Exhibit 10.45

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into by THE PANTRY,
INC., a Delaware corporation (the “Corporation”) and Robert Williams (the
“Employee”).

 

The Corporation desires to employ Employee and Employee desires to accept such
employment on the terms set forth below.

 

In consideration of the mutual promises set forth below and other good and
valuable consideration, the receipt and sufficiency of which the parties
acknowledge, the Corporation and Employee agree as follows:

 

1.      EMPLOYMENT. The Corporation employs Employee and Employee accepts
employment on the terms and conditions set forth in this Agreement. Employee
shall serve as Group Vice President and have such responsibilities and authority
as the Corporation may assign from time to time. Employee, at the Corporation’s
discretion, may be reassigned or transferred to different units or locations.

 

1.1       Employee shall perform all duties and exercise all authority in
accordance with, and otherwise comply with, all Corporation policies,
procedures, practices and directions.

 

1.2       Employee shall devote all working time and best efforts to
successfully perform his duties and advance the Corporation’s interests. During
his employment, Employee shall not engage in any other business activities of
any nature whatsoever (including board memberships) for which he receives
compensation without the Corporation’s prior consent; provided, however, this
provision does not prohibit him from personally owning and trading in stocks,
bonds, securities, real estate, commodities or other investment properties for
his own benefit which do not create actual or potential conflicts of interest
with the Corporation.

 

 

2.

COMPENSATION.

 

2.1       Base Salary. Employee’s annual salary for all services rendered shall
be $190,000 (less applicable withholdings) payable in accordance with the
Corporation’s policies, procedures and practices as they may exist from time to
time. The Employee’s salary periodically may be subject to annual increases in
the Corporation’s discretion in accordance with its policies, procedures and
practices as they may exist from time to time.

 

2.2       Bonus Programs. Employee may participate in any incentive program
which may be made available from time to time to Corporation’s employees at
Employee’s level; provided, however, that Employee’s participation is subject to
the applicable terms, conditions and eligibility requirements of the program, as
they may exist from time to time.

 

2.3       Benefits. Employee may participate in all medical, dental, disability,
insurance, 401(k), pension, vacation and other employee benefit plans and
programs which may be made available from time to time to Corporation employees
at Employee’s level; provided, however, that Employee’s participation is subject
to the applicable terms, conditions and eligibility requirements of these plans
and programs, some of which are within the plan administrator’s discretion, as
they may exist from time to time. Notwithstanding the foregoing, Employee shall
be

 

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entitled to three (3) weeks of annual vacation and, thereafter, vacation shall
be in accordance with the Corporation’s policies and programs. Subject to
applicable state law, accrued, unused vacation may not be carried over from year
to year.

 

2.4       Benefit Plans Subject to Amendment. Nothing in this Agreement shall
require the Corporation to create, continue or refrain from amending, modifying,
revising or revoking any of the plans, programs or benefits set forth in
Sections 2.2 and 2.3. Employee acknowledges that the Corporation, in its sole
discretion, may amend, modify, revise or revoke any such plans, programs or
benefits. Any amendments, modifications, revisions and revocations of these
plans, programs and benefits shall apply to Employee. Nothing in this Agreement
shall afford Employee any greater rights or benefits with regard to these plans,
programs and benefits than are afforded to him under their applicable terms,
conditions and eligibility requirements, some of which are within the plan
administrator’s discretion, as they may exist from time to time.

 

2.5       Offset for Disability Payments. If at any time during which Employee
is receiving salary or post-termination payments from the Corporation, he
receives payments on account of mental or physical disability from any
Corporation-provided plan, then the Corporation, in its discretion, may reduce
his salary or post-termination payments by the amount of such disability
payments.

 

3.         TERM OF EMPLOYMENT AND TERMINATION. The term of employment shall be
for a one (1) year period commencing on January 16, 2006 and terminating on
January 15, 2007 subject to the following provisions:

 

3.1       Automatic Renewal. Upon the expiration of the original term or any
renewal term of employment, Employee’s employment shall be automatically renewed
for a one (1) year period unless, at least sixty (60) days prior to the renewal
date, either party gives the other party written notice of its intent not to
continue the employment relationship. During any renewal term of employment, the
terms, conditions and provisions set forth in this Agreement shall remain in
effect unless modified in accordance with Section 8.

