Employment Agreement by and between the Company and Matt Henson, dated July 6, 2021
.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 Human Resources Officer of the Company, subject to the control and direction of the Company’s Chief Executive Officer (the “CEO”).Duties/Authority
. During the Term, 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 CEO. The Executive’s duties hereunder shall be consistent with the duties, responsibilities, and authority generally incident to the position of Chief Human Resources Officer and such other reasonably related duties as may be assigned to him from time to time by the CEO consistent with his role as a senior executive.Principal Place of Employment
. The Executive’s principal place of employment shall be at the Company’s headquarters in Rochester, New York, subject to customary travel.Term of Employment
. The “Term” of this Agreement shall commence on a date to be mutually agreed by the parties, but in no event later than July 6, 2021 (the “Start Date”) and end on December 31, 2023 (the “Initial Term”), unless sooner terminated as provided herein. Unless earlier terminated, the Term shall automatically renew (each a “Renewal Term”) at the end of the Initial Term and on each anniversary thereafter for a period of one (1) year unless either party shall give written notice of intent not to extend the then-current Term to the other party not later than ninety (90) days prior to the end of then-current Term. References herein to the Term shall mean the period of the Executive’s employment during the Initial Term and any Renewal Term.
. As consideration for services rendered, the Company shall pay the Executive a salary of $340,000 per annum (the “Base Salary”), payable not less frequently than monthly. The Executive’s Base Salary will be reviewed annually by the Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board”)and may be increased (but not decreased without the Executive’s consent) to reflect the Executive’s performance and responsibilities.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 cash bonus in respect of each prior fiscal year during the Term, of 37.5% of the Base Salary if the company achieves its threshold performance levels and 50% of the Base Salary if the Company achieves its target level of performance set by the Committee with respect to such fiscal year, increased up to a maximum of 75% of the Base Salary if the Company exceeds such performance targets by amounts to be determined by the Committee (the “Annual Bonus”). For 2021, the Annual Bonus shall be prorated based on the portion of the year the Executive is employed by the Company. If this Agreement terminates other than at the end of a fiscal year either: (i) upon the expiration of the Term; or (ii) pursuant to Section 4, and the Executive is entitled to a pro rata bonus for such partial fiscal year pursuant to Section 5 or Section 6 hereof, such pro rata bonus shall be equal to the bonus the Executive would have received under the Bonus Plan, based on the Company’s actual performance during such fiscal year, 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 the number of days in such fiscal year (the “Pro Rata Bonus”). The Executive may be entitled to the Annual Bonus for the fiscal year prior to the fiscal year in which the Executive’s employment is terminated, to the extent not yet paid (the “Preceding Bonus”). The Executive shall be entitled to receive the Preceding Bonus and/or the Pro Rata Bonus, as applicable: (a) at the same time the annual bonuses for the same periods are paid to other senior executives of the Company; and (b) only to the extent the Board or the Committee determines to pay such bonus to the other senior executives of the Company. The Annual Bonus shall, in all respects, be subject to the terms of the Bonus Plan.Sign-On Bonus
. On the first payroll date following the Start Date, the Company shall pay the Executive a cash sign-on bonus of $225,000 (the “Sign-On Bonus”). If the Executive’s employment is terminated by the Company with Cause or the Executive resigns other than for Good Reason, in either case within one (1) year following the Start Date, the Executive shall repay the Sign-On Bonus to the Company within ten (10) days following the date of termination (the “Sign-On Bonus Repayment”). With notice to the Executive, the Company may offset against the Sign-On Bonus Repayment any amounts that the Company then owes to the Executive.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.Equity Awards Expenses
. Subject to such policies generally applicable to senior executives of the Company, as may from time to time be established by the Board, 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. In addition, for up to two (2) years following the Effective Date or such longer period as agreed by the parties, the Company shall pay Executive’s reasonable travel expenses for his travel from his home to the Company’s offices in Rochester, New York, subject to the Company’s standard expense reimbursement policies, and shall provide Executive an apartment in Rochester, New York.
