EXHIBIT 10.5
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
BECKY ILIFF ("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 circumstance
