Document:

Exhibit
10.6

 

SUPPLEMENTAL NONQUALIFIED RETIREMENT AGREEMENT

 

THIS AGREEMENT, made as of this
31st day of March, 2004, between First National Bank of Ottawa (the “Bank”) and
                                   
(the “Director”).  The Bank and the
Director shall be individually referred to as a “Party” and collectively
referred to as the “Parties”

 

WITNESSETH:

 

WHEREAS, the Director is currently a valued
member of the Bank’s board or directors; and

 

WHEREAS, the Bank wishes to induce the
Director’s continued service as a director by supplementing the Director’s
retirement income; and

 

WHEREAS, the Bank desires to adopt and
establish, effective as of March 31, 2004, a non-qualified unfunded
supplemental retirement agreement with the Director with such agreement and
certain other agreements with other employees and directors of the Bank
together constituting the First National Bank of Ottawa Executive Retirement
Plan.

 

NOW, THEREFORE, the Bank and the
Director do hereby adopt and approve this Agreement consisting of the terms and
provisions set forth below:

 

Section 1.                                            Definitions.  A number of terms are defined
throughout this Agreement when the term is first used. In addition, unless the
context clearly indicates otherwise, the following terms shall have the following
meanings:

 

(a)                                  “After-Tax Factor” for a given Plan Year means the
percentage determined by subtracting the Bank’s top marginal income tax rate
for the tax year that ends with or during the Plan Year from one (1).  For example, if the Bank’s top marginal
income tax rate for the Bank’s taxable year ending with or within a given Plan
Year equaled 35%, the After-Tax Factor for such Plan Year would equal 65% (1
minus 35%).

 

(b)                                 “Annual After-Tax Cost of Funds” for a Plan Year
means the product of the Cumulative Costs as of the last day of the Plan Year
multiplied by the Annual After-Tax Cost-of-Funds Rate for the Plan Year.  An example of the computation of the
After-Tax Cost of Funds is attached to this Agreement on Exhibit A.

 

(c)                                  “Annual After-Tax Cost-of-Funds Rate” for a Plan
Year means the product of (i) the Lehman Brothers Aggregate Bond Index yield in
effect on the first day of the Plan Year, multiplied by (ii) the After-Tax
Factor for such Plan Year.

 

(d)                                 “Annual
Benefit Credit” means the annual benefit credit as described in Section 2
below.

 

 

(e)                                  “Annual
Earnings on Bank-Owned Life Insurance” means, with respect to a Plan Year, the
sum of (i) the increases in cash value of the Bank Owned Life Insurance during
such Plan Year in excess of premiums paid for such Plan Year, plus (ii) death
benefits received by the Bank (to the extent not paid to a Director under a
split-dollar plan agreement) from such Bank Owned Life Insurance during the
Plan Year in excess of cash values released at death during such Plan Year.

 

(f)                                    “Bank-Owned
Life Insurance” means the life insurance policies listed on Schedule I.

 

(g)                                 “Benefit Credit Balance” means the sum of (1) plus
(2) minus (3), where (1) is the Director’s Opening Benefit Credit Balance, (2)
is the sum of the Annual Benefit Credits for the current Plan Year and all
previous Plan Years, and (3) is the sum of the Installment Payments paid during
the current Plan Year and all previous Plan Years.

 

(h)                                 “Cause” means: (1) Material failure to perform
duties; or (2) Committing an act of fraud injurious to the Holding Company or
the Bank; or (3) the conviction for or the plea of no contest with respect to a
felony; or (4) the conviction for or the plea of no contest with respect to
crime involving moral turpitude; or (5) Committing an act of personal profit,
and self-dealing, respectively, 
injurious to the Holding Company or the Bank; or (6)  Breach of material provision of this
Agreement.

 

(i)                                     “Cumulative Costs” means with respect to the initial
Plan Year, the difference between (i) the premiums paid under the Bank-Owned
Life Insurance during the initial Plan Year minus (ii) the death benefits
received by the Bank from the Bank-Owned Life Insurance during the initial Plan
Year.

 

Cumulative Costs means, with
respect to each subsequent Plan Year, the sum of (x), (y), and (z) where:

 

(x)                                   is the Cumulative Cost of the prior Plan Year, and

 

(y)                                 is the difference between (i) the premiums paid
under the Bank-Owned Life Insurance during such Plan Year minus (ii) the death
benefits received from the Bank-Owned Life Insurance during such Plan Year, and

 

(z)                                   is the Annual After-Tax Cost of Funds of the prior
Plan Year.

