Document:

EXHIBIT 10.7

 

AMENDMENT TO
EMPLOYMENT AGREEMENT

 

This Amendment
to Employment Agreement (this “Amendment”) is made and entered into as of the
24th day of March, 2005, by and between Gardenburger, Inc., an
Oregon Corporation (the “Company”), and James W. Linford (the “Executive”).

 

Preliminary Statements:

 

A.                                   The
Company and the Executive are parties to an Employment Agreement, dated as of February 26,
2004, pursuant to which the Executive serves as the Chief Operating Officer of
the Company (the “Employment Agreement”).

 

B.                                     The
parties desire to amend the Employment Agreement as set forth herein.

 

C.                                     Article XIV
of the Employment Agreement provides that the Employment Agreement may be
modified by an agreement in writing between the parties thereto.

 

Agreement:

 

NOW THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Preamble
and Recitals: Defined Terms.  The
preamble and recitals hereinabove set forth are incorporated herein and made a
part hereof.  Except as otherwise
provided herein, capitalized terms used in this Amendment shall have the
meanings ascribed thereto in the Employment Agreement.

 

2.                                       Change
in Control.  Effective as of the date
hereof, the definition of “Change in Control,” as set forth in Article I
of the Employment Agreement, is hereby amended, as follows:

 

(a)                                  By
modifying Paragraph (d) of the definition of Change in Control as follows:
“A complete liquidation or dissolution of the Company or the sale or other
disposition of all or substantially all of the assets of the Company,
including, but not limited to a Sale Transaction, other than to a corporation,
with respect to which following such sale or other disposition, including, but
not limited to a Sale Transaction (A) more than 50% of, respectively, the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such sale or other disposition, including but not limited to a Sale
Transaction, in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding the Company and any Employee benefit plan (or related trust)
of the Company or such corporation and any Person beneficially owning,
immediately prior to

 

 

such sale or other disposition, including, but not limited to a Sale
Transaction, directly or indirectly, 50% or more of the Outstanding Company
Common Stock or Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 50% or more of, respectively, the
then outstanding shares of common stock or such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (C) at least a
majority of the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale or other disposition
of assets of the Company, including, but not limited to a Sale Transaction.

 

(b)                                 By
deleting the Paragraph which immediately follows Paragraph (d) of the
definition of Change in Control.

 

3.                                       CIC
Date. The following definition of CIC Date is added after the definition
of  “Change in Control” and before the
definition of “Confidential Information: “The date on which a transaction which
constitutes a Change in Control closes.”

 

4.                                       Good
Reason.  All references to “Employee”
in the definition of “Good Reason” are restated to read “Executive”. The last
sentence of the definition of “Good Reason” is amended and restated to read: “For
this purpose, if Executive is terminated by the Company without Cause before
the CIC Date and such termination is in connection with the Change in Control,
Employee will be deemed to have continued his employment through the date which
is ninety days (90) following the CIC Date.”

 

5.                                       Sale
Transaction. Paragraph (a) of the definition of “Sale Transaction” is
amended and restated as follows: “(a) A sale or other disposition by the
Company of all or substantially all of its assets;”.  The word “or” is inserted (i) after the
end of Paragraph (a) of the definition of Sale Transaction and before the
beginning of Paragraph (b) of the definition of Sale Transaction; and (ii) after
the end of Paragraph (b) of the definition of Sale Transaction and before
the beginning of Paragraph (c) of the definition of Sale Transaction.  Paragraph (d) of the definition of Sale
Transaction shall be deleted in its entirety.

