Exhibit 10.3**CHANGE IN CONTROL AGREEMENT**     AGREEMENT between Penford Corporation, a Washington corporation (the “*Corporation*”), and___ (the “*Executive*”), dated as of___ (the “*Effective Date*”).**RECITALS**     A. The Executive is an executive officer or key employee of the Corporation and an integralpart of its management.     B. The Corporation wishes to assure both itself and the Executive of continuity of managementin the event of any actual or threatened change in control of the Corporation.     C. This Agreement is not intended to alter the compensation and benefits that the Executivecould reasonably expect in the absence of the occurrence of a Change in Control, as defined in thisAgreement; consequently, this Agreement will be operative only upon the Executive’s terminationduring the term of this Agreement after the occurrence of a Change in Control.     NOW, THEREFORE, it is hereby agreed as follows;     **1. Definitions**. For purposes of this Agreement, the following terms shall have the meaningsset forth below.          “*Average Target Attainment Bonus*” shall mean the product of the Executive’s Target Bonus inthe year of the Executive’s termination of employment multiplied by the average of the percentagesof Target Bonuses attained by the Executive for the three fiscal years preceding the year of theExecutive’s termination of employment in which the Executive was a participant in the Corporation’sbonus plan administered for executive officers and key employees for a full fiscal year, or suchfewer number of fiscal years in which the Executive was a participant in such bonus plan for a fullfiscal year, or the Target Bonus for the year of termination if the Executive has not previouslybeen a participant for a full fiscal year in such bonus plan. The percentages of Target Bonusesattained shall be computed by including all bonuses paid with respect to a fiscal year regardlessof whether a bonus is paid pursuant to a plan or awarded on a discretionary basis, but shall notinclude any bonus paid in the year of the Executive’s termination of employment or anydiscretionary bonus paid which are directly attributable to a Change in Control. For example,assume the Executive has a Target Bonus in the year of the Executive’s termination of 50% of BaseSalary and with respect to the preceding three fiscal years was awarded bonuses which represented80%, 120% and 70%, respectively, of the Executive’s then applicable Target Bonuses of 35%, 40% and40%, then the Average Target Attainment Bonus would be 90% times 50% or 45% of Base Salary.Management shall maintain a record of the Average Target Attainment Bonuses and such record shallbe reviewed and concurred to by the compensation committee of the Corporation.
 

 
          “*Base Salary*” shall mean an amount equal to the greater of (i) the Executive’s annual basesalary at the rate in effect on the date of a Change in Control, or (ii) the Executive’s annualbase salary at the rate in effect on the date of the Executive’s termination of employment, eitherwithout regard to any reduction made in connection with an event constituting Good Reasonhereunder. In either case Base Salary shall be determined prior to any deductions actually takenfrom salary including without limitation (1) for salary reductions or deferrals under any plan ofthe Corporation, (2) for payments of employee benefits under any plan of the Corporation which werecharged to the Executive, and (3) for the purchase of stock under any plan of the Corporation.          “*Cause*” means a finding by the Board of Directors in good faith that (i) the Executive’semployment has been terminated for gross misconduct in connection with the Executive’s position asan officer of the Corporation that results in demonstrably material injury to the Corporation, or(ii) the Executive has breached a covenant of the Executive set forth in this Agreement (if, afterwritten notice by the Corporation to the Executive and a thirty (30) day opportunity by theExecutive to cure during which the Executive does not cure the condition). For this purpose, badjudgment, negligence and policy disagreements with the Board of Directors shall not constitutegross misconduct, nor shall any act or omission of the Executive that was reasonably believed bythe Executive to have been in, and not opposed to, the interests of the Corporation.          “*Change in Control*” shall mean any of the following events: (i) The Corporation is merged, consolidated orreorganized (“Reorganization”) with another entity and as a result ofwhich less than 50% of the outstanding voting interests or securitiesof the surviving or resulting entity immediately after theReorganization are owned in the aggregate by the former shareholders ofthe Corporation, as the same shall have existed immediately prior tosuch Reorganization, in substantially the same proportions as theirownership before such Reorganization;  (ii) The Corporation sells all or “*SubstantiallyAll*” of its assets to another entity that is not a wholly-ownedsubsidiary or affiliate of the Corporation, provided that a sale shallconstitute Substantially All of the Corporation’s assets only if thefair market value of the consideration received for such assets exceeds50% of the fair market value of the Corporation’s average total marketcapitalization during the twenty (20) trading days ending twenty (20)trading days prior to the first public announcement of such sale;provided further that the fair market value of the considerationreceived and the total market capitalization of the Corporation shallbe as reasonably determined by the Board of Directors in good faith andthat both the Corporation’s stock and any publicly traded considerationreceived in a sale shall be valued using the closing price for suchsecurity (y) for the period referenced above in the case of theCorporation’s stock and (z) the
2

