AGREEMENT

Exhibit 10.12

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:

(A)

any failure of the Company to comply with and satisfy any of the terms of this Agreement;



(B)

any significant reduction by the Company of the authority, duties, reporting responsibilities or job responsibilities of Employee;



(C)

any removal by the Company of Employee from the employment grade, compensation level or officer positions which Employee holds as of the effective date hereof except in connection with promotions to higher office;



(D)

the requirement that Employee undertake business travel to an extent substantially greater than is reasonable and customary for the position Employee holds; or



(E)

the moving of the principal office of the Company to which Employee is assigned by more than 50 miles from its location on the date of this Agreement.

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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:

        (a)   Within 15 days after the Termination Date, Employee shall receive a lump sum cash payment equal to (i) the Employee's Base Compensation times the number of years in the Severance Period; plus (ii) a pro-rated amount of the annual incentive bonus that Employee would have received for the year of termination. The pro-rated bonus shall be computed as 100% of the Employee's average bonus three (3) calendar years preceding the Employee's Termination of Employment, multiplied by a fraction (x) the numerator of which is the number of days in such year preceding Employee's Termination Date, and (y) the denominator of which is 365.

        (b)   The Company shall continue to provide benefits under the Company's then current health plan for Employee and his spouse or dependents for the Severance Period on the same basis as if Employee had continued to be employed during that period, or pay Employee cash in lieu of such coverage in an amount equal to Employee's after-tax cost of continuing such coverage.

        (c)   During the Severance Period, the Company shall reimburse Employee for the cost of outplacement assistance services, which shall be provided by an outplacement agency selected by Employee. The Company shall reimburse Employee within 15 days following the date on which the Company receives proof of payment of such expense.

        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.    

        (a)   In the event that the Company shall fail or refuse to make payment of any amounts due Employee under Section 3, 4 and 10 hereof with the respective time periods, provided therein, the Company shall pay to Employee, in addition to the payment of any other sums provided in this Agreement, interest, compounded daily, on any amount remaining unpaid from the date payment is required under Section 3, 4, and 10, as appropriate, until paid to Employee, at the rate from

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time to time announced by Bank of America, N.A. as its "prime rate" plus 2%, each change in such rate to take effect on the effective date of the change in such prime rate.

        (b)   It is the intent of the parties that Employee not be required to incur any expenses associated with the enforcement of his rights under this Agreement by arbitration, litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to Employee hereunder. Accordingly, the Company shall pay Employee on demand the amount necessary to advance to or reimburse Employee in full for all expenses (including all attorneys' fees and legal expenses) incurred by Employee in attempting to enforce any of the obligations of the Company under this Agreement, without regard to outcome.

        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