Document:

Exhibit 10.1

 

BONUS AND BONUS UNIT PLAN

 

GOLDEN GRAIN ENERGY, LLC

 

I.                                         Purpose.  The purposes of this Golden Grain Energy, LLC
Bonus and Bonus Unit Plan are to retain the key management employees of the
Company, to compensate those key management employees for their contributions
to the growth of the Company and to induce those employees to continue making
contributions to the growth of the Company.

 

II.                                     Definitions.  As used in this Plan, the following terms
will have the following meanings:

 

A.                                   “Board” shall mean the Board of Directors of the Company.

 

B.                                     “Bonus Unit” shall mean the restricted units of ownership
interest in the Company awarded pursuant to this Plan.  The Bonus Units shall be “A Units” and shall
be governed by the provisions of the Company’s most current Operating
Agreement, except where a provision of this Plan is in conflict with the
provisions of the Company’s most current Operating Agreement in which case the
provisions of this Plan shall control.

 

C.                                     “Change in Control” shall mean the occurrence of any of the
following events:  (1) a person or
group acquires more than fifty percent (50%) of the voting power or more than
fifty percent (50%) of the fair market value of all of the Company’s
outstanding Units; (2) a person or group acquires thirty-five percent
(35%) or more of the Company’s outstanding Units over a 12-month period;
(3) over a 12-month period, a majority of the Company’s directors are
replaced by individuals whose election is not endorsed by the Board of
Directors; or (4) over a 12-month period, a person or group acquires Company
assets whose collective fair market value equals or exceeds forty percent (40%)
of the total fair market value of all assets owned by the Company.  Persons who are Unitholders on
December 31, 2005 shall not be counted in applying this definition.

 

D.                                    “Committee” shall mean the Compensation Committee of the
Board of Directors.

 

E.                                      “Company” shall mean Golden Grain Energy, LLC.

 

F.                                      “Issue Date” shall mean the date on which a Participant
signs an agreement acknowledging the award of Bonus Units and agreeing 

 

 

to be bound by
the restrictions contained in this Plan, as further provided in
paragraph B of Article III below.

 

G.                                     “Participant” shall mean an eligible employee who is awarded
Bonus Units pursuant to this Plan.

 

H.                                    “Plan” shall mean the Golden Grain Energy, LLC Bonus and
Bonus Unit Plan as set forth in this document and any amendments thereof.

 

I.                                         “Restricted Period” shall mean the time period (after which
all restrictions shall lapse) beginning on the Issue Date of Bonus Units and
ending on the fifth anniversary of the Issue Date.

 

III.                                 Eligibility.  All members of the Company’s Management Team
(consisting of the Chief Executive Officer, the Chief Financial Officer, the
Plant Manager, the Commodities Manager and the Lab Manager) shall be eligible
to receive Cash Bonuses, Bonus Units and Extraordinary Performance Bonuses
under this Plan as further provided in this section.

 

A.                                   Cash
Bonuses.  The Committee may from time
to time set group performance goals for the Company’s Management Team.  Such goals shall be measurable and
ascertainable and shall be reasonably calculated to increase the Company’s efficiency,
or profitability or the price at which the Company can sell its Units to
investors.  Goals shall be set with
reference to the Company’s fiscal year performance, and the Committee shall
determine whether the Management Team has met those goals shortly before or
after the end of each fiscal year or as soon as the relevant financial
information becomes available.  If the Management
Team has met its performance goals, the Committee shall determine a Cash Bonus
amount.  Such amount shall be evenly divided
among and promptly distributed equally to all members of the Management Team
who were employed by the Company throughout the fiscal year for which the goals
applied.  The Committee shall not be
obligated to determine and announce Cash Bonus goals for each fiscal year of
the Company.

 

B.                                     Bonus
Units.  The Committee may also set
individual or additional group performance goals for the members of the Company’s
Management Team.  These goals may (but
need not) be different for each Management Team member.  Such goals shall be measurable and
ascertainable and shall be reasonably calculated to increase the Company’s
efficiency or profitability or the price at which the Company can sell its
Units to investors.  Goals shall be set
with reference to the Company’s fiscal year performance, and the 

 

2

 

Committee
shall determine whether the goals have been met, either by each individual
member of the Management Team in the case of individual goals or by all members
collectively in the case of group goals. 
The Committee shall make its determination shortly before or after the
end of each fiscal year or as soon as the relevant financial information
becomes available.  If the goals have
been met, the Committee shall determine a separate cash award for each member
of the Management Team who has met his or her goals.  The cash awards need not be equal, and the
Committee shall not be obligated to determine and announce Bonus Unit goals for
each member of the Management Team or for each fiscal year of the Company.