 
   average closing prices for the first twenty (20) trading days afterthe Closing of any sale or other transaction in which any publiclytraded consideration is received;  (iii) Any person, within the meaning of Sections3(a)(9), 13(d) or 14(d) (as in effect on the date hereof) of theSecurities and Exchange Act of 1934 (“*Exchange Act*”) (“Person”), otherthan any employee benefit plan then maintained by the Corporation,acquires more than 40% of the outstanding voting securities of theCorporation (whether, directly, indirectly, beneficially or of record).For purposes hereof, ownership of voting securities shall take intoaccount and shall include ownership as determined by applying theprovisions of Rule 13d-3(d)(1)(i) (as in effect on the date hereof)pursuant to the Exchange Act; or  (iv) During any 24 month period, individuals whoconstitute the Board of Directors of the Corporation at the beginningof such period cease for any reason to constitute at least a majoritythereof, unless the election, or nomination for election by theCorporation’s shareholders, of each new director was approved by thevote of at least two-thirds of the directors then still in office whowere directors of the Corporation at the beginning of such period;provided that no individual shall be considered so approved if suchindividual initially assumed office as a result of or in connectionwith an actual or threatened solicitation of proxies or consents by oron behalf of a Person other than the Board of Directors of theCorporation.          “*CIC Amount*” shall have the meaning set forth in Annex B.          “*Compensation Period*” shall have the meaning set forth in Annex B.          “*Disability*” shall mean, to the extent such term is not defined in an Employment Agreement, ifany, a physical or mental condition as a result of which the Executive has been approved forbenefits under a Corporation-sponsored long-term disability plan, policy or arrangement in whichthe Executive participates.          “*Employment Agreement*” shall mean a written offer letter or employment between the Executiveand the Corporation, if any, covering the terms and conditions of employment with the Corporation.          “*Good Reason*” shall exist under any of the following conditions (if, after written notice bythe Executive to the Corporation and a thirty (30)day opportunity by the Corporation to cure duringwhich the Corporation does not cure the condition): (i) The Executive’s most significant duties,responsibilities or authority held, prior to the date of the Change inControl or at any time after the date of the Change in Control arereduced or
3

 
   diminished in other than an immaterial manner without the Executive’swritten consent;  (ii) Either (A) the Executive’s Base Salary orTarget Bonus are reduced by the Corporation from the levels in effectimmediately prior to a Change in Control without the Executive’swritten consent, or (B) the Executive’s health, welfare and otherbenefits referred to in Paragraph 6 are denied or modified in a mannerdifferent than changes applicable to other executive officers of theCorporation or any controlling entity without the Executive’s writtenconsent, and (C) the aggregate effect of all such reductions, denialsand modifications (including any increases in compensation, bonuses, orbenefits) represents more than an immaterial reduction to the Executive’s overallcompensation package in existence prior to the Change in Control;  (iii) The Corporation violates the material terms ofthis Agreement, or the Executive’s Employment Agreement, if any;  (iv) The Executive is required to relocate his orher principal place of employment to a location which is more than 50miles from both his principal place of employment and his principalresidence prior to the announcement of an agreement or transaction thatresults in a Change in Control (for avoidance of doubt the principalplace or employment and principal residence for the Executive shall beset forth on Annex B hereto and shall be updated from time to time,provided that the failure to so update shall not preclude thisprovision from being applicable); or  (v) There is a liquidation, dissolution,consolidation or merger of the Corporation or transfer or sale of allor a Substantially All (as defined above) of its assets, unless asuccessor (by merger, consolidation or otherwise) to which all orSubstantially All of its assets have been transferred or sold hasassumed (either by operation of law or otherwise) all duties andobligations of the Corporation under this Agreement and any EmploymentAgreement, if any.          “*Outplacement Period”*shall have the meaning set forth in Annex B.          “*Target Bonus*” shall mean an amount equal to the target bonus payable to the Executive underthe Corporation’s annual incentive bonus plan in effect for the fiscal year of the Executive’stermination of employment, or other fiscal years specifically referenced in this Agreement, withoutregard, to any reduction made in connection with an event constituting Good Reason hereunder.
4

 
          “*Termination of the Executive’s Employment*” shall (a) mean (i) termination by the Corporationof the employment of the Executive for any reason other than Cause, death, or Disability; or (ii)termination by the Executive of his or her employment for Good Reason in the absence ofcircumstances that constitute Cause; and (b) shall be interpreted in a manner consistent with theterm “separation from service” under Section 409A(a)(2)(i) of the Internal Revenue Code of 1986, asamended (“Code”).          “*Waiver and Release Agreement*” shall mean the written waiver and release agreement attachedhereto as Annex A, which the Executive must execute on or within forty-five (45) days after hislast day of employment in favor of the Corporation, and not thereafter revoke, in order to beentitled to receive any payments or benefits under paragraphs 4, 5, 6 and 7 of this Agreement.     **2. Term of Agreement**. This Agreement shall remain in effect until terminated by theCorporation in accordance with this paragraph or, if a Change in Control occurs prior to suchtermination by the Corporation, until the obligations of the Corporation pursuant to this Agreementhave been fulfilled. This Agreement shall terminate one year after the date the Corporation givesthe Executive written notice of the termination of this Agreement; except that if a Change inControl occurs prior to the termination date, this Agreement shall remain in effect with respect toall rights accruing as a result of the occurrence of the Change in Control.     **3. Termination of Employment**. If, during the term of this Agreement, there is a Terminationof the Executive’s Employment within twenty-four (24) months after a Change in Control, then theExecutive shall receive the compensation and benefits described in paragraphs 4, 6 and 7. Section5 shall apply upon a Change in Control with or without a Termination of the Executive’s Employment.Notwithstanding the foregoing, a termination shall not have occurred under this Agreement if, inconnection with a Change in Control, the Executive terminates employment with the Corporation andbecomes an employee of the acquiring or controlling entity or one of its affiliates which succeedsto the business of the Corporation under terms and conditions that would not give rise to GoodReason had employment with the Corporation continued.     **4. Compensation**. Subject to the provisions of paragraphs 3, 10 and 13, the Executive shallhave the right to receive the CIC Amount (as defined in Annex B)) during the Compensation Period(as defined in Annex B). Fifty percent (50%) of the CIC Amount shall be payable within thirty(30) days after Termination of the Executive’s Employment and the remaining fifty percent (50%) ofthe CIC Amount shall be paid in equal monthly installments over the Compensation Period. Inaddition, the Executive shall be paid his or her prorated Target Bonus for the fiscal year in whichthe Executive was terminated within thirty (30) days after Termination of the Executive’sEmployment. The prorated Target Bonus shall be determined by multiplying the Target Bonus by afraction the numerator of which shall be the number of full or partial months that the Executivewas employed during the fiscal year in which the Termination of the Executive’s Employmentoccurred. To the extent a bonus for the fiscal year prior to the year in which the Termination ofthe Executive’s Employment occurs has not been paid at the time of the Termination of theExecutive’s Employment, such bonus as determined in good faith and consistently with prior practiceshall be paid to the Executive not later than the time such bonuses were generally paid in theprior year. Notwithstanding the foregoing, if necessary to
5

