MONRO MUFFLER BRAKE, INC. 8-K

0000950152-07-007891.txt : 20071004 0000950152-07-007891.hdr.sgml : 20071004 20071004153955 ACCESSION NUMBER: 0000950152-07-007891 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071001 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071004 DATE AS OF CHANGE: 20071004 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONRO MUFFLER BRAKE INC CENTRAL INDEX KEY: 0000876427 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AUTOMOTIVE REPAIR, SERVICES & PARKING [7500] IRS NUMBER: 160838627 STATE OF INCORPORATION: NY FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19357 FILM NUMBER: 071156600 BUSINESS ADDRESS: STREET 1: 200 HOLLEDER PKWY CITY: ROCHESTER STATE: NY ZIP: 14615-3808 BUSINESS PHONE: 7166476400 8-K 1 l28180ae8vk.htm MONRO MUFFLER BRAKE, INC. 8-K MONRO MUFFLER BRAKE, INC. 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):

October 1, 2007

MONRO MUFFLER BRAKE, INC.

(Exact name of registrant as specified in its charter)


New York	0-19357	16-0838627

(State of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)


200 Holleder Parkway, Rochester, New York		14615

(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (585) 647-6400

Not Applicable

(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 (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Agreement

On October 1, 2007, the Company entered into an Employment Agreement with its President, Robert G. Gross. The Agreement became effective on October 1, 2007 and has a five year term.

Under the Agreement, Mr. Gross (i) will be paid a base salary of $840,000; (ii) will be eligible to earn a target annual bonus, pursuant to the terms of the Company’s Management Incentive Compensation Plan, equal to up to 150% of his base salary upon the achievement of certain predetermined corporate objectives and (iii) will participate in the Company’s other incentive and welfare and benefit plans made available to executives. Mr. Gross will also receive a special bonus of $750,000, payable in five annual installments of $150,000, which payments began on October 1, 2007 (the “Special Bonus”). If the Agreement terminates before October 1, 2012 either for Cause (as defined therein) or as the result of Mr. Gross’s resignation without Good Reason (as defined therein), then Mr. Gross will be required to repay a portion of the last-received annual installment of the Special Bonus, pro-rata to the date of termination. In consideration for Mr. Gross’s covenant not-to-compete with the Company or to solicit its employees, the Company will pay him an additional $750,000, payable in five equal installments of $150,000, beginning on October 1, 2012 or the earlier termination of the Agreement (the “Non-Compete Payment”). Finally, Mr. Gross is entitled to certain payments upon death, disability, a termination without Cause (as defined therein), a resignation by Mr. Gross for Good Reason (as defined therein) or a termination in the event of a Change in Control of the Company (as defined therein), all as set forth in detail in the Agreement.

On October 2, 2007 and in consideration for Mr. Gross’s execution of the Agreement, the Company’s Compensation Committee awarded to Mr. Gross an option to purchase 375,000 shares of Common Stock (calculated following the Company’s recent three-for-two stock split) at an exercise price of $22.80 per share (the closing price of the Company’s stock on the date of the award), pursuant to the Company’s 2007 Stock Incentive Plan.

A copy of the Company’s Employment Agreement with Mr. Gross is attached to this Current Report as Exhibit 99.1 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(a) Not Applicable

(b) Not Applicable


Exhibit No.		Description

99.1		Employment Agreement by and between Monro Muffler Brake, Inc. and Robert G. Gross, dated October 1, 2007.

SIGNATURES

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



		MONRO MUFFLER BRAKE, INC.
		(Registrant)



October 4, 2007	By:	/s/ Catherine D’Amico
		Catherine D’Amico
		Executive Vice President and Chief Financial Officer

EX-99.1 2 l28180aexv99w1.htm EX-99.1 EX-99.1

Exhibit 99.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, entered into on September 28, 2007 and effective as of October 1, 2007 (the “Effective Date”), between Monro Muffler Brake, Inc. (the “Company”) and Robert G. Gross (the “Executive”).

WHEREAS, the Company and the Executive wish for the Executive to continue to be employed by the Company upon the terms and conditions as set forth herein; and

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 Chief Executive Officer (“CEO”) of the Company, subject to the control and direction of the Company’s Board of Directors (the “Board”).