 

Each cash
award thus determined shall be converted into Bonus Units by dividing the
amount of each Participant’s cash award by the recent price (or the average of
the recent prices) at which Units have been traded among Unitholders or
otherwise transferred in a private transaction. 
If the Committee believes that there are no private transactions recent
enough to indicate the value of a Unit, the Committee shall determine the fair
market value of a Unit on the basis of all information then available to it, and
each Participant’s cash award shall be divided by the Unit value determined by
the Committee in order to determine the number of Bonus Units received by each
Participant.  In converting the cash
awards into Bonus Units, no discount shall be applied on account of the
restricted status of the Bonus Units.

 

All Participant’s
Bonus Unit awards shall be delivered in Bonus Units.  No Participant shall be entitled to demand
the cash amount used to determine the number of Bonus Units awarded to him or
her.  Participants shall not be required
to make any payment for their Bonus Units, but Participants shall be responsible
for all income and employment tax liability incurred with respect to their
Bonus Unit awards.

 

The Company
may require each Participant to represent that the Participant will hold the
Bonus Units for purposes of investment and with no intent to transfer, sell or
otherwise dispose of the Bonus Units. 
The Bonus Units may be transferred only in accordance with this Plan,
the Company’s then-existing Operating Agreement or other governance documents,
and applicable securities law.

 

As a condition
of receiving Bonus Units, each Participant shall deliver an agreement
substantially in the form of Exhibit A hereto.  The date on which the Participant delivers
the Agreement to the 

 

3

 

Company shall
be the “Issue Date” for purposes of this Plan. 
The Company may also require the Participant to sign any Operating
Agreement or similar document signed by other Unitholders as a condition to
receiving Bonus Units hereunder.

 

C.                                     Extraordinary
Performance Bonus.  From time to
time, the Committee may award any one or more Management Team members cash
bonuses for extraordinary performance. 
The awarding of any such bonus shall be within the discretion of the
Committee or its delegate.  Extraordinary
Performance Bonuses shall be given sparingly.

 

IV.                                 Special
Provisions for Bonus Units.

 

A.                                   Issuance
of Certificates.  After the
Participant has delivered the agreement described in paragraph B of
Article III above, the Participant’s Bonus Units shall be issued and
certificates showing the Participant’s ownership of such Units shall be
prepared.  The Participant shall then
become the owner of the Bonus Units, and shall have all rights belonging to a
Unitholder, other than the right to vote on issues presented to the Company’s
members during the Restricted Period applicable to such Units.  Notwithstanding the preceding sentence, the
Bonus Units shall be subject to the restrictions described in this
Article.  If the Company so directs, the
certificates representing the Bonus Units shall be printed with a legend
stating that the Units are subject to the restrictions contained in this
Plan.  To aid in the enforcement of those
restrictions, the Participant shall deposit the certificates, together with a
transfer document appropriately endorsed in blank, with an escrow holder
designated by the Company.  The Company
may serve as escrow holder.

 

B.                                     Recapitalization
Events.  If, during the Restricted
Period, the Participant should be entitled to new, additional or different
Units by virtue of his or her ownership of the Bonus Units, then additional
certificates for such new, additional or different Units shall be issued to the
Participant in the same manner, and subject to the same restrictions, as the certificates
issued pursuant to paragraph A above. 
The Restricted Period applicable to such new, additional or different
Units shall be the same as the Restricted Period applying to the underlying
Units issued to the Participant, and the restrictions on the new, additional or
different Units shall lapse contemporaneously with the lapse of the
restrictions on the underlying Units.

 

4

 

C.                                     Dividends.  If dividends or other distributions are paid
on the Bonus Units during the Restricted Period, the Participant shall receive
such dividends or distributions and shall be responsible for any income tax
liability arising therefrom.

 

D.                                    Termination
of Participant’s Employment.  If the
Participant’s employment with the Company ends for any reason (including the
Participant’s death or disability) during a Restricted Period, the Company
shall direct the escrow holder to deliver the Bonus Units subject to that
Restricted Period to the Company, the Participant or the Participant’s
designated beneficiary in accordance with subparagraphs 1 through 5 below.  The Participant shall not be entitled to any
payment for the Bonus Units delivered to the Company.

 

1.                                       If
the Participant’s employment ends before the third anniversary of the Issue
Date, the escrow holder shall deliver all of the Bonus Units awarded on that
Issue Date to the Company.