 
meet the requirements of subparagraphs (2)(A)(i) and (B)(i) of Code Section 409A(a)(2), thecompensation that would normally be paid during the first six (6) months after the Termination ofthe Executive’s Employment shall not be paid to an Executive who is a specified employee (asdefined in Code Section 409A(a)(2)(B)(i)) until the six-month anniversary of the Termination of theExecutive’s Employment (or, if earlier, the date of his or her death). If such a delay isrequired, the aggregate compensation for the first six months after the Termination of theExecutive’s Employment shall be paid in a single lump sum on (or as soon as practicable after) thesix-month anniversary, after which time the compensation shall be paid at the same time and in thesame manner as it was paid immediately prior to the Executive’s termination until the end of theCompensation Period.     **5. Equity**. All stock options, restricted stock, restricted stock units and other equity basedrights and interests outstanding immediately prior to the Change in Control shall become vestedimmediately prior to the Change in Control and shall be exercisable, transferable, payable orotherwise available in accordance with the plan, grant, agreement or other instrument setting forththe Executive’s rights.     **6. Benefits**. Subject to the provisions in Paragraphs 3, 10, and 13, accrued vacation throughthe date of Termination of the Executive’s Employment shall be paid within thirty (30) days of theeffective date of the Waiver and Release Agreement. The Executive, his or her dependents,beneficiaries and/or estate shall continue during the Compensation Period to be entitled to allbenefits under medical, dental, life insurance and similar plans (except for any disability plan)that are in effect on the Executive’s termination date. If by reason of a plan provision, adversetax consequences to the Corporation or the Executive, law or government regulation or third-partycontractual restriction the Executive, his or her dependents, beneficiaries and/or estate cannotreceive or participate in a benefit, then the Corporation shall, to the extent necessary, pay orprovide for payment of such benefit or a reasonably equivalent benefit to the Executive, his or herdependents, beneficiaries and/or estate in the same amount and manner as they would have beenprovided by the relevant plan provided by the Corporation prior to the Executive’s termination date(e.g., through the payment by the Corporation of a portion of COBRA premiums). Notwithstanding theforegoing, if the Executive is employed by another employer, the Corporation shall not provide anymedical, dental, life insurance or similar benefit to the extent a comparable benefit is providedby the other employer. The participation of the Executive in the Penford Corporation RetirementPlan, the Penford Corporation 401(k) Plan or any other plan described in Code Section 401(a) shallterminate after the Executive’s termination date in accordance with the terms of such plans and theCorporation shall not be obligated to provide equivalent benefits. Notwithstanding the foregoing,to the extent necessary to meet the requirements of subparagraphs (2)(A)(i) and (B)(i) of CodeSection 409A(a)(2), the benefits that would normally be provided under this paragraph 6 (includingtreatment of the Executive as having not terminated employment for purposes of continued healthand welfare benefits or cash payments in lieu thereof) during the first six (6) months of theCompensation Period shall not be provided to an Executive who is a specified employee (as definedin Code Section 409A(a)(2)(B)(i)) until the six-month anniversary of such Executive’s Terminationof Employment (or, if earlier, the date of his or her death). If such a delay is required, theExecutive will not be treated as having continued employment during the first six months of theCompensation Period until the six-month anniversary of the Executive’s Termination of Employment.Also on such six-month anniversary, the Executive will receive a lump sum cash
6