1.2 Duties/Authority. The Executive shall have responsibility for the conduct of the business and 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 Board. The Executive’s duties hereunder shall be consistent with the duties, responsibilities, and authority generally incident to the position of CEO and such other reasonably related duties as may be assigned to him from time to time by the Board.

2. Term of Employment. The term of this Agreement shall commence on the Effective Date and end on the fifth anniversary of the Effective Date (the “Term”), unless sooner terminated as provided herein.

3. Compensation.

3.1 Salary. As consideration for services rendered, the Company shall pay the Executive during the Term a salary of $840,000 per annum (the “Base Salary”), payable not less frequently than monthly. The Executive’s Base Salary will be reviewed annually by the Compensation Committee of the Board (the “Committee”) and may be increased (but not decreased) to reflect the Executive’s performance and responsibilities.

3.2 Special Bonus. In consideration for the Executive entering into this Agreement and agreeing to serve as CEO during the Term, the Company shall pay to the Executive an amount equal to $750,000, payable in five (5) equal installments of $150,000, beginning on the Effective Date and continuing until the fourth anniversary of the Effective Date. The Special Bonus is subject to repayment or acceleration in certain circumstances, as set forth in Sections 5 and 6 of this Agreement.

3.3 Annual Bonus. Pursuant to the Monro Muffler Brake, Inc. Management Incentive Compensation Plan (as such plan may be amended or replaced from time to time, 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 2008), of 90% of Base Salary if the Company achieves its performance targets set by the Committee with respect to such year, increased up to a maximum of 150% of Base Salary if the Company exceeds such performance targets by amounts to be determined by the Committee (the “Annual Bonus”). 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 5 hereof, such pro rata bonus shall be equal to the bonus the Executive would have received under the Bonus Plan had he 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 he was so employed and the denominator of which shall be 365 (the “Pro Rata Bonus”). The Executive may be entitled to 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”). 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 or any Committee designated by the Board determines to pay such bonus to the executive-level employees of the Company. The Annual Bonus shall, in all respects, be subject to the terms of the Bonus Plan.

3.4 Option Grant. The Board shall recommend to the Compensation Committee of the Board that the Compensation Committee grant to the Executive, an option to purchase 375,000 shares of the Company’s Common Stock (the “Option”) under the terms of the 2007 Stock Incentive Plan (the “Plan”). The Option shall have an exercise price per share equal to the fair market value of one share of the Company’s Common Stock on the date of grant, as determined in accordance with the Plan, and shall have a five year term. Subject to the Executive’s continued employment with the Company, and subject to final determination by the Compensation Committee, the Option shall become exercisable with respect to the shares of Common Stock in accordance with the following schedule:


Date	Amount Exercisable
October 1, 2007		25	%
October 1, 2008		50	%
October 1, 2009		75	%
October 1, 2010		100	%

3.5 Non-Compete Payment. In consideration for the Executive’s agreement not to compete with the Company or to solicit its employees in Sections 7.2 and 7.3, respectively, the Company agrees to pay the Executive an amount equal to $750,000 (the “Non-Compete Payment”), payable in five (5) equal installments of $150,000, beginning on the fifth anniversary of the Effective Date and continuing until the ninth anniversary of the Effective Date. To the

extent that the Executive violates the terms of Section 7.2 or 7.3, the Non-Compete Payment shall be forfeited and the Executive agrees to repay to the Company promptly any and all installments thereof.

3.6 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.

3.7 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.

3.8 Vacation. The Executive shall be entitled to such amount of vacation which is available generally to other senior executives of the Company.

3.9 Additional Benefits. The Executive shall be entitled to 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 his use of such vehicle.

3.10 Controlling Document. To the extent there is any inconsistency between the terms of this Agreement and the terms of any plan or program under which compensation or benefits are provided hereunder, this Agreement shall control. Otherwise, the Executive shall be subject to the terms, conditions and provisions of the Company’s plans and programs, as applicable.