 

6.                                       Total
Consideration.  The definition
of  “Total Consideration” is amended and
restated to read: “The total
consideration paid and to be paid (which shall be deemed to include amounts
paid or to be paid into escrow), directly or indirectly, regardless of how
allocated or the form of consideration, to the Company or its security holders
in connection with a Sale Transaction, including, without limitation:  (i) cash; (ii) notes or debt
(valued at face) or equity securities (which, if of the same class as
securities which are publicly traded, shall be valued at the average of the
last closing market price thereof on each of the five trading days prior to the
closing of the Sale Transaction) and other property; (iii) the value of
assumed, “cashed out” or substituted options, warrants or other rights to
acquire capital stock (whether or not vested); (iv) any interest-bearing
indebtedness, or capital lease obligations of the Company or others assumed by
an acquiring party in an acquisition of assets or which remain outstanding at
the time of the closing of the Sale Transaction in all other cases; (v) payments
to be made in installments or otherwise deferred, including amounts held in
escrow; (vi) contingent payments, related to future earnings or
operations; (vii) any assets (whether cash, cash equivalents, securities
or other property) of the Company which are paid in the form of dividends,
capital distributions, partial

 

2

 

or total liquidating distributions or
otherwise to its security holders other than in the ordinary course of
business; and (viii) any other form of consideration to be paid, including
amounts over normal salaries, severance, salary continuances and executive
retention programs, reimbursement for taxes, payments for non-competition
agreements, confidentiality agreements, consulting agreements, license
agreements and above market rentals.  In
the case of a recapitalization, Total Consideration includes the value of any
capital stock of the Company or rights to acquire capital stock of the Company
(whether or not vested) that roll over or otherwise remain outstanding
following the Sale Transaction.  The
value of all non-cash consideration, other than consideration in the form of notes
or debt, or equity securities, which are of a class which is publicly traded,
shall be the fair market value thereof as mutually agreed by Executive and
Company in writing, or if
Executive and Company are unable to reach an agreement within 30 days after the
closing of the Sale Transaction, as determined by an investment banker or other
person experienced in valuing such non-cash consideration mutually acceptable
to Executive and the Company. The determination of the investment banker or
other person shall be binding on Executive and Company, and Executive and
Company shall each be responsible for paying one-half of the fees of any such
investment banker or other person.

 

7.                                       Sale
Bonus.  The last sentence of the
first Paragraph of Article IV of the Agreement is amended and restated to
read: “The Sale Bonus will be payable to Executive promptly upon consummation
of the Sale Transaction.”

 

8.                                       Severance
Payment.  

 

Paragraph (a) of Article VI of the Agreement
is amended and restated to read: “An amount equal to Executive’s annual base
salary as in effect on the date of termination payable in full on the date of
termination.”

 

Paragraph (b) of Article VI of the Agreement
is amended to read: “Continuation of all health and welfare benefits for
Executive and his/her dependents for a period of 12 months following
termination at the same or comparable levels of coverage, provided, however,
that if such health and welfare benefits are not available from the Company for
any reason, then, on the date that such benefits are no longer available, the
Company shall pay Executive a lump sum sufficient to enable Executive to obtain
equivalent health and welfare benefits from another source.”

 

9.                                       No
Obligation to Fund. Article XI of the Agreement is deleted in its
entirety.

 

10.                                 Release
of Claims Required for Certain Benefits. 
The last sentence of Article XVII of the Agreement is amended and
restated to read: “Executive understands that he/she will not be entitled to
receive any payments until he/she executes and delivers the Separation
Agreement, and the revocation period set forth in the Separation Agreement has
run.”

 

11.                                 Separation
Agreement.  The first sentence of the
first paragraph of Paragraph 9 of the Separation Agreement, which is attached
as Addendum A to the Employment Agreement, is amended to delete the word “insurers”
after the words “past, present, and future” and before the words “representatives,
officers, ...”

 

12.                                 Affirmation.  In all other respects the Employment
Agreement is affirmed.

 

3

 

IN WITNESS WHEREOF,
and intending to be legally bound, the undersigned have caused this Amendment
to Employment Agreement to be executed as of the date first written above.

 

	
  EXECUTIVE

  	
  GARDENBURGER,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
     /s/
  James W. Linford

  	
   

  	
  By:

  	
  /s/ Scott Wallace

  	
   

  
	
  James W. Linford

  	
   

  	
  Scott Wallace

  
	
   

  	
   

  	
  President & Chief Executive Officer

  
					

 

4EXHIBIT 10.8

 

AMENDMENT TO
EMPLOYMENT AGREEMENT

 

This Amendment
to Employment Agreement (this “Amendment”) is made and entered into as of the
24th day of March, 2005, by and between Gardenburger, Inc., an
Oregon Corporation (the “Company”), and Robert T. Trebing, Jr. (the “Executive”).

