AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit No. 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, entered into on February 6, 2006 and effective as
of May 19, 2005 (the “Agreement Date”), between Monro Muffler Brake, Inc. (the “Company”) and
Xxxxxxxxx X’Xxxxx (the “Executive”).
WHEREAS, the Company and the Executive entered into an Employment Agreement dated as of
December 1, 2000, as amended and restated as of May 15, 2003 (the “Prior Agreement”).
WHEREAS, the Company and the Executive wish for the Executive to continue to be employed by
the Company upon the terms and conditions hereinafter provided; and
WHEREAS, the Company and the Executive have agreed to amend and restate the Prior Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment and Duties.
1.1 Employment by the Company. The Company hereby agrees to employ the Executive for
the Term (as herein defined) to render exclusive and full-time services in the capacity of
Executive Vice President and Chief Financial Officer of the Company, subject to the control and
direction of the Company’s President and Board of Directors.
1.2 Duties/Authority. The Executive shall have responsibility for the conduct of the
business and the fiscal affairs of the Company and the general supervision of and control over the
assets, business interests, and agents of the Company, in each case subject to the control and
direction of the President. The Executive’s duties hereunder shall be consistent with the duties,
responsibilities, and authority generally recognized for the offices of Chief Financial Officer and
Executive Vice President.
2. Term of Employment. The term of the Executive’s employment under this Agreement
(the “Term”) shall continue beginning on the Agreement Date and ending on June 30, 2008, unless
sooner terminated as provided herein.
3. Compensation.
3.1 Salary. As compensation for all services to be rendered pursuant to this
Agreement, the Company shall pay the Executive during the Term a salary of $200,000 per annum (the
“Base Salary”) effective April 1, 2005, payable not less frequently than monthly, less such amounts
as shall be required to be withheld by applicable law and regulations. The Executive’s Base Salary
will be reviewed annually by the Compensation Committee of the Board of Directors (the “Committee”)
and may be adjusted upward (but not downward) to reflect the Executive’s performance and
responsibilities.
3.2 Annual Bonus. Pursuant to the Company’s bonus plan (the “Bonus Plan”), the
Company shall pay the Executive, within 120 days of its fiscal year end, a bonus in respect of each
prior fiscal year
during the Term beginning with the fiscal year ending in March 2006, of 35% of Base Salary if
the Company
achieves its performance targets set by the Board of Directors with respect to such
year, increased up to a maximum of 87.5% of Base Salary if the Company exceeds such performance
targets by amounts to be determined by the Committee (the “Annual Bonus”), less such amounts as
shall be required to be withheld by applicable law and regulations. If this Agreement terminates
other than at the end of a fiscal year and if the Executive is entitled to a pro rata bonus for
such partial year pursuant to Section 4.5, such pro rata bonus shall be equal to the bonus the
Executive would have received under the Bonus Plan had she been employed by the Company for the
entire fiscal year multiplied by a fraction, the numerator of which shall be the number of days
during such fiscal year she was so employed and the denominator of which shall be 365.
3.3 Participation in Employee Benefit Plans. The Executive shall be permitted during
the Term, if and to the extent eligible, to participate in any group life, hospitalization or
disability insurance plan, health program, or any pension plan or similar benefit plan of the
Company, which is available generally to other senior executives of the Company.
3.4 Expenses. Subject to such policies generally applicable to senior executives of
the Company as may from time to time be established by the Board of Directors, the Company shall
pay or reimburse the Executive for all reasonable expenses (including travel expenses) actually
incurred or paid by the Executive during the Term in the performance of the Executive’s services
under this Agreement (“Expenses”) upon presentation of expense statements or vouchers or such other
supporting information as it may require.
3.5 Vacation. The Executive shall be entitled to such amount of vacation which is
available generally to other senior executives of the Company.
3.6 Additional Benefits. The Executive shall be entitled to the following additional
benefits under this Agreement:
(a) The use of an automobile comparable to that provided to other senior executives in
connection with the rendering of services to the Company pursuant to this Agreement, together with
reimbursement for all gas, maintenance, insurance and repairs required by reason of her use of such
vehicle.
