Exhibit 10.13

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered into as of
the 30th day of April, 2008 (“Agreement”) by and between THE PANTRY, INC., a
Delaware corporation (the “Corporation”), and Peter J. Sodini (the “Employee”).

 

W I T N E S S E T H:

 

WHEREAS, the Corporation desires to employ Employee as President and CEO of the
Corporation on the terms and conditions hereinafter set forth, and Employee is
desirous of accepting said employment; and

 

WHEREAS, the Corporation and Employee are parties to an employment agreement
dated October 1, 1997 which the parties have amended by five amendments dated
April 1, 1999, September 21, 2001, August 28, 2002, December 7, 2003, and
November 17, 2005 (the employment agreement as amended by the five amendments,
the “Employment Agreement”). The parties wish to amend and restate the
Employment Agreement as provided herein.

 

NOW, THEREFORE, in consideration of the employment of Employee, the mutual terms
and conditions set forth below, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:

 

1.    Employment and Term. Subject to the terms and conditions of this
Agreement, the Corporation agrees to employ the Employee in a full time capacity
to serve as President and CEO for a term commencing on October 1, 1997 and
ending on September 30, 2009. Employee will carry out faithfully and to the best
of his abilities such duties and have such responsibilities as would normally be
carried out by the President and CEO of the Corporation, subject to the control
of and in accordance with the directives and policies of the Board of Directors
of the Corporation. The employment of Employee shall be on a full time basis,
but the Employee may be a passive investor or otherwise have a passive interest
in other businesses, partnerships and entities so long as such other activities
of the Employee do not interfere with the performance of his duties hereunder
and so long as such other businesses, partnerships and entities do not cause the
Employee to violate the non-competition restrictions of this Agreement.

 

2.          Compensation. The Corporation shall provide Employee with an annual
salary equal to $800,000.00 payable in equal monthly installments, or such other
schedule established by the Corporation. The annual salary may, at the option of
the Board of Directors, be subject to annual increases upon review by the Board
of Directors. Any such reviews will be made after completion of the
Corporation’s fiscal year, with any increases to be retroactive to the first day
of the fiscal year.

 

3.          Bonus Program and Other Benefits. Employee shall be eligible to
participate in a manner commensurate with other senior management employees of
the Corporation in all benefits or other programs available, to the extent such
exist or are sponsored by the Corporation. Without limiting the generality of
the foregoing, Employee shall participate in an incentive bonus program which
shall provide for a payout of a minimum of 25% upon the achievement of goals
determined by the Board of Directors.

 

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4.          Car Allowance. During the term of this Agreement, the Corporation
shall provide Employee with a company car.

 

 

5.

Employment Termination Prior to Change In Control.

 

5.1        Termination By The Corporation. Prior to a Change in Control (as
defined in Section 6.1 hereof), the Corporation may terminate Employee’s
employment upon the occurrence of any of the following:

 

(a)       At the election of the Corporation for just cause, immediately upon
written notice by the Corporation to Employee. For the purpose of this Section
5.1(a), just cause for termination shall be deemed to exist in the event of: (A)
the willful and continued failure by Employee to substantially perform his
duties with the Corporation after written instruction by the Corporation to do
so, (B) the engaging by Employee in conduct which is demonstrably and materially
injurious to the Corporation, (C) the conviction of Employee of, or the entry of
a pleading of guilty or nolo contendere by Employee to, any crime involving
moral turpitude or any felony, (D) material breach by Employee of any of the
terms of this Agreement or (E) gross negligence or willful misconduct in the
performance of his duties.

 

(b)       Upon death or upon determination of disability of Employee. As used in
this Section 5, the term “disability” or “disabled” shall mean the failure of
Employee, due to a physical or mental disability, for a period of 180 days,
during any consecutive 12-month period, to substantially perform the services
contemplated under this Agreement with or without reasonable accommodation and
as determined by the Corporation in its reasonable discretion and in accordance
with applicable law.

