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                                                                    Exhibit 10.6

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective as of January 2, 2002, by and between Maxim Pharmaceuticals, Inc.,
(the "Company"), and Philippe G. Prokocimer ("Executive"). The Company and
Executive are hereinafter collectively referred to as the "Parties," and
individually referred to as a "Party."

                                    RECITALS

         A.       The Company desires assurance of the association and services
of Executive in order to retain Executive's experience, skills, abilities,
background and knowledge, and is willing to engage Executive's services on the
terms and conditions set forth in this Agreement.

         B.       Executive desires to be in the employ of the Company, and is
willing to accept such employment on the terms and conditions set forth in this
Agreement.

                                    AGREEMENT

         In consideration of the foregoing recitals and the mutual promises and
covenants herein contained, and for other good and valuable consideration, the
Parties, intending to be legally bound, agree as follows:

1.       EMPLOYMENT.

         1.1      The Company hereby employs Executive, and Executive hereby
accepts continued employment by the Company, upon the terms and conditions set
forth in this Agreement, effective as of the date first set forth above
("Commencement Date"). This Agreement shall continue in effect until terminated
pursuant to Section 5 below.

         1.2      Executive shall be the Vice-President, Drug Development of the
Company (or a position of at least comparable status) and shall serve in such
other capacity or capacities as the Chief Executive Officer and/or the Company's
Board of Directors ("Board") may from time to time prescribe.

         1.3      Executive shall do and perform all services, acts or things
necessary or advisable to manage and conduct the business of the Company and
which are normally associated with the position Vice-President, Drug
Development, consistent with the Bylaws of the Company, as well as its general
employment policies and practices, including, but not limited to the global
development and regulatory approval activities for Maxim's pharmaceutical
products. However, at all times during his employment Executive shall be subject
to the direction and policies from time to time established by the Board and/or
the Chief Executive Officer.

         1.4      Unless the Parties otherwise agree in writing, during the term
of this Agreement, Executive shall perform the services he is required to
perform pursuant to this Agreement at the Company's offices, located at 8899
University Center Lane, Suite 400 or at any other place at which the Company
maintains an office; provided, however, that the Company may from time to time
require Executive to travel temporarily to other locations in connection with
the Company's business.

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2.       LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.

         2.1      During his employment by the Company, Executive shall devote
his full business energies, interest, abilities and productive time to the
proper and efficient performance of his duties under this Agreement.

         2.2      During the term of this Agreement, Executive shall not engage
in competition with the Company, either directly or indirectly, in any manner or
capacity, as adviser, principal, agent, partner, officer, director, employee,
member of any association or otherwise, in any phase of the business of
developing, manufacturing and marketing of products which are in the same field
of use or which otherwise compete with the products or proposed products of the
Company.

         2.3      Ownership by Executive, as a passive investment, of less than
one percent (1%) of the outstanding shares of capital stock of any corporation
with one or more classes of its capital stock listed on a national securities
exchange or publicly traded in the over-the-counter market shall not constitute
a breach of this paragraph.

3.       COMPENSATION OF EXECUTIVE.

         3.1      While employed by the Company, as compensation for proper and
satisfactory performance of all duties to be performed hereunder, the Company
shall pay Executive an annual base salary of Two Hundred Eighty Thousand
Dollars, $280,000 per year (the "Base Salary"), payable in regular periodic
payments in accordance with Company policy. Such salary shall be prorated for
any partial year of employment on the basis of a 365-day fiscal year. In
addition, Executive will be eligible for an incentive bonus of up to 20% of base
salary, based upon defined milestone, during the agreement period.

         3.2      Executive's compensation may be changed from time to time by
mutual agreement of Executive and the Board.

         3.3      All of Executive's compensation shall be subject to customary
withholding taxes and any other employment taxes as are commonly required to be
collected or withheld by the Company.

         3.4      Executive shall be entitled to vacation and illness days
consistent with the Company's standard practice for its employees generally.

         3.5      Executive shall, at the discretion of the Board, be entitled
to participate in the benefits for which he is eligible under the terms and
conditions of the standard Company benefits which may be in effect from time to
time and provided by the Company.

4.       EXPENSE REIMBURSEMENT.

         4.1      Executive shall be entitled to receive prompt reimbursement of
all reasonable business and travel expenses incurred by Executive in connection
with the business of the Company. Such expenses must be properly accounted for
under the policies and procedures established by the Company.