4. Termination or Removal from Duties.

4.1 Termination Upon Death. This Agreement shall terminate automatically upon the Executive’s death.

4.2 Removal from Position Upon Disability. If during the Term, as a result of a physical or mental incapacity or infirmity, the Executive is unable to perform the essential functions of his job with or without reasonable accommodation for a period or periods aggregating 90 days during any twelve month period, the Executive shall be deemed disabled (the “Disability”) and the Company, by written notice to the Executive, shall have the right to remove him from his position. The Executive’s status as an employee of the Company shall continue after such removal for the period of time that his Disability continues. However, the Company shall have no obligation to reinstate or otherwise continue the Executive’s employment if he should recover from his Disability and any such termination shall not constitute a termination without Cause or without Good Reason (as herein defined). The existence of a Disability shall be determined by a reputable, licensed physician selected by the Company in good faith, whose determination shall be final and binding on the parties.

4.3 Termination for Cause. The Company may at any time, by written notice to the Executive, terminate the Executive’s employment hereunder for Cause. For purposes hereof, the term “Cause” shall mean: (A) Executive’s conviction of or pleading guilty or no contest to a felony; (B) failure or refusal of the Executive in any material respect (i) to perform the duties of his employment or to follow the lawful and proper directives of the Board, 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 (so long as same are not inconsistent with this Agreement) 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 7 of this Agreement.

4.4 Termination without Cause. During the Term, the Company may terminate the Executive’s employment without Cause at any time.

4.5 Termination with or without Good Reason. With forty-five (45) days prior written notice to the Company, this Agreement and the Executive’s employment hereunder may be terminated by the Executive with or without Good Reason. For purposes of this Agreement, “Good Reason” means if the Executive is able to document, to the reasonable satisfaction of the Company’s outside counsel, that the reason for such resignation is as a direct result of either: (i) the Company’s material breach of this Agreement; or (ii) the Board of Directors requiring the Executive to act, or omit to act, in a way that the Executive reasonably believes is illegal; provided, however, that a termination by the Executive for Good Reason pursuant to (i) or (ii) shall be effective only if, within 30 days following the delivery of written notice of a termination for Good Reason by Executive to the Company, the Company has failed to cure the circumstances giving rise to the Good Reason. The written notice of termination for Good Reason must specify in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, if applicable.

Any resignation pursuant to the terms of this Section shall not constitute a breach of this Agreement by either party.

5. Rights and Obligations of the Company and the Executive Upon Termination, or Removal. Other provisions of this Agreement notwithstanding, upon the occurrence of an event described in Section 4, the parties shall have the following rights and obligations:

5.1 Death. If the Executive’s employment is terminated by reason of the Executive’s death, the Company shall pay the Executive’s estate in one lump sum amount: (A) the lesser of (i) one year’s Base Salary (as in effect as of the date of termination), or (ii) the amount of Base Salary that would have been payable to the Executive from the date of death through the fifth anniversary of the Effective Date; plus (B) any Special Bonus payments not yet received during the Term as of the date of death; plus (C) any Preceding and/or Pro Rata Bonus to which the Executive is entitled.

5.2 Disability.

(A) If the Executive is removed from his position because of a Disability, the Executive, for the period of time during which his Disability continues, may continue to participate in certain of the employee benefit plans in which he participated immediately prior to his 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 his removal. In addition, the Executive shall be entitled to compensation and benefits accrued through the date of his removal from his duties, including any amounts payable to the Executive under any Company profit sharing or other employee benefit plan up to the date of removal. However, the Executive’s rights to bonuses and fringe benefits accruing after his removal, if any, shall cease upon such removal; provided, however, that 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.

(B) The Executive shall be entitled to payments equal to: (A) the lesser of (i) one year’s Base Salary (as in effect as of the date of removal), or (ii) the amount of Base Salary that would have been payable to the Executive from the date of removal through the Term of the Agreement, payable as follows, (x) a lump sum payment six months following such removal equal to the lesser of (1) six months of Base Salary or (2) Base Salary for the remainder of the Term and (y), if applicable, following such six month period, continued payment of Base Salary (payable in accordance with the Company’s payroll practice) for the lesser of six months or the remainder of the Term; plus (B) any Special Bonus payments not yet received during the Term as of the date of Disability (payable six months following such removal from his position); plus (C) any Preceding and/or Pro Rata Bonus to which the Executive is entitled (payable six months following such removal from his position).