4. Termination, Removal from Duties or Resignation.
4.1 Termination Upon Death. If the Executive dies during the Term, this Agreement
shall terminate and the Company shall have no further obligations under this Agreement with regard
to salary. All other obligations of the Company shall be pro-rated through the date of death in
accordance with Section 4.5.
4.2 Removal from Position Upon Disability. If, during the Term, the Executive becomes
physically or mentally disabled, whether totally or partially, so that the Executive is unable to
perform the essential functions of her job, with or without reasonable accommodation, for a period
or periods aggregating 90 days during any twelve month period, the Company may at any time after
such 90th day of disability, by written notice to the Executive, remove her from her position for
the remainder of the Term of the Executive’s employment hereunder. The Executive’s employment
status with the Company will continue after such removal for a period of time so that the Executive
may receive certain benefits as outlined in Section 4.6. The Company shall have no obligation to
reinstate her position or otherwise continue the Executive’s employment if she should recover from
her disability and such termination shall not constitute a termination without Cause (as defined in
Section 4.3).
4.3 Termination for Cause. The Company may at any time, by written notice to the
Executive, terminate the Term of the Executive’s employment hereunder for Cause and the Executive
shall have no right to receive any compensation or benefits hereunder on and after the effective
date of such notice, except for the payment of any Base Salary earned, and any Expenses incurred
but not yet paid to the Executive and benefits in accordance with Section 4.5 hereof. For purposes
hereof, the term “Cause” shall mean: (a) conviction of, or a plea of nolo contendere or guilty by,
the Executive for any crime constituting a felony in the jurisdiction in which
committed or for any other criminal act against the Company; (b) failure or refusal of the
Executive in any material respect (i) to perform the duties of her employment or to follow the
lawful and proper directives of the Board of
Directors, provided such duties or directives are
consistent with this Agreement and such duties or directives have been given to the Executive in
writing, or (ii) to comply with the reasonable and substantial written policies, practices,
standards or regulations of the Company as may be established from time to time, if such failure or
refusal under either clause (i) or clause (ii) continues uncured for a period of 10 days after
written notice thereof, specifying the nature of such failure or refusal and requesting that it be
cured, is given by the Company to the Executive; (c) any willful or intentional act of the
Executive committed for the purpose, or having the reasonably foreseeable effect, of injuring the
Company, its business or reputation or of improperly or unlawfully converting for the Executive’s
own personal benefit any property of the Company; or (d) any violation or breach of the provisions
of Section 6 of this Agreement.
4.4 Termination Without Cause. During the Term, the Company may terminate the
Executive’s employment without Cause upon 30 days’ written notice. If the Company terminates the
Executive’s employment without Cause, upon the Executive’s execution of a general release of the
Company’s officers, directors, employees and agents from any and all liability arising from the
Executive’s employment relationship with the Company (which release shall include an agreement
between both parties not to disparage the other and which shall not prohibit the Executive from
making good faith disclosures in compliance with any legal or regulatory obligations or
requirements to which she is subject), the Executive shall receive (i) her Base Salary, payable in
accordance with the provisions of Section 3.1 hereof, for one year from the date of such
termination, (ii) the Annual Bonus for the year prior to the year in which the Executive is
terminated, to the extent not yet paid (the “Preceding Bonus”); and (iii) the Annual Bonus for the
fiscal year in which the Executive is terminated, pro rata to the date of termination (the “Pro
Rata Bonus”). The Executive shall be entitled to receive the Preceding Bonus or the Pro Rata
Bonus, as applicable: (i) at the same time the annual bonuses for the same periods are paid to
other senior-level executives of the Company; and (ii) only to the extent the Company’s Board of
Directors or any Committee designated by the Board determines to pay such bonus to the
executive-level employees of the Company. Termination by the Company any time prior to June 21,
2008 will require payments in accordance with the preceding sentence. All stock options that have
been granted to the Executive through the termination date shall be deemed fully vested and
exercisable on such termination date and for a period of 90 days following such date, all in
accordance with the other terms of any such plan or grant.
