10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(MARK ONE)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For Fiscal Year Ended March 31, 2007
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

Commission File Number 0-19357

MONRO MUFFLER BRAKE, INC.

(Exact name of registrant as specified in its charter)

New York	16-0838627
(State of incorporation)	(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

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $.01 per share

Securities registered pursuant to Section 12(g) of the Act:
NONE

(Title of Class)

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o     No þ

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o     No þ

Indicate by check mark if the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one)

Large Accelerated Filer  o     Accelerated Filer  þ     Non-Accelerated Filer  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ

As of June 1, 2007, the aggregate market value of voting stock held by non-affiliates of the registrant was $492,480,000.

As of June 1, 2007, 14,378,133 shares of the registrant’s Common Stock, par value $.01 per share, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the registrant’s definitive proxy statement (to be filed pursuant to Regulation 14A) for the 2007 Annual Meeting of Shareholders (the “Proxy Statement”) are incorporated by reference into Part III hereof.

PART I

Item 1.  Business

GENERAL

Monro Muffler Brake, Inc. (“Monro” or the “Company”) is a chain of 698 Company-operated stores (as of March 31, 2007) and 14 dealer-operated stores providing automotive undercar repair and tire services in the United States. At March 31, 2007, Monro operated Company stores in New York, Pennsylvania, Ohio, Connecticut, Massachusetts, West Virginia, Virginia, Maryland, Vermont, New Hampshire, New Jersey, North Carolina, South Carolina, Indiana, Rhode Island, Delaware and Maine under the names “Monro Muffler Brake & Service”, “Tread Quarters Discount Tire” and “Mr. Tire” (together, the “Company Stores”). The Company’s Stores typically are situated in high-visibility locations in suburban areas and small towns, as well as in major metropolitan areas. The Company Stores serviced approximately 3,528,000 vehicles in fiscal 2007. (References herein to fiscal years are to the Company’s year ended fiscal March [e.g., references to “fiscal 2007” are to the Company’s fiscal year ended March 31, 2007].)

The predecessor to the Company was founded by Charles J. August in 1957 as a Midas Muffler franchise in Rochester, New York, specializing in mufflers and exhaust systems. In 1966, the Company discontinued its affiliation with Midas Muffler, and began to diversify into a full line of undercar repair services. An investor group led by Peter J. Solomon and Donald Glickman purchased a controlling interest in the Company in July 1984. At that time, Monro operated 59 stores, located primarily in upstate New York, with approximately $21 million in sales in fiscal 1984. Since 1984, Monro has continued its growth and has expanded its marketing area to include 17 additional states.

In December 1998, the Company appointed Robert G. Gross as President and Chief Executive Officer, who began full-time responsibilities on January 1, 1999.

The Company was incorporated in the State of New York in 1959. The Company’s principal executive offices are located at 200 Holleder Parkway, Rochester, New York 14615, and its telephone number is (585) 647-6400.

The Company provides a broad range of services on passenger cars, light trucks and vans for brakes (estimated at 23% of fiscal 2007 sales); mufflers and exhaust systems (8%); and steering, drive train, suspension and wheel alignment (14%). The Company also provides other products and services including tires (24%) and routine maintenance services including state inspections (31%). Monro specializes in the repair and replacement of parts which must be periodically replaced as they wear out. Normal wear on these parts generally is not covered by new car warranties. The Company typically does not perform under-the-hood repair services except for oil change services, various “flush and fill” services and some minor tune-up services. The Company does not sell parts or accessories to the do-it-yourself market.

All of the Company’s stores provide the services described above. However, a growing number of the Company’s stores are more specialized in tire replacement and service and, accordingly, have a higher mix of sales in the tire category. These stores are described below as tire stores, whereas the majority of the Company’s stores are described as service stores. (See additional discussion under “Operating Strategy”.)

The Company’s sales mix for fiscal 2007 and 2006 is as follows:

	Service Stores						Tire Stores						Total Company
	FY07			FY06			FY07			FY06			FY07			FY06
Brakes		28	%		30	%		11	%		11	%		23	%		24	%
Exhaust		12			15			1			1			8			11
Steering		15			15			11			11			14			14
Tires		10			8			54			57			24			23
Maintenance		35			32			23			20			31			28
Total		100	%		100	%		100	%		100	%		100	%		100	%

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The Company has one wholly-owned subsidiary, Monro Service Corporation, which is a Delaware corporation qualified to do business in the State of New York.

Monro Service Corporation holds all assets, rights, responsibilities and liabilities associated with the Company’s warehousing, purchasing, advertising, accounting, office services, payroll, cash management and certain other operations that are performed in New York State and Maryland. The Company believes that this structure has enhanced, and will continue to enhance, operational efficiency and provide cost savings.

INDUSTRY OVERVIEW

According to industry reports, demand for automotive repair services, including undercar repair and tire services, has increased due to the general increase in the number of vehicles registered, the growth in vehicle miles driven, the increase in the average age of vehicles and the increased complexity of vehicles, which makes it more difficult for a vehicle owner to perform do-it-yourself repairs.

At the same time as demand for automotive repair services has grown, the number of general repair outlets has decreased, principally because fewer gas stations now perform repairs, and because there are fewer new car dealers. Monro believes that these factors present opportunities for increased sales by the Company, even though the number of specialized repair outlets (such as those operated by the Company and its direct competitors) has increased to meet the growth in demand.

EXPANSION STRATEGY

Monro has experienced significant growth in recent years due to acquisitions and, to a lesser extent, the opening of new stores. Management believes that the continued growth in sales and profits of the Company is dependent, in large part, upon its continued ability to open/acquire and operate new stores on a profitable basis. In addition, overall profitability of the Company could be reduced if new stores do not attain profitability.

Monro believes that there are significant expansion opportunities in new as well as existing market areas which will result from a combination of constructing stores on vacant land, opening full service Monro stores within host retailers’ service center locations (e.g. BJ’s Wholesale Clubs) and acquiring existing store locations. The Company believes that, as the industry consolidates due to the increasingly complex nature of automotive repair and the expanded capital requirements for state-of-the-art equipment, there will be increasing opportunities for acquisitions of existing businesses or store structures, and to open stores in host retailers’ locations.

In that regard, the Company has completed several acquisitions in recent years, as follows:

In September 1998, the Company completed the acquisition of 189 company-operated and 14 franchised Speedy stores (the “Acquired Speedy stores”), from SMK Speedy International Inc. of Toronto, Canada. The Acquired Speedy stores are located primarily in complementary areas in Monro’s existing markets in the Northeast, Mid-Atlantic and Midwest regions of the United States. These stores now operate under the Monro brand name.

Effective April 1, 2002, the Company completed the acquisition of Kimmel Automotive, Inc. (the “Kimmel Acquisition”). Kimmel operated 34 tire and automotive repair stores in Maryland and Virginia, as well as Wholesale and Truck Tire Divisions (including two commercial stores). In June 2002, Monro disposed of Kimmel’s Truck Tire Division. The Maryland stores now operate primarily under the Mr. Tire brand name while the Virginia stores continue to operate under the Tread Quarters brand name.

In February 2003, Monro acquired ten company-operated tire and automotive repair store locations in the Charleston and Columbia, South Carolina markets from Frasier Tire Service, Inc. (the “Frasier Acquisition”). These stores now operate under the Tread Quarters brand name.

Effective March 1, 2004, the Company completed the acquisition of Mr. Tire stores (the “Mr. Tire Acquisition”) from Atlantic Automotive Corp., which added 26 retail tire and automotive repair stores in Maryland and Virginia, as well as a wholesale operation based in Baltimore, Maryland.

With the Mr. Tire Acquisition, the Company has 51 stores in the Baltimore, Maryland area. To further solidify the Company’s leading position in this large metropolitan area, in the first quarter of fiscal 2005, the Company’s

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existing Speedy locations were converted to Monro branded stores and the Kimmel stores were converted to Monro and Mr. Tire branded stores. The Company believes that this initiative has increased brand awareness and raised visibility of its two dominant brands in the market. In connection with this re-branding effort, the Company closed one existing Kimmel store in fiscal 2005.

In fiscal 2005, the Company further expanded its presence in Maryland through the acquisition of certain assets of Rice Tire, Inc. (the “Rice Acquisition”) and Henderson Holdings, Inc. (the “Henderson Acquisition”), which added five and ten retail tire and automotive repair stores in the Frederick and southern Maryland markets, respectively. Thirteen of these stores operate under the Mr. Tire brand name and one under the Tread Quarters brand name. (One store has been closed.)

On November 1, 2005, the Company acquired a 13% interest in R&S Parts and Service, Inc. (“R&S”), a privately owned automotive aftermarket parts and service chain, for $2.0 million from GDJ Retail LLC. As part of the transaction, the Company also loaned R&S $5.0 million under a secured subordinated debt agreement that had a five-year term and carried an 8% interest rate. The loan was repaid in full in December 2006.

On August 11, 2006, the Company announced that it would not exercise its option to purchase the remaining 87% of R&S, originally negotiated for an additional $12.0 million in cash and $1.0 million of Monro stock. In addition, the Company recorded an after-tax impairment charge of $1.7 million with respect to the original 13% equity investment, as well as due diligence costs related to R&S. Management reached this conclusion after learning that R&S had filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. The impairment charge has been reflected within “Other Expenses” on the Consolidated Statement of Income for the year ended March 31, 2007.

Under the terms of the R&S debtor-in-possession financing, the Bankruptcy Court ordered the repayment to Monro of the $5 million secured loan, plus a portion of legal and other fees incurred by Monro in connection with the issuance and repayment of the loan. In February 2007, the Creditors’ Committee appointed in R&S’s bankruptcy commenced an action seeking repayment of the $5 million. In response, the Company filed a complaint against GDJ Retail, LLC and its principal, Glen Langberg, for breach of contract, contractual indemnification and negligent misrepresentation arising from the Company’s purchase of a 13% interest in R&S in November 2005.

In May 2007, the Bankruptcy Court approved a global settlement of both actions. As a result of the settlement, the Company received $325,000 from R&S. All claims against the Company, GDJ Retail, LLC, Glen Langberg and R&S have been dismissed.

On April 29, 2006, the Company acquired substantially all of the assets of ProCare Automotive Service Solutions LLC (the “ProCare Acquisition”) for $14.7 million in cash. The Company acquired 75 ProCare locations that offer automotive maintenance and repair services. The stores are located in eight metropolitan areas throughout Ohio and Pennsylvania. The Company converted 31 of the acquired ProCare stores to tire stores which operate under the Mr. Tire brand. The remaining stores operate as service stores under the Monro brand. In April 2007, the Company closed three of the acquired locations in accordance with its plan for this acquisition, leaving it with 43 service stores and 29 tire stores.

During fiscal 2007, the Company opened three full-service, Monro branded stores within BJ’s Wholesale Clubs in Pennsylvania (2), and Massachusetts (1), bringing the total number of stores that the Company operates in BJ’s Wholesale Clubs to 37 at March 31, 2007.

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As of March 31, 2007, Monro had 698 Company-operated stores and 14 dealer locations located in 18 states. The following table shows the growth in the number of Company-operated stores over the last five fiscal years:

Store Additions and Closings

	Year Ended Fiscal March
	2007			2006			2005			2004			2003
Stores open at beginning of year		625			626			595			560			514
Stores added during year		84	(f)		10	(e)		35	(d)		40	(c)		50	(b)
Stores closed during year(a)		(11	)		(11	)		(4	)		(5	)		(4	)
Stores open at end of year		698			625			626			595			560
Service (including BJ’s) stores		584			544			546			525			516
Tire stores		114			81			80			70			44

(a)	Generally, stores were closed because they failed to achieve or maintain an acceptable level of profitability or because a new Monro store was opened in the same market at a more favorable location. Store closures in fiscal 2003 include the sale of two commercial tire stores and a retread plant that were acquired in the purchase of Kimmel in the first quarter of fiscal 2003.
(b)	Includes 37 stores acquired in the Kimmel Acquisition and 10 stores acquired in the Frasier Acquisition.
(c)	Includes 26 stores acquired in the Mr. Tire Acquisition and 12 stores opened in BJ’s Wholesale Club locations.
(d)	Includes 15 stores acquired in the Henderson and Rice Acquisitions and 16 stores opened in BJ’s Wholesale Club locations.
(e)	Includes four stores opened in BJ’s Wholesale Club locations.
(f)	Includes 75 stores acquired in the ProCare Acquisition and three stores opened in BJ’s Wholesale Club locations.

The Company plans to add approximately 16 new stores in fiscal 2008, including 10 in BJ’s Wholesale Clubs, and to continue to search for appropriate acquisition candidates or opportunities to operate stores within host retailers’ locations. In future years, should the Company find that there are no suitable acquisition or retail partnership candidates, it might increase its new store (greenfield) openings.

The Company has developed a systematic method for selecting new store locations and a targeted approach to marketing new stores. Key factors in market and site selection include population, demographic characteristics, vehicle population and the intensity of competition. The characteristics of each potential site are compared to the profiles of existing stores in projecting sales for that site. Monro attempts to cluster stores in market areas in order to achieve economies of scale in advertising, supervision and distribution costs. All new sites presently under consideration are within Monro’s established market areas.

As a result of extensive analysis of its historical and projected store opening strategy, the Company has established major market profiles, as defined by market awareness: mature, existing and new markets. Over the next several years, the Company expects to build a greater percentage of stores in mature and existing markets in order to capitalize on the Company’s market presence and consumer awareness. During fiscal 2007, 61 of the 84 stores added were in existing markets with the balance in new, but contiguous markets.

The Company believes that management and operating improvements implemented over the last several fiscal years has enhanced its ability to sustain its growth. The Company has a chain-wide computerized inventory control and electronic point-of-sale (“POS”) management information system, which has increased management’s ability to monitor operations as the number of stores has grown. The Company has customized the POS system to specific service and tire store requirements and deploys the appropriate version in each type of store. Being Windows-based, the system has simplified training of new employees. Additionally, the system includes electronic mail and electronic cataloging, which allows store managers to electronically research the specific parts needed for the make and model of the car being serviced. This enhanced system includes software which contains data that mirrors the

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scheduled maintenance requirements in vehicle owners’ manuals, specifically by make, model, year and mileage for every automobile. Management believes that this software facilitates the presentation and sale of scheduled maintenance services to customers. Other enhancements include the streamlining of estimating and other processes; graphic catalogs; a feature which facilitates tire searches by size; direct mail support; appointment scheduling; customer service history; a thermometer graphic which guides store managers on the profitability of each job; and expanded monitoring of price changes. This latter change requires more specificity on the reason for a discount, which management believes has helped to control discounting. Enhancements will continue to be made to the POS system annually in an effort to increase efficiency, improve the quality and timeliness of store reporting and enable the Company to better serve its customers.