 
payment equal to the value of any health and welfare benefits that could not be providedduring such six months. After the six-month anniversary, these benefits under this paragraph 6will continue through the end of the Compensation Period.     **7. Outplacement Services**. Subject to compliance with Paragraphs 3, 10 and 13, theCorporation shall pay for the cost of senior executive-level outplacement services for theExecutive for the Outplacement Period (defined in Annex B). Outplacement services shall beprovided by such executive outplacement firm selected by the Executive and reasonably approved bythe Corporation. The Executive shall commence utilization of such senior executive-leveloutplacement services within ninety (90) days following his or her termination date.     **8. Effect of Death**. In the event of death of the Executive during the Compensation Period,the compensation that would otherwise have been paid to the Executive under this Agreement shall bepaid to the Executive’s estate. Coverage of any dependents under any plan described in paragraph 6shall continue for the Compensation Period as though the Executive had remained alive. Nothing inthis paragraph shall affect any other payments by the Corporation due in respect of the Executive’sdeath.     **9. Section 280G Tax Payment**.     (a) *Impact of Section 280G*. Except as otherwise provided in Annex B and notwithstanding anyother provisions of this Agreement, if the aggregate “*present value*” (as defined in Section280G(d)(4) of the Code) of all “*parachute payments*” (as defined in Section 280G(b)(2) of the Code)made to or for the benefit of the Executive under this Agreement equals or exceeds three times theExecutive’s “*base amount*” (as defined in Section 280G(b)(3) of the Code), such that a deductionwould not be allowed to the Company under Section 280G for all or any part of such payments, or ifthe payments made hereunder would cause the Executive to be liable for tax under Section 4999 ofthe Code then the parachute payments under this Agreement shall be reduced so that the aggregatepresent value of such payments shall total one hundred dollars ($100.00) less than three times thebase amount. The purpose of such reduction is to ensure that the payments to the Executive willnot constitute a parachute payment within the meaning of Section 280G(b)(2) of the Code, that theCompany will be entitled to the maximum deduction for all amounts paid under this Agreement, andthat the Executive will not be subject to tax under Section 4999 of the Code. The Executive shallhave the right to receive the benefit of any amendments to Section 280G of the Code that increasethe amount that may be received without loss of the deduction to the Company.     (b) *Opinion of Counsel*. In the event of any change in, or further interpretation of, Sections280G or 4999 of the Code and the regulations promulgated thereunder, the Executive shall beentitled by written notice to the Corporation to request an opinion of tax counsel regarding theapplication of such change in any of the foregoing, and the Corporation shall use its best effortsto cause such opinion to be rendered as promptly as practicable. All fees and expenses of taxcounsel incurred in connection with this Agreement shall be borne by the Corporation.
7

 
     **10. Waiver and Release**. As a condition to receiving any payments and benefits underparagraphs 4, 6 and 7 hereunder, the Executive shall execute (and not later revoke) the Waiver andRelease Agreement on or within thirty (30) days after written request. The Corporation shall haveno obligation to make any payments or provide any benefits to the Executive hereunder unless anduntil the effective date of the Waiver and Release Agreement, as defined therein.     **11. Corporation’s Setoff Rights**. The payments and benefits made or provided to the Executiveor to the Executive’s spouse or other beneficiary under this Agreement shall be subject to setoffby the Corporation by the amount of any claim of the Corporation against the Executive or theExecutive’s spouse or other beneficiary for any debt or obligation of the Executive or theExecutive’s spouse or other beneficiary to the Corporation.     **12. No Mitigation**. The Executive shall have no duty to seek employment following terminationof employment or otherwise to mitigate damages. The amounts or benefits payable or available tothe Executive, the Executive’s spouse or other beneficiary under this Agreement shall not bereduced by any amount the Executive may earn or receive from employment with another employer orfrom any other source.     **13. Impact on Existing Severance and Benefit Plans**. Payments or benefits under this Agreementare in lieu of any payments or benefits to which the Executive may be entitled under any otherseparation plan or policy of the Corporation, and shall be coordinated with the Executive’sEmployment Agreement, if any, such that the Executive shall receive the maximum amount ofseparation pay available under either agreement, but shall not receive any duplication of benefits.No provision in this Agreement shall be construed to reduce or impair the Executive’s rights andbenefits under such retirement or welfare plans, policies or arrangements. Payments and benefitsprovided under paragraphs 4, 5, 6 or 7, however, shall not be considered eligible compensation, norshall the period attributable to such payments or benefits be considered eligible service, underany retirement or welfare plan, policy or arrangement maintained by the Corporation.     **14. Non-Competition, Non-Solicitation, Non-Disparagement and Confidentiality**. The Executiveagrees that:     (a) During the Executive’s employment with the Corporation and during the Compensation Period,the Executive shall not, either directly or indirectly be employed by or otherwise engaged by orhave any equity interest (other than ownership of 2% or less of the outstanding stock of any entitylisted on the New York or American Stock Exchange or any other recognized stock exchange orincluded in the National Association of Securities Dealers Automated Quotation System) in anybusiness that is directly competitive with any business in which the Corporation or any of itssubsidiaries was involved or had under active consideration immediately prior to the Change inControl and in which the Executive was engaged during his or her employment prior to a termination.     (b) During the Executive’s employment with the Corporation and during the Compensation Period,the Executive shall not, either directly or indirectly
8

