve Board); or (iv) by anycombination of such methods of payment.
                           (b)        Method of Payment – Public Market.  In the event there exists a public marketfor the Company's Common Stock on the date of exercise, payment of the exerciseprice may be made by surrender of shares of the Company's Common Stock.  In this case payment shall be made asfollows:

                                        (i)          Optionee shall deliver to theSecretary of the Company a written notice which shall set forth the portion ofthe purchase price the Optionee wishes to pay with Common Stock, and the numberof shares of such Common Stock the Optionee intends to surrender pursuant tothe exercise of this Option, which shall be determined by dividing theaforementioned portion of the purchase price by the average of the last reportedbid and asked prices per share of Common Stock of the Company, as reported in TheWall Street Journal (or, if not so reported, as otherwise reported by theNational Association of Securities Dealers Automated Quotation (NASDAQ) Systemor, in the event the Common Stock is listed on a national securities exchange,or on the NASDAQ Small-Cap Market of any successor national market system, theclosing price of Common Stock of the Company on such exchange as reported in TheWall Street Journal) for the day on which the notice of exercise is sent ordelivered;

                                        (ii)         Fractional shares shall be disregardedand the Optionee shall pay in cash an amount equal to such fraction multipliedby the price determined under subparagraph (i);

                                        (iii)        The written notice shall be accompaniedby a duly endorsed blank stock power with respect to the number of Shares setforth in the notice, and the certificate(s) representing said Shares shall bedelivered to the Company at its principal offices within three (3) working daysfrom the date of the notice of exercise;

                                        (iv)       The Optionee hereby authorizes anddirects the Secretary of the Company to transfer so many of the Sharesrepresented by such certificate(s) as are necessary to pay the purchase pricein accordance with the provisions herein;

                                        (v)        If any such transfer of Shares requiresthe consent of the California Commissioner of Corporations or of some otheragency under the securities laws of any other state, or an opinion of counselfor the Company or Optionee that such transfer may be effected under applicablefederal and state securities laws, the time periods specified herein shall beextended for such periods as the necessary request for consent to transfer ispending before said commissioner or other agency, or until counsel renders suchan opinion, as the case may be.  Allparties agree to cooperate in making such request for transfer, or in obtainingsuch opinion of counsel, and no transfer shall be effected without such consentor opinion if required by law; and

                                        (vi)       Notwithstanding any other provisionsherein, the Optionee shall only be permitted to pay the purchase price withshares of the Company's Common Stock owned by him as of the exercise date inthe manner and within the time periods allowed under Rule 16b-3 promulgatedunder the Securities Exchange Act of 1934 as such regulation is presentlyconstituted, as it is amended from time to time, and as it is interpreted nowor hereafter by the Securities and Exchange Commission and any such shares havebeen held by the Optionee for not less than six (6) months.
             3.          Exercise of Option.  The Option shall vest and become exercisableduring its term, subject to the provisions of Section 5 below, as follows:

                           (a)         Vesting and Right to Exercise.

                                        (i)          The Option hereby granted shall vestand become exercisable on a prorated basis over a twelve-month period beginningSeptember 29, 2000.  The option will befully vested on September 29, 2001.

             Subjectto the provisions of subparagraph (ii) and (iii) below, the Optionee canexercise any portion of the Option, which has vested until the expiration ofthe Option term.

             Ifa "change of control" of the Company should occur, as defined below,then the Option shall immediately vest and become exercisable in full.  For purposes of the foregoing provision, a"change in control" means the occurrence of any of the following:

                                                     (A)       any "person," as such term isused in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,as emended (the "Exchange Act") (other than the Company or itsexisting shareholders) is or becomes the "beneficial owner" (asdefined in Rule 13d-3 under the Exchange Act), directly or indirectly, ofsecurities of the Company (or a successor to the Company) representing 50% ormore of the combined voting power of the then outstanding securities of theCompany or such successor;

                                                     (B)        the dissolution of the Company orliquidation of more than 50% or more in value of the assets of the Company,(ii) or any merger or reorganization of the Company whether or not anotherentity is the survivor, (iii) a transaction (other than the initial publicoffering of the Company's shares) pursuant to which holders, as a group, of allof the shares of the Company outstanding before the transaction, hold, as agroup, less than 50% of the combined voting power of the Company or anysuccessor company outstanding after the transaction, or (iv) any other event orseries of events which the Optionee determines, in his discretion, wouldmaterially alter the structure of the Company or its ownership.

                                        (ii)         In the event of the Optionee's death,disability, other termination of employment or ceases to be a member of theBoard prior to exercise, the exercisability of the Option shall be governed bySection 5 below.

                                        (iii)        The Option may be exercised in whole orin part but may not be exercised as to fractional shares.