The financing to open a new greenfield service store location may be accomplished in one of three ways: a store lease for the land and building (in which case, land and building costs will be financed primarily by the lessor), a land lease with the building constructed by the Company (with building costs paid by the Company), or a land purchase with the building constructed by the Company. In all three cases, each new store also will require approximately $125,000 for equipment (including a POS system and a truck) and approximately $60,000 in inventory. Because Monro generally does not extend credit to its customers, stores generate almost no receivables and a new store’s actual net working capital investment is nominal. Total capital required to open a new greenfield service store ranges, on average (based upon the last five fiscal years’ openings, excluding the BJ’s locations and the acquired stores), from $300,000 to $1,000,000 depending on the location and which of the three financing methods is used. In general, tire stores are larger and have more service bays than Monro’s traditional service stores and, as a result, construction costs are at the high end of the range of new store construction costs. In instances where Monro acquires an existing business, it may pay additional amounts for intangible assets such as customer lists, covenants not-to-compete, trade names and goodwill.

Total capital required to open a store within a BJ’s Wholesale Club is substantially less than opening a greenfield store.

At March 31, 2007, the Company leased the land and/or the building at approximately 73% of its store locations and owned the land and building at the remaining locations. Monro’s policy is to situate new stores in the best locations, without regard to the form of ownership required to develop the locations.

New service stores, excluding acquired stores and BJ’s locations, have average sales of approximately $360,000 in their first 12 months of operation, or $60,000 per bay.

OPERATING STRATEGY

Monro’s operating strategy is to provide its customers with dependable, high-quality automotive service at a competitive price by emphasizing the following key elements.

Products and Services

All stores provide a full range of undercar repair services for brakes, steering, mufflers and exhaust systems, drive train, suspension and wheel alignment, as well as tire replacement and service. These services apply to all makes and models of domestic and foreign cars, light trucks and vans. The service stores provide significantly more exhaust service than tire stores, and tire stores provide substantially more tire replacement and related services than service stores.

All stores provide many of the routine maintenance services (except engine diagnostic), which automobile manufacturers suggest or require in the vehicle owners’ manuals, and which fulfill manufacturers’ requirements for new car warranty compliance. The Company offers “Scheduled Maintenance” services in all of its stores whereby the aforementioned services are packaged and offered to consumers based upon the year, make, model and mileage of each specific vehicle. Management believes that the Company is able to offer this service in a more convenient and cost competitive fashion than auto dealers can provide.

Included in maintenance services are oil change services, heating and cooling system “flush and fill” service, belt installation, and a transmission “flush and fill” service. Additionally, all stores replace and service batteries, starters and alternators. Stores in New York, West Virginia, New Hampshire, Maryland, Rhode Island, New Jersey,

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Pennsylvania, North Carolina, Virginia and Vermont also perform annual state inspections. Approximately 40% of the Company’s stores also offer air conditioning services.

Customer Satisfaction

The Company’s vision of being the dominant Auto Service provider in the markets it serves is supported by a set of values displayed in each Company store emphasizing TRUST:

•  Total Customer Satisfaction

•  Respect, Recognize and Reward (employees who are committed to these values)

•  Unparalleled Quality and Integrity

•  Superior Value and

•  Teamwork

Additionally, each Company-operated store displays and operates under the following set of customer satisfaction principles: free inspection of brakes, shocks, front end and exhaust systems; item-by-item review with customers of problem areas; free written estimates; written guarantees; drive-in service without an appointment; fair and reasonable prices; a 30-day best price guarantee; and repairs by professionally trained undercar specialists. (See additional discussion under “Store Operations: Quality Control and Warranties”.)

Competitive Pricing, Advertising and Co-branding Initiatives

The Company seeks to set competitive prices for quality services and products. The Company supports its pricing strategy by advertising through direct mail coupon inserts and in-store promotional signage and displays. In addition, the Company advertises through radio, yellow pages, newspapers, service reminders and electronic mail to increase consumer awareness of the services offered. The Company also maintains websites for the Monro and Mr. Tire/Treadquarters brands which allow customers to search for a location, print coupons, make service appointments, search tires for their vehicle and access information and tips on vehicle services offered at the Company’s stores.

The Company employs co-branding initiatives to more quickly increase consumer awareness in certain markets. The Company believes that, especially in newer markets, customers may more readily be drawn into its stores because of their familiarity with national brand names. As part of its BJ’s Wholesale Club program, the Company has implemented a series of co-branded initiatives to market the Company’s services to the large number of BJ’s Wholesale Club members where a new Monro store has opened within the BJ’s Wholesale Club service center.

Centralized Control

Unlike many of its competitors, the Company operates, rather than franchises, all of its stores (except for the 14 dealer locations). Monro believes that direct operation of stores enhances its ability to compete by providing centralized control of such areas of operations as service quality, store appearance, promotional activity and pricing. A high level of technical competence is maintained throughout the Company, as Monro requires, as a condition of employment, that employees participate in comprehensive training programs to keep pace with changes in technology. Additionally, purchasing, distribution, merchandising, advertising, accounting and other store support functions are centralized primarily in the Company’s corporate headquarters in Rochester, New York, and are provided through the Company’s subsidiary, Monro Service Corporation. The centralization of these functions results in efficiencies and gives management the ability to closely monitor and control costs.

Comprehensive Training

The Company provides ongoing, comprehensive training to its store employees. Monro believes that such training provides a competitive advantage by enabling its technicians to provide quality service to its customers in

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all areas of undercar repair and tire service. (See additional discussion under “Store Operations: Store Personnel and Training”.)

STORE OPERATIONS

Store Format

The typical format for a Monro repair store is a free-standing building consisting of a sales area, fully-equipped service bays and a parts/tires storage area. In BJ’s locations, the Company and BJ’s both operate counters in the sales area, while the Company operates the service bay area. Most service bays are equipped with above-ground electric vehicle lifts. Generally, each store is located within 25 miles of a “key” store which carries approximately double the inventory of a typical store and serves as a mini-distribution point for slower moving inventory for other stores in its area. Individual store sizes, number of bays and stocking levels vary greatly, even within the service and tire store groups, and are dependent primarily on the availability of suitable store locations, population, demographics and intensity of competition among other factors (See additional discussion under “Store Additions and Closings”). A summary of average store data for service and tire stores is presented below:

							Average
							Number
	Average		Average				of Stock
	Number		Square		Average		Keeping
	of Bays		Feet		Inventory		Units (SKUs)
Service stores (excluding BJ’s and ProCare)		6		4,400	$	86,000		3,200
Tire stores		7		5,600	$	125,000		1,700

(Data for the acquired ProCare service stores has been excluded because the stores’ stock rooms are smaller than those in typical service stores and therefore, they generally carry less than half the amount of inventory of a typical service store.)

The stores generally are situated in high-visibility locations in suburban areas, major metropolitan areas or small towns and offer easy customer access. The typical store is open from 7:30 a.m. to 7:00 p.m. on Monday through Friday and from 7:30 a.m. to 5:00 p.m. on Saturday. Selected locations, primarily tire stores, are also open Sundays from 9:00 a.m. to 5:00 p.m.

Inventory Control and Management Information System

All Company stores communicate daily with the central office and warehouse by computerized inventory control and electronic POS management information systems, which enable the Company to collect sales and operational data on a daily basis, to adjust store pricing to reflect local conditions and to control inventory on a near “real-time” basis. Additionally, each store has access, through the POS system, to the inventory carried by the seven stores nearest to it. Management believes that this feature improves customer satisfaction and store productivity by reducing the time required to locate out-of-stock parts.

Quality Control and Warranties

To maintain quality control, the Company conducts audits to rate its employees’ telephone sales manner and the accuracy of pricing information given.

The Company has a customer survey program to monitor customer attitudes toward service quality, friendliness, speed of service, and several other factors for each store. This program includes a monthly telephone survey contacting customers of all stores. (Fifteen customers are contacted for each store during each fiscal quarter.) Customer concerns are addressed via letter and personal follow-up by customer service and field management personnel.

The Company uses a “Double Check for Accuracy Program” as part of its routine store procedures. This quality assurance program requires that a technician and supervisory-level employee (or in certain cases, another technician in tire stores) independently inspect a customer’s vehicle, diagnose and document the necessary repairs, and agree on an estimate before presenting it to a customer. This process is formally documented on the written estimate by store personnel.

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The Company is an active member of the Motorist Assurance Program (“MAP”). MAP is an organization of automotive retailers, wholesalers and manufacturers which was established as part of an industry-wide effort to address the ethics and business practices of companies in the automotive repair industry. Participating companies commit to improving consumer confidence and trust in the automotive repair industry by adopting “Uniform Inspection Communication Standards” established by MAP. These “UICS” are available in the Company’s stores and serve to provide consistent recommendations to customers in the diagnosis and repair of a vehicle.

Monro offers limited warranties on substantially all of the products and services that it provides. The Company believes that these warranties are competitive with industry practices and serve as a marketing tool to increase repeat business at the stores.

Store Personnel and Training

The Company supervises store operations primarily through its Divisional Vice Presidents who oversee Zone Managers who, in turn, oversee Market Managers. The typical service store is staffed by a Store Manager and four to six technicians, one of whom serves as the Assistant Manager. The typical tire store is staffed by a Store Manager, an Assistant Manager and/or Service Manager, and four to eight technicians. Larger volume tire stores may also have one or two sales people. The higher staffing level at many tire stores is necessary to support their higher sales volume. All Store Managers receive a base salary, and Assistant Managers receive hourly compensation. In addition, Store Managers and Assistant Managers may receive other compensation based on their store’s customer relations, gross profit, labor cost controls, safety, sales volume and other factors via a monthly or quarterly bonus based on performance in these areas.

Monro believes that the ability to recruit and retain qualified technicians is an important competitive factor in the automotive repair industry, which has historically experienced a high turnover rate. Monro makes a concerted effort to recruit individuals who will have a long-term commitment to the Company and offers an hourly rate structure and additional compensation based on productivity; a competitive benefits package including health, dental, life and disability insurance; a 401(K)/profit-sharing plan; as well as the opportunity to advance within the Company. Many of the Company’s Managers and Market Managers started with the Company as technicians.

Many of the Company’s new technicians join the Company in their early twenties as trainees or apprentices. As they progress, they are promoted to technician and eventually master technician, the latter requiring ASE certification in both brakes and suspension. The Company offers a tool purchase program through which trainee technicians can acquire their own set of tools. The Company also will reimburse technicians for the cost of ASE certification registration fees and test fees and encourages all technicians to become certified by providing a higher hourly wage rate following their certification.

The Company’s training program provides multiple training sessions to both store managers and technicians in each store, each year.

Management training courses are developed and delivered by the Company’s dedicated training department and Operations management, and are supplemented with live and online vendor training courses. Management training covers customer service, sales, human resources (counseling, recruiting, interviewing, etc.), leadership, scheduling, financial and operational areas, and is delivered on a quarterly basis. During the second half of fiscal 2007, this program replaced the Company’s Monro University training program, which was a week long course delivered in Rochester, New York by the training department and other headquarters staff to only a portion of the Company’s store managers annually. The Company believes that involving Operations management in the development and delivery of these sessions results in more relevant and actionable training for store managers and that more frequent training covering all managers each year will improve overall performance and staff retention.

The Company’s training department develops and delivers technical training courses on critical areas of automotive repair to technicians in every store, every year (e.g. ABS brake repair, drivability, TPMS, etc.) and also conducts required technical training to maintain compliance with inspection licenses, where applicable, and MAP accreditation. Additionally, the Company’s training department holds in-house technical clinics for store personnel and coordinates technician attendance at technical clinics offered by the Company’s vendors. Each service store

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maintains a library of 20 to 25 instructional videos. The Company issues technical bulletins to all stores on innovative or complex repair processes, and maintains a centralized data base for technical repair problems. In addition, the Company has established a telephone technical hotline to provide assistance to store personnel in resolving problems encountered while diagnosing and repairing vehicles. The help line is available during all hours of store operation.

PURCHASING AND DISTRIBUTION

The Company, through its wholly-owned subsidiary Monro Service Corporation, selects and purchases parts and supplies for all Company-operated stores on a centralized basis through an automatic replenishment system. Although purchases outside the centralized system (“outside purchases”) are made when needed at the store level, these purchases are low by industry standards, and accounted for approximately 13% of all parts used in fiscal 2007.

The Company’s ten largest vendors accounted for approximately 76% of its parts and tire purchases, with the largest vendor accounting for approximately 19% of total purchases in fiscal 2007. The Company purchases parts and tires from over 100 vendors. Management believes that the Company’s relationships with vendors are excellent and that alternative sources of supply exist, at comparable cost, for substantially all parts used in the Company’s business. The Company routinely obtains bids from vendors to ensure it is receiving competitive pricing and terms.

Most parts are shipped by vendors to the Company’s primary warehouse facility in Rochester, New York, and are distributed to stores through the Company-operated tractor/trailer fleet. Stores are replenished either on a weekly or bi-weekly basis from this warehouse, and such replenishment fills, on the average, 96% of all items ordered by the stores’ automatic POS-driven replenishment system. The Rochester warehouse stocks approximately 7,700 SKUs. The Company also operates warehouses in Baltimore and Virginia that service the tire and service stores in those markets. These warehouses carry, on average, 4,900 and 2,100 SKUs, respectively.

The Company has entered into various contracts with parts and tire suppliers, certain of which require the Company to buy up to 100% of its annual purchases of specific products including brakes, exhaust, oil and ride control at market prices. These agreements expire at various dates through January 2012. The Company believes these agreements provide it with high quality, branded merchandise at preferred pricing, along with strong marketing and training support.

COMPETITION

The Company competes in the retail automotive service industry. This industry is generally highly competitive and fragmented, and the number, size and strength of competitors vary widely from region to region. The Company believes that competition in this industry is based on customer service and reputation, store location, name awareness and price. Monro’s primary competitors include national and regional undercar, tire specialty and general automotive service chains, both franchised and company-operated; car dealerships, mass merchandisers operating service centers; and, to a lesser extent, gas stations and independent garages. Monro considers Midas, Inc. and Meineke Discount Mufflers Inc. to be direct competitors. In most of the new markets that the Company has entered, at least one competitor was already present. In identifying new markets, the Company analyzes, among other factors, the intensity of competition. (See “Expansion Strategy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.)

EMPLOYEES

As of March 31, 2007, Monro had 3,885 employees, of whom 3,641 were employed in the field organization, 76 were employed at the warehouses, 145 were employed at the Company’s corporate headquarters and 23 were employed in its Baltimore office and warehouse. Monro’s employees are not members of any union. The Company believes that its relations with its employees are good.

REGULATION

The Company stores new oil and recycled antifreeze and generates and/or handles used tires and automotive oils, antifreeze and certain solvents, which are disposed of by licensed third-party contractors. In certain states, as

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required, the Company also recycles oil filters. Thus, the Company is subject to a number of federal, state and local environmental laws including the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”). In addition, the United States Environmental Protection Agency (the “EPA”), under the Resource Conservation and Recovery Act (“RCRA”), and various state and local environmental protection agencies regulate the Company’s handling and disposal of waste. The EPA, under the Clean Air Act, also regulates the installation of catalytic converters by the Company and all other repair stores by periodically spot checking jobs, and has the power to fine businesses that use improper procedures or materials. The EPA has the authority to impose sanctions, including civil penalties up to $25,000 per violation (or up to $25,000 per day for certain willful violations or failures to cooperate with authorities), for violations of RCRA and the Clean Air Act.