 

2.                                       If
the Participant’s employment ends on or after the third anniversary and before
the fourth anniversary of the Issue Date, the escrow holder shall deliver fifty
percent (50%) of the Bonus Units awarded on that Issue Date to the Company and
the remaining fifty percent (50%) of the Bonus Units awarded on that Issue Date
to the Participant.

 

3.                                       If
the Participant’s employment ends on or after the fourth anniversary and before
the fifth anniversary of the Issue Date, the escrow holder shall deliver twenty-five
percent (25%) of the Bonus Units awarded on that Issue Date to the Company and
the remaining seventy-five percent (75%) of the Bonus Units awarded on that
Issue Date to the Participant.

 

4.                                       If
the Participant’s employment ends on or after the fifth anniversary of the
Issue Date, the escrow holder shall deliver all of the Bonus Units awarded on
that Issue Date to the Participant.

 

5.                                       Notwithstanding
subparagraphs 1 through 4 above, if the Participant’s employment ends on
account of the Participant’s death, disability or retirement, the escrow holder
shall deliver all of the Bonus Units to the Participant or, in the case of the
Participant’s death, to the Participant’s designated beneficiary or the
personal representative of the

 

5

 

Participant’s
estate as described in paragraph 6 below. 
For purposes of this subparagraph 5, the Participant’s disability
shall mean his or her physical or mental inability to perform the functions of
his or her Management Team position for a continuous period which has lasted or
is expected to last for at least one year. 
The Participant’s retirement shall mean his or her cessation of all
full-time employment on or after attaining age sixty-two (62).

 

6.                                       For
purposes of subparagraph 5 above, each Participant shall be entitled to
designate a beneficiary to receive his or her restricted Bonus Units if the
Participant should die within a Restricted Period.  Any such beneficiary designation shall be in
writing and shall be signed and dated by the Participant.  No such beneficiary designation shall be
effective until it has been delivered to the Company, and each beneficiary designation
shall supersede all previous ones.  If
the Participant has not designated a beneficiary or if the Participant’s
designated beneficiary is not living at the time of the Participant’s death or,
if at the time of the Participant’s death, he or she is divorced from the
individual listed as designated beneficiary, the Participant’s Bonus Units
shall be delivered to the personal representative of the Participant’s
estate.  The receipt of the Participant’s
designated beneficiary or of the personal representative of the Participant’s
estate shall be a full acquittance of the Company.

 

E.                                      Transfer
Restrictions.  During the Restricted
Period, the Bonus Units shall not be sold, exchanged, pledged or otherwise
transferred or disposed of.

 

F.                                      Lapse
of Restrictions.  All restrictions
set forth in this Article IV shall lapse as provided in subparagraphs 1
through 4 below.

 

1.                                       On
the third anniversary of the Issue Date with respect to an award of Bonus
Units, the Restricted Period shall end with respect to fifty percent (50%) of
the Bonus Units covered by the award, and the escrow holder shall deliver such
unrestricted Bonus Units to the Participant. 
The Participant will not be obligated to pay for the Bonus Units thus
delivered but shall bear all tax liability with respect thereto.  Upon delivery to the Participant, the Bonus
Units shall no longer be subject to this Plan but shall remain subject to all restrictions
contained in the Company’s Operating 

 

6

 

Agreement and
any similar document binding on all Unitholders.

 

2.                                       On
the fourth anniversary of the Issue Date with respect to an award of Bonus
Units, the Restricted Period shall end with respect to an additional
twenty-five percent (25%) of the Bonus Units originally covered by the award
and such Bonus Units shall be delivered to the Participant on the terms and
conditions outlined in subparagraph 1 above.  The Participant shall then have unrestricted
ownership of seventy-five percent (75%) of the Bonus Units originally covered
by the award.

 

3.                                       On
the fifth anniversary of the Issue Date with respect to an award of Bonus
Units, the Restricted Period shall end with respect to the remainder of the
Bonus Units covered by the award and such remaining Units shall be delivered to
the Participant on the terms and conditions outlined in subparagraph 1
above.

 

4.                                       Upon
any change in control of the Company, the Restricted Period shall end with
respect to all Bonus Units awarded to the Participant, regardless of the date
of the award.  The Units shall
immediately be delivered to the Participant on the terms and conditions
outlined in subparagraph (1) above.

 

V.                                     Finality
of Determination.  The Committee will
administer this Plan and construe its provisions.  Any determination by the Committee in
carrying out, administering, or construing this Plan will be final and binding
for all purposes and upon all interested persons and their heirs, successors,
and personal representatives.