4.5 Benefits upon Termination. Notwithstanding termination of this Agreement pursuant
to Section 4.1, the Executive shall continue to be entitled to compensation and benefits accrued
through the date of death. Except as provided in Sections 4.4 and 5 hereof, all of the Executive’s
rights to bonuses and fringe benefits accruing after any termination of this Agreement, if any,
shall cease upon such termination; provided, however, that (i) the Executive shall
be entitled to any amounts payable to the Executive under any Company profit sharing or other
employee benefit plan up to the date of termination; (ii) nothing contained in this Agreement is
intended to limit or otherwise restrict the availability of any benefits to the Executive required
to be provided pursuant to Section 4980B of the Code; and (iii) if the employment of the Executive
terminates pursuant to Section 4.1 or 4.4 other than at the end of a fiscal year, she shall be
entitled to a pro rata bonus under the Bonus Plan in respect of such year as provided in Section
3.2.
4.6 Benefits upon Removal. If the Executive is removed from her position pursuant to
Section 4.2, the Executive, for a period of time (a) during which her disability continues, and (b)
consistent with the then-current policy of the Company applicable to the Executive, shall continue
to participate in certain of the employee benefit plans in which she participated immediately prior
to her removal. These benefits would include participation in, as applicable and to the extent
defined in the Company’s applicable plans, group life, medical/dental and disability insurance
plans, each at the same ratio of employer/employee contribution as applicable to the Executive
immediately prior to her removal. In addition, the Executive shall be entitled to compensation and
benefits accrued through the date of her removal from her duties. However, the Executive’s rights
to bonuses and fringe benefits accruing after her removal, if any, shall cease upon such removal;
provided, however that (i) the Executive shall be entitled to any amounts payable to the Executive
under any Company profit sharing or other employee benefit plan up to the date of termination; (ii)
nothing contained in this Agreement is intended to limit or otherwise restrict the availability of
any benefits to the Executive required to be provided
pursuant to Section 4980B of the Code; and (iii) if the employment of the Executive terminates
pursuant to Section 4.2 other than at the end of a fiscal year, she shall be entitled to a pro rata
bonus under the Bonus Plan in respect of such year as provided in Section 3.2, to the date of such
removal.
4.7 Termination upon Resignation. Notwithstanding anything stated in this Agreement
to the contrary, with fifteen (15) days prior written notice, the Executive may resign from her
position for the remainder of the Term of the Executive’s employment hereunder. Such notice shall
explicitly state in reasonable detail the reason(s) for such resignation. Upon receipt of such
written notice, the Company, in its sole discretion, may shorten the fifteen (15) day prior notice
requirement. Upon a resignation by the Executive pursuant to this Section, the Executive shall be
entitled to compensation and benefits accrued through the effective date of her resignation. All
other rights and obligations of the parties shall be determined as provided for in this Agreement.
In addition, if the Company requires the Executive, as a condition of continued employment under
the terms of this Agreement, that the Executive be based anywhere beyond fifty (50) miles from the
Company’s current offices in Rochester, New York except for required travel on Company business,
such resignation shall be treated as a termination without Cause pursuant to Section 4.4. Any
resignation pursuant to the terms of this Section shall not constitute a breach of this Agreement
by either party.