 

An example of the computation of
Cumulative Costs is attached to this Agreement on Exhibit A.

 

(j)                                     “Designated
Beneficiary” means any person or persons (who may be

 

2

 

designated contingently or successively) to
whom payments are to be made under Sections 3(b) or 3(c) and which are so
designated by the Director signing a form provided by the Bank for such
purpose.  A beneficiary designation form
will be effective only after the signed form is filed with the Bank while the
Director is alive and such form will cancel all beneficiary designation forms
signed and filed earlier with the Bank. 
If the Director fails to designate a beneficiary as provided herein, or
if all the designated beneficiaries of the Director die before the Director or
before complete payment of all amounts due hereunder, the Bank shall pay the
unpaid amount to the legal representative or representatives of the estate of
the last to die of the Director and the Designated Beneficiary (or
beneficiaries).

 

(k)                                  “Holding Company” means First Ottawa Bancshares,
Inc. or such successor corporation.

 

(l)                                     “Installment
Payments” means the periodic payments of benefits made under this Agreement to
the Director or to a Designated Beneficiary.

 

(m)                               “Opening
Benefit Credit Balance” means the value, as of the effective date of this
Agreement, of the Director’s accrued benefit under the Director Supplemental
Retirement Plan dated September 26, 2000. 
See Schedule II for a list of Opening Benefit Credit Balances.

 

(n)                                 “Plan
Year” means January 1, through December 31, with the exception of
year 1, which is March 31, through December 31.

 

Section 2.                                            Crediting
of Benefits.    (a) Opening
Benefit Credit Balance.  As of the
effective date of this Agreement, the Director will be credited with his
Opening Benefit Credit Balance.  Upon
execution and delivery of this Agreement, the Director’s benefit, and the Bank’s
liability, under the Director Supplemental Retirement Plan dated September 26,
2000 is extinguished. Any benefits accrued under the Director Supplemental
Retirement Plan dated September 26, 2000 shall become a part of the
benefits payable hereunder, and no further benefits shall be payable under the
Directors Supplemental Retirement Plan.

 

(b)                                 Additional Accruals
Under this Agreement.  As of the last
day of each Plan Year with respect to which the Director is entitled to the
accrual of a benefit under this Agreement, the Bank shall credit to a notional
book reserve account maintained for the Director an amount equal to the
Director’s Annual Benefit Credit for such Plan Year.  The Annual Benefit Credit for a given Plan
Year shall be an amount equal to the difference between  (1) and (2), where:

 

(1)                                  is
the Annual Earnings on Bank-Owned Life Insurance for such Plan Year , and

 

(2)                                  is
the Annual After-Tax Cost-of-Funds for such Plan Year .

 

If the aforementioned calculation results in
a negative number, the Annual Benefit Credit

 

3

 

will be a reduction.

An example of the crediting of benefits is
attached to this Agreement on Exhibit A.

 

The Director’s Benefit Credit Balance shall accumulate
without interest.  The Parties
acknowledge that the notional book reserve account is used solely to measure
the amount that accrues for the Director’s benefit under this Agreement and
that the Bank shall have no duty to set aside assets in such account to cover
its obligations hereunder.  The right of
the Director or any designated beneficiary to receive a distribution under this
Agreement is an unsecured claim against the general assets of the Bank.

 

Any insurance policy or other asset
acquired by the Bank shall be deemed to not be held in trust for the benefit of
the Director nor to be collateral security for the performance of the
obligations of the Bank, but shall remain a general, unpledged and unrestricted
asset of the Bank.   The Director and
designated beneficiaries have the status of general unsecured creditors of the
Bank.  This Agreement constitutes a mere
promise by the Bank to make benefit payments in the future.

 

Section 3.                                            Payment
of Benefits.                                  (a)
Termination of Service. Upon the Director’s termination of service, the
Bank shall pay the Director 120 monthly Installment Payments equal to the
Benefit Credit Balance, as of the Director’s termination date, divided by
120.  Installment Payments will commence
not later than thirty days after the Director terminates service.

