8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 19, 2010

THE PANTRY, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-25813	56-1574463
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

305 Gregson Drive Cary, North Carolina	27511
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (919) 774-6700

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On November 19, 2010, the Compensation and Organization Committee (the “Committee”) of the Board of Directors of The Pantry, Inc. (the “Company”) amended the Company’s Annual Incentive Program (“AIP”) under the Company’s 2007 Omnibus Plan (the “Omnibus Plan”).  The AIP provides for performance-based cash awards to certain of the Company’s employees, including its executive officers.  The Committee also approved a new form of award agreement under the Omnibus Plan for awarding restricted stock subject to performance-based vesting to employees (the “Form of Performance-Based Restricted Stock Award”).

Annual Incentive Program

 The Company amended the AIP, effective beginning with awards related to performance in fiscal year 2011, to establish Merchandise Gross Profit Ratio (merchandise gross profit divided by operating store general and administrative expenses without operating rent) and Fuel Gross Profit Dollars (gasoline sales minus the cost of gasoline sales) as the performance measures for awards under the AIP.  Further, awards under the AIP will be conditioned upon achievement of a minimum EBITDA threshold established by the Committee.  The target award opportunity for the Company’s Chief Executive Officer will be 100% of his or her annual base salary, and the target award opportunity for the Company’s other executive officers will be 60% of his or her annual base salary.  The AIP is designed to be an “ ;evergreen” annual incentive program for future years.

Form of Restricted Stock Award Agreement for Multi-Year Performance Period

Restricted stock granted pursuant to the Form of Performance-Based Restricted Stock Award will have restrictions that lapse on each of the first, second and third anniversaries of the initial grant of the award, subject to the achievement of annual performance goals for each of the first two installments and the achievement of cumulative three-year performance goals for the third installment.  The restrictions will lapse (a) with respect to each of the first and second anniversary of the initial grant of the award, on up to one-third (1/3) of the shares of restricted stock and (b) with respect to the third anniversary of the initial grant of the award, on up to the number of shares that is equal to the maximum award opportunity for the three-year period (which is expressed as a percentage of the target award level) less the sum of the shares that vested as part of the first and second installments.   In addition to the achievement of performance goals, the vesting of the shares of restricted stock is subject to continued employment with the Company.

Any restrictions remaining on the restricted stock will immediately lapse in the event that the employee is terminated by reason of death or disability, and the employee will receive shares of restricted stock, at the target level.  Additionally, if the employee’s termination is a result of retirement after attaining age fifty-five with at least ten years of completed service with the Company, any restrictions on the restricted stock will lapse for the installment for the performance period in which retirement occurs, capped at the target level, on the date the Committee determines the Company has met its performance goals for such installment.  With regard to the restricted stock, the employee will have all rights of a stockholder, including dividend and voting rights.

The above summaries are qualified in their entirety by reference to the Company’s Annual Incentive Program, as amended, and the Form of Award Agreement (Awarding Performance-Based Restricted Stock to Employee for Multi-Year Performance Period), which are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d)           Exhibits

Exhibit No.	Description
10.1	The Pantry, Inc. Annual Incentive Program, as amended, under The Pantry, Inc. 2007 Omnibus Plan
10.2	Form of Award Agreement (Awarding Performance-Based Restricted Stock to Employee for Multi-Year Performance Period)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		THE PANTRY, INC.
	By:		/s/ Mark R. Bierley
			Mark R. Bierley Senior Vice President and Chief Financial Officer
Date:  November 24, 2010

EXHIBIT INDEX

Exhibit No.	Description
10.1	The Pantry, Inc. Annual Incentive Program, as amended, under The Pantry, Inc. 2007 Omnibus Plan
10.2	Form of Award Agreement (Awarding Performance-Based Restricted Stock to Employee for Multi-Year Performance Period)

EX-10.1

Exhibit 10.1

The Pantry, Inc. Annual Incentive Program

The Pantry, Inc. Annual Incentive Program (the “Program”) is a compensatory program under The Pantry, Inc. 2007 Omnibus Planthat was originally established on November 25, 2008 by the Compensation and Organization Committee (the “Committee”) of the Board of Directors (the “Board”) of The Pantry, Inc. (the “Company”). The Program provides for performance-based cash awards to certain of the Company’s employees, including its executive officers. Executive officers are eligible for awards under the Program based on threshold, target, and maximum performance levels set by the Committee, and the actual award amounts, if any, will therefore vary depending on the achievement of certain performance goals by the Company. The Program&# 8217;s performance cycle is concurrent with the Company’s fiscal year.