The Company is subject to various laws and regulations concerning workplace safety, zoning and other matters relating to its business. The Company maintains programs to facilitate compliance with these laws and regulations. The Company believes that it is in substantial compliance with all applicable environmental and other laws and regulations and that the cost of such compliance is not material to the Company.

The Company is environmentally conscious, and takes advantage of recycling opportunities both at its headquarters and at its stores. Cardboard, plastic shrink wrap and parts’ cores are returned to the warehouse by the stores on the weekly stock truck. There, they are accumulated for sale to recycling companies or returned to parts manufacturers for credit.

SEASONALITY

Although the Company’s business is not highly seasonal, customers do purchase more undercar service during the period of March through October than the period of November through February, when miles driven tend to be lower. As a result, sales and profitability are typically lower during the latter period. In the tire stores, the better sales months are typically May through August, and October through December. The slowest months are typically January through April and September.

COMPANY INFORMATION AND SEC FILINGS

The Company maintains a website at www.monro.com and makes its annual, quarterly and periodic Securities and Exchange Commission (“SEC”) filings available through the Investor Information section of that website. The Company’s SEC filings are available through this website free of charge, via a direct link to the SEC website at www.sec.gov. The Company’s filings with the SEC are also available to the public at the SEC Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330.

Item 1A. Risk Factors

RISKS RELATED TO OUR BUSINESS

In addition to the risk factors discussed elsewhere in this annual report, the following are some of the important factors that could cause the Company’s actual results to differ materially from those projected in any forward looking statements:

We operate in the highly competitive automotive repair industry.

The automotive repair industry in which we operate is generally highly competitive and fragmented, and the number, size and strength of our competitors varies widely from region to region. We believe that competition in the industry is based primarily on customer service, reputation, store location, name awareness and price. Our primary competitors include national and regional undercar, tire specialty and general automotive service chains, both franchised and company-operated, car dealerships, mass merchandisers operating service centers and, to a lesser extent, gas stations and independent garages. Some of our competitors have greater financial resources, are more geographically diverse and have better name recognition than we do, which might place us at a competitive disadvantage to those competitors. Because we seek to offer competitive prices, if our competitors reduce prices, we may be forced to reduce our prices, which could have a material adverse effect on our business, financial condition and results of operations. We cannot assure that we or any of our stores will be able to compete effectively. If we are

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unable to compete successfully in new and existing markets, we may not achieve our projected revenue and profitability targets.

We are subject to seasonality and cycles in the general economy that impact demand for our products and services.

Although our business is not highly seasonal, our customers typically purchase more undercar service during the period of March through October than the period of November through February, when miles driven tend to be lower. As a result, our sales and profitability tend to be lower during the latter period. In our tire stores, the slowest months are typically January through April and September. Further, customers may defer or forego vehicle maintenance at any time during periods of inclement weather.

The automotive repair industry is subject to fluctuations in the general economy. During a downturn in the economy, customers may defer or forego vehicle maintenance or repair. During periods of good economic conditions, consumers may decide to purchase new vehicles rather than having their older vehicles serviced. While the number of automobiles registered in the United States has steadily increased, this trend may not continue. In any event, should a reduction in the number of miles driven by automobile owners occur, it would likely have an adverse effect on the demand for our products and services. For example, when the retail cost of gasoline increases, the number of miles driven by automobile owners may decrease, which would result in less frequent service intervals and fewer repairs.

We depend on our relationships with our vendors.

We depend on close relationships with our vendors for parts and supplies and for our ability to purchase products at competitive prices and terms. Our ability to purchase at competitive prices and terms results from the volume of our purchases from these vendors. We have entered into various contracts with parts suppliers that require us to buy from them (at market prices) up to 100% of our annual purchases of specific products including brakes, exhaust, oil and ride control products. These agreements expire at various dates through January 2012. If we fail to purchase sufficient volumes from our vendors, we may obtain parts and supplies on less competitive terms.

We believe that alternative sources exist for most of the products we sell or use at our stores, and we would not expect the loss of any one supplier to have a material adverse effect on our business, financial condition or results of operations. Our dependence on a small number of suppliers, however, subjects us to the risks of shortages and interruptions. If any of our suppliers do not perform adequately or otherwise fail to distribute parts or other supplies to our stores, our inability to replace the suppliers in a timely manner and on acceptable terms could increase our costs and could cause shortages or interruptions that could have a material adverse effect on our business, financial condition and results of operations.

Our industry is subject to environmental, consumer protection and other regulation.

We are subject to various federal, state and local environmental laws and other governmental regulations regarding the operation of our business. For example, we are subject to rules governing the handling, storage and disposal of hazardous substances contained in some of the products such as motor oil that we sell and use at our stores, the recycling of batteries, tires and used lubricants, and the ownership and operation of real property. These laws and regulations can impose fines and criminal sanctions for violations and require the installation of pollution control equipment or operational changes to decrease the likelihood of accidental hazardous substance releases. Accordingly, we could become subject to material liabilities relating to the investigation and cleanup of contaminated properties, and to claims alleging personal injury or property damage as a result of exposure to, or release of, hazardous substances. In addition, stricter interpretation of existing laws and regulations, new laws and regulations, the discovery of previously unknown contamination or the imposition of new or increased requirements could require us to incur costs or become the basis of new or increased liabilities that could have a material adverse effect on our business, financial condition and results of operations.

National automotive repair chains have also been the subject of investigations and reports by consumer protection agencies and the Attorneys General of various states. Publicity in connection with these investigations could have an adverse effect on our sales and, consequently, our business, financial condition and results of

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operations. State and local governments have also enacted numerous consumer protection laws that we must comply with.

The costs of operating our stores may increase if there are changes in laws governing minimum hourly wages, working conditions, overtime, workers’ compensation insurance rates, unemployment tax rates or other laws and regulations. A material increase in these costs that we were unable to offset by increasing our prices or by other means could have a material adverse effect on our business, financial condition and results of operations.

Our business is affected by advances in automotive technology.

The demand for our products and services could be adversely affected by continuing developments in automotive technology. Automotive manufacturers are producing cars that last longer and require service and maintenance at less frequent intervals in certain cases. Quality improvement of manufacturers’ original equipment parts has in the past reduced, and may in the future reduce, demand for our products and services, adversely affecting our sales. For example, manufacturers’ use of stainless steel exhaust components has significantly increased the life of those parts, thereby decreasing the demand for exhaust repairs and replacements. Longer and more comprehensive warranty or service programs offered by automobile manufacturers and other third parties also could adversely affect the demand for our products and services. We believe that a majority of new automobile owners have their cars serviced by a dealer during the period that the car is under warranty. In addition, advances in automotive technology continue to require us to incur additional costs to update our diagnostic capabilities and technical training programs.

We may not be successful in integrating new and acquired stores.

Management believes that our continued growth in sales and profit is dependent, in large part, upon our ability to open/acquire and operate new stores on a profitable basis. In order to do so, we must find reasonably priced new store locations and acquisition candidates that meet our criteria and we must integrate any new stores (opened or acquired) into our system. Our growth and profitability could be adversely affected if we are unable to open or acquire new stores or if new or existing stores do not operate at a sufficient level of profitability. In addition, we generally fund our acquisitions through our existing bank credit facility. If new stores do not achieve expected levels of profitability, this may adversely impact our ability to remain in compliance with our debt covenants or to make required payments under our credit facility.

Store closings result in costs.

From time to time, in the ordinary course of our business, we close certain stores, generally based on considerations of store profitability, competition, strategic factors and other considerations. Closing a store could subject us to costs including the write-down of leasehold improvements, equipment, furniture and fixtures. In addition, we could remain liable for future lease obligations.

We rely on an adequate supply of skilled field personnel.

In order to continue to provide high quality services, we require an adequate supply of skilled field managers and technicians. Trained and experienced automotive field personnel are in high demand, and may be in short supply in some areas. We cannot assure that we will be able to attract, motivate and maintain an adequate skilled workforce necessary to operate our existing and future stores efficiently, or that labor expenses will not increase as a result of a shortage in the supply of skilled field personnel, thereby adversely impacting our financial performance. While the automotive repair industry generally operates with high field employee turnover, any material increases in employee turnover rates in our stores or any widespread employee dissatisfaction could also have a material adverse effect on our business, financial condition and results of operations.

If we are unable to generate sufficient cash flows from our operations, our liquidity will suffer and we may be unable to satisfy our obligations.

We currently rely on cash flow from operations and our revolving credit facility to fund our business. Amounts outstanding on the revolving credit facility are reported as debt on our balance sheet. While we believe that we have

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the ability to sufficiently fund our planned operations and capital expenditures for the foreseeable future, the risks to our business could result in circumstances that would materially affect our liquidity. For example, cash flows from our operations could be affected by changes in consumer spending habits, the failure to maintain favorable vendor payment terms or our inability to successfully implement sales growth initiatives, among other factors. We may be unsuccessful in securing alternative financing when needed on terms that we consider acceptable.

In addition, a significant increase in our leverage could have important consequences to an investment in our common stock, including the following risks:

•  our ability to obtain additional financing for working capital, capital expenditures, store renovations, acquisitions or general corporate purposes may be impaired in the future;

•  our failure to comply with the financial and other restrictive covenants governing our debt, which, among other things, require us to maintain a minimum net worth, comply with certain financial ratios and limit our ability to incur additional debt and sell assets, could result in an event of default that, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations; and

•  our exposure to certain financial market risks, including fluctuations in interest rates associated with bank borrowings could become more significant.

If we do not perform in accordance with our debt covenants, the institutions providing the funds have the option to withdraw their funding support. We cannot assure that we will remain in compliance with our debt covenants in the future. In addition, our current financing agreement expires in January 2012, and we cannot assure that we will be able to refinance our existing credit facility when it expires.

We depend on the services of key executives.

Our senior executives are important to our success because they have been instrumental in setting our strategic direction, operating our business, identifying, recruiting and training key personnel, identifying expansion opportunities and arranging necessary financing. Losing the services of any of these individuals could adversely affect our business until a suitable replacement could be found. It may be difficult to replace them quickly with executives of equal experience and capabilities. Although we have employment agreements with selected executives, we could not prevent them from terminating their employment with us. Other executives are not bound by employment agreements with us.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Company, through Monro Service Corporation, owns its office/warehouse facility of approximately 95,000 square feet, which is located on 12.7 acres of land in Holleder Technology Park, in Rochester, New York.

Of Monro’s 698 Company-operated stores at March 31, 2007, 191 were owned, 377 were leased and for 130, the land only was leased. In general, the Company leases store sites for a ten-year period with several five-year renewal options. Giving effect to all renewal options, approximately 57% of the operating leases (281 stores) expire after 2017. Certain of the leases provide for contingent rental payments if a percentage of annual gross sales exceeds the base fixed rental amount. The highest contingent percentage rent of any lease is 6.75%, and no such lease has adversely affected profitability of the store subject thereto. An officer of the Company or members of his family are the lessors, or have interests in entities that are the lessors, with respect to six of the leases. No related party leases, other than the six assumed as part of the Mr. Tire Acquisition in March 2004, have been entered into, and no new related party leases are contemplated.

As of March 31, 2007, there was $.7 million outstanding under a mortgage held by the City of Rochester, New York, secured by the land on which the headquarters office and warehouse is located.

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Item 3. Legal Proceedings

The Company is not a party or subject to any legal proceedings other than certain routine claims and lawsuits that arise in the normal course of its business. The Company does not believe that such routine claims or lawsuits, individually or in the aggregate, will have a material adverse effect on its financial condition or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth quarter of fiscal 2007.

PART II

Item 5. Market for the Company’s Common Equity and Related Stockholder Matters

MARKET INFORMATION

The Common Stock is traded on the over-the-counter market and is quoted on the NASDAQ National Market System under the symbol “MNRO”. The following table sets forth, for the Company’s last two fiscal years, the range of high and low sales prices on the NASDAQ National Market System for the Common Stock:

	Fiscal 2007				Fiscal 2006
Quarter Ended	High		Low		High		Low
June	$	39.60	$	32.03	$	29.79	$	24.52
September	$	34.74	$	29.58	$	31.77	$	25.47
December	$	38.31	$	32.16	$	32.63	$	25.94
March	$	38.26	$	33.00	$	40.58	$	29.47

HOLDERS

At June 1, 2007, the Company’s Common Stock was held by approximately 4,200 shareholders of record or through nominee or street name accounts with brokers.

TREASURY STOCK

In January 2007, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to $30 million of its common stock at market prices. The share repurchase program has a term of 12 months. The amount and timing of any purchase will depend upon a number of factors, including the price and availability of the Company’s shares and general market conditions. The Company’s purchases of common stock are recorded as “Treasury Stock” and result in a reduction of “Shareholders’ Equity”. Through the end of fiscal 2007, the Company repurchased 2,500 shares through this program for approximately $86,000, or an average price of $34.53 per share. All repurchases were made in the fourth quarter of fiscal 2007.

DIVIDENDS

On September 16, 2003, the Company’s Board of Directors declared a three-for-two stock split in the form of a 50% stock dividend payable to shareholders of record on October 21, 2003. Information regarding the number of shares of Common Stock outstanding, as set forth in this Form 10-K, reflect the impact of this stock split.

In May 2005, 2006 and 2007, respectively, the Company’s Board of Directors declared its intention to pay a regular quarterly cash dividend beginning with the first quarter of fiscal 2006, 2007 and 2008 of $.05, $.07 and $.09, respectively. However, the declaration of and any determination as to the payment of future dividends will be at the discretion of the Board of Directors and will depend on the Company’s financial condition, results of operations, capital requirements, compliance with charter and contractual restrictions, and such other factors as the Board of Directors deems relevant. The terms of the Company’s Credit Facility permit the payment of cash dividends not to exceed 25% of the preceding year’s net income. See additional dividend disclosure in Note 16 to the consolidated financial statements.

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Item 6. Selected Financial Data

The following table sets forth selected financial and operating data of the Company for each year in the five-year period ended March 31, 2007. The financial data and certain operating data have been derived from the Company’s audited financial statements. This data should be read in conjunction with the financial statements and related notes included under Item 8 of this report and in conjunction with other financial information included elsewhere in this Form 10-K.

