AGREEMENT

        This Agreement made as of the 19th day of October, 2004, by and between Friendly Ice Cream Corporation, a Massachusetts corporation (the "Company"), and                         ("Employee").

        WHEREAS, Employee is an executive of the Company, currently serving as its                        ;

        WHEREAS, the Board of Directors (the "Board") of the Company believes that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of Employee to the company without distraction notwithstanding the fact that the Company could be subject to a change of control, although no such transaction is currently being negotiated, and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of key management personnel to the detriment of the Company; and

        WHEREAS, in consideration for Employee agreeing to continue in employment with the Company, agreeing to keep Company information confidential and not to compete with the Company in the event Employee's employment is terminated and providing the Company with a release of any potential claims, the Company agrees that Employee shall receive a similar release from the Company and the compensation set forth in this Agreement as a cushion against the financial and career impact on Employee in the event Employee's employment with the Company is terminated without cause if there is a change of control.

        NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, the parties hereto agree as follows:

        1.    Definitions.    

        "Affiliate" shall have the respective meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

        "Base Compensation" shall mean the sum of (i) the annualized base rate of salary being paid to Employee in all capacities with the Company, and its Affiliates, as reported for Federal income tax purposes on Form W-2, together with any and all salary reduction authorized amounts under any of the Company's benefit plans or programs, on the last day of the preceding calendar year, or if higher, the actual date of the Change of Control, and (ii) the Executive's average bonus for the preceding three (3) calendar years.

        "Board" shall mean the Board of Directors of the Company.

        "Cause" shall mean (1) misappropriation of funds, (2) habitual insobriety or substance abuse, (3) conviction of a crime involving moral turpitude, or (4) gross negligence in the performance of duties, which gross negligence has had a material adverse effect on business, operations, assets, properties or financial condition of the Company and its Subsidiaries taken as a whole.

        "Change of Control" means the occurrence of any of the following events with respect to the Company:

        (i)    any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of 50% or more of the total voting power of the Voting Stock of the Company;

        (ii)   during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company then in office;



        (iii)  any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, the assets of the Company to any person or group of persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act)(other than to any Wholly Owned Subsidiary of the Company);

        (iv)  the Company merges or consolidates with or into another Person or another Person merges with or into the Company, and in any such case, the securities of the Company that are outstanding immediately prior to such transaction and that represent 100% of the voting power of the Voting Stock of the Company are changed into or exchanged for cash, securities or property, unless pursuant to such transaction such securities of the Company are changed into or exchanged for, in addition to any other consideration, securities of the surviving corporation that represent, immediately after such transaction, at least a majority of the aggregate voting power of the Voting Stock of the surviving Person or transferee; or

        (v)   the adoption of a plan of liquidation of the Company.

        [Hopkins Only: (vi) the Company ceases to manage or operate a retail sales component of its business operations.]

        For purposes of the definition of Change of Control, the term "Permitted Holders" means Donald N. Smith and/or the Company's then existing senior management and their respective Affiliates. The term "Voting Stock" of the Company means all classes of capital stock of the Company then outstanding and normally entitled to vote in the election of directors.

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

        "Severance Period" shall mean the [two (2) years for Cutter and Hoagland, one (1) year for Green, Hopkins, Pastore, Rusinko and Ulrich] period after Employee's Termination of Employment.

        "Termination Date" shall mean the date of receipt of the Notice of Termination described in Section 2 hereof or any later date specified therein, as the case may be.

        "Termination of Employment" shall mean the termination of Employee's active employment relationship with the Company.

        "Termination following a Change of Control" shall mean a Termination of Employment within two years after a Change of Control either:

        (i)    initiated by the Company for any reason other than (x) Employees' continuous illness, injury or incapacity for a period of six consecutive months or (y) for "Cause" or

        (ii)   initiated by Employee upon one or more of the following occurrences:

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        2.    Notice of Termination.    Any Termination of Employment shall be communicated by a Notice of Termination to the other party hereto given in accordance with Section 16 hereof. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific reasons for the termination, (ii) briefly summarizes the facts and circumstances deemed to provide a basis for termination of Employee's employment, and (iii) if the Termination Date is other than the date of receipt of such notice, specifies the Termination Date (which date shall not be more than 15 days after the giving of such notice).

        3.    Severance Compensation upon Termination.    Subject to the provisions of Section 10 hereof and the paragraph of this Section 3, in the event of Employee's Termination following a Change of Control, Employee shall be entitled to receive the following payments and benefits from the Company:

        Notwithstanding the foregoing, no such payments or benefits shall be provided unless Employee executes, and does not revoke, an effective written release, complying with all state and federal requirements (the "Release"), of any and all claims against the Company and all related parties with respect to all matters arising out of Employee's employment by the Company (other than entitlements under the terms of this Agreement or under any other plans or programs of the Company in which Employee participated and under which Employee has accrued or become entitled to a benefit) or the termination thereof. On the day following the expiration of the revocation period for the Release, the Company shall provide Employee with a mutual release releasing Employee from any and all claims arising out of Employee's employment with the Company.

        4.    Other Payments and Indemnifications.    The payment due under Section 3 hereof shall be in addition to and not in lieu of any payments or benefits due to Employee under any other plan, policy or program of the Company except that Employee shall not receive any benefits under any other severance plan of the Company. In addition, Employee shall continue to be covered by any policy of insurance providing indemnification rights for service as an officer and director of the Company and to all other rights to indemnification provided by the Company, in each case at least as favorable as applicable to him on the date of this Agreement.

