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): June 26, 2017

MONRO MUFFLER BRAKE, INC.

(Exact name of registrant as specified in its charter)

New York	0-19357	16-0838627
(State or Other Jurisdiction 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

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

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

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

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

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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

On June 28, 2017, John W. Van Heel resigned as President of Monro Muffler Brake, Inc. (the “Company”), effective as of August 1, 2017. In addition, Mr. Van Heel’s employment as Chief Executive Officer of the Company will end on October 1, 2017 upon the expiration of his term of employment in accordance with the terms of his existing employment agreement with the Company and, in connection therewith, on June 28, 2017, Mr. Van Heel also tendered his resignation as a member of the Board of Directors of the Company (the “Board”), effective as of October 1, 2017. Also on June 28, 2017, the Board appointed Brett Ponton to serve as President of the Company, effective as of August 1, 2017, and as Chief Executive Officer of the Company, effective as of October 2, 2017.

Mr. Van Heel will remain with the Company as an advisor for six months after his employment agreement expires on October 1, 2017. In connection with Mr. Van Heel’s transition to this advisory role, the Company entered into an Agreement with Mr. Van Heel on June 28, 2017 (the “Van Heel Agreement”). The Van Heel Agreement will become effective on October 2, 2017 for a term expiring on March 31, 2018. Under the Van Heel Agreement, the Company agreed to pay Mr. Van Heel a lump sum payment of $275,000 in recognition of prior services rendered by him to the Company. Mr. Van Heel agreed to, among other things, render part-time services as an advisor to the Company and assist in the Chief Executive Officer transition in exchange for a monthly payment of $33,333.

In connection with the transition, on June 28, 2017, the Company also entered into an Employment Agreement with Mr. Ponton (the “Ponton Agreement”), effective as of August 1, 2017. The Ponton Agreement has a three-year term. Under the Ponton Agreement, Mr. Ponton (i) will be paid an annual base salary of $550,000; (ii) will be eligible to earn a bonus, pursuant to the terms of the Company’s bonus plan, of up to 150% of his base salary, upon the achievement of corporate objectives determined by the Compensation Committee of the Board; and (iii) will participate in the Company’s other incentive and welfare and benefit plans made available to executives. Mr. Ponton’s base salary will be reviewed annually by the Compensation Committee of the Board and may be increased to reflect his performance and responsibilities.

In addition, Mr. Ponton is entitled to certain payments upon death, disability, a termination without Cause (as defined in the Ponton Agreement), a resignation by Mr. Ponton for Good Reason (as defined in the Ponton Agreement), a determination by the Company not to extend the term of the Ponton Agreement in accordance with its terms, or a termination in the event of a Change in Control (as defined in the Ponton Agreement) of the Company, all as set forth in detail in the Ponton Agreement.

In consideration of Mr. Ponton’s execution of the Ponton Agreement, the Company will pay Mr. Ponton a cash signing bonus of $600,000 on or promptly following August 1, 2017. If Mr. Ponton’s employment is terminated for Cause or he resigns other than for Good Reason, in either case within one year following his commencement date, he will be required to repay a pro rata portion of the signing bonus. Additionally, effective as of August 1, 2017, Mr. Ponton will be entitled to the following equity awards pursuant to the Company’s 2007 Stock Incentive Plan: (i) nonqualified stock options to purchase 300,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), that vest in in three ratable installments over three years, subject to Mr. Ponton’s continued employment with the Company through the applicable vesting date; (ii) a nonqualified stock option to purchase 100,000 shares of Common Stock, at an exercise price of $65.00 per share, with a term of six years, which vests only if the closing price of the Common Stock is $65.00 or higher for 45 consecutive days, subject to Mr. Ponton’s continued employment with the Company; and (iii) time-vesting restricted stock units with respect to 30,000 shares of Common Stock that vest in three ratable installments, subject to Mr. Ponton’s continued employment with the Company through the applicable vesting date.

Pursuant to the Ponton Agreement, Mr. Ponton may not compete with the Company for two years following his termination of employment. In addition, he may not solicit Company employees for one year following his termination of employment.

