EXHIBIT 10.5
GANTOS, INC.
0000 XXXX XXXX XXXXXX, 0XX XXXXX
XXXXXXXX, XXXXXXXXXXX 00000
March 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"), and the letter agreement, dated May 19,
1998 (the "First Amendment"), with respect to your employment with Gantos,
Inc. ("Gantos"). In connection with your continued employment by Gantos, you
and Gantos desire to (i) extend for one year the term and minimum bonus
provisions of the Agreement, (ii) reduce the threshold for a change in
control involving a merger, consolidation, reorganization or share exchange
from 50% to 40%, and (iii) terminate the Termination Agreement. This letter
(the "Second 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. TERM. The Agreement, as amended, is further amended by substituting
the phrase "four years" for the phrase "three years" in the introductory
paragraph of Paragraph 2 of the Agreement.
2. MINIMUM BONUS. The Agreement, as amended, is further amended by
substituting the following for Paragraph 3(d) of the Agreement:
"(d) If you are employed by Gantos at the end of the applicable fiscal
year, you will receive a minimum bonus of $75,000 with respect to each of
fiscal 1996, 1998 and 1999. Therefore, if you are employed by Gantos at
the end of the applicable fiscal year, with respect to each of fiscal 1996,
1998 and 1999, Gantos will pay to you the excess, if any, of $75,000 over
the amount paid or payable to you pursuant to Paragraph 3.(b) and
Paragraph 3.(c). Conversely, if the amount paid or payable to you pursuant
to Paragraph 3.(b) and Paragraph 3.(c) is at least $75,000, no payment will
be made under this Paragraph 3.(d) with respect to that fiscal year."
3. CHANGE IN CONTROL. The Agreement, as amended, is further amended by
substituting the figure "40%" for the figure "50%" in the two places it appears
in Paragraph 6(f)(iii)(2) of the Agreement.
4. TERMINATION AGREEMENT. The Agreement, as amended, is further amended
by terminating the Termination Agreement and treating it as if it had never
existed.
5. NO OTHER CHANGE. Except as modified by this Second Amendment, the
Agreement, as amended, shall continue in full force according to its terms and
is ratified.
6. COUNTERPARTS. This Second Amendment may be signed in counterparts,
both of which together will be deemed an original of this Second Amendment.
This Second Amendment will also be effective if evidenced by signed copies
transmitted by telecopier or facsimile transmission.
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