5.       TERMINATION.

         5.1      The Company may terminate Executive's employment under this
Agreement "for cause" by delivery of written notice to Executive specifying the
cause or causes relied upon for such termination. If Executive's employment
under this Agreement is terminated by the Company for cause under this section,
Executive shall be entitled to receive only accrued Base Salary and other
accrued benefits required by law, prorated to the date of termination. Executive
will not be entitled to severance pay, pay in lieu of notice or any other such
compensation. Grounds for the Company to terminate this Agreement "for cause"
shall be limited to the occurrence of any of the following events:

                  5.1.1    If Executive is in material breach of any provision
of this Agreement;

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                  5.1.2    Executive's engaging or in any manner participating
in any activity which is competitive with or intentionally injurious to the
Company or which violates any provision of Section 7 of this Agreement;

                  5.1.3    Executive's commission of any fraud against the
Company or use or appropriation for his personal use or benefit of any funds or
properties of the Company not authorized by the Board to be so used or
appropriated;

                  5.1.4    Executive's conviction of any crime involving
dishonesty or moral turpitude;

                  5.1.5    Conduct by Executive which in good faith and
reasonable determination of the Board demonstrates gross unfitness to serve.

         Any notice of termination given pursuant to this Section 5.1 shall
effect termination as of the date specified in such notice or, in the event no
such date is specified, on the last day of the month in which such notice is
delivered or deemed delivered as provided in Section 9 below.

         5.2      The Company may terminate the Executive's employment at any
time without cause upon delivery of written notice to the Executive. Any notice
of termination given pursuant to this Section 5.2 shall effect termination as of
the date specified in such notice or, in the event no such date is specified, on
the last day of the month in which such notice is delivered or deemed delivered
as provided in Section 9 below. If such termination shall occur under this
Section 5.2, then in lieu of all other remedies and as liquidated damages,
Executive shall be entitled to continuation of Base Salary and health benefits
for a period of six (6) months from said date of termination with such Base
Salary continuation to be at the rate set forth in Section 3.1 or, if greater,
at the rate of Executive's then current compensation in effect as of the date of
termination.

         5.3      The parties may mutually agree at any time to terminate this
Agreement upon such terms and conditions as may be agreed upon in writing.

         5.4      This Agreement shall terminate without notice upon the date of
Executive's death or the date when Executive becomes "completely disabled" as
that term is defined in Section 6.2

         5.5      Notwithstanding any provision to the contrary herein, unless
otherwise provided herein or unless otherwise provided by law, Executive may at
any time terminate his employment with the Company hereunder. In such event, the
Company shall not be liable to Executive for the payment of any amount other
than accrued Base Salary and other accrued benefits required by law, prorated to
the date of termination. Executive will not be entitled to severance pay, pay in
lieu of notice or any other such compensation.

6.       DEATH OR DISABILITY DURING TERM OF EMPLOYMENT.

         6.1      Upon termination of Executive's employment pursuant to Section
5.4, Executive or his estate or personal representative, as the case may be,
shall be entitled to receive Executive's Base Salary and benefits for a period
of one month following the date of death or the date when Executive becomes
completely disabled.

         6.2      The term "completely disabled" as used in this Agreement shall
mean the inability of Executive to perform the essential functions of his
position under this Agreement by reason of any incapacity, physical or mental,
which the Board of the Company, based upon medical advice or an opinion provided
by a licensed physician acceptable to the Board of the Company and approved by
the Executive, which approval shall not be unreasonably withheld, determines to
have incapacitated Executive from satisfactorily performing any or all essential
functions of his position for the Company during the foreseeable future. Based
upon such medical advice or opinion, the determination of the Board of the
Company shall be final and binding and the date such determination is made shall
be the date of such complete disability for purposes of this Agreement.

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7.       CONFIDENTIAL INFORMATION; NONSOLICITATION.

         7.1      Executive recognizes that his employment with the Company will
involve contact with information of substantial value to the Company, which is
not generally known in the trade, and which gives the Company an advantage over
its competitors who do not know or use it, including but not limited to,
techniques, designs, drawings, processes, inventions, developments, equipment,
prototypes, sales and customer information, and business and financial
information relating to the business, products, practices and techniques of the
Company (hereinafter referred to as "Confidential Information"). Executive will
at all times regard and preserve as confidential such Confidential Information
obtained by Executive from whatever source and will not, either during his
employment with the Company or thereafter, publish or disclose any part of such
Confidential Information in any manner at any time, or use the same except on
behalf of the Company, without the prior written consent of the Company. As a
condition of this Agreement, Executive will sign and return a copy of the
Company's "Proprietary Information and Inventions Agreement," attached as
Exhibit A.

         7.2      While employed by the Company and for one (1) year thereafter,
the Executive agrees that in order to protect the Company's confidential and
proprietary information from unauthorized use, that Executive will not, either
directly or through others, solicit or attempt to solicit any employee,
consultant or independent contractor of the Company to terminate his or her
relationship with the Company in order to become an employee, consultant or
independent contractor to or for any other person or business entity; or the
business of any customer, vendor or distributor of the Company which, at the
time of termination or one (1) year immediately prior thereto, was listed on
Company's customer, vendor or distributor list.