Mr. Ponton, age 47, brings more than 20 years of experience as a senior executive in the automotive services industry, with extensive knowledge of both franchised and company-operated retail stores. Prior to joining the Company, Mr. Ponton will have served as President and Chief Executive Officer of American Driveline Systems, Inc. (the parent company of AAMCO Transmissions Inc., Cottman Transmission Systems, LLC and Global Powertrain Systems, Inc.) from September 2013 until July 2017. Prior to then, he was President and Chief Executive Officer of Heartland Automotive Services, Inc., the largest operator of Jiffy Lube stores in North America, from 2009 until September 2013. Mr. Ponton also previously served in a variety of roles during an 18-year tenure at The Goodyear Tire & Rubber Company.

There are no family relationships between Mr. Ponton and any director or executive officer of the Company, and he does not have any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

On June 27, 2017, Robert G. Gross informed the Company of his intention to not stand for re-election to the Board when his current term expires at the Company’s 2017 Annual Meeting of Shareholders, and tendered his resignation as Executive Chairman of the Company, effective immediately. The Company thanks Mr. Gross for his 18 years of distinguished service to the Board and the Company.

In light of Mr. Gross’s resignation as Executive Chairman, on June 28, 2017, the Board elected Robert E. Mellor to serve as an independent Chairman of the Board, effective immediately.

On June 27, 2017, Elizabeth A. Wolszon tendered her resignation as a member of the Board, effective as of June 26, 2017. Also on June 27, 2017, James R. Wilen tendered his resignation as a member of the Board, effective immediately. The Company also thanks Ms. Wolszon and Mr. Wilen for their years of exemplary service to the Board and the Company.

Item 8.01. Other Events.

On June 28, 2017, the Company issued a press release announcing these leadership changes. A copy of the press release is furnished as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are furnished as part of this Report:

Exhibit Number	Description
99.1	Press Release, dated June 28, 2017

SIGNATURE

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

	MONRO MUFFLER BRAKE, INC.
By:	/s/ Maureen E. Mulholland
Name:	Maureen E. Mulholland
Title:	Vice President – General Counsel and Secretary

DATE: June 28, 2017

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release, dated June 28, 2017

EX-99.1

Exhibit 99.1

CONTACT	John Van Heel
	Chief Executive Officer
	(585) 647-6400
	Media:
	Carolyn Sargent
	Rubenstein
	(212) 843-8030

FOR IMMEDIATE RELEASE:

MONRO MUFFLER BRAKE, INC. ANNOUNCES SUCCESSION, APPOINTS BRETT PONTON AS ITS NEXT PRESIDENT AND CHIEF EXECUTIVE OFFICER

~ Robert Mellor elected independent Chairman of the Board, effective immediately ~

~ John Van Heel will continue as CEO until the end of his contract on October 1, 2017, and then act as an advisor to the Company through March 2018 ~

~ Robert Gross, prior Executive Chairman, to retire from the Board and the Company ~

ROCHESTER, N.Y. – June 28, 2017 – Monro Muffler Brake, Inc. (Nasdaq: MNRO), a leading provider of automotive undercar repair and tire services, announced today that it has elected Brett Ponton as its next President and Chief Executive Officer. Mr. Ponton, an executive with more than 20 years of senior management experience in the auto and tire service industry, most recently served as CEO of American Driveline Systems, the parent company of AAMCO Transmissions & Total Car Care. Mr. Ponton will succeed John Van Heel, who has decided not to renew his long-term contract when it expires on October 1, 2017. Mr. Van Heel has been CEO and a member of the Board of Directors since 2012.

Monro also announced the election of lead director Robert Mellor as independent Chairman of the Board of Directors. Robert Gross, Executive Chairman, will retire from the Board and the Company at the conclusion of the annual shareholder meeting on August 15, 2017.

The transition comes at a time of dynamic evolution and opportunities for the rapidly growing company, which has 1,118 Company-operated stores and 114 franchised locations in 27 states. In fiscal 2017, Monro’s sales totaled a record $1.022 billion, 8% more than the previous year. In the past 15 years, Monro has made 42 acquisitions; the stores it acquired in fiscal 2017 are projected to add $150 million in annualized sales over fiscal 2016.

“Monro is very pleased to welcome Brett Ponton as its next President and CEO. His deep industry expertise and contacts, his success running both franchise and company-operated automotive service and tire stores and his proven leadership skills will help accelerate Monro’s successful acquisition strategy. He is the right person to lead Monro at this stage in its growth,” Mr. Mellor said.