 
 (i) hire, offer to hire, entice away or in any other mannerpersuade or attempt to persuade any officer, employee, consultant or agent ofthe Corporation or any of its subsidiaries to alter or discontinue his or herrelationship with Corporation or its subsidiaries, other than generaladvertisements not targeted at employees of the Corporation or itssubsidiaries;  (ii) solicit, divert, or in any other manner persuade or attempt topersuade any supplier of the Corporation or any of its subsidiaries to alter ordiscontinue its relationship with the Corporation or any of its subsidiaries;or  (iii) solicit, divert, take away or attempt to solicit, divert ortake away any customers of the Corporation or its subsidiaries.     (c) At all times during the Executive’s employment with the Corporation and during and afterthe Compensation Period, the Executive will not divulge or appropriate to the Executive’s own useor the use of others any secret or confidential information or knowledge pertaining to the businessof the Corporation, or any of its subsidiaries, obtained during his employment by the Corporationor any of its subsidiaries; provided that this provision shall not apply to information that is orbecomes publicly available without breach by the Executive.     (d) At all times during the Executive’s employment with the Corporation and during and afterthe Compensation Period, the Executive will not publicly disparage the Corporation or itssubsidiaries or any of their respective directors, officers or employees. At all times, theCorporation will not publicly disparage the Executive and will direct its officers and directors tonot publicly disparage the Executive.     (e) The Corporation and the Executive agree that the provisions of this paragraph 14 do notimpose an undue hardship on the Executive and are not injurious to the public; that this provisionis necessary to protect the business of the Corporation and its subsidiaries; that the nature ofthe Executive’s responsibilities with the Corporation have provided the Executive with access toconfidential information that is valuable and confidential to the Corporation and its subsidiaries;that the Corporation would not enter into this Agreement if the Executive did not agree to theprovisions of this paragraph 14; that the scope of this paragraph 14 is reasonable in terms oflength of time and geographical scope; and that adequate consideration supports this paragraph 14.In the event that a court determines that the geographical scope of this provision in unreasonablybroad or the length of time is unreasonably long, the Executive agrees that such Court shouldnarrow such provision to the extent necessary to make it reasonable and enforce the provision asnarrowed. Nothing in this Agreement restricts the Executive from responding to process of law. Insuch a circumstance, the Executive must immediately notify the Corporation of such process in orderto enable the Corporation to seek protective relief if appropriate.     (f) The Executive’s entitlement to benefits under this Agreement is conditioned upon theExecutive’s compliance with the provisions of this paragraph 14.     **15. Arbitration of All Disputes**. Any controversy or claim arising out of or relating to thisAgreement or the breach hereof shall be settled by arbitration in the City of Chicago in accordancewith the laws of the State of Washington by three arbitrators, one of whom shall be
9

 
appointed by the Corporation, one of whom shall be appointed by the Executive and one of whomshall be appointed by the first two arbitrators. The arbitration shall be conducted in accordancewith the rules of the American Arbitration Association, except with respect to the selection ofarbitrators which shall be as provided in this paragraph. Judgment upon the award rendered by thearbitrators may be entered in any court having jurisdiction thereof. In the event that it shall benecessary or desirable for the Executive to retain legal counsel or incur other costs and expensesin connection with the enforcement of the Executive’s rights under this Agreement, the Corporationshall pay the Executive’s reasonable attorneys’ fees and costs and expenses in connection with suchenforcement (including the enforcement of any arbitration award in court), regardless of the finaloutcome, unless the arbitrators shall determine that under the circumstances recovery by theExecutive of any such fees, costs and expenses would be unjust. Notwithstanding any otherprovisions of this Agreement regarding dispute resolution, including this paragraph 15, theExecutive agrees that Executive’s violation of any provision of paragraph 14 of this Agreement(“*Restrictive Covenants*”) would cause the Corporation irreparable harm which would not beadequately compensated by monetary damages and that an injunction may be granted by any court orcourts having jurisdiction, restraining the Executive from violation of the terms of thisAgreement, upon any breach or threatened breach of the Executive of the obligations set forth inany of the Restrictive Covenants. The preceding sentence shall not be construed to limit theCorporation from any other relief or damages to which it may be entitled as a result of theExecutive’s breach of any provision of this Agreement, including Restrictive Covenants.     **16. Indemnification and Insurance**. All rights to indemnification by the Corporation nowexisting in favor of the Executive as provided in the Articles of Incorporation or Bylaws of theCorporation shall continue in full force and effect, and the Corporation shall also advanceexpenses for which indemnification may ultimately be claimed as such expenses are incurred to thefullest extent permitted under applicable law. After a Change in Control, the Corporation shallnot amend its Articles of Incorporation or Bylaws or any agreement in any manner which adverselyaffects the rights of the Executive to indemnification thereunder. Any provision contained hereinnotwithstanding, this Agreement shall not limit or reduce any rights of the Executive toindemnification pursuant to applicable law. In addition, the Corporation will maintain directors’and officers’ liability insurance, or purchase “tail coverage,” for a period of at least six yearsfor acts and omissions of the Executive through the date on which the Executive’s employment isterminated, providing coverage comparable to the coverage in effect immediately prior to the Changein Control.     **17. Notices**. Any notices, requests, demands and other communications provided for by thisAgreement shall be sufficient if in writing and if sent by registered or certified mail, ordelivered by a nationally recognized overnight delivery service, postage or charges prepaid, to theExecutive at the last address he has filed in writing with the Corporation and to the Corporationat its principal executive offices.     **18. Assignment**. Neither the Corporation nor the Executive may assign this Agreement or anyrights, duties or obligations hereunder to any third party other than by operation of law ormerger, consolidation, reorganization or sale of the Corporation, without the other party’sconsent. The Corporation’s rights, duties and obligations under this Agreement shall be bindingobligations of any successor in interest to the Corporation to the fullest extent
10