5.3 Termination for Cause or without Good Reason. If the Executive’s employment shall be terminated (A) by the Company for Cause; or (B) by the Executive without Good Reason, the Company shall pay the Executive his Base Salary through the date of termination at the rate then in effect and shall reimburse the Executive for any Expenses incurred but not yet paid and shall have no further obligations to the Executive under this Agreement. If such termination occurs before October 1, 2012, the Executive shall be required to repay (within five business days following such termination) a portion of the last-received annual installment of the Special Bonus, pro-rata to the date of termination.

5.4 Termination without Cause or with Good Reason. If the Executive’s employment is terminated (A) by the Company without Cause, or (B) by the Executive with Good Reason, the Company shall pay (unless otherwise noted, in the normal course) to the Executive or provide the following amounts or benefits:

(i) to the extent not yet paid, the Executive’s Base Salary through the date of termination at the rate in effect on the date of termination;

(ii) Base Salary for the remainder of the Term, payable as follows (x) a lump sum payment six months following such removal equal to the lesser of (1) six months of Base Salary or (2) Base Salary for the remainder of the Term and (y), if applicable, following such six month period, continued payment of Base Salary (payable in accordance with the Company’s payroll practice) for the remainder of the Term;

(iii) in one lump sum amount, payable six months following such termination of employment, any Special Bonus payments not yet received during the Term as of the date of termination;

(iv) to the extent not yet paid, the Non-Compete Payment, payable in equal annual installments, beginning six months following the date of termination and continuing on the anniversary date of such termination of employment until paid in full;

(v) payment of the Preceding and/or Pro Rata Bonus to which the Executive is entitled, payable six months following such termination of employment; and

(vi) any and all stock options that have been granted to the Executive through the termination date shall be deemed fully vested on such termination date and exercisable for a period of 90 days following such date, all in accordance with the other terms of any such plan or grant.

All payments to be provided to the Executive under this Section shall be subject to the Executive’s (x) compliance with the restrictions in Section 7 and (y) execution of a general release and waiver of claims against the Company, its officers, directors, employees and agents from any and all liability arising from the Executive’s employment relationship with the Company (which release will include an agreement between both parties not to disparage the other) that is not revoked.

6. Change in Control.

6.1 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, (A) the Executive’s employment is terminated without Cause or (B) the Executive resigns following:

(i) a material diminution in his duties as set forth in Section 1.2 of this Agreement (to include no longer acting as chief executive officer or president of the “parent company”); or

(ii) in the case of the sale of the Company, the Executive is not offered a comparable position (as chief executive officer or president of the “parent company”) by the buyer (either (i) or (ii), a “Resignation for Good Cause”), then the Executive shall be entitled to the benefits described in Section 6.2.

6.2 Upon a termination without Cause or a Resignation for Good Cause described in Section 6.1, the Executive will receive in one lump sum amount, unless otherwise noted:

(A) to the extent not yet paid, the Executive’s Base Salary through the date of termination at the rate in effect on the date of termination;

(B) the Executive’s Base Salary for the remainder of the Term, payable six months following such termination of employment;

(C) any Special Bonus payments not yet received during the Term as of the date of termination, payable six months following such termination of employment;

(D) to the extent not yet paid, the Non-Compete Payment, payable in equal annual installments, beginning six months following the date of termination and continuing on the anniversary date of such termination of employment until paid in full;

(E) payment of the Preceding and/or Pro Rata Bonus to which the Executive is entitled, payable six months following such termination of employment; and

(F) any and all stock options that have been granted to the Executive through the termination date shall be deemed fully vested on such termination date and exercisable for a period of 90 days following such date, all in accordance with the other terms of any such plan or grant.

6.3 For purposes of this Agreement, a “Change in Control” shall mean any of the following: (A) 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; (B) the sale of the Company substantially as an entity (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 (C) 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 in 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 (A), (B) or (C) of the preceding sentence.

