Exhibit 10.2

 

Summary of Material Terms of

The Pantry, Inc. Annual Incentive Plan

 

The Pantry, Inc. Annual Incentive Plan, effective October 1, 2004 (the “Plan”),
is a compensatory plan through which the Company’s executive officers are
eligible to receive a cash bonus based primarily on the Company’s earnings per
share (“EPS”) results during fiscal year 2005, adjusted for such things as
acquisitions and divestitures and other items at the discretion of the
Compensation Committee of our Board of Directors, and previously established
cash bonus targets for each executive officer. The Plan aligns the interests of
executive officers with those of the Company’s stockholders by linking the bonus
amounts directly to Company performance. The target EPS result is based on the
Company’s internal EPS budget estimates. Each executive’s cash bonus target is
set by the Compensation Committee of our Board of Directors at the beginning of
each fiscal year. Actual bonus payouts, if any, under the Plan will vary
depending on the Company’s actual EPS results. In addition, the Compensation
Committee has retained the discretion under the Plan, in extraordinary
circumstances, to award bonuses or otherwise increase, reduce or eliminate
bonuses that otherwise might be payable to an executive officer based on actual
performance even if inconsistent with the Plan. Participants in the Plan who
join the Company mid-year will have bonuses, if any, prorated. Bonuses are
intended to be paid no later than 120 days following the close of the fiscal
year. Participants must be employed on the date bonuses are paid in order to
receive a payment, except that participants who retire prior to that date may
have their bonuses prorated and paid on the date other bonuses are paid in the
discretion of the Compensation Committee of our Board of Directors.