8.       ASSIGNMENT AND BINDING EFFECT.

         8.1      This Agreement shall be binding upon and inure to the benefit
of Executive and Executive's heirs, executors, personal representatives,
assigns, administrators and legal representatives. Because of the unique and
personal nature of Executive's duties under this Agreement, neither this
Agreement nor any rights or obligations under this Agreement shall be assignable
by Executive. This Agreement shall be binding upon and inure to the benefit of
the Company and its successors, assigns and legal representatives.

9.       NOTICES.

         9.1      All notices or demands of any kind required or permitted to be
given by the Company or Executive under this Agreement shall be given in writing
and shall be personally delivered (and receipted for) or mailed by certified
mail, return receipt requested, postage prepaid, addressed as follows:

                  9.1.1             If to the Company:

                                    LARRY STAMBAUGH
                                    MAXIM PHARMACEUTICALS, INC.
                                    8899 UNIVERSITY CENTER LANE
                                    SUITE 400
                                    SAN DIEGO, CA  92122

                  9.1.2             If to Executive:

                                    PHILIPPE PROKOCIMER
                                    MAXIM PHARMACEUTICALS, INC.
                                    8899 UNIVERSITY CENTER LANE
                                    SUITE 400
                                    SAN DIEGO, CA  92122

                                       4
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Any such written notice shall be deemed received when personally delivered or
three (3) days after its deposit in the United States mail as specified above.
Either Party may change its address for notices by giving notice to the other
Party in the manner specified in this section.

10.      CHOICE OF LAW.

         10.1     This Agreement is made in San Diego, California. This
Agreement shall be construed and interpreted in accordance with the laws of the
State of California.

11.      INTEGRATION.

         11.1     This Agreement contains the complete, final and exclusive
agreement of the Parties relating to the subject matter of this Agreement, and
supersedes all prior oral and written employment agreements or arrangements
between the Parties.

12.      AMENDMENT.

         12.1     This Agreement cannot be amended or modified except by a
written agreement signed by Executive and the Company.

13.      WAIVER.

         13.1     No term, covenant or condition of this Agreement or any breach
thereof shall be deemed waived, except with the written consent of the Party
against whom the wavier in claimed, and any waiver or any such term, covenant,
condition or breach shall not be deemed to be a waiver of any preceding or
succeeding breach of the same or any other term, covenant, condition or breach.

14.      SEVERABILITY.

         14.1     The finding by a court of competent jurisdiction of the
unenforceability, invalidity or illegality of any provision of this Agreement
shall not render any other provision of this Agreement unenforceable, invalid or
illegal. Such court shall have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or provision
which most accurately represents the parties' intention with respect to the
invalid or unenforceable term or provision.

15.      INTERPRETATION; CONSTRUCTION.

         15.1     The headings set forth in this Agreement are for convenience
of reference only and shall not be used in interpreting this Agreement. This
Agreement has been drafted by legal counsel representing the Company, but
Executive has been encouraged, and has consulted with, his own independent
counsel and tax advisors with respect to the terms of this Agreement. The
Parties acknowledge that each Party and its counsel has reviewed and revised, or
had an opportunity to review and revise, this Agreement, and the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

16.      REPRESENTATIONS AND WARRANTIES.

         16.1     Executive represents and warrants that he is not restricted or
prohibited, contractually or otherwise, from entering into and performing each
of the terms and covenants contained in this Agreement, and that his execution
and performance of this Agreement will not violate or breach any other
agreements between Executive and any other person or entity.

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17.      COUNTERPARTS.

         17.1     This Agreement may be executed in two counterparts, each of
which shall be deemed an original, all of which together shall contribute one
and the same instrument.

         IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.

                                      The Company:

                                      MAXIM PHARMACEUTICALS, INC.

                                       /s/ Larry G. Stambaugh
                                      ------------------------------------------
                                      Larry G. Stambaugh
                                      Chairman of the Board, President and Chief
                                      Executive Officer

                                      EXECUTIVE:

                                       /s/ Philippe G. Prokocimer
                                      ------------------------------------------
                                      Philippe G. Prokocimer

                                       6Prepared by MERRILL CORPORATION

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EXHIBIT 10.1    
  

 
 

EMPLOYMENT AGREEMENT    
  

        This Agreement (this "Agreement") is made and entered into as of this 25th day of March, 1997 by and between Wholesome & Hearty
Foods, Inc., an Oregon corporation (the "Employer" or "WHFI"), and James W. Linford (the "Employee"). In consideration of the promises and mutual covenants herein contained, the parties agree
as follows: 

 
 

AGREEMENT    
  

        1.    Engagement.    Employer hereby agrees to employ Employee and Employee hereby agrees to be employed in the
capacity of Vice President of Supply Chain for the terms and on the conditions stated herein. 

