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Exhibit 10-67
EMPLOYMENT AGREEMENT
AGREEMENT made by between MONRO MUFFLER BRAKE, INC., 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Company") and Xxxxxxxx X. Day,
residing at 00 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Employee").
1. DEFINITIONS. The following definitions shall be applicable
to this Agreement.
(a) "ACQUIRING ENTITY" shall mean any entity, whether a
corporation, partnership, joint venture, etc., that, as a result of a Change In
Control, either directly or indirectly has effective control over the business
plans, direction and operations of the Company. This term shall also include any
subsidiaries or related entities over which the Acquiring Entity has control,
and shall also include any entity that, within one year following a Change In
Control of the Company, acquires control over the entity that acquired control
of the Company.
(b) "CHANGE IN CONTROL" shall mean a change in control of the
Company 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
of 1934 as in effect on the date of this Agreement or, if in the future Item
6(e) is no longer in effect, any regulations issued by the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934 which serve
similar purposes; provided that, without limitation, a Change In Control shall
be deemed to have occurred if and when: (x) any "person" (as such term is used
in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), other
than Employee, becomes a beneficial owner, directly or indirectly, of securities
of the Company representing a majority of the combined voting power of the
Company's then outstanding securities (excluding, however, the transfer of any
shares beneficially owned by Employee); or (y) individuals who were members of
the Board of Directors of the Company immediately prior to meeting of the
shareholders of the Company involving a contest for the election of Directors
shall not constitute a majority of the Board of Directors following such
election. The effective date of any such Change in Control shall be the closing
of the transaction that results in the Change in Control. The terms of this
subparagraph shall also apply to any change in control of any entity that
acquires control of an Acquisition Entity within one year following the
acquisition by the Acquiring Entity of control of the Company.
(c) "EVENT OF TERMINATION" shall mean the termination of
Employee's employment, whether due to a Termination For Cause, a Termination
Upon Death or Disability, a Termination Without Cause, a Change In
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Control, or a Voluntary Termination of Employment by Employee, such that
Employee is no longer employed by the Company.
(d) "TERMINATION FOR CAUSE" shall mean that the Company, in
its sole discretion, by delivery of written notice at any time, terminates
Employee's employment due to Employee's dishonesty, willful misconduct, breach
of a fiduciary duty involving personal profit, intentional failure to perform
stated duties, or follow the lawful and proper directives of the Board of
Directors, willful violation of any law, rule, regulation or final cease and
desist order (the penalty for which constitutes a felony under applicable law);
or any breach of Paragraph 9 of this Agreement. The notice referred to in the
previous sentence shall have attached a copy of a resolution or consent in lieu
of a resolution duly adopted by the Board of Directors which shall set forth the
grounds for termination in reasonable detail. Termination for Cause shall not
include intentional failure to perform stated duties or failure to follow the
lawful and proper directives of the Board of Directors unless the Employee has
been given written notice of his failure by the Board of Directors, and he has
not cured the failure within 30 days of his receipt of the written notice.
(e) "TERMINATION UPON DEATH OR DISABILITY" shall mean that the
Company terminates the Employee's employment due to the Employee's death or
disability. For purposes of this Agreement "disability" shall mean that the
Employee shall become ill, mentally or physically disabled, or otherwise
incapacitated, so as to be unable to substantially perform his services
hereunder, even with reasonable accommodation, for (i) a period of three (3)
consecutive months, or (ii) for shorter periods aggregating three (3) months
during any twelve (12) month period.
(f) "TERMINATION WITHOUT CAUSE" shall mean that the Company,
in its sole discretion, terminates Employee's employment for any reason that
would not constitute a Termination For Cause, Termination Upon Death or
Disability, result from any Change in Control, or constitute a Voluntary
Termination of Employment by Employee.
(g) "VOLUNTARY TERMINATION OF EMPLOYMENT BY EMPLOYEE" shall
mean that Employee, voluntarily leaves his employment with the Company under
circumstances not involving a Termination Without Cause, a Termination For
Cause, Termination Upon Death or Disability or a Change In Control.
2. EMPLOYMENT. The Company hereby employs Employee and
Employee hereby accepts employment with the Company upon the terms and
conditions hereinafter set forth. Employee shall serve as the
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President and Chief Executive Officer of the Company responsible for the overall
business and strategic planning, management and operations of the Company.
Employee shall perform the customary duties of such positions and such other
commensurate duties as may be assigned from time to time by the Company's Board
of Directors. Employee agrees to abide by the reasonable rules, regulations,
instructions, personnel practices, employment manuals and policies of the
Company, as they may exist or be modified from time to time by the Company.
Employee shall devote his entire business time and attention and best efforts to
the business of the Company. Employee shall perform his duties in a diligent,
effective and loyal manner. Under no circumstances shall Employee take any
action contrary to the best interests of the Company.