 
enforceable by law. No interest of the Executive (or the Executive’s spouse or otherbeneficiary), nor any right to receive any payment or distribution hereunder, shall be subject tosale, transfer, assignment, pledge, attachment or garnishment or otherwise be assigned orencumbered, and any attempt to do so shall be void. No such interest or right shall be taken,voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claimsagainst, the Executive (or the Executive’s spouse or other beneficiary), including claims foralimony, child support, separate maintenance and claims in bankruptcy.     **19. Governing Law**. This Agreement shall be governed by and construed and enforced inaccordance with the substantive laws of the State of Washington.     **20. Amendments**. This Agreement may not be changed, waived or discharged orally, but only byan instrument in writing, signed by the party against which enforcement of such change, waiver ordischarge is sought.     **21. Successors**. This Agreement shall extend to and be binding upon the Corporation, itssuccessors and assigns. For purposes of this Agreement, unless the context otherwise requires,references to the Corporation shall include its subsidiaries.     **22. Severability**. In the event that any provision of this Agreement shall be determined to beinvalid or unenforceable for any reason, the remaining provisions of this Agreement shall beunaffected thereby and shall remain in full force and effect.     **23. Headings**. The headings of the paragraphs in this Agreement are solely for convenience orreference and shall not control the meaning or interpretation of any provision of this Agreement.     **24. Entire Agreement**. This Agreement including Annexes A and B constitutes the entireagreement between the parties with respect to the subject matter hereof and supersedes all prioragreements, written or oral, between the parties with respect to such subject matter.[SIGNATURE PAGE TO FOLLOW]
11

 
     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and deliveredas of the date first above written.       PENFORD CORPORATION       By         Title                   [Executive’s Name]
12

 
ANNEX A**PENFORD CORPORATION****WAIVER AND RELEASE AGREEMENT**     In consideration for the pay and benefits to be provided to me by Penford Corporation (the“*Corporation*”) under the terms of paragraphs 4, 6 or 7 of the Penford Corporation Change in ControlAgreement entered into between me and the Corporation, dated___, ___ (the “*Agreement*”),I hereby acknowledge, understand and agree under this agreement (the “*Release*”) to the following:1. In consideration of the foregoing, including, without limitation, payment to me of thedetermined amounts under the Agreement, I hereby release the Corporation and all of itspartners, affiliates, parents, predecessors, successors, assigns, officers, members,directors, trustees, employees, shareholders, agents, administrators, representatives,attorneys, insurers or fiduciaries, past, present or future (collectively, the “*ReleasedParties*”) from any claims, actions, causes of action, demands, obligations or damages of anykind arising from my employment and the separation of that employment that I ever had or nowhave upon or by reason of any matter, cause or thing, up to and including the day on which Isign this Release (the “*Claims*”). 2. The Claims I am waiving include, but are not limited to, my selection for termination, claimsof wrongful discharge, Claims for the payment of any salary, wages, bonuses or commissions,Claims under common law or any federal or state statute, include Claims under Title VII of theCivil Rights Act of 1964, as amended; Claims under the Americans with Disabilities Act; Claimsunder the Age Discrimination in Employment Act (“ADEA”); all Claims under the Fair LaborStandards Act; Claims under the National Labor Relations Act; all Claims under the Family andMedical Leave Act; Claims relating to the Corporation’s intellectual property, confidentialand proprietary information and trade secrets; Claims of misrepresentation or detrimentalreliance, Claims for severance pay (other than for the separation pay and benefits payableunder the Agreement), Claims based on breach of contract, defamation, intentional inflictionof emotional distress, tort, personal injury, invasion of privacy, violation of public policy,negligence or any other Claim for any type of relief, whether federal, state or local, whetherstatutory, regulatory or common law or otherwise. This Release does not apply to any Claimsdirectly related to the enforcement of the Agreement, Claims which I may make under stateworkers’ compensation or unemployment laws and/or any Claims I cannot waive as a matter oflaw. 3. I intend this Release to be binding on my successors and I specifically (i) waive anyapplicable law (and confirm that I have no Claim under any law providing rights to employees)and (ii) agree not to file or continue any Claim in respect of matters covered by thisRelease. I further agree never to institute any suit, complaint, proceeding, grievance oraction of any kind at law, in equity, or otherwise in any court of the United States or in anystate, or in any administrative agency of the United States or any state,
A-1