	Year Ended Fiscal March
	2007			2006			2005			2004			2003
	(Amounts in thousands, except per share data)
Income Statement Data:
Sales	$	417,226		$	368,727		$	337,409		$	279,457		$	258,026
Cost of sales, including distribution and occupancy costs		250,804			220,915			200,616			165,412			153,073
Gross profit		166,422			147,812			136,793			114,045			104,953
Operating, selling, general and administrative expenses		126,439			108,030			102,379			84,708			81,040
Operating income		39,983			39,782			34,414			29,337			23,913
Interest expense, net		4,564			3,478			2,549			2,613			2,601
Other expense (income), net		734			(502	)		463			48			(211	)
Income before provision for income taxes		34,685			36,806			31,402			26,676			21,523
Provision for income taxes		12,414			14,140			11,733			10,136			8,179
Net income	$	22,271		$	22,666		$	19,669		$	16,540		$	13,344
Earnings per share      Basic(a)	$	1.59		$	1.67		$	1.50		$	1.28		$	1.05
Diluted(a)	$	1.46		$	1.51		$	1.35		$	1.15		$	.95
Weighted average number of Common Stock and equivalents           Basic(b)		13,878			13,531			13,102			12,954			12,699
Diluted(b)		15,252			15,022			14,562			14,400			14,105
Cash dividends per common share or common share equivalent	$	.26		$	.15
Selected Operating Data(c):
Sales growth:
Total		13.2	%		9.3	%		20.7	%		8.3	%		14.8	%
Comparable store(d)		3.2	%		1.7	%		2.0	%		4.7	%		2.9	%
Stores open at beginning of year		625			626			595			560			514
Stores open at end of year		698			625			626			595			560
Capital expenditures(e)	$	22,319		$	16,005		$	18,586		$	14,327		$	14,822
Balance Sheet Data (at period end):
Net working capital	$	28,328		$	31,392		$	27,158		$	29,611		$	22,630
Total assets		340,023			303,395			284,985			259,343			206,984
Long-term debt		52,525			46,327			55,438			68,763			36,183
Shareholders’ equity		215,119			192,990			167,489			138,993			120,051

(a)	See Note 10 for calculation of basic and diluted earnings per share.
(b)	Adjusted in fiscal year 2003 for the effect of the Company’s October 2003 three-for-two stock split.
(c)	Includes Company-operated stores only — no dealer locations.
(d)	Comparable store sales data is calculated based on the change in sales of only those stores open as of the beginning of the preceding fiscal year.
(e)	Amount does not include the funding of the purchase price related to the Kimmel or Frasier Acquisitions in fiscal year 2003, the Mr. Tire Acquisition in fiscal 2004, the Rice and Henderson Acquisitions in fiscal 2005, or the ProCare Acquisition in fiscal 2007.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following table sets forth income statement data of the Company expressed as a percentage of sales for the fiscal years indicated:

	Year Ended Fiscal March
	2007			2006			2005
Sales		100.0	%		100.0	%		100.0	%
Cost of sales, including distribution and occupancy costs		60.1			59.9			59.5
Gross profit		39.9			40.1			40.5
Operating, selling, general and administrative expenses		30.3			29.3			30.3
Operating income		9.6			10.8			10.2
Interest expense, net		1.1			.9			.8
Other expense (income), net		.2			(.1	)		.1
Income before provision for income taxes		8.3			10.0			9.3
Provision for income taxes		3.0			3.8			3.5
Net income		5.3	%		6.2	%		5.8	%

FORWARD-LOOKING STATEMENTS

The statements contained in this Annual Report on Form 10-K that are not historical facts, including (without limitation) statements made in this Item and in “Item 1 – Business”, may contain statements of future expectations and other forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed. These factors include, but are not necessarily limited to, product demand, dependence on and competition within the primary markets in which the Company’s stores are located, the need for and costs associated with store renovations and other capital expenditures, the effect of economic conditions, the impact of competitive services and pricing, product development, parts supply restraints or difficulties, industry regulation, risks relating to leverage and debt service (including sensitivity to fluctuations in interest rates), continued availability of capital resources and financing, risks relating to integration of acquired businesses, the risks set forth in “Item 1A. Risk Factors” and other factors set forth or incorporated elsewhere herein and in the Company’s other SEC filings. The Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company.

CRITICAL ACCOUNTING POLICIES

The Company believes that the accounting policies listed below are those that are most critical to the portrayal of the Company’s financial condition and results of operations, and that required management’s most difficult, subjective and complex judgments in estimating the effect of inherent uncertainties. This section should be read in conjunction with Note 1 to the consolidated financial statements which includes other significant accounting policies.

Inventory

The Company evaluates whether inventory is stated at the lower of cost or market based on historical experience with the carrying value and life of inventory. The assumptions used in this evaluation are based on current market conditions and the Company believes inventory is stated at the lower of cost or market in the consolidated financial statements. In addition, historically the Company has been able to return excess items to vendors for credit or sell such inventory to wholesalers. Future changes by vendors in their policies or willingness to accept returns of excess inventory could require a revision in the estimates.

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Carrying Values of Goodwill and Long-Lived Assets

Goodwill represents the amount paid in consideration for an acquisition in excess of the net assets acquired. In accordance with Statement of Financial Accounting Standards No. 142 (“SFAS 142”), “Goodwill and Other Intangible Assets”, the Company does not amortize goodwill for acquisitions made after June 30, 2001. The Company conducts tests for impairment of goodwill annually, typically during the third quarter of the fiscal year, or more frequently if circumstances indicate that the asset might be impaired. These impairment tests include management estimates of future cash flows that are dependent upon subjective assumptions regarding future operating results including growth rates, discount rates, capital requirements and other factors that impact the estimated fair value. An impairment loss is recognized to the extent that an asset’s carrying amount exceeds its fair value.

The Company evaluates the carrying values of its long-lived assets to be held and used in the business by reviewing undiscounted cash flows by operating unit. Such evaluations are performed whenever events and circumstances indicate that the carrying amount of an asset may not be recoverable. In such instances, the carrying values are adjusted for the differences between the fair values and the carrying values. Additionally, in the case of fixed assets related to locations that will be closed or sold, the Company shortens the depreciable life of the related assets to coincide with the planned sale or closing date.

Self-Insurance Reserves

The Company is largely self-insured with respect to workers compensation, general liability and employee medical claims. In order to reduce its risk and better manage its overall loss exposure, the Company purchases stop-loss insurance that covers individual claims in excess of the deductible amounts. The Company maintains an accrual for the estimated cost to settle open claims as well as an estimate of the cost of claims that have been incurred but not reported. These estimates take into consideration the historical average claim volume, the average cost for settled claims, current trends in claim costs, changes in the Company’s business and workforce, and general economic factors. These accruals are reviewed on a quarterly basis, or more frequently if factors dictate a more frequent review is warranted.

Warranty

The Company provides an accrual for estimated future warranty costs based upon the historical relationship of warranty costs to sales, except for tire road hazard warranties which are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Technical Bulletin 90-1 “Accounting for Separately Priced Extended Warranty and Product Maintenance Contracts”. The warranty reserve and warranty expense related to all product warranties at and for the fiscal years ended March 2007, 2006 and 2005 were not material to the Company’s financial position or results of operations.

Stock-Based Compensation

The Company accounts for its stock options in accordance with Statement of Financial Accounting Standards No. 123R (“SFAS 123R”), “Share-Based Payment”, as interpreted by FASB Staff Positions No. 123R-1, 123R-2, 123R-3, 123R-4, 123R-5, and 123R-6, using the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation”, effective March 26, 2006.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the following assumptions. Expected volatilities are based on historical changes in the market price of the Company’s common stock. The expected term of options granted is derived from the vesting period of the award, as well as historical exercise behavior, and represents the period of time that options granted are expected to be outstanding. The risk-free rate is calculated using the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the expected term of the awards. The Company uses historical data to estimate forfeitures. The dividend yield is based on historical experience and expected future changes.

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RESULTS OF OPERATIONS

FISCAL 2007 AS COMPARED TO FISCAL 2006

Sales for fiscal 2007 increased $48.5 million, or 13.2% to $417.2 million as compared to $368.7 million in fiscal 2006. The increase was due to an increase of approximately $43.1 million from new stores (which are defined as stores added since March 26, 2005), including $35.3 million from the Acquired ProCare stores, as well as a comparable store sales increase of 3.2%. Fiscal 2007 was a 53-week year, and, therefore, there were 312 selling days in fiscal year 2007 as compared to 308 selling days in fiscal year 2006. Adjusting for days, comparable store sales increased 1.9%.

During the year, 84 stores were added and 11 were closed. At March 31, 2007, the Company had 698 stores in operation.

As occurred in fiscal 2006, the Company completed the bulk sale of approximately $3.9 million of slower moving inventory to Icon International, a barter company. The bulk sales of inventory to Icon are important transactions for the Company. The sales help to improve inventory turns, which becomes a higher priority as interest rates continue to rise, and in light of the accounting rules of Emerging Issues Task Force Issue No. 02-16 (“EITF 02-16”), “Accounting by a Customer (Including a Reseller) for Cash Consideration Received from a Vendor,” which require that vendor rebates be recognized as inventory turns. As new vendor agreements fall under these rules, inventory turns have a more direct impact on cost of goods sold and gross profit than in the past.

Management believes that the improvement in sales resulted from several factors, including an increase in tire sales, scheduled maintenance services and alignments. Price increases in several product categories also contributed to the sales improvement. Comparable store traffic improved as did average ticket. Management believes that soft economic conditions resulted in consumers deferring repairs to their vehicles, especially in the first half of the Company’s fiscal year, which typically accounts for slightly more than 50% of its sales and 65 – 75% of its earnings. In the first half of fiscal 2007, the Company’s comparable store sales declined .9%. However, most repairs can only be deferred for a period of time. When customers did come in to have their vehicles repaired, it is management’s belief that they spent more on average because the problem with their vehicle had worsened due to additional wear.

The Company introduced “Scheduled Maintenance” services in all of its stores late in fiscal 2001. These services are required by vehicle manufacturers to comply with warranty schedules, and are offered by Monro in a more convenient and cost competitive fashion than auto dealers typically provide. Management believes that these services, which are offered both in bundled “packages” and individually, will continue to contribute positively to comparable store sales in future years, and have helped to mitigate the decline in exhaust which negatively impacted recent fiscal years. The exhaust decline resulted primarily from manufacturers’ use of non-corrosive stainless steel exhaust systems on most new cars beginning in the mid-1980s and completed in the mid-1990s.

Additionally, the Company continued to reward store employees with pay programs focused on high customer service scores. Management believes that, in spite of the sluggish economic environment, it is continuing to build the trust of its customers, through quality, integrity and fair pricing, and is gaining an advantage over some of its competitors.

The new ProCare stores acquired on April 29, 2006 were purchased out of bankruptcy. These stores suffered significant sales declines in recent years and did not perform at a profitable level in fiscal 2007. The ProCare stores lost approximately $.09 in diluted earnings per share in fiscal 2007. However, sales improved over the course of fiscal 2007, efforts were made to reduce costs and improve margins, and management believes these stores will be solidly profitable in fiscal 2008.

Gross profit for fiscal 2007 was $166.4 million or 39.9% of sales, as compared with $147.8 million or 40.1% of sales for fiscal 2006. The ProCare stores increased consolidated cost of sales and reduced gross profit by .7% as a percentage of sales during fiscal 2007. The decrease in consolidated gross profit occurred primarily in the areas of labor and material costs. Even in times of declining sales, technicians receive a minimum base wage when they are not fully productive. This subsidization of wages in the ProCare stores raised labor costs as a percentage of consolidated sales. Higher than normal outside purchases of parts by the ProCare stores increased total material

18

costs. However, the Company saw declines in outside purchases over the course of the year as it added to, and rebalanced, the inventory at these locations. The Company expects to see more improvement in this expense line as it continues to refine the types and level of inventory which is carried at these stores, and as these stores continue to improve their level of transfers of product from neighboring stores. Additionally, due to negative comparable store sales at these locations, fixed occupancy costs created pressure on gross margin.

Without the ProCare stores, gross profit was 40.6% of sales for fiscal 2007, as compared to 40.1% in the prior year. The improvement in gross profit as a percentage of sales is due to a couple of factors. One reason is the shift of vendor rebates or cooperative advertising credits from Operating, Selling, General and Administrative Expenses (“SG&A”) to cost of sales. Additionally, the Company earned more vendor rebates in fiscal 2007 than it did in fiscal 2006. These rebates offset the negative impact of the shift in mix to the lower margin tire and maintenance services categories. Decreases in technician labor and occupancy costs also contributed to the improvement in gross margin as compared to the prior year. Technician labor costs decreased due to better operational control and improved productivity. Additionally, the increase in tire sales, which carry lower labor costs as compared to other service categories, helped to decrease labor costs as a percent of sales in fiscal 2007 as compared to fiscal 2006.

Distribution and occupancy costs as a percentage of sales in fiscal 2007 also decreased as compared to fiscal 2006, as the Company, with improved sales, was able to better leverage these largely fixed costs. Additionally, expenditures for building maintenance in fiscal 2007 were slightly less than the prior year.

Operating, selling, general and administrative expenses for fiscal 2007 increased by $18.4 million to $126.4 million, and increased as a percentage of sales to 30.3% compared to 29.3% in 2006. The ProCare stores accounted for a .5% increase in store direct cost (included in SG&A) as compared to the prior year. Manager pay and benefits are included in store direct costs, and being largely fixed, put adverse pressure on margins against negative comparable store sales in these locations. In addition to the percentage increase attributable to the ProCare stores, a shift in cooperative advertising credits from SG&A to cost of sales in connection with the accounting for new vendor agreements under EITF 02-16 caused SG&A expenses to increase approximately one percentage point as compared to the prior year. Partially offsetting these increases, however, was a decrease in management bonus expense due to the Company not attaining minimum profit goals.

The Company experienced an unplanned charge of $1.3 million in workers compensation and garage liability insurance expense in the fourth quarter of fiscal 2007, and these expenses also increased $1.9 million over the same quarter of last year. However, benefits expense in total, which includes workers compensation expense, was flat for the year as a percent of sales when compared to the prior year because of an offsetting decline in health insurance expense which had occurred over the course of fiscal 2007. General insurance expense for the full year, which includes garage liability insurance, increased only slightly over the prior year.

The Company adopted SFAS 123R in fiscal 2007 and recognized approximately $.5 million of expense related to stock options issued in fiscal 2007. In the fourth quarter of fiscal 2006, the Company accelerated the vesting of all outstanding stock options and recognized a charge of approximately $.3 million just prior to adoption. (See additional discussion under the section “Fiscal 2006 as Compared to Fiscal 2005.”) Most of this expense is included in SG&A in both years.

Operating income in fiscal 2007 of $40.0 million, or 9.6% of sales, increased by $.2 million from the fiscal 2006 level of $39.8 million, due to the factors discussed above.

Interest expense, net of interest income, increased as a percent of sales from .9% in fiscal 2006 to 1.1% in fiscal 2007. The weighted average debt outstanding for the year ended March 31, 2007 increased by approximately $11.0 million from fiscal 2006, primarily related to $20.2 million of capital leases assumed in connection with the ProCare acquisition, involving 45 locations, partially offset by net payments on the Company’s revolving credit facility. Additionally, there was an increase in the weighted average interest rate for the year ended March 31, 2007 of approximately 60 basis points from the year ended March 25, 2006, resulting in an increase in expense between the two years. The increase was also largely due to the interest rates associated with the capital leases which are generally much higher than the Company’s incremental borrowing rate under its revolving credit facility.

