CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (the Agreement) is made by and between Gardenburger, Inc., an Oregon corporation (the Company) and Scott C. Wallace (Employee).

WHEREAS, the Board of Directors of the Company considers it essential to the best interests of the Company to foster the continued employment of key management personnel including Employee; and

WHEREAS, the parties entered into an employment agreement (the Employment Agreement) on January 15, 2001; and

WHEREAS, the Board of Directors of the Company wishes to insure that Employee is focused on and motivated by the desire to obtain maximum value for the Company in the event of a sale or acquisition;

WHEREAS, the Board recognizes that, as is the case with many publicly-held corporations, the possibility of a Change in Control exists and that it is in the best interests of the Company to enter into this Agreement to minimize any distraction to Employee in the performance of his duties to the Company in the face of a potential Change in Control; and

WHEREAS, the Board has determined that any benefits payable to Employee in connection with a Change in Control should be conditioned on Employees agreement (as specified in this Agreement) to provide services to the Company and its successor in the period immediately following a Change in Control transaction, to be available to provide consulting services to the Companys successor, and to refrain from competing with the Company or its successor during the period specified in this agreement following the Change in Control;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the Company and Employee hereby agree as follows:

1.             Effect on Employment Agreement.  The Employment Agreement remains in full force and effect except (a) as expressly provided in a Supplement to Employment Agreement in the form attached to this Agreement as Appendix 1, and (b) to the extent expressly or necessarily modified by provisions of this Agreement.

2.             Term.  This Agreement shall commence on the date last signed and shall continue in effect through December 31, 2004; provided, however, that if a Change in Control shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period of nine (9) months beyond the day in which such Change in Control occurred.  This Agreement shall automatically terminate nine (9) months after a Change in Control unless expressly extended by the Board of Directors.

3.             Limitation of Agreement to Change in Control.  The payments and benefits under this Agreement are intended to compensate Employee for services and refraining from competition during the period following a termination as a result of or in connection with a Change in Control.  If Employee is terminated before a Change in Control and for reasons unrelated to the Change in Control, any payments or benefits will be determined by the Employment Agreement.

4.             Definitions

                4.1  Change in Control.  For the purpose of this Agreement, a Change in Control shall mean:

                (a)           The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) (a Person) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (i) the then outstanding shares of common stock of the Company (the Outstanding Company Common Stock) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Company Voting Securities); provided, however, that the following acquisitions shall not constitute a Change in Control:  (w) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege, other than a conversion privilege in existence as of the date of this agreement), (x) any acquisition by the Company, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (z) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (i), (ii) and (iii) of subsection (c) of this Section 4.1 are satisfied; or

                (b)           Individuals who, as of the  date of this Agreement, constitute the Board (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date of this Agreement whose election, or nomination for election by the Companys shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office as a director of the Company occurs as a result of either an actual or a threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

                (c)           Approval by the shareholders of the Company of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (i) more than 50% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation 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 reorganization, merger or consolidation in substantially the same proportions, as

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