        2.    At-Will Employment.    Employee's employment with Employer shall commence on March 14, 1997.
The Employer and the Employee both hereby acknowledge and agree that the employment created pursuant to this Agreement is an at-will relationship and that, subject to the terms and
provisions hereof, either party may terminate the relationship with or without cause, at any time during the course of the Employee's employment hereunder. 

        3.    Duties.    

        (a)  Employee
shall be employed initially as Vice President Supply Chain on a full-time basis. As Vice President Supply Chain, Employee shall perform at all
times, faithfully, industriously, and to the best of
her/his ability, all duties and functions consistent with the office of Vice President Supply Chain as she/he may be called upon to perform by Employer's President (hereinafter "President") or
designee. Employee also agrees to abide by any general employment guidelines or policies adopted by Employer as they may be implemented and/or amended from time to time. 

        (b)  During
the term of Employee's employment under this Agreement, Employee may engage in other business activities or on a volunteer basis in religious, charitable or other
community activities, provided that Employee provides advance notification to the President of each such activity and that such activities do not negatively reflect on Employer or impair or otherwise
negatively affect Employee's ability to fulfill her/his duties under this Agreement. If Employee engages in any such business, religions, charitable or other community activity that in the
determination of the President reflects negatively on Employer or impairs or otherwise negatively affects Employee's ability to fulfill her/his duties under this Agreement, Employee shall immediately
cease participating in such activity at the request of the President or the President's designee. 

        4.    Compensation.    

        (a)  As
compensation for the services to be rendered by the Employee to Employer pursuant to this Agreement, Employer hereby agrees to pay the Employee an annual gross salary
of $135,000 (hereinafter "Gross Salary"), minus lawful withholdings, payable according to Employer's normal payroll practices and schedule. 

        5.    Employee Benefits.

        (a)  If
eligible, the Employee shall be entitled to receive the Company's standard employee benefits, including, if provided, medical, dental, and disability insurance and
paid sick leave and vacation according to the terms provided by Employer. Employee will accrue vacation time at the rate of three weeks per year for the first two years of employment. Such benefits
may be amended or discontinued by Employer at any time. Employee will be eligible to begin participating in the Company's health insurance on or about April 1, 1997 and will be eligible to
participate in the 

1

 

Company's qualified retirement plans in accordance with the eligibility and participation rules contained therein. 

        6.    Incentive Stock Options.    The Company will grant Employee the following options under the Company's 1992 First
Amended and Restated Combination Stock Option Plan (the "Plan"). 

        Pending
approval from the Board of Directors' Compensation Committee, an incentive stock option to purchase 50,000 shares of the Company's common stock. Exercise price will equal the
fair market value
(as defined in the Plan) of the stock on the day approval of the Board of Directors is granted. This incentive stock option shall vest and become exercisable by Employee as to Twenty percent (20%) of
the option shares on the date of grant, and shall thereafter vest and become exercisable as to Twenty percent (20%) of the option shares on each subsequent anniversary of the date of grant. The terms
and conditions of such incentive stock option are set forth in the Incentive Stock Option Agreement attached as Exhibit A, which the parties shall execute contemporaneously with the execution
of this Agreement. 

        7.    Termination.    This Agreement may only be terminated upon the occurrence of one or more of the following
events: 

        (a)  Death. This Agreement shall terminate upon the death of the Employee. 

        (b)  Disability. This Agreement shall terminate five (5) days after Employer delivers notice to the Employee (or
his/her personal representative) or Employee delivers notice to Employer that the Employee is suffering from a disability that renders her/him unable to perform the essential functions of his/her
employment hereunder with or without reasonable accommodations. 

        (c)  At-Will. This Agreement may be terminated without cause by either party hereto by delivering to the other
party a Notice of Intent to Terminate at least fourteen (14) days prior to such termination (hereinafter "Notice Period"). Failure by the Employee to provide at least fourteen days' prior
written notice of her/his intent to terminate shall result in forfeiture by the Employee of any and all accrued and unpaid benefits which would otherwise be payable upon termination of this Agreement.
Upon providing notice to the Employee, Employer shall have the option of relieving the Employee of all duties throughout the Notice Period. 

        (d)  For Cause. This Agreement may be terminated by Employer immediately for Cause. For purposes of this Agreement,
termination for "Cause" shall mean a termination due to (a) Employee's conviction of a felony; (b) objective evidence of dishonesty by Employee related to his or her employment;
(c) Employee's use of illegal drugs, or use of lawful drugs or alcohol in a manner violative of Employer's written policies; (d) objective evidence of Employee's wrongful discrimination
against or harassment of another person;1
(e) gross insubordination or gross dereliction of duty by Employee (i.e. egregious conduct such as repeated refusal to follow direct orders of Employer or refusal to perform minimum duties
after repeated warning); or (f) Employee's diversion of any corporate opportunity or other similarly serious conflict of interest inuring to the Employee's direct or indirect benefit and the
company's detriment. 