3. COMPENSATION. Employee shall be compensated by the Company
for all services to be rendered pursuant to this Agreement as follows:
(a) The Company shall pay Employee a base salary ("Salary") at
the rate of $225,000 per year payable in accordance with the normal payroll
practices of the Company applicable to its executive officers. The Company shall
review Employee's Salary at least annually.
(b) The Company shall also pay Employee annual
performance-based bonuses and non-cash compensation such as stock options and
other incentive awards as may be determined, if any, pursuant to financial and
other performance goals established in advance by the Compensation Committee of
the Company's Board of Directors.
4. BENEFITS. Employee shall also be entitled to receive the
following benefits:
(a) Four (4) weeks of paid vacation per year or such greater
period as may be approved from time to time by the Company's Board of Directors.
(b) Paid holidays as customarily provided to the Company's
other comparable employees.
(c) Life insurance in the face amount of $900,000.00.
(d) Medical and dental insurance coverage as provided by the
Company to its other comparable employees.
(e) A suitable automobile for use in connection with the
Company's business.
(f) Coverage in accordance with their terms of any pension,
profit-sharing or retirement plans now existing or hereafter established by the
Company and made generally available for comparable employees.
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(g) Reimbursement for all reasonable expenses incurred by
Employee during the term of this Agreement for advancing the Company's business
in accordance with Company policies upon Employee's presentation, from time to
time, of an itemized account and evidence and explanation reasonably
satisfactory to the Company of such expenses.
(h) Such other benefits as the Company may, from time to time,
provide to its other executive level officers.
5. TERM. This Agreement shall be effective for a period of two
years from the execution date hereof and continue year to year, unless
terminated by one of the parties hereto (the "Term").
6. TERMINATION OF EMPLOYMENT FOR CAUSE OR UPON DEATH OR
DISABILITY. In the event that Employee's employment is Terminated For Cause, or
Terminated Upon Death or Disability he shall not be entitled to receive any
further payments hereunder. Under these circumstances, Employee shall only be
entitled to receive his accrued but unpaid Salary and any other nonforfeitable
compensation and benefits accrued as of the effective date of such Event of
Termination.
7. VOLUNTARY TERMINATION OF EMPLOYMENT BY EMPLOYEE. In the
event of a Voluntary Termination of Employment by Employee, he shall not be
entitled to receive any further payments hereunder. Under such circumstances,
Employee shall only be entitled to receive his accrued but unpaid Salary and any
other nonforfeitable compensation and benefits accrued as of the effective date
of such Event of Termination.
8. TERMINATION OF EMPLOYEE'S EMPLOYMENT IN THE EVENT OF A
CHANGE IN CONTROL. If, as a condition precedent to, as a result of, or within
one year following, a Change In Control of the Company (i) Employee's employment
with the Company is terminated by the Company or the Acquiring Entity for any
reason other than a Termination for Cause; or (ii) Employee resigns his
employment with the Company or with the Acquiring Entity upon the occurrence of
either of the following events:
(a) A significant change in the nature of scope of
Employee's employment duties or authority or a reduction in
Employee's total compensation as the same existed immediately
prior to the Change In Control; or
(b) As a result of the Change In Control of the
Company and any change in circumstances thereafter
significantly affecting his position, Employee is unable to
exercise the authority, power, functions as duties that he had
so exercised immediately prior to such Change In Control,
then termination of Employee's employment shall be a Termination in the Event of
a Change In Control.
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9. (a) NON-DISCLOSURE. Employee will not, during the period of
Employee's employment with the Company or at any time thereafter, regardless of
the reason for the cessation of Employee's employment: (i) use any Confidential
Information for Employee's own benefit or for the benefit of any person or
entity other than the Company; (ii) disclose to any person or entity any
Confidential Information; or (iii) remove from the Company's premises or make
copies of any Confidential Information, in any form; except, in each case, as
may be required within the scope of Employee's duties during Employee's
employment by the Company.
Upon termination of Employee's employment, or at any such time
as the Company may request, Employee will deliver to the Company all copies in
Employee's possession of any Confidential Information, in any form. Employee
will not at any time assert any rights as against the Company in or with respect
to any Confidential Information.
For purposes of this Agreement, "Confidential Information"
means any and all technical, research, operational, manufacturing, marketing,
sales and financial information, customer lists and trade secrets of the Company
or of any vendor, supplier, distributor or customer of the Company, regardless
of how acquired or developed by the Company or any such vendor, supplier,
distributor or customer, concerning any of their respective businesses.
Confidential Information does not include information, knowledge or data which
Employee can prove was in Employee's possession prior to the commencement of
Employee's employment with the Company or information, knowledge or data which
was or is in the public domain by reason other than the wrongful acts of
Employee.
