Exhibit No. 10.1
AMENDED AND RESTATED
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 Catherine D’Amico (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

 

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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

 

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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.

 

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               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

 

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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.

 

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          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.
200 Holleder Parkway
Rochester, New York 14615
Attention: Robert G. Gross
          (b) if to the Executive, to her at:
55 Great Wood Circle
Fairport, New York 14450
               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

 

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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/ Robert G. Gross     
 
           
 
      Robert G. Gross, President and Chief Executive Officer    
 
           
 
      /s/ Catherine D’Amico              
 
      Catherine D’Amico