 

3.2       Without Cause. During the original or any extension term, the
employment relationship hereunder shall be terminated without cause thirty (30)
days after the Corporation or the Employee gives notice of such termination to
the other party.

 

3.3       With Cause. The Corporation may terminate Employee’s employment
immediately without notice at any time for the following reasons which shall
constitute “Cause”: (i) the willful and continued failure by Employee to
substantially perform his duties with the Corporation; (ii) Employee’s
insubordination in responding to any specific, reasonable instructions from
either the Corporation’s Chief Executive Officer or Board of Directors; (iii)
conduct by the Employee which is demonstrably and materially injurious to the
Corporation, monetarily or otherwise; or (iv) the conviction of Employee of, or
the entry of a plea of guilty or nolo contendere by Employee to, any crime
involving moral turpitude or any felony. Prior to a termination pursuant to
Section 3.3(i), Employee shall be given written notice of the manner in which he
has failed to perform and a thirty (30) day opportunity to cure such failure.

 

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3.4       Death or Disability. The Corporation may terminate Employee’s
employment without notice in the event of Employee’s death or “Disability” which
shall mean Employee’s physical or mental inability to perform the essential
functions of his duties with or without reasonable accommodation for a period of
180 consecutive days or 180 days in total within a 365-day period as determined
by the Corporation in its reasonable discretion and in accordance with
applicable law.

 

3.5       Survival. Section 4 (Compensation Upon Termination), Section 5
(Competitive Business Activities, Trade Secrets, Confidential Information and
Corporation Property), and Section 6 (Change in Control) shall survive the
expiration or termination of this Agreement, regardless of the reasons for such
expiration or termination, until the obligations set forth therein have been
satisfied.

 

 

4.

COMPENSATION UPON TERMINATION.

 

4.1       By Corporation For Cause or Employee Without Cause. If Employee’s
employment is terminated by the Corporation for Cause or by Employee without
cause or by notice of non-renewal, the Corporation’s obligation to compensate
Employee ceases on the effective termination date except as to amounts due at
that time.

 

4.2       By Corporation by Non-Renewal or Without Cause. If the Corporation
terminates Employee’s employment by notice of non-renewal or without Cause, then
Employee shall be entitled to receive: (i) amounts due on the effective
termination date; and (ii) an amount (less applicable withholdings) equal to
Employee’s then current monthly salary for twelve (12) months, payable in
accordance with the Corporation’s regular payroll periods or, at the
Corporation’s option, a lump sum. During the twelve (12) month period following
termination, if Employee accepts employment or a consultancy with another entity
or becomes self-employed, then he must notify the Corporation before such
employment or consultancy begins and the payments made pursuant to Section
4.2(ii) shall be reduced by the amount of compensation to be paid to him in
connection with such employment, consultancy or self-employment. If Employee
does not notify the Corporation in accordance with this provision, then its
obligation to make payments or further payments pursuant to Section 4.2(ii)
shall cease.

 

4.3       Death or Disability. If Employee’s employment is terminated because of
Employee’s death, then the Corporation shall pay to the estate of Employee only
amounts due to Employee as of the date of death. If Employee’s employment is
terminated because of Disability, then the Corporation shall continue to pay
Employee his then-current monthly salary (less applicable withholdings) until
the earlier of: (i) six (6) months from the date of termination; or, (ii) the
date on which Employee begins receiving long term disability insurance benefits
in accordance with the Corporation’s long term disability plan.

 

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4.4       Severance Pursuant to Agreement. The Corporation’s obligation to
provide the payments under Section 4.2 and 4.3 (except in the event of
termination because of Employee’s death) is conditioned upon Employee’s
execution of an enforceable release of all claims and his compliance with
Section 5 hereof (specifically including the return of all Corporation
property). The required release shall contain a non-disparagement clause. If
Employee chooses not to execute such a release or fails to comply with Section 5
of this Agreement, then the Corporation’s obligation to compensate him ceases on
the effective termination date except as to amounts due at that time.