Other expense, net, for fiscal 2007 was $.7 million, consisting of $2.8 million related to the loss on investment in R&S Parts and Service, Inc. and $1.0 million of amortization expense. Partially offsetting these expenses was

19

$2.8 million in gains on the sale of fixed assets and $.3 million of miscellaneous income. As discussed elsewhere in this Form 10-K, during fiscal 2007, the Company recorded an impairment charge with respect to its original 13% equity investment as well as due diligence costs related to R&S, upon learning that R&S had filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code, and deciding that it would not exercise its option to purchase the remaining 87% of R&S.

In fiscal 2006, the Company reported other income, net, of $.5 million, consisting of gains on sale of fixed assets of $1.0 million, consulting fees from Strauss of $.3 million and miscellaneous income of $.1 million, partially offset by $.9 million of amortization expense.

The Company’s effective tax rate was 35.8% and 38.4% of pre-tax income in fiscal 2007 and 2006, respectively. During the first quarter of fiscal 2007, the Company recognized $.4 million of income tax benefit primarily related to the favorable resolution of state income tax issues. Additionally, in the fourth quarter of fiscal 2007, in connection with finalization of its full year tax provision, the Company reduced income tax reserves by $.2 million.

Net income for fiscal 2007 decreased by $.4 million, or 1.7%, from $22.7 million in fiscal 2006, to $22.3 million in fiscal 2007, and earnings per diluted share decreased by 3.3% from $1.51 to $1.46 due to the factors discussed.

FISCAL 2006 AS COMPARED TO FISCAL 2005

Sales for fiscal 2006 increased $31.3 million, or 9.3% to $368.7 million as compared to $337.4 million in fiscal 2005. The increase was due to an increase of approximately $26.6 million from stores added since March 27, 2004, and a comparable store sales increase of 1.7%. The Company also sold some slower moving inventory for approximately $4.1 million to ICON International, a barter company. There were 308 selling days in fiscal year 2006 compared to 307 selling days in fiscal year 2005. Adjusting for days, comparable store sales increased 1.4%.

During the year, 10 stores were added and 11 were closed. At March 25, 2006, the Company had 625 stores in operation.

Management believes that the improvement in sales resulted from several factors, including an increase in tire sales and scheduled maintenance services. Price increases in several product categories also contributed to the sales improvement. While comparable store traffic declined slightly, average ticket increased.

Gross profit for fiscal 2006 was $147.8 million or 40.1% of sales, as compared with $136.8 million or 40.5% of sales for fiscal 2005. The decrease in gross profit as a percentage of sales is primarily attributable to an increase in material costs due to a shift in mix to the lower margin categories of tires and maintenance services. On a consolidated basis, tires represented 22.5% of sales in fiscal 2006 as compared to 20.2% of sales in fiscal 2005. Maintenance services increased from 26.8% of sales to 28.4% of sales, while the core services of brakes, exhaust and steering all decreased as a percent of sales from the prior year.

The Company also experienced cost increases in oil and tires. Additionally, the bulk sale of inventory to ICON was at a lower margin than Monro’s typical sales, although there were no labor costs, and accounted for a slight decrease in gross margin.

However, price increases, as well as the recognition of vendor rebates against cost of goods in concert with inventory turns in accordance with EITF 02-16, helped to partially offset the aforementioned margin pressures.

Partially offsetting these increases were decreases in technician labor and occupancy costs, which are included in cost of sales. Technician labor costs decreased due to better operational control and improved productivity. Additionally, the increase in tire sales, which carry lower labor costs as compared to other service categories, helped to decrease labor costs as a percent of sales in fiscal 2006 as compared to fiscal 2005.

Distribution and occupancy costs as a percentage of sales in fiscal 2006 also decreased as compared to fiscal 2005, as the Company, with improved sales, was able to leverage these largely fixed costs.

Operating, selling, general and administrative (“OSG&A”) expenses for fiscal 2006 increased by $5.7 million to $108.0 million, but decreased as a percentage of sales to 29.3% compared to 30.3% in 2005. The decrease is

20

partially due to the leveraging of fixed costs against sales, including the bulk inventory sale. Additionally, the Company experienced lower costs in health and other insurance as a percent of sales. It also reduced advertising expense as a percent of sales from fiscal 2005.

Effective March 24, 2006, the Compensation Committee of the Board of Directors approved the accelerated vesting of all 220,000 stock options held by the Company’s employees. The Company’s executive officers and certain senior level managers agreed that they would hold the shares related to the accelerated vesting at least through the original vesting date of the corresponding options, other than with respect to sales of such shares necessary to pay withholding taxes incurred as a result of the exercise of such options. Except for the accelerated vesting, all other material terms and conditions of the previously granted awards remain unchanged.

The decision to accelerate the vesting of these stock options was made to reduce non-cash compensation expense that otherwise would have been recorded in future periods following the Company’s adoption of SFAS 123R, which became effective for the Company on March 26, 2006. The accelerated vesting resulted in a one-time non-cash stock based compensation charge of approximately $.3 million, or $.02 per share, in the fourth quarter of fiscal 2006. As a result of the vesting acceleration, the Company estimates it eliminated the recognition of approximately $900,000 to $1,000,000 of non-cash expense over the four fiscal years 2007 through 2010, with more than half of the expense reduction attributable to fiscal 2007. Most of the $.3 million is included in OSG&A expense.

Operating income in fiscal 2006 of $39.8 million, or 10.8% of sales, increased by $5.4 million from the fiscal 2005 level of $34.4 million, due to the factors discussed above.

Interest expense, net of interest income, increased as a percent of sales from .8% in fiscal 2005 to .9% in fiscal 2006. The weighted average debt outstanding for the year ended March 25, 2006 decreased by approximately $6.4 million from fiscal 2005. However, offsetting this decrease was an increase in the weighted average interest rate for the year ended March 25, 2006 of 260 basis points from the year ended March 26, 2005, resulting in an increase in expense between the two years.

Other income, net, for fiscal 2006 was $.5 million, consisting of $1.4 million in gains on sale of fixed assets and miscellaneous income, partially offset by $.9 million of amortization expense. In fiscal 2005, the Company reported other expense, net, of $.5 million, consisting of amortization expense of $.8 million offset by gains on sale of fixed assets and miscellaneous income of $.3 million.

The Company’s effective tax rate was 38.4% and 37.4% of pre-tax income in fiscal 2006 and 2005, respectively.

Net income for fiscal 2006 increased by $3.0 million, or 15.2%, to $22.7 million as compared to $19.7 million in fiscal 2005, due to the factors discussed.

CAPITAL RESOURCES AND LIQUIDITY

Capital Resources

The Company’s primary capital requirements for fiscal 2007 were divided among the funding of the acquisitions for $13.1 million, the upgrading of facilities and systems and the funding of its store expansion program totaling $22.3 million. In fiscal 2006, the Company’s primary capital requirements were the upgrading of facilities and systems and the funding of its store expansion program. The Company spent $16.0 million, principally for equipment and leasehold improvements. It also spent $2.0 million and $5.0 million, respectively, for the investments in and loan to R&S Parts and Service, Inc.

In both fiscal years 2007 and 2006, these capital requirements were primarily met by cash flow from operations.

In fiscal 2008, the Company intends to open approximately 16 new stores, of which 10 are expected to be stores located within BJ’s Wholesale Clubs. Total capital required to open a new service store ranges, on average (based upon the last five fiscal years’ openings – excluding the acquired stores and BJ’s locations), from $300,000 to

21

$1,000,000 depending on whether the store is leased, owned or land leased. Total capital required to open a store within a BJ’s Wholesale Club is substantially less than for a greenfield store.

The Company also plans to continue to seek suitable acquisition candidates. Management believes that the Company has sufficient resources available (including cash flow from operations and bank financing) to expand its business as currently planned for the next several years.

Contractual Obligations

Payments due by period under long-term debt, other financing instruments and commitments are as follows:

			Within		Within 2 to		Within 4 to		After
	Total		1 Year		3 Years		5 Years		5 Years
	(Dollars in thousands)
Long-term debt	$	21,178	$	18			$	20,500	$	660
Capital lease commitments		32,715		1,350	$	3,002		3,050		25,313
Operating lease commitments		100,414		21,542		34,413		18,268		26,191
Purchase obligations		144,677		37,419		76,339		30,919
Total	$	298,984	$	60,329	$	113,754	$	72,737	$	52,164

In March 2003, the Company renewed its existing credit facility agreement. The amended financing arrangement consisted of an $83.4 million Revolving Credit facility and a non-amortizing credit loan (formerly synthetic lease financing) totaling $26.6 million.

In July 2005, the Company amended its existing credit terms by entering into a five-year, $125 million Revolving Credit Facility agreement (the “Credit Facility”) with five banks in the lending syndicate that provided the Company’s prior financing arrangement. Interest only is payable monthly throughout the Credit Facility’s term. The Credit Facility increased the Company’s borrowing capacity by $15 million to $125 million and included a provision allowing the Company to expand the amount of the overall facility to $160 million, subject to existing or new lender(s) commitments at that time. The terms of the Credit Facility immediately reduced the spread the Company pays on LIBOR-based borrowings by 50 basis points and permit the payment of cash dividends not to exceed 25% of the preceding year’s net income. Additionally, the amended Credit Facility is not secured by the Company’s real property, although the Company has entered into an agreement not to encumber its real property, with certain permissible exceptions. Other terms of the Credit Facility are generally consistent with the Company’s prior financing agreement.

In January 2007, the Company amended the Credit Facility to: 1) allow stock buybacks subject to the Company being able to meet its existing financial covenants; 2) extend the termination date by 18 months to January 2012; and 3) increase the accordion feature by $40 million, which allows the Company to expand the amount of the overall facility to $200 million.

Within the aforementioned $125 million Revolving Credit facility, the Company has available a sub-facility of $20 million for the purpose of issuing standby letters of credit. The line requires fees aggregating .88% annually of the face amount of each standby letter of credit, payable quarterly in arrears. There were $11.6 million in outstanding letters of credit under this line at March 31, 2007.

In addition, the Company has financed certain store properties and vehicles with capital leases, which amount to $32.7 million and are due in installments through 2026.

During fiscal 1995, the Company purchased 12.7 acres of land for $.7 million from the City of Rochester, New York, on which its office/warehouse facility is located. The City has provided financing for 100% of the cost of the land via a 20-year non-interest bearing mortgage, all due and payable in 2015.

To finance its office/warehouse building, the Company obtained permanent mortgage financing in fiscal 1996 consisting of a 10-year mortgage for $2.9 million and an eight-year term loan in the amount of $.7 million. In October 2005, the Company paid the remaining $1.5 million outstanding on the mortgage for the headquarters office/warehouse building.

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Certain of the Company’s long-term debt agreements require, among other things, the maintenance of specified interest and rent coverage ratios and amounts of net worth. They also contain restrictions on dividend payments. The Company is in compliance with these requirements at March 31, 2007. These agreements permit mortgages and specific lease financing arrangements with other parties with certain limitations.

From time to time, the Company enters into interest rate hedge agreements, which involve the exchange of fixed and floating rate interest payments periodically over the life of the agreement without the exchange of the underlying principal amounts. The differential to be paid or received is accrued as interest rates change and is recognized over the life of the agreements as an offsetting adjustment to interest expense. Currently the Company has no hedge agreements. The most recent hedge agreement expired in October 2005.

INFLATION

The Company does not believe its operations have been materially affected by inflation. The Company has been successful, in many cases, in mitigating the effects of merchandise cost increases principally through the use of volume discounts and alternative vendors.

FINANCIAL ACCOUNTING STANDARDS

See “Recent Accounting Pronouncements” in Note 1 to the consolidated financial statements for a discussion of the impact of recently issued accounting standards on the Company’s consolidated financial statements as of March 31, 2007 and for the year then ended, as well as the expected impact on the Company’s consolidated financial statements for future periods.

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to market risk from potential changes in interest rates. At year end March 2007 and 2006, approximately 3% of the Company’s long-term debt, excluding capital leases, was at fixed interest rates and therefore, the fair value is affected by changes in market interest rates. The Company’s cash flow exposure on floating rate debt, which is not supported by interest rate swap agreements, would result in interest expense fluctuating approximately $.2 million based upon the Company’s debt position at fiscal year ended March 31, 2007 and $.3 million for fiscal year ended March 25, 2006, given a 1% change in LIBOR.

The Company regularly evaluates these risks and has in the past entered and may in the future enter into interest rate swap agreements, all of which prior agreements had expired by October 2005. The Company believes the amount of risk and the use of derivative financial instruments described above are not material to the Company’s financial condition or results of operations.

Long-term debt, including current portion, had a carrying amount of $21.2 million and a fair value of $20.9 million as of March 31, 2007, as compared to a carrying amount of $35.2 million and a fair value of $34.9 million as of March 25, 2006.

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Item 8. Financial Statements and Supplementary Data

	Page
Report of Independent Registered Public Accounting Firm		25
Audited Financial Statements:
Consolidated Balance Sheet at March 31, 2007 and March 25, 2006		27
Consolidated Statement of Income for the fiscal three years ended March 31, 2007		28
Consolidated Statement of Changes in Shareholders’ Equity for the fiscal three years ended March 31, 2007		29
Consolidated Statement of Cash Flows for the fiscal three years ended March 31, 2007		30
Notes to Consolidated Financial Statements		31
Selected Quarterly Financial Information (Unaudited)		58
EX-10.04
EX-10.04A
EX-10.04B
EX-10.04C
EX-10.04D
EX-10.71
EX-10.79C
EX-21.01
EX-23.01
EX-24.01
EX-31.1
EX-31.2
EX-32.1

24

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Monro Muffler Brake, Inc.:

We have completed integrated audits of Monro Muffler Brake, Inc.’s consolidated financial statements and of its internal control over financial reporting as of March 31, 2007, in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

Consolidated Financial Statements

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Monro Muffler Brake, Inc. and its subsidiaries at March 31, 2007 and March 25, 2006, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2007 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1 – Significant Accounting Policies and Note 9 – Employee Stock Plans to the consolidated financial statements, the Company changed the manner in which it accounts for share-based compensation effective March 26, 2006.

As discussed in Note 1 – Significant Accounting Policies and Note 12 – Employee Retirement and Profit Sharing Plans to the consolidated financial statements, the Company changed the manner in which it accounts for defined benefit pension and other postretirement plans effective March 31, 2007.

