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Exhibit 10.1
EXHIBIT C
GANTOS, INC.
0000 XXXX XXXX XXXXXX, 0XX XXXXX
XXXXXXXX, XXXXXXXXXXX 00000
November 16, 1999
Xx. Xxxxxx X. Xxxxx
0000 Xxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Dear Xxxxxx:
We have entered into a letter agreement, dated June 20, 1996 (the
"Agreement"), as amended by the Termination Agreement, dated as of May 12, 1998
(the "Termination Agreement"), the letter agreement, dated May 19, 1998 (the
"First Amendment") and the letter agreement, dated March 16, 1999 (the "Second
Amendment"), with respect to your employment with Gantos, Inc. ("Gantos"). In
connection with your continued employment by Gantos, you and Gantos desire to
provide that your severance payments upon a change in control will equal the
amount that provides you with the greatest after-tax benefits. This letter (the
"Third Amendment") states our agreement with respect to the changes to the
Agreement and is entered into in exchange for good and valuable consideration,
the receipt and adequacy of which are acknowledged by both of us.
1. Change in Control Severance. The final paragraph of Section 6(c) of
the Agreement, as amended, (beginning "Notwithstanding the foregoing, . . . .")
is amended and restated to read as follows:
"Notwithstanding the foregoing, the total amount of all payments of cash
or property in the nature of compensation contingent on a change in the
ownership or effective control of Gantos or in the ownership of a
substantial portion of Gantos' assets, including, without limitation, the
benefits provided pursuant to this Paragraph 6(c) and payments relating to
any stock options that vest as a result of a Change in Control, shall not
exceed whichever of the following provides you with the greatest dollar
value after federal income and excise taxes: (1) the maximum amount that
may be paid to you and not be deemed a "parachute payment" resulting in an
excise tax to you and a loss of compensation deduction to Gantos, all
within the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended, and related provisions, or any successor provisions, and (2)
the amounts payable to you in the absence of this sentence. If the
benefits otherwise provided pursuant to this Paragraph 6(c) would result
in you receiving such a "parachute payment" and clause (1) above is
applicable, your benefits shall be reduced (in the order set forth above)
until they are $1.00 less than the amount that would result in you
receiving such a "parachute payment"."
2. No Other Change. Except as modified by this Third Amendment, the
Agreement, as amended, shall continue in full force according to its terms and
is ratified.
3. Counterparts. This Third Amendment may be signed in counterparts, both
of which together will be deemed an original of this Third Amendment. This Third
Amendment will also be effective if evidenced by signed copies transmitted by
telecopier or facsimile transmission.
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If this letter correctly expresses our mutual understanding, please sign
and date the enclosed copy and return it to us.
Very truly yours,
GANTOS, INC.
By:
Its:
The terms of this agreement
are accepted and agreed to
on _______________________:
Xxxxxx X. Xxxxx
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