 

(c)       At the election of the Corporation at any time upon thirty (30) days
prior written notice to Employee and subject to the provisions of Section
5.3(b).

 

5.2        Termination By The Employee. The Employee may terminate his
employment upon 30 days’ notice to the Corporation.

 

 

5.3

Effect of Termination Prior To Change In Control.

 

(a)       In the event Employee’s employment is terminated pursuant to Sections
5.1(a) or (b) or should the Employee terminate his employment pursuant to
Section 5.2, the Corporation shall pay to Employee the compensation and benefits
otherwise payable to him under Section 2 through the last day of his actual
employment by the Corporation (for termination for just cause or upon death) or
his effective date of termination (for termination upon disability).

 

(b)       Should Employee’s employment be terminated by the Corporation pursuant
to Section 5.1(c) (at the election of the Corporation at any time), then the
Corporation shall pay or provide to the Employee regardless of the number of
months then remaining in the term of this Agreement:

 

 

(i)

amounts due on the effective termination date;

 

(ii)       an amount equal to his then current monthly salary (less applicable
withholdings) for eighteen (18) months, payable in substantially equal monthly

 

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installments on the last business day of each applicable month. For purposes of
Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”),
as applicable, each installment payment shall be considered a separate payment;

 

(iii)      unless Employee obtains comparable group health insurance coverage
from a subsequent employer, then, for the eighteen (18) months following the
termination of Employee’s employment, Employee may elect to continue
participation in the Corporation’s group health insurance plan in which Employee
participated upon termination of employment by electing continuation coverage
under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). For the
eighteen (18) month continuation period, the Corporation shall reimburse
Employee for that portion of the COBRA premiums that are in excess of the amount
Employee paid for group health plan coverage immediately prior to termination
from employment. In the event Employee prefers to obtain coverage under an
individual health insurance policy that is less expensive than COBRA coverage
rather than electing COBRA continuation coverage, the Corporation shall, for
eighteen (18) months, reimburse Employee for that portion of the premium
payments that are in excess of the amount Employee paid for group health plan
coverage immediately prior to termination of employment. All reimbursements
required under this Section 5.3(b)(iii) shall be paid as soon as reasonably
practicable following Employee’s submission of proof of timely premium payments
to the Corporation; provided, however, that all such claims for reimbursement
shall be submitted by Employee and paid by the Corporation no later than
twenty-one (21) months following Employee’s termination of employment.

 

(c)       If Employee’s employment is terminated by death or because of
disability either before or after a Change in Control (as hereinafter defined)
pursuant to Section 5.1(b), the Corporation shall pay to the estate of the
Employee or to Employee, as the case may be, an amount equal to Employee’s then
current salary for twelve (12) months (less any applicable taxes and
withholdings and less any amounts paid or payable to Employee under any
disability plan). Any payments paid to Employee or his estate pursuant to this
Section shall be paid in substantially equal installments on the last business
day of each applicable month. For purposes of Section 409A, as applicable, each
installment payment shall be considered a separate payment.

 

 

6.

Employment and Termination Subsequent To A Change of Control.

 

6.1        Definition of Change of Control. For purposes of this Agreement, a
“Change in Control” shall mean a change in control of the Corporation occurring
after the date hereof that is of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not
the Corporation is in fact required to comply therewith; provided, that, without
limitation, such a change in control shall be deemed to have occurred in the
following circumstances:

 

(a)       any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Corporation, trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation or 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 the existing holders of capital stock 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 50% of the combined voting power of the
Corporation’s then outstanding securities;

 

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(b)       the consummation of a merger or consolidation of the Corporation with
any other corporation, other than (i) a merger or consolidation which would
result in the voting securities of the Corporation outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 50% of the
combined voting securities of the Corporation or such surviving entity
outstanding immediately after such merger or consolidation or (ii) a merger or
consolidation effected to implement a recapitalization of the Corporation (or
similar transaction) in which no “person” (as hereinabove defined and subject to
the exceptions contained in such definition) acquires more than 50% of the
combined voting power of the Corporation’s then outstanding securities;