 

(b)                                 In the Event of Death Prior to Commencement of
Installment Payments.  If the Director dies while employed by or
serving as a director with respect to the Bank, and prior to the commencement
of any Installment Payments under this Agreement, the Bank shall pay to the
Director’s Designated Beneficiary a lump sum equal to the Benefit Credit
Balance as of his date of death.  The
lump sum will be within thirty days of the Director’s death.  Upon payment of the amounts described in this
subsection, the Bank shall have no further obligation under this Agreement.

 

(c)                                  In the Event of
Death After the Commencement of Installment Payments.  If the Director dies after Installment
Payments have commenced, as described in subsection 3(a), the Bank shall
continue Installment Payments to the Director’s Designated Beneficiary for the
number of months equal to the difference between (a) 120 minus (b) the number
of Installment Payments previously paid to the Director.  Upon payment of the amounts described in this
subsection, the Bank shall have no further obligation under this Agreement.

 

Section 4.                                            Forfeiture
and Change in Control.  (a) Forfeitures.  The Director’s benefits under this Agreement
shall be forfeited upon termination of the Director’s employment or service for
Cause, or upon the Director’s entering into “competition” with the Bank at any
time after his employment is terminated for any reason.  For purposes of this section, “competition”
shall mean the Director’s engaging in any manner, directly or indirectly,
individually, as a stockholder, partner, member, consultant, or agent of any
company or other business organization or otherwise that engages in the
development, marketing, selling or maintenance of any line of business that the
Bank actively conducts (the “Company Business”) in any county in which the
Holding Company,

 

4

 

the Bank or an affiliated entity has an office or facility (the “Noncompete
Area”).

 

Notwithstanding the previous sentence, “competition”
shall not include the Director’s ownership of no more than 2% of the debt or
equity securities of corporations listed on a registered securities exchange
that directly or indirectly engage in the Company Business in the Noncompete
Area.  In addition, the provisions of
this Section 4(a) shall not apply if the Director is terminated after a
Change in Control (as defined in Section 4(c)) for reasons other than
Cause.

 

(b)                                 Establishment of a
Grantor Trust upon a Change in Control. 
Upon a Change in Control, the Bank shall establish a grantor trust which
shall be used exclusively for the funding of benefits under the First National
Bank of Ottawa Executive Retirement Plan and satisfying the claims of general
creditors of the Bank in the event the Bank becomes insolvent.

 

(c)                                  Change in Control.  For purposes of this Agreement, a “Change in
Control” shall mean:

 

(1)                                  Any
“person” (as that term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended), other than (A) a trustee or other fiduciary
holding securities under an employee benefit plan of the Holding Company or (B)
Director or a group of persons including Director, is or becomes the beneficial
owner (as that term is used in Section 13(d) of the Securities Exchange
Act of 1934), directly or indirectly, of 50% or more of the common voting stock
of the Holding Company, the Bank or their successors;

 

(2)                                  There
shall be any consolidation or merger of the Holding Company or the Bank in
which such entity is not the continuing or surviving corporation or as a result
of which the holders of the voting capital stock of the Holding Company or the
Bank (as the case may be) immediately prior to the consummation of the
transaction do not own more than 50% of the voting capital stock of the
surviving corporation; or

 

(3)                                  There
occurs the sale of all or substantially all of the assets of the Holding
Company or the Bank.

 

Section 5.                                            Unfunded
Arrangement.  The Bank’s obligation
to make payments to any person under this Agreement is purely contractual.  Except as provided in section 4(b), the
Parties do not intend that the amounts payable hereunder be held by the Bank in
trust or as a segregated fund for the Director, the Designated Beneficiary, or
other person entitled to payments hereunder. 
Except as provided in section 4(b), the benefits provided under
this Agreement shall be payable solely from the general assets of the
Bank.  Neither the Director nor any other
person entitled to payments hereunder shall have any interest in any assets of
the Bank by virtue of this Agreement. 
The Bank’s obligation under this Agreement shall be merely that of an
unfunded and unsecured promise of the Bank to pay money in the future.  To the extent that this Agreement should be
deemed to be a “pension plan,” the Parties intend that it be unfunded for
federal income tax purposes, as well as for Title I of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”).