	1
	Sworn
statements shall satisfy this requirement of objective evidence. 

        8.    Non-Competition.    As a condition of his/her employment, Employee hereby agrees that, during the
term of this Agreement and for a period of one year following the termination of Employee's employment with the Company, without Employer's prior written consent, Employee shall not, directly or
indirectly, own, have any interest in, act as an officer, director, agent, employee or consultant of, or assist in any way or in any capacity any person, firm, association, partnership, corporation or
other entity which is a creator, manufacturer, distributor, seller or provider of non-meat or vegetarian food products or otherwise engaged in a business that is substantially similar to
Employer (a "Competitive Entity") in any geographical area where Employer engages in such business. The restrictions of this 

2

 

section prohibiting ownership in a Competitive Entity shall not apply to Employee's ownership of less than five percent (5%) of publicly-traded securities of any Competitive Entity. 

        While
the Employee and Employer acknowledge that the restrictions contained in this section are reasonable, in the unlikely event that any court should determine that any of the
restrictive covenants contained in this section, or any part thereof, is unenforceable because of the duration of such provision, the area covered thereby or any other basis, such court shall have the
power to reduce the duration or area of such provision or otherwise amend it and, in its reduced form, such provision shall then be enforceable and shall be enforced. 

        9.    Definition of Confidential Information.    As used in this Agreement, the term "Confidential Information" means
(i) all trade secrets and proprietary information of WHFI; (ii) all information marked or designated by WHFI as confidential; (iii) all information, whether or not in written form
and whether or not designated as confidential, which is known to Employee as being treated by WHFI as confidential; and (iv) all information provided to WHFI by third parties which WHFI is
obligated to keep confidential. Confidential Information includes, but is not limited to, all inventions, improvements, devices, compositions, formulae, discoveries, ideas, designs, drawings,
specifications, techniques, models, data, programs, documentation, processes, know-how, customer names and lists, marketing, product development and other business plans and financial,
scientific and technical information. 

        10.    Ownership.    Employee acknowledges and agrees that all Confidential Information is and shall continue to be
the exclusive and permanent property of WHFI, whether or not prepared in whole or in part by Employee, and whether or not disclosed or entrusted to Employee in connection with his/her work for WHFI. 

        11.    Acknowledgment of Receipt of Confidential Information.    Employee acknowledges that in the course of
performing his/her duties for WHFI, he/she will have access to Confidential Information, the ownership and confidential status of which are highly important to WHFI, and he/she agrees, in addition to
the specific covenants contained in this Agreement, to comply with all of WHFI policies and procedures for the protection of such Confidential Information. 

        12.    Covenant of Non-Disclosure.    Employee agrees that he/she will not, during the period of his/her
employment with WHFI or thereafter, reveal, communicate or disclose any Confidential Information, directly or indirectly, under any circumstances or by any means, to any third person without the prior
express written consent of WHFI. 

        13.    Covenant of Non-Use.    Employee agrees that he/she will not, during the period of his/her
employment with WHFI or thereafter, directly or indirectly, copy, transmit, reproduce, summarize, quote or make any commercial or other use whatsoever of any Confidential Information, except as may be
necessary to perform his/her duties for WHFI. 

        14.    Safeguard of Confidential Information.    Employee agrees to exercise the highest degree of care in
safeguarding Confidential Information against loss, theft, or to her inadvertent disclosure, and agrees generally to take all steps necessary to ensure the maintenance of confidentiality. 

        15.    Return of Confidential Information.    Employee agrees, upon termination of his/her employment by WHFI, or
otherwise as requested, to promptly deliver to WHFI all Confidential Information, in whatever form, that may be in his/her possession or under his/her control, together with my written certification
of compliance. 

        16.    Inventions.    

        (a)  Disclosure. Employee will promptly disclose in writing to the President of WHFI, or his or her designee, and to no other
person or entity, all inventions, improvements, discoveries, devices, compositions, trade secrets, formulae, techniques, processes, know-how, computer programs and ideas, and all
information or data related thereto, made, conceived, or first reduced to practice by Employee, 

3

 

alone or in conjunction with others, while in the employment of WHFI if resulting from or suggested by such employment or related to fields of interest of WHFI (whether or not patentable; whether or
not made or conceived at the request of or upon the suggestion of WHFI, during or out of Employee's usual hours of work, in or about the premises of WHFI or elsewhere, or with or without the use of
any of WHFI's equipment, supplies, facilities or Confidential Information; and whether made or conceived prior to or subsequent to the execution hereof) and also those inventions made, conceived or
first reduced to practice by Employee within one year after the termination of his/her employment if
resulting from or suggested by such employment or related to fields of interest of WHFI (all of the foregoing hereinafter collectively referred to as "inventions"). 