(b) NON-COMPETITION. Employee will not, during the period of
Employee's employment with the Company, and for a period of two (2) years after
the termination of Employee's employment with the Company for any reason,
directly or indirectly, on Employee's behalf or on behalf of any other person or
entity, in any way, whether as an individual proprietor, partner, stockholder,
officer, employee, consultant, director, joint venturer, investor, lender (other
than as an employee of a bank or other financial institution) or in any other
capacity with any entity materially engaged in the business of the Company,
compete within the territory served, or contemplated to be entered, by Company
on the date of such termination with the business of the Company; provided,
however, that in the event of a Voluntary Termination of Employment by Employee,
Employee shall remain so restricted for a period of two (2) years after the
expiration of the Term. Nothing contained herein shall be construed as
preventing the Employee from owning beneficially or of record not more than five
percent (5%) of the outstanding equity
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security of any entity whose equity securities are registered under the
Securities Act of 1933, as amended, or are listed for trading on any
recognizable United States or foreign stock exchange or market. The business of
the Company shall be defined to include the undercar service and repair of
automobile and light truck brake, exhaust and suspension systems, and related
activities.
(c) NON-SOLICITATION OF EMPLOYEES. Employee will not, during
the period of Employee's employment with the Company, and for a period of two
(2) years after the termination of Employee's employment with the Company for
any reason, directly or indirectly, recruit, solicit or otherwise induce or
attempt to induce any employees of the Company to leave the employment of the
Company, nor hire any such employee at any enterprise with which employee is
then affiliated; provided, however, that in the event of a Voluntary Termination
of Employment by Employee, Employee shall remain so restricted for a period of
two (2) years after the expiration of the Term.
(d) ENFORCEABILITY OF PROVISIONS. If any restriction set forth
in this Paragraph 9 is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time or over too great
a range of activities or in too broad a geographic area, it shall be interpreted
to extend only over the maximum period of time, range of activities or
geographic area as to which it may be enforceable, it being understood and
agreed that by the execution of this Agreement, the parties hereto regard the
restrictions herein as reasonable and compatible with their respective rights.
(e) As reasonable compensation for his agreement to and
compliance with covenants contained in this Paragraph 9, except as provided
below, the Employee shall receive an amount equal to his then current salary and
benefits in effect immediately prior to the termination of his employment in
each of the two years following the termination of his employment; provided,
however, that in the event of Termination For Cause, a Termination Upon Death or
Disability, or a Voluntary Termination of Employment by Employee, no additional
compensation shall be payable pursuant to this Paragraph 9(e), but the Employee
shall continue to be bound by the provisions of this Paragraph 9; provided,
further, that if the Employee violates the covenants contained in this Paragraph
9, Employee shall repay to the Company all amounts previously paid to him
pursuant to this Paragraph 9.
10. TERMINATION PAYMENTS. In the event of a Termination
Without Cause or a Termination in the Event of a Change in Control then Employee
shall also be entitled to the following payments and benefits: On the effective
date of either such Event of Termination, all stock options that shall have been
granted to Employee
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through such date under any stock option plans of the Company or otherwise shall
be deemed fully vested and exercisable on such date and for a period of one year
following such date, all in accordance with the other terms of any such plan or
grant.
11. PAYMENT LIMITATION. (a) Anything in this Agreement to the
contrary notwithstanding, if the benefits payable pursuant to this Agreement,
either alone or together with other payments which the Employee has the right to
receive either directly or indirectly from the Company, would constitute a
parachute payment (the "Parachute Payment") under Section 280G(b)(2)(A) of the
Internal Revenue Code of 1986, as amended, the Employee hereby agrees that the
benefits payable pursuant to this Agreement shall be reduced (but not below
zero) by the amount necessary to prevent any such payments to the Employee from
constituting Parachute Payment.
(b) All determinations required to be made under this
Paragraph 11, including whether a Parachute Payment would result under this
Agreement, the amount of any reduction pursuant to Paragraph 11(a), and the
assumptions to be utilized in arriving at such determinations, shall be made by
the independent accountants then auditing the Company's financial statements
(the "Accounting Firm") which shall provide detailed supporting calculations
both to the Company and the Employee at such time as is requested by the
Company.
(c) For purposes of this Paragraph 11, no portion of any
benefits the receipt or enjoyment of which the Employee shall have effectively
waived in writing prior to his right to receive them shall be taken into account
for purposes of calculating whether or not a Parachute Payment has or will
occur.
(d) In the event that pursuant to this Paragraph 11 there must
be a reduction in the benefits the Employee is to receive from the Company, the
Employee shall have the discretion to decide which of his benefits shall be
reduced and by what amounts (each a "Reduction"), so long as the total dollar
amount of all Reductions results in the non-occurrence of a Parachute Payment
and the dollar amount assigned to each Reduction is consistent with the
Accounting Firm's calculations as provided for in Paragraph 11(b) hereof.