 

5

 

Section 6.                                            Administration.  (a) Named Fiduciary and Administrator.  The named fiduciary shall be the Bank.  The named fiduciary shall have the authority
to control and manage the operation and administration of this Agreement.  The administration of this Agreement shall be
under the supervision of a Director, officer or employee of the Bank
(hereinafter referred to as the “Administrator”) designated by the Board of
Directors of the Bank (the “Board”).  It
shall be a principal duty of the Administrator to see that the Agreement is
carried out, in accordance with the terms of the Agreement.

 

(b)                                 Power of the Board
or Designee.  The Board, and any
persons designated to act for the Board shall have such powers as are necessary
to discharge their duties, including but not limited to interpretation and
construction of the Agreement, the determination of all questions of
eligibility, benefits and all other related or incidental matters.  The Board, and any persons designated to act for
the Board shall decide all questions in accordance with the terms of the
controlling legal documents and applicable law and their good faith decision
will be binding on the Bank, the Director, and all other interested parties,
subject to review or correction only when the interpretation or determination
is arbitrary, capricious, contrary to law, or not supported by substantial
evidence.

 

(c)                                  Expenses of Board,
or Designee.  The reasonable expenses
of the Board or the Board’s designee, if any, incurred by such persons in the
performance of their duties under the Agreement, including, without limitation,
reasonable counsel fees and expense of other agents, shall be paid by the Bank.

 

Section 7.                                            Claims
for Benefits.  (a) Any claim for
specific benefits under this Agreement shall be made in writing to the
Administrator. If any claim for benefits under this Agreement is wholly or
partially denied, notice of the decision shall be furnished to the claimant
within a reasonable period of time, not to exceed 90 days after receipt of the
claim by the Administrator, unless special circumstances require an extension
of time for processing the claim.  If
such an extension of time is required, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial 90-day period.  In no event shall such extension exceed the
period of 90 days from the end of such initial period.  The extension notice shall indicate the
special circumstances requiring an extension of time and the date on which the
administrator expects to render a decision.

 

(b)                                 The Administrator
shall provide every claimant who is denied a claim for benefits written notice
setting forth, in a manner calculated to be understood by the claimant, the
following: (1)             specific
reasons for the denial;  (2) specific
reference to pertinent provisions upon which the denial is based;  (3) a description of any additional material
or information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and (4) an explanation
of the Agreement’s claims review procedure as set forth below.

 

(c)                                  The claimant may
appeal the denial of his claim to the named fiduciary for a full and fair
review.  The claimant or his duly
authorized representative may request a review upon written application to the
Administrator, review pertinent documents, and submit issues and

 

6

 

comments in writing.  A claimant
(or his duly authorized representative) shall request a review by filing a
written application for review with the Board or its designee (the “Reviewer”)
at any time within 60 days after receipt by the claimant of written notice of
the denial of his claim.

 

(d)                                 The decision on review
shall be made by the Reviewer, who may, in his discretion, hold a hearing on
the denied claim; the Reviewer shall make his decision promptly, and not later
than 60 days after the Administrator receives the request for review, unless
special circumstances require extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later than 120 days
after receipt of the request for review. 
If such an extension of time for review is required, written notice of
the extension (including the special circumstances requiring the extension of
time) shall be furnished to the claimant prior to the commencement of the
extension. In the event that the decision on review is not furnished within the
time period set forth in this paragraph, the claim shall be deemed denied on
review.

 

The decision on review shall be in
writing and shall include reasons for the decision, written in a manner
calculated to be understood by the claimant, and specific references to the
pertinent provisions in the relevant documents on which the decision is based.

 

Section 8.                                            Amendment and Termination. The Bank reserves the right to amend, terminate or
extend this Agreement at any time. The Bank has established this Agreement with
a bona fide intention and expectation that from year to year it will deem it
advisable to continue it in effect. 
However, the Board of the Bank, in its sole discretion, reserves the
right to terminate this Agreement in its entirety at any time.  However, no such amendment or termination
shall deprive the Director of any benefit that has accrued hereunder prior to
the date of such amendment or termination.

 

Section 9.                                            Miscellaneous.  (a)  Spendthrift
Clause.  To the extent permitted by
law, no benefits payable under this Agreement shall be subject to the claim of
any creditor of the Director (or Designated Beneficiary, if applicable) or to
any legal process by any creditor of any such person.  The Director or Designated Beneficiary, if
applicable, shall have no right to alienate, anticipate, pledge or assign any
benefits under the Agreement.

