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Exhibit 10.1 Tier 1 — CEO and CFO FORM OF
AMENDMENT TO CHANGE IN CONTROL AGREEMENT
This Amendment to the Change in
Control Agreement (the "Agreement") dated as of ___, between
Penford Corporation, a Washington corporation (the "Company") and
___ (the "Executive") is made as of December 30, 2008.
RECITALS A. The Company
and Executive intend that the Agreement be interpreted and operated
to the fullest extent possible so that the payments and benefits
under this Agreement either shall be exempt from the requirements
of Code Section 409A or shall comply with the requirements of
such provision. B. Therefore,
the Company and Executive deem it appropriate to adopt this
amendment to the Agreement. NOW,
THEREFORE, the Company and the Executive agree as follows:
1. The words "and to the extent
not resulting in a violation of the requirements of Code
Section 409A" are added after "to the extent necessary" in the
third sentence of paragraph 6 Benefits.
2. The last two sentences of
paragraph 6 Benefits are deleted in their entirety and the
following sentences substituted therefor: Notwithstanding the
foregoing, any such benefits shall be made available to the
Executive by the Company during such delay period at
Executive’s expense. If such a delay is required, on such
six-month anniversary, the Executive will receive a lump sum cash
payment equal to the value of any health and welfare benefits that
could not be provided during such six months. After the six-month
anniversary, these benefits under this paragraph 6 will continue
through the end of the Compensation Period.
3. The first sentence of
subparagraph (d) Payment of Gross-Up of paragraph 9
Section 280G Tax Payment is deleted in its entirety and
the following substituted therefor: Subject to paragraph 25(c), an
estimated Gross-Up Payment shall be made to the Executive on the
55th day following the Executive’s Separation from Service
provided the Waiver and Release Agreement was executed and
delivered on or within forty-five days after the Executive’s
Separation from Service and not revoked by such 55th day following
the Executive’s Separation from Service; provided, however,
the Gross-Up Payment shall be made no later than the time the
Executive is required to remit the taxes with respect to which the
Gross-Up
Payment relates provided an effective Waiver and Release
Agreement has been provided by such time.
4. The text of paragraph 11
Corporation’s Setoff Rights is deleted in its entirety
and the following substituted therefor: Subject to the limitations
of Code Section 409A, including without limitation, Treas.
Reg. §1.409A-3(j)(4)(xiii), to the extent applicable, the
payments and benefits made or provided to the Executive or to the
Executive’s spouse or other beneficiary under this Agreement
shall be subject to setoff by the Corporation by the amount of any
claim of the Corporation against the Executive or the
Executive’s spouse or other beneficiary for any debt or
obligation of the Executive or the Executive’s spouse or
other beneficiary to the Corporation.
5. The first sentence of
paragraph 13 Impact on Existing Severance and Benefit Plans
is deleted in its entirety and the following substituted therefor:
Subject to the limitations of Code Section 409A, payments or
benefits under this Agreement are in lieu of any payments or
benefits to which the Executive may be entitled under any other
separation plan or policy of the Corporation, and shall be
coordinated with the Executive’s Employment Agreement, if
any, such that the Executive shall receive the maximum amount of
separation pay available under either agreement, but shall not
receive any duplication of benefits.
6. The following is added to the
Agreement as paragraph 25 Compliance with Code
Section 409A : 25. Compliance with Code
Section 409A . All payments pursuant to this Agreement
shall be subject to the provisions of this paragraph 25.