12. GENERAL TERMS.
(a) BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their personal representatives,
successors and assigns.
(b) ASSIGNMENT. This Agreement may not be assigned, in whole
or in part, by any party hereto without the prior written consent of all other
parties, except to an Acquiring Entity in connection with a Change in Control.
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(c) ENTIRE AGREEMENT. This Agreement contains the entire
understanding between or among the parties hereto and supersedes any prior
understanding, memoranda or other written or oral agreements between or among
any of them respecting the within subject matter. There are no representations,
agreements, arrangements or understandings, oral or written, between or among
any of the parties relating to the subject matter of this Agreement which are
not fully expressed herein.
(d) MODIFICATIONS; WAIVER. No modification or waiver of this
Agreement or any part hereof shall be effective unless in writing and signed by
the party or parties sought to be charged therewith. No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different nature. No waiver
of any breach or condition of this Agreement by or with respect to any party
hereto shall be deemed to be a waiver of the same breach or condition with
respect to any other party hereto. No course of dealing between or among any of
the parties hereto will be deemed effective to modify, amend or discharge any
part of this Agreement or the rights or obligations of any party hereunder.
(e) NO THIRD PARTY BENEFICIARY. None of the provisions of this
Agreement shall be for the benefit of, or enforceable by, any person or entity
not a party hereto.
(f) PARTIAL INVALIDITY. In addition to the provisions of
Paragraph 9(d) hereof, if any provision of this Agreement shall be held invalid
or unenforceable by competent authority, such provision shall be construed so as
to be limited or reduced to be enforceable to the maximum extent compatible with
the law as it shall then appear. The total 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.
(g) NOTICES. Any notice or other communication required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given (i) upon hand delivery, or (ii) on the third day following
delivery to the U.S. Postal Service as certified or registered mail, return
receipt requested and postage prepaid, or (iii) on the first day following
delivery to a nationally recognized United States overnight courier service, fee
prepaid, return receipt or other confirmation of delivery requested, or (iv)
when telecopied or sent by facsimile transmission if an additional notice is
also given under (i), (ii) or (iii) above within three days thereafter. Any such
notice or communication shall be delivered or directed to a party at its address
set forth above or at such other
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address as may be designated by a party in a notice given to all other parties
hereto in accordance with the provisions of this paragraph.
(h) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York pertaining to
contracts made and to be wholly performed within such state, without taking into
account conflicts of laws principles.
(i) JURISDICTION AND VENUE. In the event that any legal
proceedings are commenced in any court with respect to any matter arising under
this Agreement, the parties hereto specifically consent and agree that:
(i) the courts of the State of New York and/or the
United States Federal Courts located in the State of New York shall
have jurisdiction over each of the parties hereto and over the subject
matter of any such proceedings; and
(ii) the venue of any such action shall be Monroe
County, New York and/or the United States District Court for the
Western District of New York.
(j) INJUNCTIVE RELIEF. In the event of a breach or threatened
breach of any of the terms of this Agreement, the Company shall be entitled to
an injunction restraining Employee from committing any breach of this Agreement
without showing or proving any actual damages and without diminishing any other
right or remedy which the Company may have at law or in equity to enforce the
provisions of this Agreement. Employee waives any right he may have to require
the Company to post a bond or other security with respect to obtaining or
continuing any injunction or temporary restraining order, releases the Company
and its officers and directors from and waives any claim for damages against
them which Employee may have with respect to the Company's obtaining any
injunction or restraining order pursuant to this Agreement.
(k) SURVIVAL. The Proprietary Information provisions of
Paragraph 9 shall indefinitely survive the term of this Agreement, and the
provisions of this Paragraph 12 shall survive the term of this Agreement with
respect to any dispute which may arise out of this Agreement.
(l) HEADINGS. The headings contained in this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(m) FAIR MEANING. This Agreement shall be construed according
to its fair meaning, the language used shall be deemed the language chosen by
the parties hereto to express their mutual intent, and no presumption or rule of
strict construction will be applied against any party hereto.
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(n) GENDER. Whenever the context may require, any pronoun used
herein shall include the corresponding masculine, feminine or neuter forms and
the singular of nouns, pronouns and verbs shall include the plural and vice
versa.
(o) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all of said
counterparts together shall constitute but one and the same instrument.
(p) REMEDIES. All rights and remedies of the Company or
Employee, whether provided for herein or by operation of law, are cumulative and
may be exercised singularly or concurrently, and the exercise of any such remedy
shall not be deemed an election of remedies so as to preclude the election of
any other remedy.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of February, 1997.
COMPANY:
MONRO MUFFLER BRAKE, INC.
By: /s/ XXXXXX X. AUGUST
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Title: SECRETARY
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EMPLOYEE:
/s/ XXXXXXXX X. DAY
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Xxxxxxxx X. Day
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