1

In announcing the transition, Mr. Mellor added: “We are grateful to John Van Heel for his distinguished service to Monro. During his 15 years at the Company, the past five as CEO, the Company has grown from 550 stores and $250 million in annual sales to more than 1,100 stores and annual sales of more than $1 billion.”

Mr. Ponton said: “It is an honor to be chosen as President and CEO of Monro. Since its founding 60 years ago, Monro has been an auto care pioneer with a sterling reputation and strong portfolio of retail outlets. Monro is well positioned to continue its tremendous growth through increasing same-store sales, acquiring competitors and expanding into new markets. I look forward to working with the Company’s talented professionals to expand the offerings and unparalleled service Monro is known for.”

Mr. Ponton will join Monro as President on August 1, 2017, and assume the CEO role on October 2, 2017. To facilitate the transition, Mr. Van Heel will serve as an advisor to Monro for six months following the end of his contract.

In discussions about succession planning with the Board, Mr. Van Heel indicated that he did not wish to renew his long-term contract. Subsequently, the Monro Board of Directors began an extensive, nationwide search for a new leader. “In Mr. Ponton we have found a worthy successor to Mr. Van Heel and his predecessor, Mr. Gross. Mr. Ponton’s strategic vision and proven in-store operational expertise will help drive our long-term success,” Mr. Mellor said.

Mr. Van Heel said, “It has been a privilege for me to be a part of the outstanding growth story at Monro. I am proud of the accomplishments of our team and want to thank each of our employees for their hard work and dedication to Monro, our customers and me. Also, we are grateful to Rob Gross for his outstanding leadership and contributions to the Company over the past 18 years.”

Monro operates in the $197 billion “Do-It-For-Me” segment of the U.S. automotive aftermarket industry, which will benefit from favorable industry trends including a rising number of vehicles on the road as well as the increasing age and complexity of vehicles. These factors make it more challenging for motorists to do their own repairs.

The Company recently completed the acquisition of 16 stores from a Car-X franchisee, including 13 locations in Illinois and three in Iowa. The sum total of the Company’s acquisitions completed in fiscal 2017 are expected to represent 16% in annualized sales growth over fiscal 2016.

On July 20, Monro will hold a conference call to provide an update on its business and report its fiscal 2018 first quarter results.

About Brett Ponton

Mr. Ponton most recently served as CEO and President of American Driveline Systems, Inc., which owns AAMCO Transmissions Inc., Cottman Transmission Systems, LLC, and Global Powertrain Systems, LLC. He also served on its Board of Directors. Mr. Ponton was instrumental in orchestrating a turnaround for American Driveline Systems and recently led its successful sale to Transom Capital Group. Mr. Ponton joined American Driveline in 2013 from Heartland Automotive, the largest operator of Jiffy Lube stores in North America. Mr. Ponton was recruited to join Heartland by its private owners, The Blackstone Group, to improve revenues and profitability. Upon achieving these objectives, Heartland was sold to Sun Capital Partners in 2012. Prior to joining Heartland in 2009, Mr. Ponton served as the Managing Director for the Asia-Pacific region for Veyance Technologies, a company that was spun out of Goodyear Tire & Rubber Company and was owned by The Carlyle Group. At Veyance, Mr. Ponton was based in Shanghai, and later Melbourne. Prior to joining Veyance, Mr. Ponton spent 16 years at Goodyear

2

Tire & Rubber Company, where he rose from a summer laborer and, later, an accounting intern to Vice President of Marketing for the North America tire division. At Goodyear he managed more than 800 retail locations and 8,000 employees.

About Monro Muffler Brake, Inc.

Headquartered in Rochester, New York, Monro is a chain of 1,118 Company-operated stores, 114 franchised locations, five wholesale locations, two retread facilities and 14 dealer-operated stores providing automotive undercar repair and tire sales and services. The Company operates in 27 states, serving the Mid-Atlantic and New England states and portions of the Great Lakes, Midwest and Southeast. The predecessor to the Company was founded by Charles J. August in 1957 as a Midas Muffler franchise. In 1966, Monro began to diversify into a full line of undercar repair services. The Company has experienced significant growth in recent years through acquisitions and, to a lesser extent, the opening of new construction stores. The Company went public in 1991 and trades on NASDAQ under the symbol MNRO.

###

3