 

(b)                                 Successors in
Interest.  The Bank will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Bank, to expressly assume and agree to perform the Agreement in the same manner
and to the same extent that the Bank would be required to perform if no
succession had taken place.

 

(c)                                  Rules of Construction.  Section and
subsection headings have been inserted for convenience of reference only
and are to be ignored in any construction of the provisions hereof.  If any provision of this Agreement shall for
any reason be invalid or unenforceable, the remaining provisions shall
nevertheless be valid, enforceable and fully effective.  The Agreement shall be construed,
administered and governed in all respects under and by the law of the State of
Illinois to the extent applicable, and to the extent such laws are not
applicable or superseded, by the law of the United States.

 

7

 

(d)                                 Arbitration.  After exhausting the administrative
procedures contained in Section 7, any dispute or controversy arising
under, or in connection with, the Agreement shall be settled exclusively by
arbitration in accordance with the rules of the American Arbitration
Association then in effect.  Judgment may
be entered on the arbitrator’s award in any court having jurisdiction.

 

(e)                                  No Contract of
Employment.  This Agreement in no way
constitutes a contract of employment between the Bank and the Director and
continued employment of the Director by the Bank is not guaranteed.

 

(f)                                    Survivor
Annuities and QDROs.  Nothing
contained in this Agreement is intended to give or shall give any spouse or
former spouse of the Director or any other person any right to benefits under
this Agreement by virtue of sections 401(a)(11) and 417 of the Internal Revenue
Code of 1986, as amended (the “Code”) (relating to qualified preretirement
survivor annuities and qualified joint and survivor annuities) or Code sections
401(a)(13)(B) and 414(p) (relating to qualified domestic relations orders).

 

(g)                                 Early Benefit
Payments.  Notwithstanding the
preceding provisions of this Agreement, the Bank may make payments before they
would otherwise be due if, based on a change in the federal or applicable state
tax or revenue laws, a published ruling or similar announcement issued by the
Internal Revenue Service, a regulation issued by the Secretary of the Treasury,
or a closing agreement made under Code Section 7121 that is approved by
the Internal Revenue Service and involves the Director, it determines that the
Director has or will recognize income for federal or state income tax purposes
with respect to amounts that are or will be payable under the Agreement before
they otherwise would be paid.  The amount
of any payments pursuant to this Section shall not exceed the amount of
the assessed or determined tax liability.

 

(h)                                 Taxes.              The Bank reserves
the right to withhold all applicable federal, state and local taxes on any
monies paid to the Director under this Agreement.

 

(i)                                     Representations.  This Agreement contains all representations,
written or oral, made by the Bank to the Director regarding the special
retirement benefit.

 

The Bank and the Director, respectively, have
caused these presents to be signed by themselves or their duly authorized
officers as of the day and year first above written.

 

 

	
  FIRST NATIONAL BANK OF OTTAWA

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DIRECTOR

  	
  By:

  	
   

  	
   

  

 

8

 

SCHEDULE I

 

Bank-Owned Life Insurance
Policies

 

Directors
will be allocated 8.889% of the Annual Benefit Credit for a given Plan Year
based on the following BOLI policies:

 

9

 

SCHEDULE II

 

Opening Benefit Credit Balances

 

	
  Director

  	
   

  	
  Opening
  Benefit Credit

  
	
   

  	
   

  	
   

  
	
  Armstrong

  	
   

  	
   

  
	
  Brown

  	
   

  	
   

  
	
  Cantlin

  	
   

  	
   

  
	
  Godfrey

  	
   

  	
   

  
	
  Haeberle

  	
   

  	
   

  
	
  Harris

  	
   

  	
   

  
	
  Schmidt

  	
   

  	
   

  
	
  Rooney

  	
   

  	
   

  
	
  Walsh

  	
   

  	
   

  

 

10

 

EXHIBIT A

 

(1)                                  Examples
of Cumulative Costs

 

If a single premium payment (for the Bank-Owned Life
Insurance) of $500,000 is made by the Bank during the initial Plan Year and the
Annual After-Tax Cost of Funds Rate for the initial Plan Year is 3%, and 2%,
3%, and 4% for Plan Years 2, 3 and 4 respectively, the Cumulative Cost
calculations are as follows:

 

	
  Initial Year

  	
  $500,000 x 1.03
  = $515,000

  
	