          

           Employee is not entitled to receive any compensation or benefits upon
his termination except as: (i) set forth in this Agreement; (ii) otherwise
required by law; or (iii) otherwise required by any employee benefit plan in
which he participates; provided, however, that the terms and conditions afforded
Employee under this Agreement are in lieu of any severance benefits to which he
otherwise might be entitled pursuant to a severance plan, policy or practice.
Nothing in this Agreement, however, is intended to waive or supplant any death,
disability, retirement, 401(k) or pension benefits to which Employee may be
entitled under employee benefit plans in which Employee participates.

 

5.         COMPETITIVE BUSINESS ACTIVITIES, TRADE SECRETS, CONFIDENTIAL
INFORMATION AND CORPORATION PROPERTY. Employee acknowledges that by virtue of
Employee’s employment and position with the Corporation, Employee (i) has or
will have access to trade secrets and Confidential Information (as defined in
Section 5.2.2) of the Corporation including valuable information about its
business operations and entities with whom it does business in various
locations, and (ii) has developed or will develop relationships with parties
with whom it does business in various locations. Employee also acknowledges that
the trade secrets, Confidential Information and Competitive Business Activities
provisions set forth in this Agreement are reasonably necessary to protect the
Corporation’s legitimate business interests, are reasonable as to the time,
territory and scope of activities which are restricted, do not interfere with
public policy or public interest and are described with sufficient accuracy and
definiteness to enable him to understand the scope of the restrictions imposed
on him.

 

5.1       Competitive Business Activities. During Employee’s employment and for
twelve (12) months following the termination of his employment (regardless of
the reason for the termination):

 

5.1.1    Employee shall not, either individually or on behalf of another,
directly or indirectly, as employer, employee, owner, partner, stockholder,
independent contractor, agent, or otherwise enter into or in any manner
participate in the convenience store business in North Carolina, South Carolina,
Florida, or any other state in which the Corporation owns or operates ten (10)
or more convenience stores upon the date of termination of employment.
Notwithstanding the foregoing, Employee’s ownership, directly or indirectly, of
not more than one percent of the issued and outstanding stock of a corporation
the shares of which are regularly traded on a national securities exchange or in
the over-the-counter market shall not violate Section 5.1.1.

 

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5.1.2    Employee will not directly or indirectly, request or induce any other
employee of the Corporation to: (i) terminate employment with the Corporation,
or (ii) accept employment with another business entity, or (iii) become engaged
in the convenience store business in competition with the Corporation.

 

 

5.2

Trade Secrets; Confidential Information.

 

5.2.1    Employee hereby covenants and agrees not to use or disclose any
Confidential Information (as hereinafter defined) or trade secrets except to
authorized representatives of the Corporation or except as required by any
governmental or judicial authority; provided, however, that the foregoing
restrictions shall not apply to items that, through no fault of Employee’s, have
entered the public domain.

 

5.2.2    Confidential Information. For purposes of this Agreement, “Confidential
Information” means any data or information with respect to the business
conducted by the Corporation, other than trade secrets, that is material to the
Corporation and not generally known by the public. To the extent consistent with
the foregoing definition, Confidential Information includes without limitation:
(A) reports, pricing, sales manuals and training manuals, selling and pricing
procedures, and financing methods of the Corporation, together with any
techniques utilized by the Corporation in designing, developing, manufacturing,
testing or marketing its products or in performing services for clients,
customers and accounts of the Corporation; and (B) the business plans, financial
statements, reports and projections of the Corporation, and the Corporation’s
prospective strategic or expansion plans.