The Committee approved the following performance measures and their respective weights for the Company’s executive officers because it believed these performance measures would be key indicators of the Company’s overall financial and operating results during each fiscal year:

• Merchandise Gross Profit Ratio (weighted at 75%), which is merchandise gross profit divided by operating store general and administrative expenses without operating rent.

• Fuel Gross Profit Dollars (weighted at 25%), which is gasoline sales minus the cost of gasoline sales.

There will be no payout under the Program for any performance cycle unlessEBITDA is at least equal to a threshold number established by the Committee for this purpose.

Any of the Company’s performance levels on the performance measures or the threshold EBITDA target can be adjusted for one-time events, including accounting charges not forecasted, as approved by the Committee.

Under the Program, each performance measure operates independently of the other measure. That is, an award may be paid when the threshold performance level is achieved for a single measure, without regard to results for the other measure.

Under the Program, the target award opportunity for the Company’s chief executive officer will be 100% of his or her annual base salary as initially approved by the Committee for the applicable fiscal year and will not include any additional salary increases for such fiscal year; the target award opportunity for each of the Company’s other executive officers will be 60% of his or her annual base salary as initially approved by the Committee for the applicable fiscal year and will not include any additional salary increases for such fiscal year.

Actual award payouts for the Company’s executive officers can vary from 50% of target awards for achieving or exceeding the threshold performance level to 200% of target awards for achieving the maximum performance level. For any performance below the threshold performance level, the appropriate payout percentage is 0%.

The Committee may make award payouts or otherwise increase, reduce, or eliminate payouts that would otherwise be made under the Program in its sole discretion. Executive officers who join the Company during a fiscal year will have any award amounts for that fiscal year prorated, except that no executive officer hired after the end of the third quarter of a fiscal year will be eligible to receive an award under the Program for that fiscal year. Participants must be employed on the date awards are paid in order to receive a payout, except that participants whose employment is terminated due to death or disability or as otherwise determined by the Committee in its discretion may have their award amounts prorated and paid on the date other awards are paid in the discretion of the Committee.

EX-10.2

Exhibit 10.2

THE PANTRY, INC.

AWARD AGREEMENT

(Awarding Performance-Based Restricted Stock to Employee

for Multi-Year Performance Period)

THIS AMENDED AND RESTATED AWARD AGREEMENT (this “Agreement”) is dated as of the [Grant Date] (the “Grant Date”) by and between The Pantry, Inc., a Delaware corporation (the “Company”), and [Employee] (“Participant”) pursuant to The Pantry, Inc. 2007 Omnibus Plan (the “Plan”). All capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan.

RECITALS:

A.           Participant is an employee of the Company and the Company considers it desirable to give Participant an added incentive to advance the interests of the Company and its shareholders.

B.           The Company now desires to grant Participant shares of common stock of the Company, par value $.01 per share (the “Shares”) in the form of Restricted Stock, pursuant to the terms and conditions of this Agreement and the Plan.

AGREEMENT:

NOW, THEREFORE, in consideration of the covenants hereinafter set forth, the parties agree as follows:

1.           Grant of Restricted Stock.  The Company has granted Participant, and Participant hereby accepts, [Number] Shares of Restricted Stock at target level, having a Fair Market Value per Share of [FMV] on the Grant Date.  The Restricted Stock is subject to the terms and conditions stated in this Agreement and in the Plan.

2.           Period of Restriction.  Subject to Participant’s continuing to provide services to the Company, the restrictions set forth in this Agreement with respect to the Shares shall lapse in three installments specified below (each, an “Installment”) on the later of (i) each of the first, second and third anniversaries of the Grant Date and (ii) the date that the Compensation and Organization Committee of the Board of Directors of the Company (the “Committee”) determines in its discretion, including without limitation through the inclusion or exclusion of any events listed in Section 12.2 of the Plan, that the Company has met the performance goal (the “Performance Goal& #8221;) for each of three performance periods (the “Performance Periods”) as established by the Committee (the “Vest Date”).  The maximum number of Shares that may vest as part of each of the first and second Installments is thirty-three percent (33%) of the target level number of Shares set forth in Section 1 above.  The maximum number of Shares that may vest as part of the third Installment is the difference between [Percent] ([___]%) of the target level number of Shares set forth in Section 1 above and the sum of the Shares that vested as part of the first and second Installments.  The actual number of Shares that will vest as part of any Installment will be determined based on the Company’s performance and a sliding scale.  The performance criteria for each Installment, including the period over which performance will be meas ured (the “Performance Period”), the related Performance Measure (as such term is defined in Section 12 of the Plan), the Performance Goals, and the sliding scale multiplier usedat each of threshold, target and maximum performance levels are set forth on Exhibit A.  Where performance falls between threshold and target or target and maximum levels, the number of Shares that will vest shall be determined on a pro rata basis.