 

(c)       the stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition by
the Corporation of all or substantially all of the Corporation’s assets; or

 

(d)       during any period of twenty-four (24) consecutive months, the
individuals who constitute the Board of Directors of the Corporation at the
beginning of such period (the “Incumbent Directors”) cease for any reason to
constitute a majority of the Board of Directors; provided, however, that a
director who is not a director at the beginning of such period shall be deemed
to be an Incumbent Director if such director is elected or recommended for
election by a majority of the directors who are then Incumbent Directors.

 

6.2        Termination Following Change In Control. Unless Employee’s employment
is terminated:

 

(a)       because of Employee’s death or disability (as defined in Section
6.2(i)), in which case, the Corporation shall make payments to the estate of the
Employee or to Employee, as the case may be, as provided in Section 5.3(c)
above;

 

 

(b)

by the Corporation for Cause as defined in Section 6.2(ii);

 

(c)       by Employee other than for Good Reason as defined in Section 6.2(iii);

 

upon termination of Employee’s employment subsequent to a Change of Control
regardless of the number of months then remaining in the term of this Agreement,
Employee shall be entitled to a severance payment equal to Employee’s then
current monthly salary for twenty-four (24) months plus an amount equal to two
(2) times the value of Employee’s target bonus, as described in the
Corporation’s Annual Incentive Compensation Plan (“Target Bonus”), for the year
in which the termination occurs (less any applicable taxes and withholdings)
with such severance payment beingpayable in substantially equal installments on
the last business day of each applicable month. For purposes of Section 409A, as
applicable, each installment payment shall be considered a separate payment.
Employee’s entitlement to such payments shall not be reduced by subsequent
employment, provided that no payments shall be made under this Section 6.2 to
the extent such payments would constitute “excess parachute payments” under the
Internal Revenue Code of 1986, as amended (the “Code”).

 

In addition, in the event of such termination, for twenty-four (24) months
following the termination of Employee’s employment, the Corporation shall
reimburse Employee for certain premiums paid for health insurance coverage as
described in this Section 6.2.

 

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Employee may elect to continue coverage under the Corporation’s group health
insurance plan in which he participated on the effective date of the termination
of employment by election of continuation coverage under COBRA, subject to the
terms of the group health plan and applicable law. The Corporation shall
reimburse Employee for that portion of the COBRA premiums that are in excess of
the amount Employee paid for group health plan coverage immediately prior to
termination of employment for the lesser of: (i) the maximum COBRA period for
which Employee is eligible, or (ii) twenty-four (24) months following
termination of employment. At the end of the maximum COBRA continuation period,
the Corporation shall further reimburse Employee for that portion of health
insurance premiums under a fully insured, individual health insurance policy
that are in excess of the amount Employee paid for coverage under the
Corporation’s group health plan immediately prior to termination of employment.
Such individual health insurance policy reimbursements shall continue for no
longer than the remainder, if any, of the twenty-four (24) month health
insurance continuation period following expiration of the maximum COBRA
continuation period. Notwithstanding the foregoing, in the event Employee
prefers to initially obtain health insurance coverage under a fully insured,
individual health insurance policy that is less expensive than COBRA coverage,
the Corporation shall reimburse Employee for premiums that are in excess of the
amount Employee paid for health insurance under the Corporation’s group health
plan immediately prior to termination for twenty-four (24) months. All such
reimbursements required pursuant to this Section 6.2 shall be paid as soon as
reasonably practicable following Employee’s submission of proof of timely
premium payments to the Corporation; provided, however, that all such claims for
reimbursement shall be submitted by Employee and paid by the Corporation no
later than twenty-seven (27) months following Employee’s termination of
employment.

 

(i)         Disability. If Employee is “disabled” as defined in Section 5.1(b),
and within thirty (30) days after written notice of termination is given he
shall not have returned to the full-time performance of his duties, Employee’s
employment may be terminated.

