GARDENBURGER, INC.

                 FY2000 SENIOR MANAGEMENT TEAM INCENTIVE PROGRAM


PURPOSE:

Gardenburger's senior management team is compensated by three primary methods:

-    market-based salary, as gauged against other targeted competitors for our
     talent;
-    an equity opportunity that is reflected in a meaningful stock option grant
     program that encourages ownership and commitment to long-term goals; and
-    a bonus opportunity that reflects reward for accomplishing intermediate-
     term goals.

The incentive program is specifically designed to reward the full team when
pre-determined targets are met. The business drivers are primarily GROWTH OF
REVENUE and PROFITABILITY. The focus of the company today is to continue the
successful evolution of the branding strategy first implemented by its CEO and
to capture as large a portion of the market share as possible to reduce
competition and to thwart entry by other possible competitors. At the same time,
accomplishment of specific operating income levels is critical to reward both
stockholders and other investors for their commitment to the strategy.

The agreed approach to awards has been to acknowledge the value in team-driven,
as opposed to individual, accomplishment. This fosters sharing of goals between
various business components (e.g., retail grocery, club, natural, foodservice)
and attainment of overall company success. This approach will continue in
FY2000, with use of an individual component that allows the CEO to assess team
member contribution to this broader effort. It will also reward for reaching
specific, agreed goals and team participation.

APPROACH AND PROCESS

The key drivers that impact the business are developed in advance of the
beginning of the fiscal year, and agreement is reached with all members of the
team surrounding their portion of the overall goal(s). Specific targets are
discussed and negotiated until the best possible business results are agreed
upon, with consideration given to the needs of stockholders, investors,
customers, business partners and employees.

The principal drivers are growth of revenue and operating income, with the
latter weighted at a higher value. Targets for FY2000 are:

-    Revenue goal of $92.4 million

-    Operating income target of $4.6 million

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The bonus targets for the senior team includes 55% of base salary for CEO and
45% of base salary for all other team members. Additionally, the award is
divided into two parts for the second group:

-    75% of total: Business drivers (revenue/profitability).

-    25% of total: CEO discretionary award based on individual contribution.

This means that the first component may grow or shrink as a function of the
calculation, while the second is fixed as a maximum amount relative to base
salary.

The first component would be paid for business driver accomplishment. A matrix
calculation will be used to track the percent accomplishment of each driver
against the other. There is no distinction between business product areas;
overall sales accomplishment is used. This relationship is expressed as a
geometric grid, which has been established utilizing the business plan and
laying out rates of payout against the two axes. The two factors work in tandem
with each other so that success in one may partially offset lack of full
attainment in the other.
Benchmark points for this relationship include:

-    An uncapped maximum on sales growth to reward "exceptional" performance.

-    A minimum threshold, with no payout, at $80.0 million in sales and no
     operating income.

-    A "circuit-breaker" factor which provides for no payout in the event of an
     OI loss at any revenue level.

The second component would be paid based upon the CEO's evaluation of the
individual team member's contribution to the overall business success. Factors
which may be used by the CEO could include (but are not limited to) completion
of agreed departmental goals, leadership on company-wide tasks, or participation
and leadership in senior team business processes. The award could be at any
percentage between 0-25%. Benchmark points for this component include:

-    An absolute maximum of 25% against base salary for the discretionary award,
     independent of the revenue and profitability calculation.

All rewards would be paid at conclusion of the FY, and after completion and
verification of the year-end results by the company's Finance team.





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