Internal Control over Financial Reporting

Also, in our opinion, management’s assessment, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A, that the Company maintained effective internal control over financial reporting as of March 31, 2007 based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2007, based on criteria established in Internal Control – Integrated Framework issued by the COSO. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

25

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP

Rochester, New York

June 14, 2007

26

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

	March 31,			March 25,
	2007			2006
	(Dollars in thousands)
ASSETS
Current assets:
Cash and equivalents	$	965		$	3,780
Trade receivables		2,225			1,726
Inventories		62,398			60,378
Deferred income tax asset		4,378			1,133
Other current assets		18,870			18,091
Total current assets		88,836			85,108
Property, plant and equipment		327,303			291,789
Less – Accumulated depreciation and amortization		(143,054	)		(128,164	)
Net property, plant and equipment		184,249			163,625
Goodwill		52,897			37,766
Intangible assets and other non-current assets		14,041			16,896
Total assets	$	340,023		$	303,395
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	1,368		$	525
Trade payables		27,211			25,802
Federal and state income taxes payable		1,580			1,937
Accrued payroll, payroll taxes and other payroll benefits		10,697			10,255
Accrued insurance		7,387			5,536
Other current liabilities		12,265			9,661
Total current liabilities		60,508			53,716
Long-term debt		52,525			46,327
Accrued rent expense		6,937			7,362
Other long-term liabilities		4,514			2,924
Deferred income tax liability		420			76
Total liabilities		124,904			110,405
Commitments Shareholders’ equity:
Class C Convertible Preferred Stock, $1.50 par value, $.144 conversion value at March 31, 2007 and March 25, 2006, 150,000 shares authorized; 65,000 shares issued and outstanding		97			97
Common Stock, $.01 par value, 20,000,000 shares authorized; 14,342,051 and 13,976,630 shares issued at March 31, 2007 and March 25, 2006, respectively		143			140
Treasury Stock, 334,128 and 331,628 shares at March 31, 2007 and March 25, 2006, respectively, at cost		(2,143	)		(2,056	)
Additional paid-in capital		62,866			57,661
Accumulated other comprehensive income		(1,478	)
Retained earnings		155,634			137,148
Total shareholders’ equity		215,119			192,990
Total liabilities and shareholders’ equity	$	340,023		$	303,395

The accompanying notes are an integral part of these financial statements.

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MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

	Year Ended Fiscal March
	2007		2006			2005
	(Amounts in thousands,
	except per share data)
Sales	$	417,226	$	368,727		$	337,409
Cost of sales, including distribution and occupancy costs		250,804		220,915			200,616
Gross profit		166,422		147,812			136,793
Operating, selling, general and administrative expenses		126,439		108,030			102,379
Operating income		39,983		39,782			34,414
Interest expense, net of interest income of $387 in 2007, $65 in 2006, and $50 in 2005		4,564		3,478			2,549
Other expense (income), net		734		(502	)		463
Income before provision for income taxes		34,685		36,806			31,402
Provision for income taxes		12,414		14,140			11,733
Net income	$	22,271	$	22,666		$	19,669
Earnings per share:
Basic	$	1.59	$	1.67		$	1.50
Diluted	$	1.46	$	1.51		$	1.35
Weighted average number of common shares outstanding used in computing earnings per share:
Basic		13,878		13,531			13,102
Diluted		15,252		15,022			14,562

The accompanying notes are an integral part of these financial statements.

28

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

	Class C												Accumulated
	Convertible							Additional					Other
	Preferred		Common		Treasury			Paid-In		Retained			Comprehensive
	Stock		Stock		Stock			Capital		Earnings			Income			Total
	(Dollars in thousands)
Balance at March 27, 2004	$	97	$	133	$	(1,831	)	$	44,057	$	96,950		$	(413	)	$	138,993
Net income											19,669						19,669
Other comprehensive income:
SFAS 133 adjustment(1)														58			58
Minimum pension liability adjustment(1)														338			338
Total comprehensive income																	20,065
Tax benefit from exercise of stock options									644								644
Issuance of stock: payment for acquisition				2					6,430								6,432
Exercise of stock options				2					1,353								1,355
Balance at March 26, 2005		97		137		(1,831	)		52,484		116,619			(17	)		167,489
Net income											22,666						22,666
Other comprehensive income:
SFAS 133 adjustment(1)														17			17
Total comprehensive income																	22,683
Cash dividends: Preferred											(102	)					(102	)
Common											(2,035	)					(2,035	)
Tax benefit from exercise of stock options									711								711
Exercise of warrants				1					2,232								2,233
Exercise of stock options				2					1,917								1,919
Stock issuance costs									20								20
Stock option compensation									297								297
Purchase of treasury shares						(225	)										(225	)
Balance at March 25, 2006		97		140		(2,056	)		57,661		137,148			0			192,990
Net income											22,271						22,271
Other comprehensive income:
Adjustment to initially apply SFAS 158 for pension benefits(1)														(1,478	)		(1,478	)
Total comprehensive income																	20,793
Cash dividends: Preferred											(175	)					(175	)
Common											(3,610	)					(3,610	)
Tax benefit from exercise of stock options									1,076								1,076
Exercise of stock options				3					3,606								3,609
Stock option compensation									523								523
Purchase of treasury shares						(87	)										(87	)
Balance at March 31, 2007	$	97	$	143	$	(2,143	)	$	62,866	$	155,634		$	(1,478	)	$	215,119

(1) Components of comprehensive income are reported net of related taxes of $985, $11 and $242 in fiscal years 2007, 2006 and 2005, respectively.

The accompanying notes are an integral part of these financial statements.

29

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

	Year Ended Fiscal March
	2007			2006			2005
	(Dollars in thousands)
	Increase (Decrease) in Cash
Cash flows from operating activities:
Net income	$	22,271		$	22,666		$	19,669
Adjustments to reconcile net income to net cash provided by operating activities — Depreciation and amortization		20,322			17,776			15,724
Loss on investment in R&S Parts and Services, Inc.		2,796
Stock-based compensation expense		523			297
Excess tax benefits from share-based payment arrangements		(511	)
Net change in deferred income taxes		816			(806	)		1,939
(Gain) loss on disposal of property, plant and equipment		(1,916	)		(959	)		197
Gain from relocation of tire store		(900	)
(Increase) decrease in trade receivables		(499	)		436			(187	)
Increase in inventories		(974	)		(3,543	)		(4,870	)
Increase in other current assets		(1,581	)		(2,924	)		(3,368	)
Increase in other noncurrent assets		(7,935	)		(1,377	)		(531	)
Increase in trade payables		1,250			1,906			7,087
Increase in accrued expenses		4,108			1,024			2,178
Increase in income taxes payable		719			1,966			281
Decrease in other long-term liabilities		(152	)		(680	)		(478	)
Total adjustments		16,066			13,116			17,972
Net cash provided by operating activities		38,337			35,782			37,641
Cash flows from investing activities:
Capital expenditures		(22,319	)		(16,005	)		(18,586	)
Acquisitions, net of cash acquired		(13,109	)					(4,539	)
Proceeds from the disposal of property, plant and equipment		3,999			3,015			1,986
Proceeds from relocation of tire store		450			450
Debtor in-possession financing to ProCare					(900	)
Deposit on acquisition of ProCare					(700	)
Repayment of loan receivable from (loan to) R&S Parts and Services, Inc.		5,000			(5,000	)
Investment in R&S Parts and Services, Inc.					(2,000	)
Net cash used for investing activities		(25,979	)		(21,140	)		(21,139	)
Cash flows from financing activities:
Proceeds from borrowings		127,338			206,450			122,514
Principal payments on long-term debt and capital lease obligations		(142,759	)		(219,990	)		(141,016	)
Purchase of common stock		(87	)		(225	)
Exercise of stock options		3,609			1,919			1,355
Exercise of warrants					2,233
Excess tax benefits from share-based payment arrangements		511
Dividends paid		(3,785	)		(2,137	)
Net cash used for financing activities		(15,173	)		(11,750	)		(17,147	)
(Decrease) increase in cash		(2,815	)		2,892			(645	)
Cash at beginning of year		3,780			888			1,533
Cash at end of year	$	965		$	3,780		$	888

The accompanying notes are an integral part of these financial statements.

30

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES

Background

Monro Muffler Brake, Inc. and its wholly owned subsidiary, Monro Service Corporation (the “Company”), is engaged principally in providing automotive undercar repair services in the United States. The Company had 698 Company-operated stores and 14 dealer-operated automotive repair centers located primarily in the northeast region of the United States as of March 31, 2007. The Company’s operations are organized and managed in one operating segment.

Accounting estimates

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles. The preparation of financial statements in conformity with such principles requires the use of estimates by management during the reporting period. Actual results could differ from those estimates.

Fiscal year

The Company reports its results on a 52/53 week fiscal year ending on the last Saturday of March of each year. The following are the dates represented by each fiscal period:

“Year ended Fiscal March 2007”: March 26, 2006 – March 31, 2007 (53 weeks)

“Year ended Fiscal March 2006”: March 27, 2005 – March 25, 2006 (52 weeks)

“Year ended Fiscal March 2005”: March 28, 2004 – March 26, 2005 (52 weeks)

Consolidation

The consolidated financial statements include the Company and its wholly owned subsidiary, Monro Service Corporation for fiscal year 2007 and its wholly owned subsidiaries, Monro Service Corporation and Monro Leasing, LLC for fiscal years 2006 and 2005, after the elimination of intercompany transactions and balances.

Revenue recognition

Sales are recorded upon completion of automotive undercar repair and tire services provided to customers. The following was the Company’s sales mix for fiscal 2007, 2006 and 2005:

	Year Ended
	Fiscal March
	2007			2006			2005
Brakes		23	%		24	%		26	%
Exhaust		8			11			13
Steering		14			14			14
Tires		24			23			20
Maintenance		31			28			27
Total		100	%		100	%		100	%

Sales of tire road hazard warranties are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Technical Bulletin 90-1, “Accounting for Separately Priced Extended Warranty and Product Maintenance Contracts”. Revenue from the sale of these agreements is recognized on a straight-line basis over the contract period or other method where costs are not incurred ratably.

31

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cash equivalents

The Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents.

Inventories

The Company’s inventories consist of automotive parts and tires. Inventories are valued at the lower of cost or market value using the first-in, first-out (FIFO) method.

Barter credits

The Company accounts for the receipt of barter credits in accordance with Emerging Issues Task Force (“EITF”) Issue No. 93-11, “Accounting for Barter Transactions”.

Property, plant and equipment

Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment is provided on the straight-line basis. Buildings and improvements related to owned locations are depreciated over lives varying from 10 to 39 years; machinery, fixtures and equipment over lives varying from 5 to 15 years; and vehicles over lives varying from 3 to 8 years. Computer software is depreciated over lives varying from 3 to 7 years. Buildings and improvements related to leased locations are depreciated over the shorter of the asset’s useful life or the reasonably assured lease term, as defined in Statement of Financial Accounting Standards No. 98 (“SFAS 98”), “Accounting for Leases”. When property is sold or retired, the cost and accumulated depreciation are eliminated from the accounts and a gain or loss is recorded in the Statement of Income. Expenditures for maintenance and repairs are expensed as incurred.

Certain leases have been capitalized and are classified on the balance sheet as fixed assets. These assets are being amortized on a straight-line basis over their estimated lives, which coincide with the terms of the leases. (See Note 4.)

Long-lived assets

The Company accounts for impaired long-lived assets in accordance with Statement of Financial Accounting Standards No. 144 (“SFAS 144”), “Accounting for the Impairment or Disposal of Long-Lived Assets”. This standard prescribes the method for asset impairment evaluation for long-lived assets and certain identifiable intangibles that are either held and used or to be disposed of. The Company evaluates the ability to recover long-lived assets whenever events or circumstances indicate that the carrying value of the asset may not be recoverable. In the event assets are impaired, losses are recognized to the extent the carrying value exceeds the fair value. In addition, the Company reports assets to be disposed of at the lower of the carrying amount or the fair market value less selling costs.

Store opening and closing costs

New store opening costs are charged to expense in the fiscal year when incurred. When the Company closes a store, the estimated unrecoverable costs, including the remaining lease obligation net of sublease income, if any, are charged to expense.

Leases

The Company recognizes rent expense, including rent escalations, on a straight-line basis over the reasonably assured lease term, as defined in SFAS 98. Generally, the lease term is the base lease term plus certain renewal option periods for which renewal is reasonably assured.

32

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Goodwill and intangible assets

The Company has adopted Statement of Financial Accounting Standards No. 141 (“SFAS 141”), “Business Combinations”. All business combinations consummated on or after July 1, 2001 are accounted for in accordance with that pronouncement. In addition, in accordance with Statement of Financial Accounting Standards No. 142 (“SFAS 142”), “Goodwill and Other Intangible Assets”, effective March 31, 2002, the Company no longer amortizes goodwill.

The value of intangibles, such as customer lists and trade names, is determined during the initial purchase accounting for acquisitions via the use of experts, or by the Company applying similar methodologies on smaller acquisitions. The Company analyzes goodwill and other intangible assets for impairment on an annual basis as well as when events and circumstances indicate that an impairment may have occurred. Certain factors that may occur and indicate that an impairment exists include, but are not limited to, operating results that are lower than expected and adverse industry or market economic trends. The impairment testing requires management to estimate the fair value of the assets or reporting unit and record an impairment loss for the excess of the carrying value over the fair value. The estimate of fair value of intangible assets is generally determined on the basis of discounted future cash flows supplemented by the market approach. In estimating the fair value, management must make assumptions and projections regarding such items as future cash flows, future revenues, future earnings and other factors. The assumptions used in the estimates of fair value are generally consistent with past performance and are also consistent with the projections and assumptions that are used in current operating plans. Such assumptions are subject to change as a result of changing economic and competitive conditions. If these estimates or their related assumptions change in the future, the Company may be required to record an impairment loss for these assets.

Warranty

The Company provides an accrual for estimated future warranty costs based upon the historical relationship of warranty costs to sales. The warranty reserve and warranty expense related to all product warranties at and for the fiscal years ended March 2007, 2006 and 2005 were not material to the Company’s financial position or results of operations.

Derivative financial instruments

The Company reports derivatives and hedging activities in accordance with Statement of Financial Accounting Standards No. 133 (“SFAS 133”), “Accounting for Derivative Instruments and Hedging Activities”, as amended. This statement requires that all derivative instruments be recorded on the balance sheet at fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction, and if it is, depending on the type of hedge transaction.

Comprehensive income

Comprehensive income is reported in accordance with Statement of Financial Accounting Standards No. 130 (“SFAS 130”), “Reporting Comprehensive Income”. As it relates to the Company, comprehensive income is defined as net earnings as adjusted for minimum pension liability, unrealized gains on financial instruments qualifying for cash flow hedge accounting and the adjustment to initially apply SFAS 158 for pension benefits, and is reported net of related taxes in the Consolidated Statement of Changes in Shareholders’ Equity.

Income taxes

The Company accounts for income taxes using the liability method in accordance with Statement of Financial Accounting Standards No. 109 (“SFAS 109”), “Accounting for Income Taxes”. The liability method provides that deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases

33

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of assets and liabilities and are measured using tax rates based on currently enacted rules and legislation and anticipated rates that will be in effect when the differences are expected to reverse.

