Exhibit 10.1


 


GARDENBURGER, INC.


CONSULTING AGREEMENT


 


This Consulting Agreement
(the “Agreement”), dated as of January 31, 2006, is made and entered into
by and between Gardenburger, Inc. (the “Company”) and James W. Linford (“Consultant”).  This Consulting Agreement is subject to
approval of the Court in the Company’s chapter 11 reorganization case.  The Company will take reasonable action
designed to obtain such approval on or before January 31, 2006.


 


W I T N E S S E T H


 


WHEREAS, the Consultant
is the former Senior Vice President and Chief Operating Officer of the Company
and has knowledge and expertise pertaining to the Company;


 


WHEREAS, the Company
desires to retain Consultant in order to provide services to the Company; and


 


WHEREAS, Consultant is willing
to render services to the Company in the performance of agreed upon tasks as
hereinafter provided.


 


Section 1.                                          The Services


 


1.1          Consultant will perform for the
Company such services as may be agreed upon from time to time by the Company
and Consultant (the “Services”).  The
Services include, but are not necessarily limited to, the Services described in
the attached Exhibit A.


 


1.2          Consultant shall (a) diligently
and conscientiously devote the time and effort necessary to discharge
Consultant’s duties to the Company in a trustworthy and efficient manner, (b) perform
the Services as and when requested by the Company, (c) comply with the
Company’s general procedures and the direction of the Company’s officers, and (d) fulfill
a general duty of loyalty to the Company, which includes but is not limited to
a duty to keep the Company fully informed of all relevant information; a duty
not to act adversely to the Company’s business or interests; and a duty not to
disparage the Company, its employees, products or services.


 


Section 2.              Compensation
and Payment.  In
consideration for Consultant’s agreement to enter this Agreement and to make
himself available to the Company as required herein and as full compensation
for satisfactory performance of the Services and Consultant’s other obligations
under this Agreement, the Company will pay Consultant the compensation
specified in the attached Exhibit A.


 


Section 3.                                          Performance
by Consultant


 


3.1          Consultant is an independent
contractor, not an employee or agent, of the Company.  Without limitation of the foregoing,
Consultant will:  (a) not enter into
any 


 


1

















 


contract,
agreement or other commitment, or incur any obligation or liability, in the
name or otherwise on behalf of the Company; (b) not be entitled to any
worker’s compensation, pension, retirement or other benefits afforded to
employees of the Company; (c) provide for all federal income tax and other
withholding relating to Consultant’s compensation; (d) pay all social
security, unemployment and other employer taxes relating to Consultant’s
employment or compensation; (e) provide all worker’s compensation and
other insurance relating to Consultant’s employment; and (f) perform all
reporting, recordkeeping, administrative and similar functions relating to
Consultant’s employment or compensation.


 


3.2          Consultant will not
subcontract or otherwise delegate performance of any Services without the prior
written consent of the Company.


 


3.3          In performance of the Services and
this Agreement, Consultant will comply with all applicable laws, ordinances,
rules, regulations, orders, licenses, permits and other governmental
requirements (including, but not limited to, any such requirements imposed upon
the Company with respect to the Services).


 


3.4          In connection with the Services or
this Agreement, the Company may disclose to Consultant certain information that
is confidential, proprietary or trade secret information of the Company or
others.  Consultant will not disclose,
use or publish any such information, except as required to perform the Services
in accordance with this Agreement or as otherwise authorized by the Company in
writing.  Consultant will take
appropriate steps to protect against any unauthorized disclosure, use or
publication of any such information.


 


3.5          Consultant
represents and warrants that this Agreement and the performance of Consultant’s
obligations under this Agreement will not constitute or cause any breach,
default or violation of any other consulting, nondisclosure, confidentiality or
other agreement to which Consultant is a party. 
In the performance of the Services and this Agreement, Consultant will
not infringe, misappropriate or violate any patent, copyright, trade secret,
trademark or other intellectual property right of any third party.


 


Section 4.                                          Changes


 


4.1          If agreed upon by the Company and
Consultant, changes may be made in the Services to be rendered under this
Agreement (including, but not limited to, additions to or deletions from any
Services, suspension of performance and changes in schedule).


 


4.2          If any change under Section 4.1
causes an increase or decrease in the time or costs required to perform the
Services in accordance with this Agreement, then Exhibit A will be
equitably adjusted, and this Agreement shall be amended in writing
accordingly.  Unless agreed to in writing
by Consultant, no decrease in the Services to be rendered under this Agreement
will result in any decrease in the compensation paid or payable to Consultant
under this Agreement.


