The Pantry's Hatchell Signs Three-Year Deal

CARY, N.C. -- The day after The Pantry Inc. named Dennis Hatchell as its new president and CEO, the operator of Kangaroo Express filed documents with the U.S. Securities and Exchange Commission (SEC) revealing that the new leader will serve an initial three-year term. Hatchell is set to take the helm March 5.

The SEC filing also reveals that Hatchell's contract will end on the last day of the fiscal year ending on or around Sept. 30, 2014, subject to automatic renewal for successive one-year terms unless either party gives the other notice of non-renewal, or the agreement is otherwise terminated. He will also take a seat on the company's board of directors, effective March 14.

As for compensation, the filing details that Hatchell will receive an initial annual salary of $750,000, subject to periodic increases at the discretion of the board. In addition, Hatchell will receive shares of restricted stock with a value on the date of grant of $435,937.50 with time-based vesting restrictions; shares of performance-based restricted stock where the target number of shares is determined by dividing $361,000 by the fair market value on the date of grant; an option to purchase shares of the company's common stock with a grant date fair value of $98,438; and a sign-on bonus in the amount of $46,100.

In addition, in December 2012 subject to his continued employment with the company, the chief executive will receive shares of restricted stock with a value on the date of grant of $435,937.50 with time-based vesting restrictions. For fiscal 2012, Hatchell will receive a cash bonus equal to the greater of $437,500, or the amount he would received under the company's bonus plan applicable to its senior executives, provided that he is still employed with the company at the time of bonus payments.

The two sides have also agreed that Hatchell will receive a cash living allowance of $3,000 per month for two months and will be paid $150,000 when he buys a home in the Cary, N.C. area -- the company's home base. That money will be in lieu of certain benefits provided for in the company's executive and senior officer relocation policy.

Hatchell will also receive up to $25,000 for any legal expenses he rang up while negotiating the agreement with The Pantry.