 

5.2.3    Corporation Property. Employee acknowledges that all trade secrets and
Confidential Information are and shall remain the sole, exclusive and valuable
property of the Corporation and that Employee has and shall acquire no right,
title or interest therein. Any and all printed, typed, written and other
material which Employee may have or obtain with respect to trade secrets or
Confidential Information (including without limitation all copyrights therein)
shall be and remain the exclusive property of the Corporation, and any and all
such material (including any copies) and all other Corporation property shall,
upon request of the Corporation, be promptly delivered by Employee to the
Corporation.

 

5.3       Other Agreements. Nothing in this Agreement shall terminate, revoke or
diminish Employee’s obligations or the Corporation’s rights and remedies under
law or any agreements relating to trade secrets, confidential information, or
non-competition which Employee has executed in the past or may execute in the
future or contemporaneously with this Agreement.

 

 

6.

Change in Control.

 

6.1       Definition of Change in Control. For purposes of this Agreement, a
“Change in Control” shall mean any “person” (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), other than: (i) the Corporation; (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation;
(iii) a corporation owned, directly or indirectly, by the stockholders of the
Corporation in substantially the same proportions as their ownership of stock of
the Corporation; or (iv) the existing holders of capital stock

 

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of the Corporation as of the date hereof, is or becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing more than fifty percent (50%) of the
combined voting power of the Corporation’s then outstanding securities.

 

6.2       Termination Following a Change in Control. After the occurrence of a
Change in Control, Employee shall be entitled to receive payments and benefits
pursuant to this Agreement if Employee’s employment is terminated within
eighteen (18) months following the Change in Control either by the Corporation
by notice of non-renewal, without Cause, or with Cause as defined in Section
3.3(i) (failure to perform) hereof, or by Employee for Good Reason. For purposes
of this Agreement, “Good Reason” shall exist for Employee to terminate his
employment if Employee resigns within six (6) months of any of the following
occurrences:

 

(A)      the assignment to Employee of any duties inconsistent (except in the
nature of a promotion) with the position in the Corporation that he held
immediately prior to the Change in Control or a substantial adverse alteration
in the nature or status of his position or responsibilities or the conditions of
his employment from those in effect immediately prior to the Change in Control;

 

 

(B)  

a reduction by the Corporation in Employee’s annual base salary;

 

(C)      the Corporation’s requiring Employee to be based more than fifty (50)
miles from the Corporation’s offices at which he was principally employed
immediately prior to the date of the Change in Control;

 

(D)      the failure by the Corporation to pay to Employee any portion of his
current compensation or compensation under any deferred compensation program of
the Corporation within seven (7) days of the date such compensation is due; or

 

(E)       the failure by the Corporation to continue in effect any material
compensation or benefit plan in which Employee participates immediately prior to
the Change in Control unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan, or the
failure by the Corporation to continue the Employee’s participation therein (or
in such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the level of his
participation relative to other participants, than existed at the time of the
Change in Control, except that, if, following a change in Control, Employee’s
participation in any such plan is comparable in amounts of benefits provided and
level of participation to that of other Corporation employees in positions and
seniority comparable to Employee’s, then any such a failure shall not constitute
Good Reason.

 

(F)       the failure by the Corporation to continue to provide Employee with
benefits substantially similar to those enjoyed by him under any of the
Corporation’s plans in which he was participating at the time of the Change in
Control, the taking of any action by the Corporation which would directly or
indirectly materially reduce any of such benefits or deprive Employee of any
material fringe benefit enjoyed by him at the time of the Change in Control, or
the failure by the Corporation to provide Employee with at least the same amount
of

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paid vacation per year to which he was entitled immediately prior to the Change
in Control, except that, if, following a Change in Control, Employee receives
benefits, including vacation, which are comparable in type and amount to those
provided to other Corporation employees in positions and seniority comparable to
Employee’s, then such failure or action shall not constitute Good Reason; or

 

(G)      the failure of the Corporation to obtain a satisfactory agreement from
any successor to assume and agree to perform this Agreement.