                           (b)        Method of Exercise.  In order to exercise any portion of theOption, the Optionee shall execute and deliver to the Chief Financial Officerof the Company the Notice of Exercise of Stock Option in the form attachedhereto as Exhibit "A," together with the Consent of Spouse.  The Notice of Exercise must be accompaniedby payment in full of the aggregate purchase price for the Shares to bepurchased in the type of consideration set forth in Section 2.  The Notice of Exercise may be delivered tothe Company at any time.  Thecertificate(s) for the Shares as to which the Option has been exercised shallbe registered in the name of Optionee or his designee.
                           (c)         Restrictions on Exercise.  This Option may not be exercised if theissuance of the shares upon such exercise or the method of payment ofconsideration for such shares would constitute a violation of any applicablefederal or state securities law or any other law or regulation.  As a condition to the exercise of theOption, the Company may require the Optionee to make any representation orwarranty to the Company at the time of exercise of the Option as in the opinionof legal counsel for the Company may be required by any applicable law orregulation, including the execution and delivery of an appropriaterepresentation statement.  The stockcertificate(s) for the Shares issued upon exercise of the Option may bearappropriate legends restricting transfer.

                           (d)        Delivery of Certificates.  The Company shall deliver the certificate(s)for the Shares issued upon exercise of the Option to the Optionee as soon as ispracticable; provided, however, that if any law or regulation requires theCompany to take action with respect to such shares before the issuance thereof,including, without limitation, actions taken pursuant to Section 6 below, thenthe date of delivery of such Shares shall be extended for a period necessary totake such action.

             4.          Non-Transferability of Option.  This Option may be exercised during thelifetime of the Optionee only by the Optionee and may not be transferred in anymanner other than by will or by the laws of descent and distribution.  The terms of this Option shall be bindingupon the executors, administrators, heirs and successors of the Optionee.

             5.          Term of the Option.  Except as otherwise provided in thisAgreement, to the extent not previously exercised, the right to exercise theOption shall terminate on the tenth (10th) anniversary of the date ofgrant.  Notwithstanding the foregoing,if an Optionee ceases to be a Board Member of the Company for any reason,except death and disability, he or she may, but only within ninety (90) daysafter the date he or she ceases to be a Board Member of the Company, exercisehis or her Option to the extent that he or she was entitled to exercise it atthe date of such termination, and in the case of the Optionee's death ordisability, the Optionee (or the Administrator or Executor or otherRepresentative of the Optionee's estate) may, but only within one (1) yearafter the date he or she ceases to be a Board Member of the Company due todeath or disability, exercise his or her Option to the extent that he or shewas entitled to exercise it at the date of such termination; provided, howeverthat in no event may the Option be exercised after the ten (10) year term hasexpired.  To the extent that theOptionee was not entitled to exercise an Option at the date of such termination,or if he or she does not exercise such Option (which he or she was entitled toexercise) within the time specified herein, the Option shall terminate.

             6.          Adjustments Upon /Changes inCapitalization; Other Adjustments. Subject to any required action by the shareholders of the Company, thenumber of Shares and the Exercise Price shall be proportionately adjusted forany increase or decrease in the number of issued shares of Common Stockresulting from a stock split, reverse stock split, combination,reclassification, the payment of a stock dividend on the Common Stock or anyother increase or decrease in the number of shares of Common Stock of theCompany effected without receipt of consideration by the Company; provided,however, that conversion of any convertible securities of the Company shall notbe deemed to have been "effected without receipt ofconsideration."  Such adjustmentshall be made by the Board, whose determination in that respect shall be final,binding and conclusive.  Except asexpressly provided herein, no issue by the Company of shares of stock of anyclass, or securities convertible into shares of stock of any class, shallaffect and no adjustment by reason thereof shall be made with respect to, thenumber of shares subject to, or the Exercise Price of, this Option.
                           TheBoard may, if it so determines in the exercise of its sole discretion, alsomake provision for adjusting the number of shares, as well as the ExercisePrice, in the event that the Company effects one or more reorganizations,recapitalizations, rights offerings, or other increases or reductions of sharesof its outstanding common stock, and in the event of the Company beingconsolidated with or merged into any other corporation; provided, however, thatin no event shall the Optionee be adversely affected by such adjustment.

                           TheBoard may, if it so determines in the exercise of its sole discretion, alsomake provision for changing, modifying, amending or adjusting any of the termsof this Option solely in order for the Company to perfect a significantfinancing; provided, however, that in no event shall the Optionee be adverselyaffected by such adjustment.

             7.          Rights of Shareholder.  Optionee shall have no rights as ashareholder with respect to the shares until the date of the issuance or thetransfer to the Optionee of the certificate(s) for such shares and only afterthe Exercise Price for such shares has been paid in full.

             8.          Amendment.  Except as set forth in Section 6, thisAgreement may not be amended without the written consent of the Optionee.