Treasury stock

In January 2007, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to $30 million of its common stock at market prices. The share repurchase program has a term of 12 months. The amount and timing of any purchase will depend upon a number of factors, including the price and availability of the Company’s shares and general market conditions. The Company’s purchases of common stock are recorded as “Treasury Stock” and result in a reduction of “Shareholders’ Equity”.

Stock-based compensation

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 123R, “Share-Based Payments”, (“SFAS 123R”), which replaced SFAS No. 123 “Accounting for Stock-Based Compensation”, (“SFAS 123”) and superseded Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”, (“APB 25”). SFAS 123R requires companies to measure compensation cost arising from the grant of share-based payments to employees at fair value and to recognize such cost in income over the period during which the employee is required to provide service in exchange for the award, usually the vesting period. The Company adopted SFAS 123R effective March 26, 2006 under the modified prospective transition method. In accordance with the modified-prospective transition method of SFAS 123R, the Company has not restated prior periods. Accordingly, the Company has recognized compensation expense for all awards granted or modified after March 25, 2006.

Outstanding awards at the date of adoption were fully vested and, therefore, there was no future expense associated with these awards. SFAS 123R requires forfeitures to be estimated on the grant date and revised in subsequent periods if actual forfeitures differ from those estimates. Prior to the adoption of SFAS 123R, the Company accounted for forfeitures as they occurred. Upon adoption of SFAS 123R, the Company elected to calculate its historical pool of windfall tax benefits using the “long-form method” described in FASB Staff Position No. 123R-3, “Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards”.

Prior to the adoption of SFAS 123R, the Company used the intrinsic value method prescribed in APB 25 and also followed the disclosure requirements of SFAS 123, as amended by SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure”, which required certain disclosures on a pro forma basis as if the fair value method had been followed for accounting for such compensation.

Effective March 24, 2006, the Board of Directors approved the accelerated vesting of all 220,000 stock options held by the Company’s employees. Except for the accelerated vesting, all other material terms and conditions of the previously granted awards remain unchanged.

The decision to accelerate the vesting of these stock options was made to reduce non-cash compensation expense that would otherwise have been recorded in future periods following the Company’s adoption of SFAS 123R, which became effective for the Company on March 26, 2006. The accelerated vesting resulted in a one-time non-cash stock-based compensation charge of approximately $272,000 after tax, or $.02 per diluted share, in the fourth quarter of fiscal 2006. As a result of the vesting acceleration, the Company estimates it eliminated the recognition of approximately $900,000 to $1,000,000 of non-cash expense from fiscal 2007 through fiscal 2011, beginning March 26, 2006, with more than half of the expense reduction attributable to fiscal 2007.

Option awards granted subsequent to the Board’s action are not included in the acceleration and will vest equally over the service period established in the award, typically four years.

34

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table illustrates the effect on net income if the fair value-based method had been applied to all outstanding and unvested awards in each period.

	Year Ended
	Fiscal March
	2006			2005
	(Dollars in thousands, except per share data)
Net income, as reported	$	22,666		$	19,669
Add: Total stock-based employee compensation expense recorded in accordance with APB 25, net of tax effect		272
Deduct: Total stock-based employee compensation expense determined under fair value-based method for all awards, net of related tax effects expense determined under fair value-based method for all awards, net of tax effect		(1,740	)		(1,059	)
Pro forma net income	$	21,198		$	18,610
Earnings per share:
Basic – as reported	$	1.67		$	1.50
Basic – pro forma	$	1.57		$	1.42
Diluted – as reported	$	1.51		$	1.35
Diluted – pro forma	$	1.41		$	1.28

Upon adoption of SFAS 123R, the Company elected to recognize compensation expense using the straight-line approach. The Company estimates fair value using the Black-Scholes valuation model. Assumptions used to estimate the compensation expense are determined as follows:

•  Expected term of an award is based on historical experience and on the terms and conditions of the stock awards granted to employees;

•  Expected volatility is measured using historical changes in the market price of the Company’s common stock;

•  Risk-free interest rate is equivalent to the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the expected term of the awards;

•  Forfeitures are based substantially on the history of cancellations of similar awards granted by the Company in prior years; and,

•  Dividend yield is based on historical experience and expected future changes.

The weighted average fair value of options granted during fiscal 2007, 2006 and 2005 was $11.26, $7.81 and $11.06, respectively. The fair values of the options granted were estimated on the date of their grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	Year Ended Fiscal March
	2007		2006		2005
Risk-free interest rate		4.98%		4.14%		4.53%
Expected life		6 years		6 years		9 years
Expected volatility		28.6%		28.4%		28.7%
Expected dividend yield		1.37%		1.53%		0%

35

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Total stock-based compensation expense included in selling, general and administrative and distribution expenses in the Company’s statement of operations for the year ended March 31, 2007 was $523,000. The related income tax benefit was $210,000. The Company had stock-based compensation expense under APB 25 of $272,000 for the year ended March 25, 2006, and none for the year ended March 26, 2005.

As a result of adopting SFAS 123R on March 26, 2006, the Company’s income before provision for income taxes and net income for the year ended March 31, 2007, were $523,000 and $313,000 lower, respectively, than if the Company had continued to account for stock-based compensation under APB 25. The related impact to basic and diluted earnings per share for the year ended March 31, 2007 was $.02 per share.

Prior to the adoption of SFAS 123R, the Company reported all income tax benefits resulting from the exercise of stock options as operating cash inflows in its consolidated statements of cash flow. In accordance with SFAS 123R, the Company revised its statement of cash flows presentation to include the excess tax benefits from the exercise of stock options as financing cash inflows. Accordingly, for the year ended March 31, 2007, the Company reported $511,000 of excess tax benefits as a financing cash inflow.

Earnings per share

Earnings per share for all periods have been calculated in accordance with Statement of Financial Accounting Standards No. 128 (“SFAS 128”), “Earnings Per Share”. Basic earnings per share is calculated by dividing net income less preferred stock dividends by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings per share is calculated by dividing net income by the weighted average number of shares of Common Stock and equivalents outstanding during the year. Common Stock equivalents represent shares issuable upon assumed exercise of stock options and stock purchase warrants. (See Note 10.)

Advertising

The Company expenses the production costs of advertising the first time the advertising takes place, except for direct response advertising which is capitalized and amortized over its expected period of future benefits.

Direct response advertising consists primarily of coupons for the Company’s services. The capitalized costs of this advertising are amortized over the period of the coupon’s validity, which ranges from six weeks to one year.

Prepaid advertising at fiscal year end March 2007 and 2006, and advertising expense for the fiscal years ended March 2007, 2006 and 2005, were not material to these financial statements.

Vendor Rebates and Cooperative Advertising Credits

In accordance with Emerging Issues Task Force Issue No. 02-16 (“EITF 02-16”), “Accounting by a Customer (Including a Reseller) for Cash Consideration Received from a Vendor”, for vendor agreements entered into or modified after December 31, 2002, the Company accounts for vendor rebates and cooperative advertising credits as a reduction of the cost of products purchased, except where the rebate or credit is a reimbursement of costs incurred to sell the vendor’s product, in which case it is offset against the costs incurred. Vendor rebates and credits associated with vendor agreements entered into prior to December 31, 2002 are recognized as cooperative advertising income as earned and are classified as a reduction of selling, general and administrative expenses.

Pension Expense

The Company reports all information on its pension plan benefits in accordance with Statement of Financial Accounting Standards No. 158 (“SFAS 158”), “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans (an amendment of FASB Statements No. 87, 88, 106 and 132(R))”.

36

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Guarantees

In accordance with FASB Interpretation No. 45 (“FIN 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”, at the time the Company issues a guarantee, it recognizes an initial liability for the fair value, or market value, of the obligations it assumes under that guarantee.

Reclassifications

Certain amounts in these financial statements have been reclassified to maintain comparability among the periods presented.

Recent accounting pronouncements

In February 2006, the FASB issued Statement of Financial Accounting Standards No. 155 (“SFAS 155”), “Accounting for Certain Hybrid Financial Instruments” (an amendment of FASB Statements No. 133 and 140). This Statement permits fair value measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation. SFAS 155 is effective for all financial instruments acquired, issued, or subject to a remeasurement event occurring after the beginning of an entity’s first fiscal year that begins after December 15, 2006 (fiscal year 2008 for the Company). Additionally, the fair value may also be applied upon adoption of this Statement for hybrid financial instruments that had been bifurcated under previous accounting guidance prior to the adoption of this Statement. The adoption of SFAS 155 will have no effect on the financial statements.

In June 2006, the FASB ratified the consensus reached on EITF Issue No. 06-03, “How Sales Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (that is, Gross Versus Net Presentation)” (“EITF 06-03”). The EITF reached a consensus that the presentation of taxes on either a gross or net basis is an accounting policy decision that requires disclosure. EITF 06-03 is effective for the Company’s fiscal year beginning April 1, 2007. Sales tax amounts collected from customers have been recorded on a net basis. The adoption of EITF 06-03 will have no effect on the Company’s financial position or results of operations.

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). The interpretation clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Specifically, the pronouncement prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on the related derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition of uncertain tax positions. The accounting provisions of FIN 48 will be effective for the Company beginning April 1, 2007. The Company is in the process of determining the effect, if any, the adoption of FIN 48 will have on its financial statements. The Company believes the adoption will not have a material impact on its financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (“SFAS 157”), “Fair Value Measurements.” This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not expect the adoption of SFAS 157 to have a material impact on the financial results or existing debt covenants of the Company.

37

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158 (“SFAS 158”), “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — An Amendment of FASB Statements No. 87, 88, 106 and 132(R)”. This standard requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur as a component of comprehensive income. SFAS 158 does not change the amount of actuarially determined expense that is recorded in the Consolidated Statement of Income. The standard also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, which is consistent with the Company’s present measurement date. SFAS 158 was effective as of the fiscal year ended March 31, 2007. The impact of adopting the provisions of SFAS 158 is shown in the table below:

	Before Adoption of		SFAS 158 Adoption			After Adoption of
	SFAS 158		Adjustments			SFAS 158
	(Dollars in Thousands)
Deferred income tax asset	$	3,393	$	985		$	4,378
Total current assets		87,851		985			88,836
Intangible Assets and other non-current assets		16,504		(2,463	)		14,041
Total assets		341,501		(1,478	)		340,023
Accumulated other comprehensive income		0		1,478			1,478
Total shareholders’ equity		216,597		1,478			215,119
Total liabilities and shareholder’s equity		341,501		1,478			340,023

The adoption of SFAS 158 had no impact on financial covenant compliance included in the Company’s debt agreements. See additional discussion in Note 12.

In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108 (“SAB 108”), “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”. SAB 108 eliminates the diversity of practice surrounding how public companies quantify financial statement misstatements. It establishes an approach that requires quantification of financial statement misstatements based on the effects of the misstatements on each of the Company’s financial statements and the related financial statement disclosures. SAB 108 must be applied to annual financial statements for their first fiscal year ending after November 15, 2006. The adoption of this bulletin had no material impact on the Company’s financial condition or results of operations.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159 (“SFAS 159”), “The Fair Value Option for Financial Assets and Financial Liabilities”, which permits entities to choose to measure, on an item-by-item basis, specified financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected are required to be reported in earnings at each reporting date. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The provisions of this statement are required to be applied prospectively. The Company does not expect SFAS 159 to have a material impact on its financial condition or results of operations.

NOTE 2 — ACQUISITIONS

Fiscal 2007

On April 29, 2006, the Company acquired 75 automotive maintenance and repair service stores located in eight metropolitan areas throughout Ohio and Pennsylvania from ProCare Automotive Service Solutions LLC (“ProCare”). The Company acquired the business and substantially all of the operating assets of these stores, which consist primarily of inventory and equipment, and assumed certain liabilities. The purchase price was $14.7 million

38

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

in cash which was financed through the Company’s existing bank facility. The excess of the purchase price over the fair values of assets acquired and liabilities assumed was allocated to goodwill. The Company converted 31 of the acquired ProCare stores to tire stores which are operating under the Mr. Tire brand name. The remaining stores are operating as service stores under the Monro brand name. The purchase price will be adjusted post-closing to reflect the completion of the Company’s purchase accounting procedures by the first quarter of fiscal 2008. The results of operations of the acquired ProCare stores are included in the Company’s results from April 29, 2006. In connection with the acquisition, the Company recorded a reserve for accrued restructuring costs of approximately $1.6 million. This reserve relates to costs associated with the closing of three duplicative or poorly performing ProCare stores, and includes charges for rent and real estate taxes (net of anticipated sublease income) since the April 2007 closure date, as well as the write down of assets to their fair market value. The closures brought the number of ProCare service stores down to 43 and the ProCare tire stores down to 29 stores.

Fiscal 2006

On November 1, 2005, the Company acquired a 13% interest in R&S Parts and Service, Inc. (“R&S”), a privately owned automotive aftermarket parts and service chain, for $2.0 million from GDJ Retail LLC. As part of the transaction, the Company also loaned R&S $5.0 million under a secured subordinated debt agreement that had a five-year term and carried an 8% interest rate. The loan was repaid in full in December 2006.

On August 11, 2006, the Company announced that it would not exercise its option to purchase the remaining 87% of R&S, originally negotiated for an additional $12.0 million in cash and $1.0 million of Monro stock . In addition, the Company recorded an after-tax impairment charge of $1.7 million with respect to the original 13% equity investment, as well as due diligence costs related to R&S. Management reached this conclusion after learning that R&S had filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. The impairment charge has been reflected within “Other Expenses” on the Consolidated Statement of Income for the year ended March 31, 2007.

Under the terms of the R&S debtor-in-possession financing, the Bankruptcy Court ordered the repayment to Monro of the $5 million secured loan, plus a portion of legal and other fees incurred by Monro in connection with the issuance and repayment of the loan. In February 2007, the Creditors’ Committee appointed in R&S’s bankruptcy commenced an action seeking repayment of the $5 million. In response, the Company filed a complaint against GDJ Retail, LLC and its principal, Glen Langberg, for breach of contract, contractual indemnification and negligent misrepresentation arising from the Company’s purchase of a 13% interest in R&S in November 2005.

In May 2007, the Bankruptcy Court approved a global settlement of both actions. As a result of the settlement, the Company received $325,000 from R&S. All claims against the Company, GDJ Retail, LLC, Glen Langberg and R&S have been dismissed.

Fiscal 2005

Rice Tire and Henderson Holdings

Effective October 17, 2004, the Company acquired five retail tire and automotive repair stores located in and around Frederick, Maryland from Donald B. Rice Tire Co., Inc. (the “Rice Tire Acquisition”) and on March 6, 2005, the Company acquired 10 retail tire and automotive repair stores located in southern Maryland from Henderson Holdings, Inc. (the “Henderson Acquisition”). These stores produce approximately $19 million in sales annually. The Company operates 14 of these retail locations under the Mr. Tire brand name and one under the Tread Quarters brand name. The Company purchased all of the operating assets of these stores, including fixed assets and certain inventory, and assumed certain liabilities, including obligations pursuant to the real property leases for certain of the retail store locations. The total purchase price of these stores was approximately $11.4 million which was funded through $5.1 million in cash and the assumption of liabilities and the issuance of 240,206 shares of the Company’s common stock, which was valued at $6.5 million. In addition, the Company recorded buildings and capital lease

39

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

obligations in the amount of approximately $6.1 million in connection with new leases with the seller of Henderson Holdings for nine of the properties acquired, and $.9 million in connection with a Rice Tire lease. The results of operation of these stores are included in the Company’s income statement from their respective dates of acquisition.