Participant acknowledges that prior to the lapse of the applicable restrictions, the Restricted Stock may not be sold, transferred, pledged, assigned, encumbered, alienated, hypothecated or otherwise disposed of (whether voluntarily or involuntarily or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy)).  Upon the Vest Date applicable to an Installment, the restrictions set forth in this Agreement with respect to such Installment shall lapse, except as may be provided in accordance with Section 9 hereof.

3.           Ownership.  Participant agrees that Participant’s ownership of the Restricted Stock will be evidenced solely by a “book entry” (i.e., a computerized or manual entry) in the records of the Company or its designated stock transfer agent in Participant’s name.  Upon the Vest Date applicable to an Installment, the Company shall transfer the vested shares to Participant.

               4. Termination.

(a)           Death or Disability.  If Participant’s termination of employment or other relationship with the Company is as a result of Participant’s death or Disability (as such term is defined in Participant’s employment agreement or, if Participant has no employment agreement, within the meaning of Section 22(e)(3) of the Code), then any restrictions which would otherwise remain on any of the three Installments of Restricted Stock at target levelshall immediately lapse.

(b)           Retirement.  If Participant’s termination of employment or other relationship with the Company is as a result of Participant’s Retirement (for purposes of this Agreement, defined as Participant’s termination after attaining age fifty-five (55) with at least ten (10) completed years of service), then any restrictions which would otherwise remain on the Installment for the Performance Period in which Retirement occurs shall lapse on the Vest Date for such Installmentto the extent the Performance Goals for such period are met; provided, however, that the payout for any such Performance Period shall be capped at target level.

(c)           Other Terminations.  If Participant’s Termination is by the Company or an Affiliate or by Participant for any reason other than death, Disability or Retirement, then all Restricted Stock for which the applicable restrictions had not lapsed prior to the date of such Termination shall be immediately forfeited.

5.           Taxes and Withholdings.  Upon the Vest Date for any Installment or such earlier dates as Participant elects pursuant to Section 83(b) of the Code, or as of which the value of any Shares of Restricted Stock first becomes includible in Participant’s gross income for income tax purposes, Participant shall notify the Company if Participant wishes to pay the Company in cash, check or with shares of Company common stock already owned for the satisfaction of any taxes of any kind required by law to be withheld with respect to such Shares; provided, however, that pursuant to any procedures, and subject to any limitations as the Committee may prescribe and subject to applicable law, if Participant do es not notify the Company in writing at least fourteen (14) days prior to the Vest Date for any Installment, then Participant will satisfy such withholding obligations by withholding Shares otherwise deliverable to Participant pursuant to the Restricted Stock (provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy required Federal, state, local and non-United States withholding obligations using the minimum statutory withholding rates for Federal, state, local and/or non-U.S. tax purposes, including payroll taxes, that are applicable to supplemental taxable income). Any such election made by Participant must be irrevocable, made in writing, signed by Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.  In the event that Participant elects immediate Federal income taxation with respect to all or any portion of this award of Restricted Stock pursuant to Section 83(b) of the Code, Participant agrees to deliver a copy of such election to the Company within ten (10) days after filing such election with the Internal Revenue Service.

6.           Rights as a Shareholder.  Participant shall have all rights of a shareholder (including, without limitation, dividend and voting rights) with respect to the Restricted Stock, for record dates occurring on or after the Grant Date and prior to the date any such Shares of Restricted Stock are forfeited in accordance with this Agreement, except that any dividends or distributions paid in Shares or other securities (including, without limitation, any change in the shares of Restricted Stock pursuant to Section 4.4 of the Plan) with respect to the Restricted Stock shall, until such time as the applicable restrictions have lapsed, be deposited with the Company or any holder appointed pursuant to Section 3 hereof, together with a stock power endorsed in blank or other appropriate instrument of transfer, or credited to Participant’s book-entry account established under Section 3 hereof, as applicable, and shall be subject to the same restrictions (including, without limitation, the need to satisfy the applicable Performance Goals) as such Restricted Stock and otherwise considered to be such Restricted Stock for all purposes hereunder.