 

Preliminary Statements:

 

A.                                   The
Company and the Executive are parties to an Employment Agreement, dated as of February 26,
2004, pursuant to which the Executive serves as the Chief Financial Officer of
the Company (the “Employment Agreement”).

 

B.                                     The
parties desire to amend the Employment Agreement as set forth herein.

 

C.                                     Article XIV
of the Employment Agreement provides that the Employment Agreement may be
modified by an agreement in writing between the parties thereto.

 

Agreement:

 

NOW THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Preamble
and Recitals: Defined Terms.  The
preamble and recitals hereinabove set forth are incorporated herein and made a
part hereof.  Except as otherwise
provided herein, capitalized terms used in this Amendment shall have the
meanings ascribed thereto in the Employment Agreement.

 

2.                                       Change
in Control.  Effective as of the date
hereof, the definition of “Change in Control,” as set forth in Article I
of the Employment Agreement, is hereby amended, as follows:

 

(a)                                  By
modifying Paragraph (d) of the definition of Change in Control as follows:
“A complete liquidation or dissolution of the Company or the sale or other
disposition of all or substantially all of the assets of the Company,
including, but not limited to a Sale Transaction, other than to a corporation,
with respect to which following such sale or other disposition, including, but
not limited to a Sale Transaction (A) more than 50% of, respectively, the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such sale or other disposition, including but not limited to a Sale
Transaction, in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding the Company and any Employee benefit plan (or related trust)
of the Company or such corporation and any Person beneficially owning,
immediately prior to

 

 

such sale or other
disposition, including, but not limited to a Sale Transaction, directly or
indirectly, 50% or more of the Outstanding Company Common Stock or Outstanding
Company Voting Securities, as the case may be) beneficially owns, directly or
indirectly, 50% or more of, respectively, the then outstanding shares of common
stock or such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors and (C) at least a majority of the members of the
board of directors of such corporation were members of the Incumbent Board at
the time of the execution of the initial agreement or action of the Board
providing for such sale or other disposition of assets of the Company, including,
but not limited to a Sale Transaction.

 

(b)                                 By
deleting the Paragraph which immediately follows Paragraph (d) of the
definition of Change in Control.

 

3.                                       CIC
Date. The following definition of CIC Date is added after the definition
of  “Change in Control” and before the
definition of “Confidential Information: “The date on which a transaction which
constitutes a Change in Control closes.”

 

4.                                       Good
Reason.  All references to “Employee”
in the definition of “Good Reason” are restated to read “Executive”. The last
sentence of the definition of “Good Reason” is amended and restated to read: “For
this purpose, if Executive is terminated by the Company without Cause before
the CIC Date and such termination is in connection with the Change in Control,
Employee will be deemed to have continued his employment through the date which
is ninety days (90) following the CIC Date.”

 

5.                                       Sale
Transaction. Paragraph (a) of the definition of “Sale Transaction” is
amended and restated as follows: “(a) A sale or other disposition by the
Company of all or substantially all of its assets;”.  The word “or” is inserted (i) after the
end of Paragraph (a) of the definition of Sale Transaction and before the
beginning of Paragraph (b) of the definition of Sale Transaction; and (ii) after
the end of Paragraph (b) of the definition of Sale Transaction and before
the beginning of Paragraph (c) of the definition of Sale Transaction.  Paragraph (d) of the definition of Sale
Transaction shall be deleted in its entirety.