. During the Term, the Executive shall be entitled to such amount of vacation which is available generally to other senior executives of the Company.Additional Benefits
. During the Term, 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.Controlling Document Termination or Removal from Duties
.Termination Upon Death
. This Agreement shall terminate automatically upon the Executive’s death.
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 12-month period, the Executive shall be deemed disabled (his “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 inactive 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 his 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.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) the 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 CEO, 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 ten 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. For the avoidance of doubt, the Company’s failure to attain operating or other goals shall not be grounds for a termination for “Cause”.Termination without Cause
. The Company may terminate the Executive’s employment without Cause at any time.Termination with or without Good Reason
. With 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 CEO 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 or termination
pursuant to the terms of this Section shall not constitute a breach of this Agreement by either party.Rights and Obligations of the Company and the Executive Upon Termination, or Removal
. Other provisions of this Agreement notwithstanding, and except as otherwise provided by Section 6 hereof, upon the occurrence of an event described in Section 4, the parties shall have the following rights and obligations:Death
. If the Executive’s employment is terminated during the Term by reason of the Executive’s death, the Company shall pay the Executive’s estate in one lump sum amount, one year’s Base Salary (as in effect as of the date of termination) payable on the six-month anniversary of the date of the Executive’s death; plus (B) any Preceding and/or Pro Rata Bonus to which the Executive is entitled, which shall be paid in accordance with Section 3.2. Any outstanding equity awards shall be treated as specified in the applicable equity plan and award agreement.Disability
. If the Executive’s employment shall be terminated during the Term (A) by the Company for Cause, or (B) by the Executive without Good Reason, the Company shall pay to 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.Termination without Cause or with Good Reason; Termination Due to Nonrenewal by the Company
. If the Executive’s employment is terminated (A) during the Term (x) by the Company without Cause, or (y) by the Executive with Good Reason, or (B) due to nonrenewal of the Term by the Company pursuant to Section 2, the Company shall pay (unless otherwise noted, in the normal course) to the Executive or provide the following amounts or benefits:
All payments to be provided to the Executive under this Section 5.4 shall be subject to the Executive’s (x) compliance with the restrictions in Section 7 and (y) execution, within 60 days of the Executive’s termination, 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.
Change in Control
1.2 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, within two years after the Change in Control, (A) the Executive’s employment is terminated without Cause or with Good Reason, (B) the Term ends due to nonextension of the Term by the Company pursuant to Section 2, or (C) the Executive resigns following:
1.3 Upon a termination without Cause or with Good Reason in a Change in Control, the Term ends due to nonextension of the Term by the Company or a Resignation for Good Cause described in Section 6.1 during the Term, the Executive will receive in one lump sum amount, unless otherwise noted:
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, within 60 days of the Executive’s termination, 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.
1.4 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. For purposes of this Section 6.3, the term “person” shall include a legal entity, as well as an individual. 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.
. The Executive will not, during the period of the Executive’s employment with the Company, and for a period of one year thereafter, directly or indirectly, (a) engage in (as a principal, partner, director, officer, stockholder (except as permitted below), agent, employee, consultant or otherwise); or (b) be financially interested in, any entity materially engaged in any portion of the business of the Company within the territory served, or contemplated to be entered, by the Company on the date of such termination of employment. Nothing contained herein shall prevent the Executive from owning beneficially or of record not more than five percent of the outstanding equity securities 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, as well as the sale and service of tires and related accessories, each of which shall be deemed a portion of the business.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.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.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 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, as determined by the applicable court, 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.Executive’s Representations
. The Executive represents that he is not precluded from performing this employment by reason of a preexisting 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.Other Provisions
. 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.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:
if to the Company, to it at:
if to the Executive, to him at the address reflected in the Company’s payroll records
. This Agreement contains the entire understanding of the Company and the Executive with respect to the subject matter hereof and supersedes all prior written or verbal understandings with respect thereto.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.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.Assignment
. This Agreement shall inure to the benefit of and shall be binding upon the Company and its successors. This Agreement is personal to the Executive and shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.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.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.Section 280G
/s/ Matt Henson