7.           No Right to Continued Employment.  Neither the Restricted Stock nor any terms contained in this Agreement shall confer upon Participant any express or implied right to be retained in the employment or service of the Company or any Affiliate for any period, nor restrict in anyway the right of the Company, which right is hereby expressly reserved, to terminate Participant’s employment or service at any time for any reason.  Participant acknowledges and agrees that any right to have restrictions on the Restricted Stock lapse is earned only by continuing in the service of the Company or an Affiliate at the will of the Company or such Affiliate, and satisfaction of the other applicable terms and conditions contained in the Plan and this Agreement, and not through the act of being hired, being granted the Restricted Stock or acquiring Shares hereunder.

8.           The Plan.  This Agreement is subject to all the terms, provisions and conditions of the Plan, which are incorporated herein by reference, and to such requirements as may from time to time be adopted by the Committee.  In the event of any conflict between the provisions of the Plan and this Agreement, the provisions of the Plan shall control, and this Agreement shall be deemed to be modified accordingly.A copy of the Plan is available to Participant at the Company’s principal executive offices upon request and without charge.

9.           Compliance with Laws and Regulations.

(a)           The Restricted Stock and the obligation of the Company to sell and deliver Shares hereunder shall be subject in all respects to (i) all applicable Federal and state laws, rules and regulations and (ii) any registration, qualification, approvals or other requirements imposed by any government or regulatory agency or body which the Committee shall, in its discretion, determine to be necessary or applicable.  Moreover, the Company shall not deliver any certificates for Shares to Participant or any other person pursuant to this Agreement if doing so would be contrary to applicable law.  If at any time the Company determines, in its discretion, that the listing, registration or qualification of Shares upon any national securities exchange or under any sta te or Federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable, the Company shall not be required to deliver any certificates for Shares to Participant or any other person pursuant to this Agreement unless and until such listing, registration, qualification, consent or approval has been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Company.

(b)           The Shares received upon the expiration of the applicable portion of the Period of Restriction shall have been registered under the Securities Act of 1933, as amended (“Securities Act”). If Participant is an “affiliate” of the Company, as that term is defined in Rule 144 under the Securities Act (“Rule 144”), Participant may not sell the Shares received except in compliance with Rule 144. Certificates representing Shares issued to an “affiliate” of the Company may bear a legend setting forth such restrictions on the disposition or transfer of the Shares as the Company deems appropriate to comply with Federal and state securities laws.

(c)            If, at any time, the Shares are not registered under the Securities Act, and/or there is no current prospectus in effect under the Securities Act with respect to the Shares, Participant may be required to execute, prior to the delivery of any Shares to Participant by the Company pursuant to this Agreement, an agreement (in such form as the Company may specify) in which Participant represents and warrants that Participant is purchasing or acquiring the shares acquired under this Agreement for Participant’s own account, for investment only and not with a view to the sale or distribution thereof, and represents and agrees that any subsequent offer for sale or distribution of any kind of such Shares shall be made only pursuant to either (i) a registration statement o n an appropriate form under the Securities Act, which registration statement has become effective and is current with regard to the Shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption Participant shall, prior to any offer for sale of such Shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Company, from counsel for or approved by the Company, as to the applicability of such exemption thereto.

10.           Notices.  All notices by Participant or Participant’s assignees shall be addressed to The Pantry, Inc., 305 Gregson Drive, Cary, North Carolina 27511, Attention: Human Resources, or such other address as the Company may from time to time specify.  All notices to Participant shall be addressed to Participant at Participant’s address in the Company’s records.

11.           Other Plans.  Participant acknowledges that any income derived from the Restricted Stock shall not affect Participant’s participation in, or benefits under, any other benefit plan or other contract or arrangement maintained by the Company or any Affiliate.

12.           Governing Law.  This Agreement shall be construed under and governed by the laws of the State of Delaware without regard to the conflict of law provisions thereof.

13.           Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall be deemed one Agreement.

IN WITNESS WHEREOF, the Company and Participant have executed this Agreement as of the date first above written.

THE COMPANY:

THE PANTRY, INC.

By: ________________________                                                     

     Terrance M. Marks

      President and Chief Executive Officer

PARTICIPANT:

___________________________

[Employee]

Exhibit A

Performance Criteria

The Performance Measure shall be [Measure].

The Performance Periods, Performance Goals and related multipliers shall be as follows:

For the first and second Installments:

Performance Period	Performance Goal and Multiplier
	Threshold (__%)	Target (100%)
[First Fiscal Year]	[Goal]	[Goal]
[Second Fiscal Year]	[Goal]	[Goal]

For the third Installment:

Performance Period	Performance Goal and Multiplier
	Threshold (__%)	Target (100%)	Maximum (__%)
[Cumulative Three-Year Period]	[Goal]	[Goal]	[Goal]