 

VI.                                 Limitations.

 

A.                                   No
Right to Allocation.  No person will
at any time have any right to receive a Cash Bonus, Bonus Units or an
Extraordinary Performance Bonus hereunder and no person other than the
Committee or its delegate will have authority to make any representation or
warranty with respect thereto.  Other
than as provided in paragraph E below, no Participant shall have any right
to put his or her Bonus Units to the Company.

 

B.                                     Rights
of Participants.  Participants will
have no rights other than those set forth in this Plan.  Except as provided in subparagraph 6 of
paragraph D of Article IV, such rights may not be assigned or
transferred.  If any attempt is made to
sell, exchange, transfer, pledge, hypothecate, or otherwise dispose of any
Bonus Units held 

 

7

 

by a
Participant before the restrictions of Article IV have lapsed, the Units
that are the subject of such attempted disposition will be deemed offered to
the Company for repurchase by the Company at no cost.

 

C.                                     No
Right to Continued Employment.  Neither
the Company’s action in establishing the Plan, nor any action taken by it or by
the Board or the Committee under the Plan, nor any provision of the Plan, will
be construed as giving to any person the right to be retained in the employ of
the Company.

 

D.                                    No
Affect on Retirement Plans.  Bonus
shares shall not be considered “compensation” for purposes of any qualified
retirement plan maintained by the Company.

 

E.                                      Taxes
and Withholding.  The Participant
will be liable for all employment taxes attributable
to any Cash Bonus, Bonus Units or Extraordinary Performance Bonus and for all
income tax due with respect to such awards. 
For Cash Bonuses and Extraordinary Performance Bonuses, the employment
tax and withholding liability will be satisfied out of the funds constituting
the award and the value of the bonus will be reported as taxable income, all in
accordance with the Company’s usual payroll practices.

 

1.                                       For
Bonus Unit awards, the Company shall satisfy the Participant’s employment tax
and withholding liability by deducting the necessary funds ratably from the
Participant’s regular payroll checks for the remainder of the fiscal year in
which the Bonus Units give rise to such tax liability.  The Participant may also deliver the
necessary funds to the Company or ask the Company to redeem sufficient
unrestricted Bonus Units to satisfy the income withholding liability and the
employment tax liability.

 

2.                                       The
Participant may also ask the Company to redeem sufficient unrestricted units to
satisfy the income tax liability attributable to the vesting of the units.  However, any request made pursuant to this
subparagraph must be made within thirty (30) days of the vesting of the
units.  Redemption requests shall be
limited to thirty percent (30%) of the value of the vested Units, as reported
for federal income tax purposes, less the value of the unrestricted Units
redeemed to satisfy the income tax withholding liability, plus the value of any
Units redeemed to satisfy employment tax liability.

 

8

 

3.                                       If
the Participant chooses to pay the income tax on the Bonus Units at the time
they are issued (rather than when the Restricted Period lapses), the
Participant shall so inform the Company.

 

VII.                             Amendment,
Suspension or Termination of Plan. 
The Board may amend, suspend or terminate this Plan in whole or in part
at any time; provided that such amendment will not affect adversely rights or
obligations with respect to Bonus Units previously awarded.

 

VIII.                         Governing
Law.  The Plan will be governed by
the laws of the State of Iowa.

 

IX.                                Expenses
of Administration.  All costs and
expenses incurred in the operation and administration of this Plan will be
borne by the Company.

 

This Plan was adopted by the Board of Directors of Golden
Grain Energy, LLC on December 19, 2005.

 

 

	
   

  	
   

  	
  /s/ Ron
  Pumphrey, Sec.

  

 

9

 

EXHIBIT A

 

GOLDEN GRAIN ENERGY, LLC

BONUS UNIT AGREEMENT

 

 

By signing below, I acknowledge that                
Bonus Units have been allocated to me pursuant to the Company’s Bonus and Bonus
Unit Plan.  Upon receipt of these Bonus
Units, I will deposit them, together with a stock power duly endorsed in blank
with an escrow agent appointed pursuant to paragraph A of Article IV
of the Plan.  I represent and agree that
I am acquiring these Bonus Units for investment and that I have no present
intention to transfer, sell or otherwise dispose of them, except as permitted
pursuant to the Plan and in compliance with applicable securities laws.  I agree further that I am acquiring these
shares in accordance with, and subject to, the terms, provisions and conditions
of said Plan, that I am informed about such terms, provisions and conditions
and that I hereby expressly assent to all of them.  This agreement will bind and inure to the
benefit of my heirs, legal representatives, successors and assigns.

 

	
   

  	
   

  
	
   

  	
  ParticipantExhibit 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

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