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EXHIBIT 10.30  



	 	 	Option No.	 	506
	 	 	No. of Shares	 	150,000




 
 

GARDENBURGER, INC.
  INCENTIVE STOCK OPTION AND
  INCENTIVE STOCK OPTION AGREEMENT    
  


    This Incentive Stock Option is granted and this Incentive Stock Option Agreement (the "Agreement") is executed by and between Gardenburger, Inc., an
Oregon corporation (the "Company"), and Scott C. Wallace (the "Optionee"), effective January 15, 2001. 


RECITALS  


    A.  The
Company has duly adopted that certain Gardenburger, Inc., 1992 First Amended and Restated Combination Stock Option
Plan, a copy of which is attached hereto as Exhibit A (the "Plan"). 


    B.  The
Plan authorizes a committee appointed by the Board of Directors of the Company (the "Administrative Committee") to grant incentive stock options to officers and
employees of the Company. 


    C.  The
Administrative Committee has selected the Optionee to receive an incentive stock option under the Plan. 



NOW,
THEREFORE, THE COMPANY AND THE OPTIONEE COVENANT AND AGREE AS FOLLOWS: 


    1.  Number of Shares Subject to Option and Option Price.  The Company hereby grants to the Optionee an
incentive stock option (the "Option") to purchase from the Company 150,000 shares of the no par value common stock of the Company (the "Common Stock") at an exercise price of $.71875 per share. The
Option is exercisable upon the terms and conditions contained herein. 


    2.  Additional Terms of the Option.  Subject to the provisions of Paragraph 3 below, the Option
shall have the following terms: 



    2.1 The
effective date of the grant of the Option shall be the date first set forth above. 


    2.2 The
Option shall vest as follows: 



	Date
 
	 	Cumulative

Percentage Vested
	 
	January 15, 2002	 	25	%
	

January 15, 2003	
 	

50	
%
	

January 15, 2004	
 	

75	
%
	

January 15, 2005	
 	

100	
%






    2.3 The
foregoing vesting schedule notwithstanding, this Option shall immediately vest as to any Option shares that have not then become vested upon: 



	(i)
	the
termination of the employment of the Optionee by the Company as a result of the Optionee's death or "Disability" (as defined in Optionee's
Employment Agreement dated as of January 15, 2001); or



	(ii)
	following
a "Change in Control" of the Company (as defined below), (x) the termination of the employment of the Optionee by the Company
other than for "Cause" (as defined in Optionee's Employment Agreement dated as of January 15, 2001), death or Disability 










or
(y) the occurrence of a material diminution in Optionee's position or responsibilities with or compensation by the Company. For purposes hereof, a "Change in Control" of the Company shall be
deemed to have occurred upon the earlier of: 


	(a)
	the
date that any "person" (as that term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Act")), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company, becomes a beneficial owner (within the meaning of Rule 13d-3 promulgated under the Act), directly or
indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company's then outstanding securities; or



	(b)
	the
date of any annual or special meeting of shareholders at which a majority of the directors then elected are not individuals nominated by the Company's then incumbent Board; or



	(c)
	the
date of approval by the shareholders of the Company of a plan of merger or consolidation of the Company in which such shareholders will not hold at least 75% of the combined
voting power of the resulting entity immediately following such merger or consolidation, or the approval by the shareholders of the Company of a plan of complete liquidation of the Company or an
agreement for the sale of substantially all of the Company's assets. 






    2.4 The
Option shall expire on January 15, 2011 (the "Expiration Date"). 



    2.5 To
the extent vested, the Option may be exercised in whole or in part at any time and from time to time prior to the Expiration Date. 


    2.6 The
Option must be exercised, if at all, as to a whole number of shares. 




    3.  Incorporation By Reference of the terms and Conditions of the Plan.  The terms and conditions of this
Option shall be subject to all of the terms and conditions of the Plan, which terms and conditions are expressly incorporated by reference into this Agreement to the same extent and with the same
effect as if such terms and conditions were set forth herein. In the event of a conflict or inconsistency between the terms and conditions set forth in this Agreement and the terms and conditions of
the Plan, those of the Plan shall control. 


    4.  Exercise of the Option; Delivery of Certificates.  



    4.1 The
Option may be exercised only in accordance with the terms and conditions of Section 9 of the Plan and by (1) delivery to the Company of a Notice
of Exercise substantially in the form of Exhibit B attached hereto specifying the number of shares of Common Stock for which the exercise is to be effective, and (2) tendering full
payment of the Option Price for such shares. 


    4.2 Within
a reasonable time after its receipt of the Optionee's Notice of Exercise, the Company shall deliver to the Optionee a certificate for the shares of Common
Stock for which exercise of the Option was effective. 




    5.  Transferability of the Option.  The Option is transferable only in accordance with Section 10
of the Plan. 


    6.  Warranties and Representations of the Optionee.  By executing this Agreement, the Optionee accepts
the Option and agrees to be bound by all of the terms of this Agreement and the Plan. In addition, the Optionee acknowledges that exercise of the Option and the sale of the shares of Common Stock
acquired upon exercise thereof may have tax implications for which the Optionee should seek individual advice by his or her own tax counselor or advisor. 


    7.  Indemnification by the Optionee.  The Optionee agrees to indemnify and hold the Company harmless from
any loss or damage, including attorney's fees or other legal expenses, incurred in the 







defense or payment of any such claim against the Company resulting from a breach by the Optionee of the representations, warranties or provisions contained in this Agreement. 


    8.  No Right to Continued Relationship.  Nothing herein shall confer upon the Optionee the right to
continue as an officer or employee of or with the Company or affect any right which the Company may have to terminate its relationship with the Optionee. 


    9.  Rights as Shareholder.  The Optionee shall have no rights as a shareholder of the Company on account
of the Option or on account of shares of Common Stock subject hereto until such time as the Company shall have issued and delivered stock certificates to the Optionee. 


    10.  Further Assurances.  From time to time and upon request by the Company, the Optionee agrees to
execute such additional documents as the Company may reasonably require in order to effect the purposes of the Plan and this Agreement. 


    11.  Binding Effect.  This Agreement shall be binding upon the Optionee and the Optionee's heirs,
successors and assigns, including the Qualified Successor of the Optionee (as that term is defined in Section 10.2 of the Plan). 


    12.  Waivers/Modifications.  No waivers, alterations or modifications of this Agreement shall be valid
unless in writing and duly executed by the party against whom enforcement of such waiver, alteration or modification is sought. The failure of any party to enforce any of its rights against the other
party for breach of any of the terms of this Agreement shall not be construed a waiver of such rights as to any continued or subsequent breach. 



    13.  Governing Law.  This Agreement shall be governed by the laws of the State of Oregon. 


    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. 



	GARDENBURGER, INC.:	 	OPTIONEE:
	

By:	
 	

 	
 	

 
	 	 	
	 	

	 	 	Alexander P. Coleman

Administrative Committee Member	 	Scott C. Wallace











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GARDENBURGER, INC. INCENTIVE STOCK OPTION AND INCENTIVE STOCK OPTION AGREEMENT