 

6.3       Severance Pay and Benefits. If Employee’s employment with the
Corporation terminates under circumstances as described in Section 6.2 above,
Employee shall be entitled to receive all of the following:

 

 

(A)

all accrued compensation through the termination date;

 

(B)       a severance payment equal to Employee’s then current monthly salary
for twelve (12) months (less applicable withholdings), payable in accordance
with the Corporation’s regular payroll periods or, at the Corporation’s option,
a lump sum. During the twelve (12) month period following termination, if
Employee accepts employment or a consultancy with another entity or becomes
self-employed, then he must notify the Corporation before such employment or
consultancy begins and the payments made pursuant to this Section 6.3(B) shall
be reduced by the amount of compensation to be paid to him in connection with
such employment, consultancy or self-employment. If Employee does not notify the
Corporation in accordance with this provision, then its obligation to make
payments or further payments pursuant to this Section 6.3(B) shall cease;

 

(C)      unless the Employee obtains comparable medical insurance coverage from
a subsequent employer, then, for the twelve (12) months following the
termination of Employee’s employment, he may continue to participate, to the
extent permitted by the plan, in the medical insurance plan in which he
participated on the effective termination of employment date. The Corporation
will pay or, at the Corporation’s option, reimburse the Employee for the
premiums actually paid, to continue coverage under the medical insurance plan
during the period. In the event that the Employee is ineligible to participate
in such medical insurance plan following termination of employment, the
Corporation shall arrange to provide the Employee with substantially similar
medical insurance benefits, at no greater cost to the Employee than the cost he
paid for such benefits immediately prior to termination.

 

7.         WAIVER OF BREACH. The Corporation’s or Employee’s waiver of any
breach of a provision of this Agreement shall not waive any subsequent breach by
the other party.

 

8.         ENTIRE AGREEMENT. Except as expressly provided in this Agreement,
this Agreement: (i) supersedes all other understandings and agreements, oral or
written, between the parties with respect to the subject matter of this
Agreement; and (ii) constitutes the sole agreement between the parties with
respect to this subject matter. Each party acknowledges that: (i) no
representations, inducements, promises or agreements, oral or written, have been
made by any party or by anyone acting on behalf of any party, which are not
embodied in this Agreement; and (ii) no agreement, statement or promise not
contained in this Agreement shall be valid. No

 

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change or modification of this Agreement shall be valid or binding upon the
parties unless such change or modification is in writing and is signed by the
parties.

 

9.         SEVERABILITY. If a court of competent jurisdiction holds that any
provision or sub-part thereof contained in this Agreement is invalid, illegal or
unenforceable, that invalidity, illegality or unenforceability shall not affect
any other provision in this Agreement. Additionally, if any of the provisions,
clauses or phrases in the Competitive Business Activities, Trade Secrets,
Confidential Information and Corporation Property provisions set forth in this
Agreement are held unenforceable by a court of competent jurisdiction, then the
parties desire that they be “blue-penciled” or rewritten by the court to the
extent necessary to render them enforceable.

 

10.       PARTIES BOUND. The terms, provisions, covenants and agreements
contained in this Agreement shall apply to, be binding upon and inure to the
benefit of the Corporation’s successors and assigns. The Corporation, at its
discretion, may assign this Agreement. Employee may not assign this Agreement
without the Corporation’s prior written consent.

 

11.       REMEDIES. Employee acknowledges that his breach of this Agreement
would cause the Corporation irreparable harm for which damages would be
difficult, if not impossible, to ascertain and legal remedies would be
inadequate. Therefore, in addition to any legal or other relief to which the
Corporation may be entitled by virtue of the Employee’s breach or threatened
breach of this Agreement, the Corporation may seek equitable relief, including
but not limited to preliminary and injunctive relief, and such other available
remedies.

 

12.       GOVERNING LAW. This Agreement and the employment relationship created
by it shall be governed by North Carolina law without giving effect to North
Carolina choice of law provisions.

 

IN WITNESS WHEREOF, the parties have entered into this Agreement on the day and
year written below.

 

 

/s/ Robert Williams

 

1/20/06

 

Robert Williams

 

Date

 

 

 

 

 

 

THE PANTRY, INC.

 

 

 

 

 

 

 

 

By:

/s/ Steven Ferreira

 

1/20/06

 

 

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