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EXHIBIT 10.3
EXECUTION DOCUMENT
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (this "Agreement") is
made and
entered into as of _________________, 2008 (the "Effective
Date") by and between
VICKI BAUE ("Executive") and COSI, INC., a Delaware corporation
(the "Company").
RECITALS:
WHEREAS, the Board of Directors of the Company (the "Board") has
approved
a Change in Control agreement to provide Executive with certain
benefits upon
termination of employment (in certain circumstances).
AGREEMENT:
NOW, THEREFORE, In consideration of the mutual covenants herein
contained
and the continued employment of Employee by the Company, the
parties hereto
agree as follows:
1. Term of Agreement. This Agreement shall commence on the
Effective Date
and continue in effect through December 31, 2011; provided,
however, the term of
this Agreement shall automatically be extended for one year
beyond December 31,
2011 and successive one year periods thereafter, unless, not
later than,
September 30, 2010 (for the additional year ending on December
31, 2012) or
September 30 of each year thereafter (for each subsequent
extension), the
Company shall have given notice that it does not wish to extend
this Agreement
for an additional year, in which event this Agreement shall
continue to be
effective until the end of its then remaining term; provided,
further, that
notwithstanding any such notice by the Company not to extend, if
a Change in
Control shall have occurred during the original or any extended
term of this
Agreement, this Agreement shall continue in effect for a period
of twelve (12)
months beyond such Change of Control.
2. Change in Control. No benefits shall be payable hereunder
unless there
shall have been a Change in Control of the Company. For purposes
of this
Agreement, a "Change in Control" shall mean the date on which
the earlier of the
following events occur: (a) the acquisition by any entity,
person or group
(other than ZAM Holdings, L.P., LJCB Nominees Pty Ltd., Charles
G. Phillips, or
any entity related to any such party) of beneficial ownership,
as that term is
defined in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended, of
more than 50% of the outstanding capital stock of the Company
entitled to vote
for the election of directors ("Voting Stock"); (b) the merger
or consolidation
of the Company with one or more corporations or other entity as
a result of
which the holders of outstanding Voting Stock of the Company
immediately prior
to such a merger or consolidation hold less than 60% of the
Voting Stock of the
surviving or resulting corporation or any direct or indirect
parent corporation
or entity of such surviving or resulting entity; (c) the sale or
transfer of all
or substantially all of the property of the Company other than
to an entity of
which the Company owns at least 80% of the Voting Stock; or (d)
during any
period of twenty-four (24) consecutive months, the individuals
who, at the
beginning of such period, constitute the Board of Directors (the
"Incumbent
Directors") cease for any reason other than death to constitute
at least a
majority thereof; provided, however, that a director who was not
a director at
the beginning of such 24-month period shall be deemed to have
satisfied such
24-month requirement (and be an Incumbent Director) if such
director was elected
by, or on the recommendation of or with the approval of, at
least two-thirds of
the directors who then qualified as Incumbent Directors either
actually (because
they were directors at the beginning of such 24-month period) or
through the
operation of this proviso. Notwithstanding the foregoing, a
Change in Control
shall not include any acquisition in which Executive is a member
of the
acquiring group or an officer or owner of the acquiring
entity.
3. Termination Following a Change in Control. If any of the
events
described in Section 2 above constituting a Change in Control
shall have
occurred, Executive shall be entitled to the payments and
benefits provided in
Section 4(i) below upon the subsequent termination of
Executive's employment
with the Company during the term of this Agreement unless such
termination is
(A) a result of Executive's death, (B) by Executive without Good
Reason, or (C)
by the Company for Disability or for Cause.
(i) Disability. For purposes of this Agreement, "Disability"
shall
mean Executive's physical or mental disability such that
Executive is and
has been continuously for at least six (6) months unable to
perform the
duties and services required in the performance of Executive's
job
function, and Executive is determined to be eligible or
long-term
disability benefits under the Company's long-term disability
benefits plan
in effect from time to time.
Any question as to the existence of Executive's Disability upon
which
Executive and the Company cannot agree shall be determined by a
qualified
independent physician selected by Executive and approved by the
Company,
said approval not to be unreasonably withheld. The determination
of such
physician made in writing to the Company and to Executive shall
be final
and conclusive for all purposes of this Agreement.
(ii) Cause. For purposes of this Agreement, "Cause" shall mean
only
one or more of the following:
(A) Executive shall be convicted of, or plead guilty or nolo
contendere to, a felony;
(B) Executive shall willfully neglect or fail to perform the
duties and services required in the performance of Executive's
job
function, provided that written notice from the Company
specifying
such neglect or failure and a reasonable opportunity to cure, up
to
but not to exceed thirty (30) days, has been delivered to
Executive
and such willful neglect or failure to perform shall continue
beyond
such specified cure period; and/or
(C) Executive shall commit any fraud, embezzlement or other
act of intentional dishonesty against the Company, or shall
attempt
to profit from any transaction in which the Company is a
participant
and in which Executive has an undisclosed interest adverse to
the
Company.
(iii) Good Reason. Executive shall be entitled to terminate
employment with Good Reason. For purposes of this Agreement,
"Good Reason"
shall mean the occurrence, without Executive's express written
consent, of
only one or more of the following circumstances unless, in the
case of
Sections 3(iii)(A), (B), (C) or (D) below, such circumstances
are fully
corrected within thirty (30) days after the date of such Notice
of
Termination (as defined in Section 3(iv) below) given in respect
thereof.
(A) A material diminution in Executive's duties or
responsibilities from those in effect immediately prior to
the
Change in Control, or the failure by the Company to permit
Executive
to exercise such responsibilities as are consistent with
Executive's
position (as it existed immediately prior to the Change in
Control);
(B) A reduction in the amount of Executive's annual base
salary (as in effect on the date hereof and as the same may
be
increased from time to time) or potential annual bonus (at the
rate
in effect on the date hereof and as the same may be increased
from
time to time) or the discontinuation by the Company of all
healthcare and medical benefits plans in which Executive is
participating unless the Company has increased Executive's
salary to
offset and compensate Executive for the cost of such
discontinued
healthcare and medical benefits or has otherwise provided
substantially similar healthcare and medical benefits to
Executive;
(C) The failure by the Company to make a bi-weekly base
salary
payment to Executive when due in accordance with the
Company's
regular payment practices in effect from time to time;
(D) The relocation of the Company's Support Center and
Executive's office more than fifty (50) miles outside of the
City of
Chicago and the Chicagoland area by decision of the Board, or
a
committee thereof, where Executive was not consulted about or
given
an opportunity to participate in such decision;
(E) The failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform
this
Agreement, as contemplated in Section 5 below; or
(F) Any purported termination of Executive's employment by
the
Company which is not effected pursuant to a Notice of
Termination
satisfying the requirements of Section 3(iv) below. For purposes
of
this Agreement, no such purported Termination shall be
effective;
(iv) Notice of Termination. Any purported termination of
Executive's
employment by the Company or by Executive shall be communicated
by written
Notice of Termination to the other party hereto in accordance
with Section
6 hereof. For purposes of this Agreement, a "Notice of
Termination" shall
mean a notice which shall indicate the specific termination
provision in
this Agreement relied upon and shall set forth in reasonable
detail (other
than with respect to a Good Reason termination pursuant to
Section
3(iii)(F) above) the facts and circumstances claimed to provide
a basis
for terminat
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