**EXHIBIT 99.3**

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**CHARTEROF THE COMPENSATION COMMITTEEOF THEBOARD OF DIRECTORSOFTHE RICEX COMPANY**

 

**A.**            Authority

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1.     TheBoard of Directors (the “Board”) of The RiceX Company (the “Company”) hasestablished the Compensation Committee (the “Committee”) with oversightresponsibilities as described in this Charter of the Compensation Committee(this “Charter”) or as additionally requested by the Board.

 

2.     TheCommittee shall review, assess and discharge the Board’s responsibilitiesrelating to the adequacy of the compensation of the Company’s chief executiveofficer (“CEO”) and shall review and consider the recommendations of the CEOrelating to the adequacy of the compensation of the Company’s other keypersonnel.

 

3.     TheCommittee is empowered to retain persons having special competence andexpertise as necessary to assist the Committee in fulfilling itsresponsibilities pursuant to the requirements of this Charter, and the rulesand regulations of the Securities and Exchange Commission (“SEC”) and the rulesand regulations of other regulatory organizations to which the Company issubject, all with authorization and concurrence of the Board.

 

**B.****            Purpose**

 

The purpose of the Committee includes, but is not limited to:

 

1.     Dischargingthe Board’s responsibilities relating to compensation of the Company’s CEO.  In discharging these responsibilities, theCommittee shall approve the compensation of the CEO.

 

2.     Administeringthe 1997 Stock Option Plan and other benefit programs of the Company.

 

**C.**            Membership

 

1.     Themember(s) of the Committee shall be appointed by the Board. Consistent with therules and regulations of the SEC and of other regulatory organizations to whichthe Company is subject, as appropriate, the Committee will consist of at leastone director.

 

2.     TheCommittee member(s) will be free from any financial, family or other materialpersonal relationship that, in the opinion of the Board would interfere withthe exercise of such member’s duties and responsibilities.

 

3.     Themember(s) of the Committee must have sufficient expertise in the area ofexecutive compensation, as determined by the Board in its business judgment, todischarge the responsibilities of the Committee as set forth in this Charter,or must acquire such expertise within a reasonable period of time after his orher appointment to the Committee.

 

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**D.****            Term**

 

1.     TheBoard will appoint the member(s) of the Committee, annually, after the annualshareholders meeting.

 

2.     Duringhis or her annual term, the member(s) of the Committee may be removed only bythe affirmative vote of a majority of the Board.

 

**E.**             Meetings

 

1.     Meetat least once annually and otherwise as the member(s) of the Committee deemnecessary or appropriate.

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**F.**             Reporting andCommunications; Meetings; Responsibilities of the Compensation Committee

 

1.     Thepolicies and procedures by which the Committee executes its responsibilitiespursuant to this Charter shall be flexible in order to best respond to changingconditions and to ensure that the Company continues to attract, retain andmotivate high-quality individuals who are expected to contribute to theCompany’s long-term growth and success. In carrying out its responsibilities, the Committee should, at leastannually:

 

a.     Review and approve theCompany’s CEO compensation philosophy and take such actions as the Committeedeems necessary or appropriate.

 

b.     Oversee the administration ofthe Company’s CEO compensation plans, programs and arrangements (includingequity incentive plans).

 

c.     Review and approve theCompany’s policies and procedures for evaluating the performance of the CEO.

 

d.     Review and approve thecorporate goals and objectives that are relevant to the compensation of theCEO.

 

2.     Evaluatethe performance of, and set the salary, bonus, stock option grants (if any) andother benefits for, the CEO in light of the corporate goals and objectivesrelevant to his or her compensation, as applicable.

 

a.     In determining theappropriate compensation package for the CEO, the Committee should compare hisor her performance with the previously established corporate goals andobjectives relevant to his or her compensation and take into account such otherfactors and circumstances that the Committee believes are necessary orappropriate.

 

b.     In determining the stockoption grants and other long-term compensation (if any) given to the CEO, theCommittee should consider the Company’sperformance and relative stockholder return, the value of similar incentiveawards to chief executive officers at comparable companies, the stockoption grants and other long-term compensation given to the CEO in past years and such other factors andcircumstances that the Committee believes are necessary or appropriate.

 

3.     Annuallyreview and approve stock option grants from the 1997 Stock Option Plan as incentivecompensation for selected employees.

 

a.     In determining theappropriate grant levels for the Company’s personnel,the Committee shall review and consider the recommendations of the CEO, andsuch other factors and circumstances the Committee believes are necessary orappropriate.

 

4.     Onan annual basis, prepare a report regarding employee compensation for inclusionin the Company’s annual proxy statement. This report shall include the information required by the SEC.

 

5.     Fromtime to time as the Committee determines it to be necessary or appropriate,select and retain independent

 

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counsel orother advisors, including compensation and benefits consultants, to assist in the evaluation of key personnelcompensation.  The Committeeshall have the sole authority to retain (on terms established solely by theCommittee), terminate and approve the fees of any such counsel andadvisors.  The Committee may meet withany such counsel or advisors without management present.  The Company shall bear the cost of suchcounsel and advisors.

 

6.     Promptlymake available the minutes of all meetings of the Committee to the Board andreport the Committee’s activities to the Board at the Board’s meeting nextfollowing each Committee meeting so that the Board is kept fully informed ofthe Committee’s activities on a current basis.

 

7.     Fromtime to time as the Committee determines it to be necessary or appropriate,recommend to the Board the names, responsibilities and titles of the electedofficers of the Company.

 

8.     Fromtime to time as the Committee determines it to be necessary or appropriate,consult with the CEO on matters related to the Committee’s responsibilities andon other matters, including organizational structure, appropriate compensationfor the Company’s officers and employees not set by the Committee, andindividual development programs for the Company’s entire workforce, includingmanagement.

 

9.     Fromtime to time as the Committee determines it to be necessary or appropriate,conduct such reviews, investigations and surveys as the Committee may considernecessary or appropriate in the exercise of its duties and responsibilities.

 

10.   Onan annual basis, conduct a self-assessment of its performance during theprevious year.  The purpose of thisassessment is to increase the effectiveness of the Committee.  Compliance with the responsibilities listedin this Charter shall form the principal criteria for such assessments, as wellas such other factors and circumstances as are determined appropriate by theBoard.

 

11.   Onan annual basis, review the Company’s short-term succession plan, which willtake effect if all or a portion of the Company’s senior executive officers or key personnel unexpectedly become unableto perform their duties, and the Company’s management development and otherplans related to its long-term succession planning.

 

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