6.4 If it is determined by the Company, or by the Internal Revenue Service (the “IRS”) pursuant to an IRS audit of the Executive’s federal income tax return(s) (an “Audit”), that any payment or benefit provided to the Executive under this Agreement as a result of a Change in Control of the Company would be subject to the excise tax imposed by Section 4999 of the Code (an “Excess Parachute Payment”), or any interest or penalties with respect to such excise tax (such excise tax, together with any interest or penalties thereon, is herein referred to as the “Excise Tax”), then the Company shall pay (either directly to the IRS as tax withholdings or to the Executive as a reimbursement of any amount of taxes, interest and penalties paid by the Executive to the IRS) both the Excise Tax and an additional cash payment (a “Gross-Up Payment”) in an amount that will place the Executive in the same after-tax economic position that the Executive would have enjoyed if the payment or benefit had not been subject to the Excise Tax. The amount of the Gross-Up Payment shall be calculated by the Company’s regular independent auditors based on the amount of the Excise Tax paid by the Company as determined by the Company or the IRS. If the amount of the Excise Tax determined by the IRS is greater than an amount previously determined by the Company, the Company’s auditors shall recalculate the amount of the Gross-Up Payment. The Executive shall promptly notify the Company of any IRS assertion during an Audit that an Excise Tax is due with respect to any payment or benefit, provided that the Executive shall be under no obligation to defend against such claim by the IRS unless the Company requests, in writing, that the Executive undertake the defense of such IRS claim on behalf of the Company and at the Company’s sole expense. In such event, the Company may elect to control the conduct to a final determination through counsel of its own choosing and at its sole expense, of any audit, administrative or judicial proceeding involving an asserted liability relating to the Excise Tax, and the Executive shall not settle, compromise or concede such asserted Excise Tax and shall cooperate with the Company in each phase of any contest. If, after the receipt by the Executive of an amount paid by the Company pursuant to this Section 6.4, the Executive becomes entitled to receive any refund with respect to a Gross-Up Payment, the Executive shall promptly pay to the Company the amount of such refund received (together with any interest paid or credited thereon after taxes applicable thereto).

7. Confidentiality and Covenant against Competition.

7.1 Non-Disclosure. The Executive shall forever hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive’s employment by the Company or any of its affiliated companies and which shall not be public knowledge (other than as a result of a breach of this Section 7.1 by the Executive). The Executive shall not, without the prior written consent of the Company or except as required by law or in a judicial or administrative proceeding with subpoena powers, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it.

7.2 Non-Competition. The Executive will not, during the period of the Executive’s employment with the Company, and for a period of five years thereafter, directly or indirectly, engage in (as a principal, partner, director, officer, stockholder (except as permitted below), agent, employee, consultant or otherwise) or be financially interested in any entity materially engaged in any portion of the business of the Company. Nothing contained herein shall prevent 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 automotive repair/maintenance services and related activities, as well as the sale and service of tires and related accessories, each of which shall be deemed a portion of the business.

7.3 Non-Solicitation of Employees. The Executive will not, during the period of the Executive’s employment with the Company, and for a period of one year 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.

7.4 Enforceability of Provisions. If any restriction set forth in this Section 7 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.

7.5 Remedy for Breach. The Executive hereby acknowledges that the provisions of this Section 7 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 in Sections 5 and 6 of this Agreement and Executive shall be obligated to repay, in its entirety, the Non-Compete Payment.

8. Executive’s Representations. The Executive represents that he is not precluded from performing this employment by reason of a pre-existing contractual restriction or physical or mental disability. Upon any breach or inaccuracy of the foregoing, the terms and benefits of

this Agreement shall be null and void. 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.

9. Other Provisions.

9.1 Withholdings. The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

9.2 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. 200 Holleder Parkway Rochester, New York 14615 Attention: Chief Financial Officer with a copy to: Monro Muffler Brake, Inc. 200 Holleder Parkway Rochester, New York 14615 Attention: General Counsel

	(b)		if to the Executive, to him at: 37 Whitestone Lane Rochester, New York 14618

9.3 Entire Agreement. This Agreement, together with the agreements evidencing the Option contains the entire understanding of the Company and the Executive with respect to the subject matter hereof.

9.4 Waivers and Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. 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.

9.5 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.

9.6 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.

9.7 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.

9.8 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 Employment Agreement on October 1, 2007.


	MONRO MUFFLER BRAKE, INC.
	By:	/s/ Catherine D’Amico
		Catherine D’Amico
		Executive Vice President, Chief Financial Officer and Treasurer



		/s/ Robert G. Gross
		Robert G. Gross