  Year 2

  	
  $515,000 x 1.02
  = $525,300

  
	
  Year 3

  	
  $525,300 x 1.03
  = $541,059

  
	
  Year 4

  	
  $541,059 x 1.04
  = $562,701

  

 

Further, assume that in
Year 5 the Bank receives $75,000 in death benefits and the Annual After-Tax
Cost of Funds Rate is 2%. The Cumulative Cost calculation for Year 5 is as
follows:

 

	
  Year 5

  	
  ($562,701 -
  $75,000) x 1.02 = $497,455

  

 

(2)                                  Example
of Annual After-Tax Cost of Funds

 

If the
Cumulative Costs and the Annual After-Tax Cost of Funds are the same as in item
(1) above, the Annual After-Tax Costs of Funds are as follows:

 

	
  Initial Year

  	
  $500,000 x .03 = $15,000

  
	
  Year 2

  	
  $515,000 x .02 = $10,300

  
	
  Year 3

  	
  $525,300 x .03 = $15,759

  
	
  Year 4

  	
  $541,059 x .04 = $21,642

  

 

(3)                                  Examples
of Crediting Benefits

 

If the Annual Earnings on the Bank-Owned Life
Insurance for Plan Year 11 equaled $85,000, the Cumulative Cost in Plan Year 11
was $1,000,000, and the Annual After-Tax Cost-of-Funds Rate for Plan Year 11
was 4%, then the following amount would be credited to the Director’s notional
book reserve account for Plan Year 11:

 

[$85,000  -
($1,000,000  x  .04)] = 
$45,000

 

11EXHIBIT
10.1

 

AMENDMENT TO RETENTION AGREEMENT

 

This Amendment to Retention
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 Scott C. Wallace (the “Executive”).

 

Preliminary
Statements:

 

A.                                   The Company and the Executive are parties to
a Retention Agreement, dated as of January 27, 2005 (the “Retention
Agreement”).

 

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

 

C.                                     Section 5.8 of the Retention Agreement
provides that the Retention Agreement may be modified by an agreement in
writing between the parties thereto.

 

Agreement:

 

NOW THEREFORE, effective as
of the date hereof, 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 Retention Agreement.

 

2.                                       Third “Whereas” Clause.  The
third “Whereas” clause of the Retention Agreement is hereby amended and
restated in its entirety to read as follows: “WHEREAS, in addition to the
benefits that the Executive may be entitled to receive under the Employment
Agreement between the Company and the Executive, the Company desires to
establish an incentive for the Executive to continue to be employed by the
company through and following a Change in Control (as defined in Section 2.4)
or a Going Private Transaction (as defined in Section 2.6).

 

3.                                       Bonus Amount and Conditions.  Section 1.1(b) of
the Retention Agreement is hereby amended and restated in its entirety to read
as follows: “promptly, upon request of the Company, executes and delivers a
release of claims against the Company, which release shall be in the same form
as Paragraph 9 to the Separation Agreement attached to the Employment Agreement
between Executive and Company.”

 

4.                                       Certain Limitations. A new Section 4.4 of the Retention
Agreement is added which reads: “Notwithstanding anything to the contrary in
this Agreement, the limitations contained in Section 4.1 and 4.2 of this
Agreement on the payment of monies to which Executive is entitled to receive
under this Agreement shall  not apply if
the triggering event that entitles Executive to receive monies under this
Agreement is a Sale Transaction, as defined in the Employment Agreement between
the Company and the Executive.”

 

 

5.                                       Change in Control.  Section 2.4
of the Retention Agreement is hereby amended and restated in its entirety to
read as follows:

 

“Change in Control” shall have the meaning
set forth in Article I of the Employment Agreement, as amended.”

 

6.                                       Bankruptcy Limitation.  Section 4.3
of the Retention Agreement is hereby deleted in its entirety.

 

7.                                       Affirmation.  In all other respects the
Retention Agreement is affirmed.

 

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

 

	
  EXECUTIVE

  	
   

  	
  GARDENBURGER, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
          /s/ Scott C. Wallace

  	
   

  	
  By:

  	
   

  	
  /s/ Robert T. Trebing, Jr.

  
	
  Scott C. Wallace

  	
   

  	
   

  	
   

  	
  Robert T. Trebing, Jr.

  Chief Financial Officer

  

 

2

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