 

(ii)        Cause. Termination by the Corporation of Employee’s employment for
“Cause” shall mean termination in the event of: (A) the willful and continued
failure by Employee to substantially perform his duties with the Corporation
after written instruction by the Corporation to do so, (B) the engaging by
Employee in conduct which is demonstrably and materially injurious to the
Corporation, or (C) the conviction of Employee of, or the entry of a pleading of
guilty or nolo contendere by Employee to, any crime involving moral turpitude or
any felony.

 

(iii)       Good Reason. Employee shall be entitled to terminate his employment
for Good Reason. For purposes of this Agreement, “Good Reason” shall mean (1)
during the twelve (12) month period following a Change in Control, a good faith
determination by Employee that, as a result of the Change in Control, he is not
able to discharge his duties effectively, (2) at such time as a good faith
determination is made by the Employee that he cannot carry out his duties
consistent with his ethical responsibilities, or (3) without Employee’s express
written consent, the occurrence after a Change in Control of any of the
following circumstances:

 

(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;

 

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(B)       a material reduction by the Corporation in Employee’s annual base
salary and Target Bonus as in effect on the date hereof or as the same may be
increased from time to time;

 

(C)       the Corporation’s requiring Employee to be based more than twenty-five
(25) 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;

 

(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;

 

(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 the number of paid
vacation days to which he is entitled on the basis of his years of service with
the Corporation in accordance with the Corporation’s normal vacation policy in
effect at the time of the change in control; or

 

(G)      the failure of the Corporation to obtain a satisfactory agreement from
any successor to assume and agree to perform this Agreement, as contemplated in
Section 12 hereto.

 

Employee’s right to terminate his employment pursuant to this subsection shall
not be affected by his incapacity due to physical or mental illness. Employee’s
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder.

 

7.          Moving Expenses. In the event of any termination of Employee’s
employment, other than by the Corporation for “just cause” as defined in Section
5.1(a), Employer shall be entitled to a lump sum payment of funds reasonably
sufficient to transport all of Employee’s household effects and two automobiles
to any location of the Employee’s choice in the continental United States;
provided, however, such payment shall be made no later than March 15 of the year
following the year in which the termination of employment occurred.

 

 

8.

Covenants.

 

(a)        Non-competition Covenant. During Employee’s employment and extending
through the period ending on the later of (A) 18 months after termination or (B)
the

 

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date in which Employee is no longer receiving severance benefits, Employee shall
not, either individually or on behalf of another, directly or indirectly, as
employer, employee, owner, stockholder, investor, consultant, independent
contractor, agent, or otherwise enter into or in any manner participate in the
convenience store business in North Carolina, South Carolina, Tennessee,
Georgia, Florida, Kentucky or Indiana or within any other state in which the
Corporation or its affiliates operate ten (10) or more convenience stores upon
the date of termination of employment.

 

(b)        No Interference With Employees. Employee agrees that during
Employee’s employment and extending through the period ending on the later of
(A) 18 months after termination or (B) the date in which Employee is no longer
receiving severance benefits, Employee will not directly or indirectly, request
or induce any other employee of the Corporation or its affiliates or any person
who was employed by the Corporation or its affiliates in the six months prior to
the request or inducement 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.

 

 

(c)

Trade Secrets; Confidential Information.

 

(i)         General. Employee recognizes and acknowledges that Employee will
have access to certain highly sensitive, special, unique information of the
Corporation that is confidential or proprietary. Employee hereby covenants and
agrees during the term of this Agreement and at all times thereafter not to use
or disclose any Confidential Information (as hereinafter defined) or trade
secrets except for the benefit of the Corporation and 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.

 

(ii)        Confidential Information. For purposes of this Agreement,
“Confidential Information” means any data or information with respect to the
business conducted by the Corporation, 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 and financial statements, reports
and projections of the Corporation.