             9.          Income Tax Withholding.  The Optionee authorizes the Company towithhold, in accordance with applicable law from any compensation payable tohim or her, any taxes required to be withheld by federal, state or local lawsas a result of the exercise of this Option. Furthermore, in the event of any determination that the Company hasfailed to withhold a sum sufficient to pay all withholding taxes due inconnection with the exercise of this Option, the Optionee agrees to pay theCompany the amount of such deficiency in cash within five (5) days afterreceiving a written demand from the Company to do so, whether or not Optioneeis an employee or director of the Company at that time.

             10.        Investment Representations; Legends.

                           (a)         Representations.  The Optionee represents, warrants andcovenants that:

                                        (i)          Any shares purchased upon exercise ofthis Option shall be acquired for the Optionee's account for investment only,and not with a view to, or for sale in connection with, any distribution of theshares in violation of the Securities Act of 1933 (the "SecuritiesAct"), or any rule or regulation under the Securities Act.
                                        (ii)         The Optionee has had such opportunityas he or she has deemed adequate to obtain from representatives of the Companysuch information as is necessary to permit the Optionee to evaluate the meritsand risks of his or her investment in the Company.

                                        (iii)        The Optionee is able to bear theeconomic risk of the holding of such shares acquired pursuant to the exerciseof this Option for an indefinite period.

                                        (iv)       The Optionee understands that the Sharesacquired pursuant to the exercise of this Option are not registered under theSecurities Act and are "restricted securities" within the meaning ofRule 144 under the Securities Act and may not be transferred, sold or otherwisedisposed of in the absence of an effective registration statement with respectto the Shares filed and made effective under the Securities Act of 1933, or anopinion of counsel satisfactory to the Company to the effect that registrationunder such Act is not required.

By making payment upon exercise of thisOption, the Optionee shall be deemed to have reaffirmed, as of the date of suchpayment, the representations made in this Section 10.

                           (b)        Legends of Stock Certificate.  All stock certificates representing share ofCommon Stock issued to the Optionee upon exercise of this Option shall haveaffixed thereto legend(s) substantially in the following forms, in addition toany other legends required by applicable state law:

"THESHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDERTHE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISEDISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECTTO THE SHARES EVIDENCED BY THIS CERTIFICATE, FILED AND MADE EFFECTIVE UNDER THESECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TOTHE EFFECT THAT REGISTRATION UNDER SUCH ACT IS NOT REQUIRED."

DATE OF GRANT:  February 22, 2001

The RiceX Company
    By:/s/  Daniel L. McPeak, Sr., CEO          Daniel  L. McPeak, Sr., Chief Executive Officer          By:/s/  Todd C. Crow, CFO          Todd  C. Crow, Chief Financial Officer
 

             TheOptionee acknowledges receipt of a copy of the Plan, and represents that he orshe is familiar with the terms and provisions thereof, and hereby accepts thisOption subject to all of the terms and provisions thereof.  The Optionee hereby agrees to accept asbinding, conclusive and final all decisions or interpretations of the Board ofDirectors of The RiceX Company upon any questions arising under such Agreement.
Dated:    
 

 
             Kenneth  Miller (“Optionee”) 
 

CONSENT OF SPOUSE

 

             I,________________________, spouse of the Optionee who executed the foregoingAgreement attached hereto, hereby agree that my spouse's interest in the sharesof Common Stock of The RiceX Company subject to said Agreement shall beirrevocably bound by the Agreement's terms. I agree to accept as binding, conclusive and final all decisions orinterpretations of the Board of Directors of The RiceX Company upon anyquestions arising under such Agreement. I further agree that my community property interest in such Shares, ifany, shall similarly be bound by said Agreement and that such consent isbinding upon my executors, administrators, heirs and assigns.  I agree to execute and deliver suchdocuments as may be necessary to carry out the intent of said Agreement andthis consent.
Dated:    
 
            Signature                          Print  Name
**EXHIBIT A**

 

TO:                    TheRiceX Company                           1241 HawksFlight Court, Suite 103                           El DoradoHills, CA  95762

SUBJECT:        NOTICEOF EXERCISE OF STOCK OPTIONS

 

With respect to the stock option grantedto the undersigned by The RiceX Company, (the “Company”) on (grant date)_______________________, to purchase an aggregate of ________________________shares of the Company’s Common Stock, this is official notice that theundersigned hereby elects to exercise such option to purchase shares asfollows:

             Numberof Shares        ________________________

             Dateof Purchase:         ________________________

             Modeof Payment:       ________________________           (certified check or cash)

 

The shares should be issued as follows:

             Name:                             _____________________________________________

             Address:                        _____________________________________________

                                                     _____________________________________________

 

             Signedby (print name):            _____________________________________________

             Signature:                                   _____________________________________________

             Dated:                                          _____________________________________________

 

Please send this notice of exercise to:

             TheRiceX Company             1241 Hawks Flight Court,Suite 103             El Dorado Hills, CA  95762

             Phone:  916-933-3000