 

6.                                       Total
Consideration.  The definition
of  “Total Consideration” is amended and
restated to read: “The total
consideration paid and to be paid (which shall be deemed to include amounts
paid or to be paid into escrow), directly or indirectly, regardless of how
allocated or the form of consideration, to the Company or its security holders
in connection with a Sale Transaction, including, without limitation:  (i) cash; (ii) notes or debt
(valued at face) or equity securities (which, if of the same class as
securities which are publicly traded, shall be valued at the average of the
last closing market price thereof on each of the five trading days prior to the
closing of the Sale Transaction) and other property; (iii) the value of
assumed, “cashed out” or substituted options, warrants or other rights to
acquire capital stock (whether or not vested); (iv) any interest-bearing
indebtedness, or capital lease obligations of the Company or others assumed by
an acquiring party in an acquisition of assets or which remain outstanding at
the time of the closing of the Sale Transaction in all other cases; (v) payments
to be made in installments or otherwise deferred, including amounts held in
escrow; (vi) contingent payments, related to future earnings or
operations; (vii) any assets (whether cash, cash equivalents, securities
or other property) of the Company which are paid in the form of dividends,
capital distributions, partial

 

2

 

or total liquidating
distributions or otherwise to its security holders other than in the ordinary
course of business; and (viii) any other form of consideration to be paid,
including amounts over normal salaries, severance, salary continuances and
executive retention programs, reimbursement for taxes, payments for
non-competition agreements, confidentiality agreements, consulting agreements,
license agreements and above market rentals. 
In the case of a recapitalization, Total Consideration includes the
value of any capital stock of the Company or rights to acquire capital stock of
the Company (whether or not vested) that roll over or otherwise remain
outstanding following the Sale Transaction. 
The value of all non-cash consideration, other than consideration in the
form of notes or debt, or equity securities, which are of a class which is
publicly traded, shall be the fair market value thereof as mutually agreed by
Executive and Company in writing, or
if Executive and Company are unable to reach an agreement within 30 days after
the closing of the Sale Transaction, as determined by an investment banker or
other person experienced in valuing such non-cash consideration mutually
acceptable to Executive and the Company. The determination of the investment
banker or other person shall be binding on Executive and Company, and Executive
and Company shall each be responsible for paying one-half of the fees of any
such investment banker or other person.

 

7.                                       Sale
Bonus.  The last sentence of the
first Paragraph of Article IV of the Agreement is amended and restated to
read: “The Sale Bonus will be payable to Executive promptly upon consummation
of the Sale Transaction.”

 

8.                                       Severance
Payment.  

 

Paragraph (a) of Article VI of the Agreement
is amended and restated to read: “An amount equal to Executive’s annual base
salary as in effect on the date of termination payable in full on the date of
termination.”

 

Paragraph (b) of Article VI of the Agreement
is amended to read: “Continuation of all health and welfare benefits for
Executive and his/her dependents for a period of 12 months following
termination at the same or comparable levels of coverage, provided, however,
that if such health and welfare benefits are not available from the Company for
any reason, then, on the date that such benefits are no longer available, the Company
shall pay Executive a lump sum sufficient to enable Executive to obtain
equivalent health and welfare benefits from another source.”

 

9.                                       No
Obligation to Fund. Article XI of the Agreement is deleted in its
entirety.

 

10.                                 Release
of Claims Required for Certain Benefits. 
The last sentence of Article XVII of the Agreement is amended and
restated to read: “Executive understands that he/she will not be entitled to
receive any payments until he/she executes and delivers the Separation
Agreement, and the revocation period set forth in the Separation Agreement has
run.”

 

11.                                 Separation
Agreement.  The first sentence of the
first paragraph of Paragraph 9 of the Separation Agreement, which is attached
as Addendum A to the Employment Agreement, is amended to delete the word “insurers”
after the words “past, present, and future” and before the words “representatives,
officers, ...”

 

12.                                 Affirmation.  In all other respects the Employment
Agreement is affirmed.

 

3

 

IN WITNESS
WHEREOF, and intending to be legally bound, the undersigned have caused this
Amendment to Employment Agreement to be executed as of the date first written
above.

 

	
  EXECUTIVE

  	
  GARDENBURGER,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Robert T. Trebing, Jr.

  	
   

  	
  By:

  	
  /s/ Scott Wallace

  	
   

  
	
  Robert T.
  Trebing, Jr.

  	
   

  	
  Scott Wallace

  
	
   

  	
   

  	
  President & Chief Executive Officer

  
					

 

4

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