Notwithstanding anything herein to the contrary, this Agreement is
intended to be interpreted and operated to the fullest extent
possible so that the payments and benefits under this Agreement
either shall be exempt from the requirements of Code
Section 409A or shall comply with the requirements of such
provision; provided however that notwithstanding anything to the
contrary in this Agreement in no event shall the Company be liable
to the Executive for or with respect to any taxes, penalties or
interest which may be imposed upon the Executive pursuant to Code
Section 409A. (a) Payments to
Specified Employees . To the extent that any payment or benefit
pursuant to this Agreement constitutes a "deferral of compensation"
subject to Code Section 409A (after taking into account to the
maximum extent possible any applicable exemptions) (a "409A
Payment") treated as payable upon a "separation from service"
pursuant to Code Section 409A ("Separation from Service"),
then, if on the date of the Executive’s Separation from
Service, the Executive is a Specified Employee, then to the extent
required for Executive not to incur additional taxes pursuant to
Code Section 409A, no such 409A Payment shall be made to the
Executive earlier than the earlier of (i) six (6) months
after
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the Executive’s Separation from Service; or (ii) the
date of his death. Should this paragraph 25 result in the delay of
benefits, any such benefit shall be made available to the Executive
by the Company during such delay period at Executive’s
expense. Should this paragraph 25 result in a delay of payments or
benefits to Executive, on the first day any such payments or
benefits may be made without incurring additional tax pursuant to
Code Section 409A (the "409A Payment Date"), the Company shall
make such payments and provide such benefits as provided for in
this Agreement, provided that any amounts that would have been
payable earlier but for the application of this paragraph 25 as
well reimbursement of the amount Executive paid for benefits
pursuant to the preceding sentence, shall be paid in lump-sum on
the 409A Payment Date. For purposes of this paragraph 25, the terms
"Specified Employee" and "Separation from Service" shall have the
meaning set forth in Code Section 409A as determined in
accordance with the methodology established by the Company. For
purposes of determining whether a Separation from Service has
occurred for purposes of Code Section 409A, a Separation from
Service is deemed to include a reasonably anticipated permanent
reduction in the level of services performed by the Executive to
less than fifty (50%) of the average level of services performed by
the Executive during the immediately preceding 12-month period (or
period of service if less than 12 months).
(b) Reimbursements Including Tax
Gross-ups . For purposes of complying with Code
Section 409A and without extending the payment timing
otherwise provided in this Agreement, taxable reimbursements under
this Agreement, subject to the following sentence and to the extent
required to comply with Code Section 409A, will be made no
later than the end of the calendar year following the calendar year
the expense was incurred. However, for purposes of complying with
Code Section 409A and without extending the payment timing
otherwise provided in this Agreement, any tax gross-up may be
payable through the calendar year after the calendar year in which
the Executive remits the taxes rather than be limited to the end of
the calendar year following the calendar year the expense was
incurred and reimbursement of expenses incurred due to a tax audit
or litigation addressing the existence or amount of a tax liability
may be payable through the end of the calendar year following the
calendar year in which the taxes that are the subject of the audit
or litigation are remitted to the taxing authority or where as a
result of such audit or litigation no taxes are remitted, the end
of the calendar year following the calendar year in which the audit
is completed or there is a final and nonappealable settlement or
other resolution of the litigation. To the extent required to
comply with Code Section 409A, any taxable reimbursements and
any in-kind benefit under this Agreement will be subject to the
following: (a) payment of such reimbursements or in-kind
benefits during one calendar year will not affect the amount of
such reimbursement or in-kind benefits provided during any other
calendar year (other than for medical reimbursement arrangements as
excepted under Treasury Regulations §1.409A-3(i)(1)(iv)(B)
solely because the arrangement provides for a limit on the amount
of expenses that may be reimbursed under such arrangement over some
or all of the period the arrangement remains in effect);
(b) such right to reimbursement or
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in-kind benefits is not subject to liquidation or exchange for
another form of compensation to the Executive and (c) the
right to reimbursements under this Agreement will be in effect for
the lesser of the time specified in this Agreement or ten years
plus the lifetime of the Executive. Any taxable reimbursements or
in-kind benefits shall be treated as not subject to Code
Section 409A to the maximum extent provided by Treasury
Regulations §1.409A-1(b)(9)(v) or otherwise under Code
Section 409A. (c) Release
. Subject to paragraph 25(a), (i) to the extent that Executive
is required to execute and deliver the Waiver and Release Agreement
to receive a 409A Payment and (ii) this Agreement provides for
such 409A Payment to be provided prior to the 55th day following
the Executive’s Separation from Service, such 409A Payment
will be provided upon the 55th day following Executive’s
Separation from Service provided the Waiver and Release Agreement
has been executed and delivered on or within forty-five
(45) days after Executive’s Separation from Service and
effective prior to such 55th day. To the extent there is a delay in
providing a 409A Payment because of the provisions of this
paragraph 25(c), the o
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