5. Change in Control. In the event of the occurrence of a Change in Control of the
Company, the Executive shall remain employed by the Company, pursuant to the terms and conditions
of this Agreement. If, after the Change in Control, the Executive’s employment is terminated
without Cause, the Executive resigns following: (a) a material diminution in her duties as set
forth in Section 1.2 of this Agreement or, (b) in the case of the sale of the Company, the
Executive either: (i) is not offered a comparable position by the buyer; or (ii) is required by the
buyer to be based anywhere beyond fifty (50) miles from the Company’s current offices in Rochester,
New York except for required travel on Company business to an extent substantially consistent with
that preceding the Change in Control, then the Executive shall continue to receive her Base Salary
for one year and the stock options granted to the Executive shall become fully vested and
exercisable as of the date of termination or resignation, as the case may be. The options will
remain exercisable for a period of 90 days following such date, all in accordance with the other
terms of the stock option plan under which they were granted. In addition, the Executive shall be
entitled to receive the Preceding Bonus and the Pro Rata Bonus, as defined and in the manner
calculated, in Section 4.4 hereof. For purposes of this Agreement, a “Change in Control” shall
mean any of the following: (i) any person who is not an “affiliate” (as defined in Rule 12b-2 under
the Securities Exchange Act of 1934, as amended) of the Company as of the date of this Agreement
becomes the beneficial owner, directly or indirectly, of 50% or more of the combined voting power
of the then outstanding securities of the Company except pursuant to a public offering of
securities of the Company; (ii) the sale of the Company substantially as an entirety (whether by
sale of stock, sale of assets, merger, consolidation, or otherwise) to a person who is not an
affiliate of the Company as of the date of this Agreement; or (iii) there occurs a merger,
consolidation or other reorganization of the Company with a person who is not an affiliate of the
Company as of the date of this Agreement, and in which shareholders of the Company immediately
preceding the merger hold less than 50% (the voting and consent rights of Class C Preferred Stock
shall be disregarded in this calculation) of the combined voting power for the election of
directors of the Company immediately following the merger. A change of Control shall not be deemed
to occur because of the sale or conversion of any or all of Class C Preferred Stock of the Company
unless there is a simultaneous change described in clauses (i), (ii) or (iii) of the preceding
sentence.
6. Non-Competition and Confidentiality.
6.1 Non-Disclosure. The Executive will not, during the period of the Executive’s
employment with the Company or at any time thereafter, regardless of the reason for the cessation
of the Executive’s employment: (i) use any Confidential Information for the Executive’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 the Executive’s duties during the Executive’s employment by the Company. Upon termination
of the Executive’s employment, or at any such time as the Company may request, the Executive will
deliver to the Company all copies in the Executive’s possession of any Confidential Information, in
any form. The Executive 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 the Executive can prove was in the
Executive’s possession prior to the commencement of the Executive’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 the Executive.
6.2 Non-Competition. The Executive will not, during the period of the Executive’s
employment with the Company, and for (i) a period of two years after the termination of the
Executive’s employment with the Company for any reason other than termination by the Company
without Cause, or (ii) if for termination by the Company without Cause, for the period she
continues to receive her Base Salary pursuant to Section 4.4, directly or indirectly, on the
Executive’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 the Company on the date of such termination
of employment. Nothing contained herein shall be construed as preventing the Executive from owning
beneficially or of record not more than five percent (5%) of the outstanding equity 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 and tire service and repair of
automobile and light truck brake, exhaust and suspension systems, and related activities, as well
as the sale and service of tires and related accessories.
6.3 Non-Solicitation of Employees. Except in a case of termination without Cause, the
Executive will not, during the period of the Executive’s employment with the Company, and for a
period of two years after the termination of the Executive’s employment with the Company for any
reason, directly or indirectly, recruit, solicit or otherwise induce or attempt to induce any
employee of the Company to leave the employment of the Company, nor hire any such employee at any
enterprise with which the Executive is then affiliated.
6.4 Enforceability of Provisions. If any restriction set forth in this Section 6 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.
6.5 Remedy for Breach. The Executive hereby acknowledges that the provisions of this
paragraph 6 are reasonable and necessary for the protection of the Company and its respective
subsidiaries and affiliates. In addition, the Executive further acknowledges that the Company and
its respective subsidiaries and affiliates will be irrevocably damaged if such covenants are not
specifically enforced. Accordingly, the Executive agrees that, in addition to any other relief to
which the Company may be entitled, the Company will be entitled to seek and obtain injunctive
relief (without the requirement of any bond) from a court of competent jurisdiction for the
purposes of restraining the Executive from an actual or threatened breach of such covenants. In
addition, and without limiting the Company’s other remedies, in the event of any breach by the
Executive of such covenants, the Company will have no obligation to pay any of the amounts that
remain payable by the Company under paragraphs 4 and 5 of this Agreement, as applicable.