        5.    Enforcement.    

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        6.    No Mitigation.    Employee shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for herein be reduced by any compensation earned by other employment or otherwise.

        7.    Non-exclusivity of Rights.    Except as provided in Section 4, nothing in this Agreement shall prevent or limit Employee's continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company or any of its Subsidiaries or Affiliates and for which Employee may qualify.

        8.    No Set-Off.    The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against Employee or others.

        9.    Taxes.    Any payment required under this Agreement shall be subject to all requirements of the law with regard to the withholding of taxes, filing, making of reports and the like, and the Company shall use its best efforts to satisfy promptly all such requirements.

        10.    Certain Increases in Payment.    

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provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Employee harmless, on an after-tax basis, for any excise tax, income tax or employment tax, including interest and penalties, with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 10, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Employee to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Employee agrees to prosecute such contest to a termination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine, provided further, however, that if the Company directs Employee to pay such claim and sue for a refund the Company shall advance the amount of such payment to Employee, on an interest-fee basis and shall indemnify and hold Employee harmless, on an after-tax basis, from any excise tax, income tax or employment tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further that any extension of the statute of limitations relating to payment of taxes for the taxable year of Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

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        11.    Confidential Information.    Employee recognizes and acknowledges that, by reason of his employment by and service to the Company, he has had and will continue to have access to confidential information of the Company and its Affiliates, including, without limitation, information and knowledge pertaining to the products and services offered, innovations, designs, ideas, plans, trade secrets, proprietary information, distribution and sales methods and systems, sales and profit figureS, customer and client lists, and relationships between the Company and its Affiliates and other distributors, customers, clients, suppliers and others who have business dealings with the Company and its Affiliates ("Confidential Information"). Employee acknowledges that such Confidential Information is a valuable and unique asset and covenants that he will not, either during or after his employment by the Company, disclose any such Confidential Information to any person for any reason whatsoever without the prior written authorization of the Board, unless such information is in the public domain through no fault of Employee or except as may be required by law or in a judicial or administrative proceeding. In the event that Employee is required to disclose any of the Company's Confidential Information, Employee shall provide reasonable notice to the Company and shall provide reasonable cooperation with any efforts of the Company to oppose such disclosure.

        12.    Non-Competition.    

        13.    Equitable Relief.    

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        14.    Term of Agreement.    The term of this Agreement shall be for three years from the date hereof and shall be automatically renewed for successive one-year periods unless the Company notifies Employee in writing that this Agreement will not be renewed at least sixty days prior to the end of the current term; provided, however, that (i) after a Change of Control during the term of this Agreement, this Agreement shall remain in effect until all of the obligations of the parties hereunder are satisfied, and (ii) this Agreement shall terminate if, prior to a Change of Control, the employment of Employee with the Company or any of its Subsidiaries, as the case may be, shall terminate for any reason.

        15.    Successor Company.    The Company shall require any successor or successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to Employee, to acknowledge expressly that this Agreement is binding upon and enforceable against the Company in accordance with the terms hereof, and to become jointly and severally obligated with the Company to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession or successions had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement. As used in this Agreement, the Company shall mean the Company as herein before defined and any such successor or successors to its business and/or assets, jointly and severally.

        16.    Notice.    All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be delivered personally or mailed by

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registered or certified mail, return receipt requested, or by overnight express courier services, as follows:

        If to the Company, to:

        With a copy to:

        If to Employee, to:

or to such other names or addresses as the Company or Employee, as the case may be, shall designate by notice to the other party hereto in the manner specified in this Section; provided, however, that if no such notice is given by the Company following a Change of Control, notice at the last address of the Company or to any successor pursuant to Section 16 hereof shall be deemed sufficient for the purposes hereof. Any such notice shall be deemed delivered and effective when received in the case of personal delivery, five days after deposit, postage prepaid, with the U.S. Postal Service in the case of registered or certified mail, or on the next business day in the case of overnight express courier service.

        17.    Governing Law.    This Agreement shall be governed by and interpreted under the laws of the Commonwealth of Massachusetts without giving effect to any conflict of laws provisions.

        18.    Contents of Agreement, Amendment and Assignment.    

        19.    Severability.    If any provision of this Agreement or application thereof to anyone or under any circumstances shall be determined to be invalid or unenforceable, such invalidity or

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unenforceability shall not affect any other provisions or applications of this Agreement which can be given effect without the invalid or unenforceable provision or application.

        20.    Remedies Cumulative; No Waiver.    No right conferred upon Employee by this Agreement is intended to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and shall be in addition to any other right or remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by Employee in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, including, without limitation, any delay by Employee in delivering a Notice of Termination pursuant to Section 2 hereof after an event has occurred which would, if Employee had resigned, have constituted a termination following a Change of Control pursuant to Section 1 of this Agreement.

        21.    Miscellaneous.    All section headings are for convenience only. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.

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

  Friendly Ice Cream Corporation

 

 

By:

 
    


Witness

 


Employee

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Schedule to Change of Control Agreement Relating to Change of Control

        The following is a list of the Company's employees who are party to the Change of Control Agreement, the form of which is filed herewith:


Source: OneCLE Business Contracts.