        (b)  Assignment. All Inventions which Employee is required to disclose to WHFI pursuant to Section 16(a) above shall be
the sole and exclusive property of WHFI and are hereby assigned to WHFI by Employee without compensation in addition to or separate from that regularly paid to Employee as compensation for Employee's
employment, provided that this Section 16(b) shall not apply to any invention during the development of which no equipment, supplies, facilities, personnel, Confidential Information or other
resources of WHFI was used and which was developed entirely on Employee's own time, unless (i) such invention relates in any way to the present or prospective business, products, research, or
development of WHFI, or any subsidiary or affiliate thereof, or (ii) such invention in any way results from or is suggested by any work Employee performs for or on behalf of WHFI, or any
subsidiary or affiliate thereof. 

        (c)  Cooperation. At the request of WHFI and at its sole expense, both during and after Employee's employment with WHFI,
Employee will (i) assist WHFI, or its designee, to obtain the grant of patents or other pertinent legal protection in the United States and/or in any other country or countries designated by
WHFI, covering inventions belonging to WHFI under Section 16(b) above; (ii) cooperate with WHFI in maintaining, prosecuting, protecting and enforcing such patents or other pertinent
legal protections; and (iii) in connection therewith, execute such applications, statements or other documents, furnish such information and data and take such other actions (including without
limitation the giving of testimony) as WHFI may from time to time reasonably request. In addition, Employee will execute all documents necessary to vest in WHFI all right, title and interest to such
inventions, and to such patents or other pertinent legal protections. If Employee shall be required to devote Employee's time after termination of Employee's employment, then the amount of time the
Employee shall be required to devote to WHFI shall be such that the amount of time will not interfere with Employee's other employment at that time and shall not exceed ten hours per month. 

        (d)  Excluded Inventions. A complete list of all inventions, patented or unpatented, which Employee has made or conceived
prior to his/her employment with WHFI and with respect to which Employee claims patent, trade secret or other proprietary rights, is attached hereto as Exhibit B. 

        17.    Work Made for Hire.    Employee agrees that all creative work, including without limitation computer programs
or models, prepared or originated by Employee, in whole or in part, for WHFI, or during or within the scope of Employee's employment by WHFI, which may be subject to protection under federal copyright
law, constitutes "work made for hire," all rights to which are owned by WHFI; and, in any event, Employee assigns to WHFI all rights, title, and interest, whether by way of copyright, trade secret, or
otherwise, in all such work, whether or not subject to protection by copyright laws. Employee also agrees to cooperate with WHFI and perform such other acts as may be required by Section 16(c)
above with respect to such work in the same manner and to the same extent as required with respect to inventions under Section 16(a). Employee hereby waives any and all rights he/she may have
to claim authorship of, or to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, any such work. 

        18.    Personal Property of WHFI.    Employee agrees that all memoranda, notes, records, correspondence, papers,
customer lists, plans, designs, drawings, specifications, video tapes, audio tapes, 

4

 

computer disks and tapes, and other written or otherwise recorded material, and all copies thereof, relating directly or indirectly in any way to WHFI or its operations or business, some of which may
be prepared by him/her, and all objects associated therewith (such as models and samples), which have come into Employee's possession or control at any time and in any way shall be WHFI's property.
Employee will not, except for WHFI's use, make or cause to be made any copies, duplicates, facsimiles or other reproductions, or any abstracts or summaries, of any of the aforementioned materials or
objects, or remove any such materials or objects, from WHFI's facilities, or use any information concerning them, except for WHFI's benefit, either during Employee's employment with WHFI or
thereafter. Employee agrees to deliver all of the aforementioned materials and objects that may be in his/her possession or under his/her control to WHFI on termination of his/her employment, or at
any other time on WHFI's request, together with his/her written certification of compliance. 

        19.    Acknowledgement of Irreparable Harm.    Employee acknowledges that the Confidential Information that he/she
will obtain as a result of his/her employment by WHFI is special and unique to WHFI and that the disclosure of any Confidential Information or the breach of the Non-Competition covenant
set forth in paragraph 8 will result in irreparable and continuing harm to WHFI for which there will be no adequate remedy at law. 

        20.    Remedies.    Employee agrees, in the event he/she fails to abide by paragraphs 8-19 of this
Agreement, that WHFI shall be entitled to specific performance, including immediate issuance of a temporary restraining order and/or preliminary or permanent injunctive relief enforcing this
Agreement, without the necessity of proof of actual damages and without posting bond for such relief, and to judgment for damages caused by Employee's breach, and to any other remedies provided by
applicable law. In the event any of the terms or conditions of this Agreement are found unreasonable by a court of competent jurisdiction, Employee agrees to accept as binding in lieu thereof, any
such lesser restrictions which said court may deem reasonable. 