7. Executive Representations.
(a) The Executive hereby represents and warrants to the Company that (i) the execution,
delivery and performance of this Agreement by the Executive does not and will not conflict with,
breach, violate or cause a default under any contract, agreement, instrument, order, judgment or
decree to which the Executive is a party or by which he is bound, (ii) the Executive is not a party
to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any
other person or entity, (iii) upon the execution and delivery of this Agreement by the Company,
this Agreement shall be the valid and binding obligation of the Executive, enforceable in
accordance with its terms, and (iv) the Executive is under no physical or mental disability that
would hinder him in the performance of her duties hereunder.
(b) The Executive shall indemnify and hold harmless the Company from and against any and all
claims, liabilities, damages and reasonable costs of defense and investigation arising out of any
breach or inaccuracy in any of the foregoing representations and warranties.
8. Other Provisions.
8.1 Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and shall be delivered personally, telecopied, or sent by certified,
registered or express mail, postage prepaid, to the parties at the following addresses or at such
other addresses as shall be specified by the parties by like notice, and shall be deemed given when
so delivered personally, telecopied or if mailed, two days after the date of mailing, as follows:
(a) if to the Company, to it at:
Monro Muffler Brake, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
(b) if to the Executive, to her at:
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxxxxxxx, Xxx Xxxx 00000
8.2 Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior agreements, written or
oral, with respect thereto except (a) such Stock Option Contracts written or otherwise extended to
the Executive including those referenced herein and those extended to the Executive prior hereto
and (b) and the Monro Muffler Employee Handbook, to the extent same provides additional benefits to
the Executive as a senior executive-level employee of the Company.
8.3 Waivers, Amendments and Renewal. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only
by a written instrument signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any
right, power or privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder. Notwithstanding the foregoing, Executive agrees to any
changes made by the Company to the terms of this Agreement if the Company determines, in its sole
reasonable good faith discretion, that such changes are reasonably necessary to comply with Section
409A of the Code, and any
regulations and other guidance of general applicability that are issued thereunder. The
Company will notify the Executive whether or not
it intends to negotiate in good faith the terms of
a renewal of this Agreement no later than thirty (30) days before the end of the Term.
8.4 Governing Law; Jurisdiction. This Agreement shall be governed by and construed
and enforced in accordance with and subject to, the laws of the State of New York applicable to
agreements made and to be performed entirely within such state. The courts of New York and the
United States District Courts for New York shall have jurisdiction over the parties with respect to
any dispute or controversy between them arising under or in connection with this Agreement.
8.5 Assignment. This Agreement shall inure to the benefit of and shall be binding
upon the Company and its successors and permitted assigns and upon the Executive and his heirs,
executors, legal representatives, successors and permitted assigns. However, neither party may
voluntarily assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this Agreement
or any of its or his rights hereunder without the prior written consent of the other party, and any
such attempted assignment, transfer, pledge, encumbrance, hypothecation or other disposition
without such consent shall be null and void without effect.
8.6 Counterparts. This Agreement may be executed in two counterparts, each of which
shall be deemed an original but both of which together shall constitute one and the same
instrument.
8.7 Headings. The headings in this Agreement are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.
8.8 Severability. If any term, provision, covenant or restriction of this Agreement,
or any part thereof, is held by a court of competent jurisdiction of any foreign, federal, state,
county or local government or any other governmental, regulatory or administrative agency or
authority to be invalid, void, unenforceable or against public policy for any reason, the remainder
of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties have executed this Amended and Restated Employment Agreement
as of the date first above written.
| MONRO MUFFLER BRAKE, INC. | ||||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||
| Xxxxxx X. Xxxxx, President and Chief Executive Officer | ||||||
| /s/ Xxxxxxxxx X’Xxxxx | ||||||
| Xxxxxxxxx X’Xxxxx | ||||||
