Exhibit 10.21
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is made and entered into as of the 30th day
of April, 2001 by and between THE PANTRY, INC., a Delaware corporation (the
"Corporation") and XXXXXXX X. XXXX (the "Employee").
W I T N E S S E T H:
WHEREAS, the Corporation desires to employ Employee as Vice President
of Finance and Chief Financial Officer (the "Position") on the terms and
conditions hereinafter set forth, and Employee is desirous of accepting said
employment.
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. Subject to the terms and conditions of this Agreement,
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the Corporation agrees to employ the Employee in a full time capacity to serve
in the Position. Employee will carry out such duties and have such
responsibilities as would normally be carried out by the Position in 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 an investor or
otherwise have an interest in other businesses, partnerships and entities so
long as the 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, and so long as Employee
discloses all such activities to the Board of Directors of the Employer.
2. Term. The Term of this Agreement shall be from April 30, 2001 until
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April 29, 2002.
3. Compensation. The Corporation shall provide Employee with an annual
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salary equal to $190,000.00 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.
4. Bonus Program and Other Benefits. Employee shall be eligible to
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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 and subject to the terms, conditions
and eligibility requirements of any such benefit plan or program, some of which
are in the discretion of the plan administrator, provided that Employee shall be
entitled to three weeks paid vacation per year. Without limiting the generality
of the foregoing, Employee shall be entitled to participate in any bonus
programs instituted by the Corporation, and any bonuses shall be in addition to
the compensation provided for in section 3 hereof.
5. Employment Termination Prior To Change In Control.
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5.1 Termination By The Corporation. Prior to a Change in Control
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(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 "Cause," immediately
upon written notice by the Corporation to Employee. For the purpose of this
Section 5.1(a), 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 instruction by the Corporation to do so, (B)
conduct by the Employee which is demonstrably and materially injurious to the
Corporation, monetarily or otherwise, 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.
(b) Upon the death or Disability of Employee. As used in this
Section 5, the term "Disability" shall mean the inability of Employee, due to a
physical or mental disability, for a period of 180 days, during any consecutive
12-month period to perform satisfactorily the services contemplated under this
Agreement as determined by the Company in its reasonable discretion and in
accordance with applicable law.
(c) At the election of the Corporation at any time, subject to the
provisions of Section 5.3(b).
5.2 Termination By The Employee. The Employee may terminate his
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employment upon 30 days' notice to the Corporation.
5.3 Effect of Termination Prior To Change In Control.
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(a) In the event Employee's employment is terminated for Cause
pursuant to Section 5.1(a) 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.
(b) Should Employee's employment be terminated by the Corporation
pursuant to Section 5.1(c), the Employee shall be entitled to salary continuance
for the longer of the balance of the Term of this Agreement or one year from the
date of the termination of his employment at his then-applicable salary level
until such time as Employee engages in other employment, after which Employee
shall receive the difference, if any, between his salary level with the
Corporation and his new salary. This provision shall survive the expiration of
the Term of this Agreement and shall become void only upon a Change in Control
as set forth in paragraph 6 of this Agreement.
(c) If Employee's employment is terminated by death or because of
Disability pursuant to Section 5.1(b), the Corporation shall pay to the estate
of the Employee or to
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Employee, as the case may be, the compensation and benefits which would
otherwise be payable to Employee up to the end of the month in which the
termination of his employment because of death or Disability occurs.
6. Employment and Termination Subsequent To A Change in Control.
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6.1 Definition of Change in Control. For purposes of this Agreement,
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a "Change in Control" shall mean a change in the Board of Directors of the
Corporation such that representatives of Xxxxxxx, Spogli & Co., Incorporated and
Chase do not have voting control.
6.2 Termination Following Change In Control. Unless Employee's
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employment is terminated:
(A) because of Employee's death or Disability (as defined in
Section 6.2(i)),
(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),
then, upon termination of Employee's employment subsequent to a Change of
Control, Employee shall be entitled to salary continuance and health insurance
benefits for a period of two years from the date of the termination of his
employment at his then-current salary and benefits level, until such time as
Employee engages in other employment, after which Employee shall receive the
difference, if any, between his salary level with the Corporation and his new
salary. This provision shall survive the expiration of the Term of this
Agreement.
(i) Disability. If Employee is "Disabled" as defined in Section
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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
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for "Cause" shall mean termination upon 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
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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,
actions by the Corporation which prevent Employee from being able to discharge
his duties effectively, or (2) 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 reduction by the Corporation in Employee's annual base
salary;
(C) the Corporation's requiring Employee to be based outside of
the State of North Carolina;
(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 a minimum of three weeks paid
vacation per year;
(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 11 hereto.
Employee's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting Good Reason
hereunder.
7. Covenants.
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a. Non-Competition Covenant. During Employee's employment and
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extending through the period in which Employee is receiving severance benefits,
Employee shall not, either individually or on behalf of another, directly or
indirectly, as employer, employee, owner, stockholder, independent contractor,
agent, or otherwise enter into or in any manner participate in the convenience
store business in North Carolina, South Carolina, Tennessee, 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
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Employee's employment and extending through the period in which Employee is
receiving severance benefits, Employee will not directly or indirectly, request
or induce any other
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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.
c. Trade Secrets; Confidential Information.
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i. General. Employee recognizes and acknowledges that
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Employee will have access to certain highly sensitive, special,
unique information of the Corporation that is confidential or
proprietary. 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.
ii. Confidential Information. For purposes of this Agreement,
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"Confidential Information" means any data or information with
respect to the business conducted by the Corporation on the date
of this Agreement, 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 and financial statements,
reports and projections of the Corporation.
iii. Ownership Return. Employee acknowledges that all trade
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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
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covenants contained in this Agreement are reasonably necessary to protect the
legitimate business and other interests of the Corporation, are reasonable with
respect to time and territory, and do not interfere with the interests of the
public.
e. Specific Performance. Employee agrees that a breach or
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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
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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.
8. Notices. Any and all notices, designations, consents, offers,
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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.
9. Governing Law. This Agreement shall be subject to and governed by
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the laws of the State of North Carolina.
10. Invalid Provision. The invalidity or unenforceability of any
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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.
11. Binding Effect. This Agreement shall be binding upon and inure to
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the benefit of the Corporation and Employee and the Corporation's successors and
assigns. Employee may not assign his rights or delegate his obligations
hereunder.
12. Entire Agreement.
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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.
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IN WITNESS WHEREOF, this Agreement has been duly executed on the day
and year set forth above.
THE PANTRY, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Title: President & Chief Financial Officer
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/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
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