        21.    Subpoenas.    If Employee is served with any subpoena or other compulsory judicial or administrative process
calling for production of Confidential Information, Employee will immediately notify WHFI in order that it may take such action as it deems necessary to protect its interests. 

        22.    Prior Employment.    Employee understands that WHFI is not employing him/her to obtain any information which is
the property of any previous employers or any other person or entity for whom Employee has performed services. Employee also understands that WHFI expects that the product of any services performed by
Employee in the course of his/her employment, or knowledge or information, such as trade secrets, trade lists, plans, designs, drawings, devices, machinery, engineering and scientific developments, or
other Confidential Information, developed in the course of or as a result of his/her employment, will be the property of WHFI in accordance with the terms of this Agreement. Accordingly, Employee
warrants and represents to WHFI that (i) he/she will not, in performing services for WHFI, make use of information which is the property of and/or confidential to any previous employer or other
person or entity for whim he/she has performed services; (ii) a complete
list of all prior employment, confidentiality or other agreements which may impose restrictions on his/her activities is attached hereto as Exhibit C, true and correct copies of which have been
provided to WHFI; and (iii) Employee is not currently subject to any restriction which would prevent him/her from carrying out his/her duties for WHFI. 

        23.    Miscellaneous Provisions.    

        (a)  Notification of Other Employment. In order to allow WHFI to evaluate risks to its Confidential Information and to take
steps, if necessary, to protect its exclusive ownership rights to Confidential Information and the inventions and other works assigned to WHFI hereunder, Employee agrees to notify WHFI, prior to
accepting any employment with any third party, whether as an employee or independent contractor, and prior to commencing any business relating to the subject matter of the Confidential Information. 

5

 

        (b)  Confidentiality. Employee agrees to keep the terms of this Agreement, specifically including without limitation, the
amount of the severance pay, and the fact that he/she may receive or has received severance pay, strictly confidential. Employee may disclose the terms of this Agreement to his or her spouse and
immediate family. He or she may also disclose the terms of this Agreement to his/her accountant, attorney, and taxing or other governmental authorities only as may be necessary for his or her
financial affairs or as required by law. 

        (c)  Non-disparagement. Except as necessary to perform his or her job duties, Employee shall not make any
derogatory remarks of any nature whatsoever about Employer or its products either publicly or privately, unless required by law during and after his or her employment with the Company. 

        (d)  Entire Agreement. This document is the entire, final and complete agreement and understanding of the parties regarding
the subject matter hereof and supersedes and replaces all previous agreements, communications and understandings, either written or oral, between the parties or their representatives with respect to
such subject matter. 

        (e)  Waiver. A waiver of any provision of this Agreement shall not be deemed, or shall not constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the parties making the waiver. 

        (f)    Binding Effect. All rights, remedies, and liabilities herein given to or imposed upon the parties shall extend to, inure
to the benefit of, and bind, as the circumstances may require, the parties or their representative heirs, personal representatives, administrators, successors and assigns. 

        (g)  Amendments. No supplement, modification, or amendment of this Agreement shall be valid, unless the same is in writing and
signed by all parties thereto. 

        (h)  Severability. In the event any provision or portion of this Agreement is held to be unenforceable or invalid by any court
of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect and shall in no way be affected or invalidated thereby. 

        (i)    Attorneys' Fees. If litigation or other formal proceeding is commenced by either party to enforce any provision of this
Agreement, or by reason of any breach of this Agreement, the prevailing party shall be entitled to recover reasonable costs and attorneys' fees, both at trial and on appeal. 

        (j)    Governing Law. This Agreement shall be deemed to have been executed and entered into in Portland, Oregon and shall be
governed, construed, performed and enforced in accordance with the laws of the State of Oregon, without regard to its conflict of law principles. 

        (k)  Acknowledgement. The parties have read this Agreement, fully understand the terms and conditions set forth herein, and
accept and sign the same as their own free act. 

        IN
WITNESS THEREOF, the parties have executed this Agreement on the respective dates set forth below, retroactively effective as of March 14, 1997. 

	
EMPLOYER:

Name: /s/ James W. Linford
Date: 5/2/97
	
 	
EMPLOYEE:

WHOLESOME & HEARTY FOODS,

INC., an Oregon corporation

Name: /s/ Lyle Hubbard
Title: CEO

6

 
 
 

ADDENDUM    
  

        This Addendum modifies the Employment Agreement entered between the parties dated March 25, 1997 and together with the terms contained therein, constitutes
the complete agreement of the parties. 

1.  Hire Date. Employee's employment with Employer will commence March 14, 1997. 

2.
Vacation. Employee will accrue vacation time at the rate of three weeks per year for the first four years of employment. After the first four years
of employment, Employee will accrue vacation at the rate described in the company policy on vacations in the Employee Handbook. 