 
  county or municipality, or before any other tribunal, public or private, against theCorporation arising from or relating to my employment with or my termination of employmentfrom the Corporation and/or any other occurrences to the date of this Release, other than aClaim challenging the validity of this Release under the ADEA.4. I am further waiving my right to receive money or other relief in any action instituted by meor on my behalf by any person, entity or governmental agency. Nothing in this Release shalllimit the rights of any governmental agency or your right of access to, cooperation orparticipation with any governmental agency, including without limitation, the United StatesEqual Employment Opportunity Commission. I further agree to waive my rights under any otherstatute or regulation, state or federal, which provides that a general release does not extendto Claims which the creditor does not know or suspect to exist in his favor at the time ofexecuting the release, which if known to him must have materially affected his settlement withthe debtor. 5. I further acknowledge and agree that if I breach the provisions of paragraph 2, 3 or 4 above,then (i) the Corporation shall be entitled to apply for and receive an injunction to restrainany such breach, (ii) the Corporation shall not be obligated to continue payment of any pay orbenefits described in paragraph 4 of the Agreement, (iii) I shall be obligated to pay to theCorporation its costs and expenses in enforcing this Release and defending against suchlawsuit (including court costs, expenses and reasonable legal fees), and (iv) as analternative to (iii), at the Corporation’s option, I shall be obligated upon demand to repayto the Corporation all but $1,000.00 of the pay and benefits paid or made available to mepursuant to paragraph 4 of the Agreement. I further agree that the foregoing covenants inthis paragraph 5 shall not affect the validity of this Release and shall not be deemed to be apenalty or a forfeiture. 6. In further consideration of the promises made by the Corporation in this Release, Ispecifically waive and release the Corporation from all Claims I may have as of the date Isign this Release arising under the ADEA. I further agree that: (a) My waiver of rights under this Release is knowing and voluntary and incompliance with the Older Workers Benefit Protection Act of 1990 (“*OWBPA*”);  (b) I understand the terms of this Release;  (c) The consideration offered by the Corporation under the Agreement in exchangefor the signing of this Release represents consideration over and above that to which Iwould otherwise be entitled, and that the consideration would not have been providedhad I not signed or agreed in advance to sign this Release;  (d) The Corporation is hereby advising me in writing to consult with an attorney atmy own expense prior to executing this Release;  (e) The Corporation has given me a period of at least forty-five (45) days withinwhich to consider this Release;
A-2

 
 (f) Following my execution of this Release, I have seven (7) days in which torevoke this Release by written notice. An attempted revocation not actually receivedby the Corporation prior to the revocation deadline will not be effective;  (g) This entire Release shall be void and of no force and effect if I choose to sorevoke, and if I choose not to so revoke this Release shall then become effective andenforceable; and  (h) This Section 6 does not waive rights or claims that may arise under the ADEAafter the date I sign this Release. To the extent barred by the OWBPA, the covenantnot to sue contained in Section 3 does not apply to Claims under the ADEA thatchallenge the validity of this Release.7. To revoke this Release, I must send a written statement of revocation by registered orcertified mail, or delivered by a nationally recognized overnight delivery service, postage orcharges prepaid, to the Corporation at its principal executive offices. The revocation mustbe received no later than 5:00 p.m. on the seventh day following my execution of this Release.If I do not revoke, the eighth day following my acceptance will be the “*effective date*” ofthis Release. 8. I agree to cooperate fully with the Corporation, other Corporation affiliates, and theirlegal counsel in connection with any disputes arising out of matters with which I was directlyor indirectly involved while serving as an employee of the Corporation. This cooperationshall include, but shall not be limited to, meeting with, and providing information to, theCorporation and its legal counsel, maintaining the confidentiality of any past or futureprivileged communications with the Corporation legal counsel (outside and in-house counsel),and making myself available to testify truthfully by affidavit, in depositions, or in anyother forum on behalf of the Corporation. The foregoing shall be reasonable and shall notinterfere unreasonably with my then employment. If and to the extent that the Corporationshall require my assistance pursuant to this Section 8 after the Compensation Period asdefined in the Agreement, the Corporation shall pay me $250 per hour for such services.[SIGNATURE PAGE TO FOLLOW]
A-3

 
     I acknowledge that I remain bound by, and reaffirm my intention to comply with, continuingobligations under any agreements between myself and the Corporation, as presently in effect,including, but not limited to, my confidentiality obligations.* * *     BY SIGNING THIS RELEASE, I ACKNOWLEDGE THAT: I HAVE READ THIS RELEASE AND UNDERSTAND ITSTERMS; I HAVE HAD THE OPPORTUNITY TO REVIEW THIS RELEASE WITH LEGAL OR OTHER PERSONAL ADVISORS OFMY OWN CHOICE; I UNDERSTAND THAT BY SIGNING THIS RELEASE I AM RELEASING THE RELEASED PARTIES OF ALLCLAIMS AGAINST THEM; I HAVE BEEN GIVEN AT LEAST TWENTY-ONE DAYS TO CONSIDER THE TERMS AND EFFECT OFTHIS RELEASE; AND I VOLUNTARILY AGREE TO ITS TERMS.SIGNED this _____________ day of _________________, 20___.                                                                                                    the Executive
A-4