 


2

















 


Section 5.              Term
and Termination


 


5.1          General.  The Term will commence as of the date of this
Agreement, subject to Court approval, and will continue until the earlier of (i) the
completion of Consultant’s Services pursuant to this Agreement, or (ii) three
months from date of this Agreement, whether or not all Services pursuant to
this Agreement have been completed.


 


5.2          Effect
of Termination.  Upon any termination
of the Term, the following will apply:


 


(a)           Consultant
will not be obligated to perform any Services after the end of the Term;


 


(b)           The
Company will pay Consultant in accordance with Section 2 for all Services
performed prior to the end of the Term;


 


(c)           Consultant
will not be obligated to return any compensation he received prior to the end
of the Term in the event of any termination of this Agreement;


 


(d)           the
respective rights and obligations of the parties hereto under Sections 2,
3, 5 and 6 will survive; and


 


(e)           neither
party hereto will have any obligation or liability to the other (e.g. for
anticipated revenues or profits based upon this Agreement or for any costs or
expenses incurred in reliance upon this Agreement) on account of any
termination of the Term.


 


Section 6.              Miscellaneous


 


6.1          Any
notice under this Agreement will be deemed to be properly given if given in
writing and delivered in person or mailed, properly addressed and stamped with
the required postage, to the intended recipient as follows:


 


If to Company:                                                                 Gardenburger, Inc.

15615 Alton Parkway, Suite 350

Irvine, California 92618

Attn:  Scott C. Wallace


 


If to Consultant:                                                         James
W. Linford

2177 N Sevenoaks Way

Eagle, ID  83616


 


Either party may
change its address specified in this Section 6.1 by giving the other party
notice of such change in accordance with this Section 6.1.


 


3

















 


6.2          Consultant will not (by contract,
operation of law or otherwise) assign this Agreement or any right or interest
in this Agreement without the prior written consent of the Company.  Subject to the foregoing restriction on
assignments by Consultant, this Agreement will be fully binding upon, inure to
the benefit of, and be enforceable by the parties and their respective
successors, assigns and legal representatives.


 


6.3          This Agreement will be interpreted,
construed and enforced in all respects in accordance with the laws of the State
of California without reference to its choice of law principles.


 


6.4          The failure of
either party hereto to insist upon or enforce strict performance by the other
of any other provisions of this Agreement, or to exercise any right or remedy
under this Agreement, will not be construed as a waiver or relinquishment to
any extent of such party’s right to assert or rely upon any such provision,
right or remedy in that or any other instance; rather, the same will be and
remain in full force and effect.


 


6.5          No third parties are
intended to benefit by the covenants, agreements, or any other terms or
conditions of this Agreement.


 


6.6          This Agreement sets
forth the entire agreement between the parties hereto, and supersedes any and
all prior agreements of the parties with respect to the Services.  No amendment of any provision of this
Agreement will be valid unless set forth in a written amendment signed by both
parties.


 


Signatures on Following Page


 


4

















 


IN WITNESS WHEREOF the
parties hereto have caused this Agreement to be duly executed as of the date
set forth below.


 


 


	
  Company:

  	
   

  	
  Consultant:

  	
   

  
	
   

  	
   

  
	
  Gardenburger, Inc.

  	
  James
  W. Linford

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ Scott C. Wallace

  	
   

  	
  /s/ James W.
  Linford

  	
   

  
	
  Name: Scott C.
  Wallace

  	
   

  
	
  Title: President
  and Chief Executive Officer

  	
   

  
							



 


1

















 


EXHIBIT A


 


Services and
Compensation


 


Services


 


Consultant shall render
consulting services and advice to the Company relating to continuing
responsibility for the performance of the manufacturing, logistics, R&D,
procurement, customer service and engineering departments, and other
assignments involving matters and issues that are mutually agreeable to the
Company and Consultant.  Such services
are to include up to an additional two weeks of offsite, telephonic and/or
after hours consulting services to be rendered after February 28, 2006.


 


Compensation


 


The Company shall pay
Consultant $50,000 in $12,500 weekly installments on each of February 3,
2006, February 10, 2006, February 17, 2006 and February 24,
2006.


 


The Company shall
reimburse Consultant the cost of continuing his current group health coverage
for the month of February 2006.


 


The Company shall
reimburse Consultant for approved travel and other out-of-pocket expenses
reasonably incurred by Consultant in the course of performing the Services
under this Agreement.


 


1