3.
Definitions. As used in paragraph 4 of this Addendum, the following terms shall have the following meanings: 

        (a)  Termination of Employment. Termination of employment shall mean the termination of Employee's employment by Employer for
other than "Cause." Employee's termination of the employment relationship shall not constitute a Termination of Employment under this Addendum; provided,
however, if Employee voluntarily terminates his employment immediately after there has been a change in the company's Chief Executive Officer and employee has not been offered
a substantially equivalent job from the company. Such voluntary termination shall constitute an exception to this rule and shall be considered a Termination of Employment under this Agreement and
Employee shall be entitled to severance benefits. 

        (b)  Gross Salary. Gross Salary shall mean the gross amount of weekly wages paid to Employee as of the Termination of
Employment. Gross Salary does not include the value of any other non-wage benefits provided to Employee, such as medical insurance, vacation, sick leave, stock options, or retirement
benefits. Gross Salary does not include bonuses and any non-wage benefits provided. 

4.
Severance Benefits. In the event of a Termination of Employment as defined herein, and subject to the other terms and conditions of this Agreement,
Employer agrees to provide Employee with six months Gross Salary as severance pay. The payments will shall be made in equal bi-weekly installments, and shall be subject to all normal
state, federal or other withholding and/or deductions. 

	
EMPLOYEE:

Name: /s/ James W. Linford
 Date: 5/2/97	
 	
EMPLOYER:

WHOLESOME & HEARTY FOODS,

INC., an Oregon Corporation

Name: /s/ Lyle Hubbard
Title: CEO

7

 
 
 

SECOND ADDENDUM TO EMPLOYMENT AGREEMENT    
  

        This SECOND ADDENDUM TO EMPLOYMENT AGREEMENT (this "Second Addendum") is entered into as of June 25, 2001, between Gardenburger, Inc., an Oregon
corporation (the "Company"), and James W. Linford ("Executive"), and is an addition to the existing Employment Agreement dated March 25, 1997, between the Company and Executive, as modified by
an undated Addendum (as modified, the "Original Employment Agreement"). A copy of the Original Employment Agreement is attached hereto for reference. 

        In
consideration of the mutual covenants set forth in this Second Addendum and in the Original Employment Agreement, the parties agree as follows: 

        1.    Sale Bonus

        (a)  After
the completion of a "Sale Transaction," as defined below, the Company will pay Executive a "Sale Bonus," as described below, provided Executive remains as Vice
President and Chief Operating Officer of the Company during the negotiation of and through the closing of the Sale Transaction. The Sale Bonus will be payable to Executive after all
post-closing adjustments in connection with the Sale Transaction have been determined. 

        (b)  For
purposes of this paragraph 1: 

        (ii)  A
"Sale Transaction" means a single transaction or a series of related transactions approved by the Board of Directors of the Company resulting in: 

	•
	A
sale or other disposition by the Company of all or substantially all its assets;

	•
	A
sale, share exchange, or other disposition of all or substantially all the capital stock of the Company; 

	•
	A
merger, consolidation, or other corporate transaction with a third party in which the Company's shareholders receive cash, stock, securities, or any other
consideration (or any combination of the foregoing) in exchange for their stock in the Company. 

        (ii)  The
"Sale Bonus" is an amount equal to the sum of (i) .25 percent of the portion of the "Total Consideration" (as defined below) equal to or less than
$100 million, plus (ii) .50 percent of the portion of the Total Consideration in excess of $100 million; and 

        (iii)  The
"Total Consideration" in connection with a Sale Transaction means: 

	•
	The
amount of cash and the aggregate market value of all other consideration received by the Company in connection with a sale or other disposition of its
assets (exclusive of any indebtedness or liabilities of the Company to which the assets taken are subject or which are assumed by the purchaser or other acquirer of the Company's assets); or

	•
	The
aggregate amount of cash and the aggregate market value of all other consideration received by the Company's shareholders in any sale, share exchange, or
other disposition of the Company's stock or any merger, consolidation, or similar transaction. 

        2.    Withholding and Payroll Taxes. All amounts payable by the Company to Executive pursuant to this Second Addendum are
subject to and will be reduced by amounts the Company is required to withhold for all applicable federal, state, and local income and payroll taxes. 

8

 

        The
parties have executed this Second Addendum as of the date first set forth above. 

	 	 	GARDENBURGER, INC.
	

 	
 	

By:	
 	
 
	 	 	
 Scott C. Wallace

 President and Chief Executive Officer	 	 

	 	 	EXECUTIVE
	

 	
 	

 	
 	
 
	 	 	
 James W. Linford	 	 

9

QuickLinks

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

AGREEMENT

ADDENDUM

SECOND ADDENDUM TO EMPLOYMENT AGREEMENT

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