 
Tier I — CEO and CFOCHANGE IN CONTROL AGREEMENTANNEX BSPECIFIC PROVISIONS APPLICABLETO___(“*Executive*”)     This Annex B is attached to a Change in Control Agreement between Penford Corporation and theundersigned Executive and contain specific provisions applicable to the Executive:     *“CIC Amount”*shall mean an amount equal to the product of the sum of the Executive’s BaseSalary plus the Executive’s Average Target Attainment Bonus, times 2.5.     “*Compensation Period*” shall mean the period between the Executive’s termination date andthirty (30) months after such termination date.     *“Outplacement Period”*shall mean a period of twelve (12) months.     “*Termination of the Executive’s Employment*” shall also include:(iii) termination by written notice from the Executive during the thirty (30) dayperiod beginning on the one-year anniversary of the date of the Change in Control,provided that the Executive shall not have been previously terminated by theCorporation for Cause or terminated his or her employment without Good Reason.The following shall apply in lieu of Paragraph 9 of the attached Change in Control Agreement.**9. Section 280G Tax Payment.**     (b) *Excise Tax*. If any payment made or benefit provided to the Executive under paragraphs 4,5, 6 or 7 (a “*Termination Payment*”) is subject to an excise tax under Section 4999 of the Code (the“*Excise Tax*”), the Corporation (or successor) shall pay an additional amount to the Executive in asingle sum (the “*Gross-Up Payment*”), so that the net amount of the Termination Payment received bythe Executive is not reduced by the Excise Tax (or by any interest penalties or additions theretorequired to be paid by the Executive).     (c) *Gross-Up Payment*. The Gross-Up Payment shall be an amount equal to the sum of (i) theExcise Tax (plus any interest, penalties or additions thereto required to be paid by the Executive)on the Termination Payment and (ii) the additional Excise Tax and additional federal, state andother income taxes (plus any interest, penalties or additions on all such amounts required to bepaid by the Executive) owing on the amount received under clause (i) and owing
B-1

 
Tier I — CEO and CFOon the amount received under this clause (ii). The Gross-Up Payment shall be determined atthe expense of the Corporation by a nationally recognized firm of certified public accountantsselected by the Corporation. The Gross-Up Payment shall be based on the following assumptions: (i) All payments and benefits making up the Termination Paymentshall be deemed “*parachute payments*” within the meaning of Section 280G(b)(2)of the Code, and all “*excess parachute payments*” shall be deemed to be subjectto the Excise Tax, except to the extent that independent tax counsel selectedby the Corporation opines that such payments or benefits are not subject to theExcise Tax.  (ii) The Executive shall be deemed to pay federal, state and otherincome taxes at the highest marginal rate of taxation applicable to theExecutive for the applicable calendar year.     (d) *Payment of Gross-Up*. An estimated Gross-Up Payment shall be made to the Executive nolater than thirty (30) business days following the effective date of the Waiver and ReleaseAgreement as defined therein. In the event the estimated Gross-Up Payment is less than the amountactually due to the Executive under this paragraph 9, the amount of any shortfall shall be paid tothe Executive within ten (10) business days after the determination of the shortfall. Anyoverpayment, or amount refunded to the Executive resulting from an overpayment of the Gross-UpPayment, shall be paid to the Corporation within ten (10) business days after the determination ofthe overpayment or receipt of the refund.     (e) *Opinion of Counsel*. In the event of any change in, or further interpretation of, sections280G or 4999 of the Code and the regulations promulgated thereunder, the Executive shall beentitled by written notice to the Corporation to request an opinion of tax counsel regarding theapplication of such change in any of the foregoing, and the Corporation shall use its best effortsto cause such opinion to be rendered as promptly as practicable. All fees and expenses of taxcounsel incurred in connection with this Agreement shall be borne by the Corporation.[SIGNATURE PAGE TO FOLLOW]
B-2

 
Tier I — CEO and CFO     The execution of this Annex B to the Change in Control Agreement is hereby acknowledged this___day of ___, 2006.       PENFORD CORPORATION       By         Title                   [Executive’s Name]     Principal Residence:     Principal Place of Employment:***Executive agrees to promptly notify the Corporation of any change in his or her principalresidence or principal place of employment***.
B-3

 
Tier II— 30 or 24 monthsCHANGE IN CONTROL AGREEMENTANNEX BSPECIFIC PROVISIONS APPLICABLETO___(“Executive”)     This Annex B is attached to a Change in Control Agreement between Penford Corporation and theundersigned Executive and contains specific provisions applicable to the Executive:     *“CIC Amount”*shall mean an amount equal to the product of the sum of the Executive’s BaseSalary plus the Executive’s Average Target Attainment Bonus, times 2.0.     “*Compensation Period*” shall mean the period between the Executive’s termination date andtwenty-four (24) months after such termination date.     *“Outplacement Period”*shall mean a period of six (6) months.     The execution of this Annex B to the Change in Control Agreement is hereby acknowledged this___ day of ___, 2006.       PENFORD CORPORATION       By         Title                   [Executive’s Name]     Principal Residence:     Principal Place of Employment:***Executive agrees to promptly notify the Corporation of any change in his or her principalresidence or principal place of employment***.
B-1

 
Tier III— 12 monthsANNEX BSPECIFIC PROVISIONS APPLICABLETO___(“Executive”)     This Annex B is attached to a Change in Control Agreement between Penford Corporation and theundersigned Executive and contains specific provisions applicable to the Executive:     *“CIC Amount”*shall mean an amount equal to the product of the sum of the Executive’s BaseSalary plus the Executive’s Average Target Attainment Bonus.     “*Compensation Period*” shall mean the period between the Executive’s termination date andtwelve (12) months after such termination date.     *“Outplacement Period”*shall mean a period of six (6) months.     The execution of this Annex B to the Change in Control Agreement is hereby acknowledged this___day of ___, 2006.       PENFORD CORPORATION       By         Title                   [Executive’s Name]     Principal Residence:     Principal Place of Employment:***Executive agrees to promptly notify the Corporation of any change in his or her principalresidence or principal place of employment***.
B-1