 

(iii)       Ownership Return. 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 or 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 material
(including any copies) shall, upon request of the Corporation, be promptly
delivered by Employee to the Corporation.

 

(d)        Validity of Covenants. Employee agrees that the restrictive covenants
contained in this Agreement are reasonably necessary to protect the legitimate
business and other interests of the Corporation, and reasonable with respect to
time and territory, and do not interfere with the interests of the public.

 

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(e)        Specific Performance. Employee agrees that a breach or violation of
any of the covenants under this Agreement will result in immediate and
irreparable harm to the Corporation in an amount which will be impossible to
ascertain at the time of the breach or violation and that the award of monetary
damages will not be adequate relief to the Corporation. Therefore, the failure
on the part of Employee to perform all of the covenants established by this
Agreement shall give rise to a right of the Corporation to obtain enforcement of
this Agreement in a court of equity by a decree of specific performance or other
injunctive relief. This remedy, however, shall be cumulative and in addition to
any other remedy the Corporation may have.

 

9.          Delayed Distribution to Key Employees. If the Corporation
determines, in accordance with Sections 409A and 416(i) of the Code and the
regulations promulgated thereunder, in the Corporation’s sole discretion, that
Employee is a Key Employee of the Corporation on the date his employment with
the Corporation terminates and that a delay in severance pay and benefits
provided under this Agreement is necessary for compliance with Section
409A(a)(2)(B)(i), then any severance payments and any continuation of benefits
or reimbursement of benefit costs provided under this Agreement and not
otherwise exempt from Section 409A shall be delayed for a period of six (6)
months (the “409A Delay Period”). In such event, any such severance payments and
the cost of any such continuation of benefits provided under this Agreement that
would otherwise be due and payable to Employee during the 409A Delay Period
shall be paid to Employee in a lump sum cash amount in the month following the
end of the 409A Delay Period. For purposes of this Agreement, “Key Employee”
shall mean an employee who, on an Identification Date (“Identification Date”
shall mean each December 31) is a key employee as defined in Section 416(i) of
the Code without regard to paragraph (5) of that section. If Employee is
identified as a Key Employee on an Identification Date, then Employee shall be
considered a Key Employee for purposes of this Agreement during the period
beginning on the first April 1 following the Identification Date and ending on
the following March 31.

 

10.        Notices. Any and all notices, designations, consents, offers,
acceptances, or any other communications provided for herein shall be given in
writing and shall be deemed given three (3) days after the date postmarked if
sent by first class, United States mail or by registered or certified mail,
return receipt requested; or on the date actually received if sent by express
mail or other similar overnight delivery or if hand delivered, which shall be
addressed to the Corporation at its principal office and to the Employee at his
last address as shown on the records of the Corporation.

 

11.        Governing Law. This Agreement shall be subject to and governed by the
laws of the State of North Carolina.

 

12.        Invalid Provision. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.

 

13.        Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Corporation and Employee and their respective heirs, legal
representatives, executors, administrators, successors and assigns, provided
that Employee may not assign his rights or delegate his obligations hereunder.

 

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14.

Entire Agreement.

 

(a)       This Agreement constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes any and all other
agreements, either oral or in writing, among the parties hereto with respect to
the subject matter hereof.

 

(b)       This Agreement may not be changed orally, but may be amended, revoked,
changed or modified at any time by a written agreement executed by the Employee
and the Corporation.

 

IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year
set forth above.

 

 

 

THE PANTRY, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Edwin J. Holman 4/30/08

 

 

 

Edwin J. Holman

 

 

 

Chairman, Compensation and

 

 

 

Organization Committee

 

 

 

 

 

 

EMPLOYEE:

 

 

 

 

 

 

 

 

 

 

/s/ Peter J. Sodini 5/1/08

 

 

 

Peter J. Sodini

 

 

 

 

 

 

EXECUTIVE OFFICER:

 

 

 

 

 

 

 

 

 

 

/s/ Frank G. Paci

 

 

 

Frank G. Paci

 

 

 

 

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