NOTE 3 — OTHER CURRENT ASSETS

The composition of other current assets is as follows:

	Year Ended Fiscal March
	2007		2006
	(Dollars in thousands)
Prepaid pension asset			$	4,885
Other receivables	$	1,125		971
Vendor rebates receivable		6,374		2,771
Prepaid real estate taxes		1,601		1,452
Prepaid insurance		2,071		1,642
Prepaid rent		2,283		71
Debtor-in-possession financing due from ProCare				905
Barter credit receivable		1,850		1,108
Prepaid advertising		1,484		897
Vendor debit balances		1,275		2,047
Other		807		1,342
	$	18,870	$	18,091

NOTE 4 — PROPERTY, PLANT AND EQUIPMENT

The major classifications of property, plant and equipment are as follows:

	March 31, 2007						March 25, 2006
			Assets						Assets
			Under						Under
	Assets		Capital				Assets		Capital
	Owned		Lease		Total		Owned		Lease		Total
	(Dollars in thousands)
Land	$	40,261			$	40,261	$	40,542			$	40,542
Buildings and improvements		128,154	$	31,252		159,406		122,541	$	13,450		135,991
Equipment, signage and fixtures		113,790				113,790		102,252				102,252
Vehicles		12,460		80		12,540		11,181		80		11,261
Construction-in-progress		1,306				1,306		1,743				1,743
		295,971		31,332		327,303		278,259		13,530		291,789
Less – Accumulated depreciation and amortization		137,592		5,462		143,054		124,583		3,581		128,164
	$	158,379	$	25,870	$	184,249	$	153,676	$	9,949	$	163,625

Capitalized interest costs aggregated $24,000 in fiscal 2007 and $36,000 in fiscal 2006.

40

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Amortization expense recorded under capital leases totaled $1,881,000, $868,000, and $332,000 for the fiscal years ended March 2007, 2006 and 2005, respectively.

NOTE 5 — GOODWILL AND INTANGIBLE ASSETS

The changes in goodwill during fiscal 2006 and 2007 were as follows:

	(Dollars in thousands)
Balance at March 26, 2005	$	37,218
Other adjustments		548
Balance at March 25, 2006		37,766
Acquisitions		15,131
Balance at March 31, 2007	$	52,897

In fiscal 2007, approximately $15.2 million of the goodwill acquired relates to the ProCare Acquisition. (See Note 2.) The goodwill from the acquisitions completed in fiscal 2007 is deductible for tax purposes.

The other goodwill adjustments recorded in fiscal 2006 resulted from the finalization of the valuation of tangible and intangible assets acquired, the impact of purchase price adjustments provided for in the related purchase agreements, and completion of purchase accounting procedures, related to the Henderson and Rice acquisitions.

The Company performed its required annual impairment test of goodwill during the third quarter of fiscal 2007. No impairment loss resulted from that annual impairment test.

The composition of other intangible assets and other non-current assets is as follows:

	Year Ended Fiscal March
	2007				2006
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Customer list	$	4,111	$	756	$	3,611	$	424
Trade name		2,322		2,240		2,260		1,586
Other intangible assets		436		337		436		273
Total intangible assets		6,869		3,333		6,307		2,283
Barter receivable		6,872				3,550
Prepaid pension asset		2,493
Note receivable from R&S						5,000
Investment in R&S						2,000
Other non-current assets		1,140				2,322
Total non-current assets		10,505				12,872
Total other intangible assets and non-current assets	$	17,374	$	3,333	$	19,179	$	2,283

The Company’s intangible assets are being amortized over their estimated useful lives. The weighted average useful lives of the Company’s intangible assets are 15 years for customer lists, four years for trade names and eight years for other intangible assets.

41

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Amortization of intangible assets during fiscal 2007, 2006 and 2005 totaled $1,050,000, $925,000 and $761,000, respectively.

Substantially all intangible assets are tax deductible, except for the amortization of the Tread Quarters trade name ($1 million assigned value).

Estimated future amortization of intangible assets is as follows:

Year Ending Fiscal March	(Dollars in thousands)
2008	$	486
2009		347
2010		343
2011		343
2012		252
Thereafter		1,765
	$	3,536

NOTE 6 — LONG-TERM DEBT

Long-term debt consists of the following:

	March 31,		March 25,
	2007		2006
	(Dollars in thousands)
Revolving Credit Facility, LIBOR-based(a)	$	20,500	$	34,500
Mortgage Note Payable, non-interest bearing, secured by warehouse and office land, due in one installment in 2015		660		660
Obligations under capital leases at various interest rates, secured by store properties and certain equipment, due in installments through 2026		32,715		11,656
Note payable, 7.75%, partially secured by store equipment, due in installments through 2008		18		36
		53,893		46,852
Less – Current portion		1,368		525
	$	52,525	$	46,327

(a) The London Interbank Offered Rate (LIBOR) at March 31, 2007 was 5.32%.

In March 2003, the Company renewed its existing credit facility agreement. The amended financing arrangement consisted of an $83.4 million Revolving Credit facility and a non-amortizing credit loan (formerly synthetic lease financing) totaling $26.6 million.

In July 2005, the Company entered into a five-year, $125 million Revolving Credit Facility agreement (the “Credit Facility”) with five banks in the lending syndicate that provided the Company’s prior financing arrangement. Interest only is payable monthly throughout the Credit Facility’s term. The Credit Facility increased the Company’s borrowing capacity by $15 million to $125 million and included a provision allowing the Company to expand the amount of the overall facility to $160 million, subject to existing or new lender(s) commitments at that time. The terms of the Credit Facility immediately reduced the spread the Company pays on LIBOR-based borrowings by 50 basis points and permit the payment of cash dividends not to exceed 25% of the preceding year’s net income. Additionally, the Credit Facility is not secured by the Company’s real property, although the Company

42

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

has entered into an agreement not to encumber its real property, with certain permissible exceptions. Other terms of the Credit Facility are generally consistent with the Company’s prior financing agreement.

In January 2007, the Company amended the Credit Facility to: 1) allow stock buybacks subject to the Company being able to meet its existing financial covenants; 2) extend the termination date by 18 months to January 2012; and 3) increase the accordion feature by $40 million, which allows the Company to expand the amount of the overall facility to $200 million.

Within the aforementioned $125 million Revolving Credit facility, the Company has available a sub-facility of $20 million for the purpose of issuing standby letters of credit. The line requires fees aggregating .88% annually of the face amount of each standby letter of credit, payable quarterly in arrears. There were $11.6 million in outstanding letters of credit under this line at March 31, 2007.

In addition, the Company has financed certain store properties and vehicles with capital leases, which amount to $32.7 million and are due in installments through 2026.

During fiscal 1995, the Company purchased 12.7 acres of land for $.7 million from the City of Rochester, New York, on which its office/warehouse facility is located. The City has provided financing for 100% of the cost of the land via a 20-year non-interest bearing mortgage, all due and payable in 2015.

To finance its office/warehouse building, the Company obtained permanent mortgage financing in fiscal 1996 consisting of a 10-year mortgage for $2.9 million and an eight-year term loan in the amount of $.7 million. In October 2005, the Company paid the remaining $1.5 million outstanding on the mortgage for the headquarters office/warehouse building.

Certain of the Company’s long-term debt agreements require, among other things, the maintenance of specified interest and rent coverage ratios and amounts of net worth. They also contain restrictions on dividend payments. The Company is in compliance with these requirements at March 31, 2007. These agreements permit mortgages and specific lease financing arrangements with other parties with certain limitations.

From time to time, the Company enters into interest rate hedge agreements, which involve the exchange of fixed and floating rate interest payments periodically over the life of the agreement without the exchange of the underlying principal amounts. The differential to be paid or received is accrued as interest rates change and is recognized over the life of the agreements as an offsetting adjustment to interest expense. Currently the Company has no hedge agreements. The most recent hedge agreement expired in October 2005.

Aggregate debt maturities over the next five years and thereafter are as follows:

	Capital Leases
	Aggregate		Imputed			All Other
Year Ending Fiscal March	Amount		Interest			Debt		Total
	(Dollars in thousands)
2008	$	4,547	$	(3,197	)	$	18	$	1,368
2009		4,483		(3,035	)				1,448
2010		4,409		(2,855	)				1,554
2011		4,229		(2,653	)				1,576
2012		3,980		(2,506	)		20,500		21,974
Thereafter		41,242		(15,929	)		660		25,973
Total								$	53,893

43

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 7 — FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial instruments consist of the following:

	March 31, 2007					March 25, 2006
	Notional	Carrying		Fair		Notional	Carrying		Fair
	Amount	Amount		Value		Amount	Amount		Value
	(Dollars in thousands)
Liabilities
Long-term debt, including current portion and excluding capital leases		$	21,178	$	20,941		$	35,196	$	34,921

The fair value of cash and cash equivalents, accounts receivable and accounts payable approximated book value at March 31, 2007 and March 25, 2006 because their maturity is generally less than one year in duration. The fair value of long-term debt was estimated based on discounted cash flow analyses using either quoted market prices for the same or similar issues, or the current interest rates offered to the Company for debt with similar maturities.

NOTE 8 —  INCOME TAXES

The components of the provision for income taxes are as follows:

	Year Ended Fiscal March
	2007			2006			2005
	(Dollars in thousands)
Currently payable –
Federal	$	10,541		$	13,754		$	9,076
State		1,056			1,192			937
		11,597			14,946			10,013
Deferred –
Federal		914			(695	)		1,414
State		(97	)		(111	)		306
		817			(806	)		1,720
Total	$	12,414		$	14,140		$	11,733

44

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Deferred tax (liabilities) assets consist of the following:

	March 31,			March 25,			March 26,
	2007			2006			2005
	(Dollars in thousands)
Property and equipment	$	(2,830	)	$	(4,183	)	$	(5,835	)
Pension		(1,982	)		(1,924	)		(1,969	)
Goodwill		(1,377	)		(1,036	)		(251	)
Prepaid expenses		(624	)		(731	)		(684	)
Other		(124	)		(104	)		(362	)
Total deferred tax liabilities		(6,937	)		(7,978	)		(9,101	)
Deferred rent		2,593			2,961			3,122
Warranty and other reserves		1,679			1,560			2,253
Insurance reserves		1,949			1,480			1,576
Stock options		1,157			932			932
Other		3,595			2,102			1,480
Subtotal deferred tax assets		10,973			9,035			9,363
Valuation allowance		(78	)
Total deferred tax assets		10,895			9,035			9,363
Net deferred tax assets	$	3,958		$	1,057		$	262

The Company has $.5 million of state net operating loss carryforwards available as of March 31, 2007. The carryforwards expire in varying amounts through 2027.

The Company believes it is more likely than not that future tax benefits will be realized as a result of current and future income, other than the State of Ohio.

In 2007, the Company recorded a valuation allowance of $.1 million due primarily to the assessment of the realizability of the deferred tax asset related to the Company’s state net operating loss carryforwards, specifically its Ohio net operating loss carryforward. Due to changes to its tax law by the State of Ohio, a Commercial Activities Tax measured by gross receipts has been enacted. As a result, the Company believes that the Ohio net operating losses will not be realized before the date of full transition to the Commercial Activity Tax. There was no valuation allowance required for the fiscal years ended March 25, 2006 and March 26, 2005.

A reconciliation between the U.S. Federal statutory tax rate and the effective tax rate reflected in the accompanying financial statements is as follows:

	Year Ended Fiscal March
	2007						2006				2005
	Amount			Percent			Amount		Percent		Amount			Percent
	(Dollars in thousands)
Federal income tax based on statutory tax rate applied to income before taxes	$	12,140			35.0		$	12,882		35.0	$	10,991			35.0
State income tax, net of federal income tax benefit		623			1.8			703		1.9		804			2.6
Other		(349	)		(1.0	)		555		1.5		(62	)		(.2	)
	$	12,414			35.8		$	14,140		38.4	$	11,733			37.4

45

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 9 — CONVERTIBLE PREFERRED STOCK AND COMMON STOCK

A summary of the changes in the number of shares of common stock, Class C preferred stock and treasury stock is as follows:

			Class C
	Common		Convertible
	Stock		Preferred		Treasury
	Shares		Stock Shares		Stock
	Issued		Issued		Shares
Balance at March 27, 2004		13,315,253		65,000		325,200
Shares issued in connection with Henderson Acquisition		240,206
Stock options exercised		146,996
Balance at March 26, 2005		13,702,455		65,000		325,200
Shares issued in connection with warrants exercised		100,000
Stock options exercised		174,175
Purchase of treasury shares						6,428
Balance at March 25, 2006		13,976,630		65,000		331,628
Stock options exercised		365,421
Purchase of treasury shares						2,500
Balance at March 31, 2007		14,342,051		65,000		334,128

In September 2003, the Board of Directors authorized an amendment to the Company’s Restated Certificate of Incorporation to increase the number of authorized shares of Common Stock from 15,000,000 to 20,000,000. This amendment was approved by the Company’s shareholders in December 2003. Additionally, the Board authorized a three-for-two stock split that was paid in October 2003 to shareholders of record as of October 21, 2003. All share amounts herein have been adjusted for this stock split.

In connection with the March 2005 Henderson Acquisition, the Company issued 240,206 shares of Common Stock to the seller. (See Note 2.)

Holders of at least 60% of the Class C preferred stock must approve any action authorized by the holders of common stock. In addition, there are certain restrictions on the transferability of shares of Class C preferred stock. In the event of a liquidation, dissolution or winding-up of the Company, the holders of the Class C preferred stock would be entitled to receive $1.50 per share out of the assets of the Company before any amount would be paid to holders of common stock. The conversion value of the Class C convertible preferred stock is $.144 per share at March 31, 2007.

Under the 1984 and 1987 Incentive Stock Option Plans, 1,091,508 shares (as retroactively adjusted for stock dividends and the stock split) of common stock were reserved for issuance to officers and key employees. The 1989 Incentive Stock Option Plan authorized an additional 1,126,558 shares (as retroactively adjusted for stock dividends and the stock split) for issuance.

In November 1998, the Board of Directors authorized the 1998 Incentive Stock Option Plan, reserving 1,125,000 shares (as retroactively adjusted for the stock split) of common stock for issuance to officers and key employees. The Plan was approved by shareholders in August 1999.

In May 2003, the Board of Directors authorized an additional 300,000 shares (as retroactively adjusted for the stock split) for issuance under the 1998 Plan, which was approved by shareholders in August 2003. In June 2005, the Compensation Committee of the Board of Directors (the “Compensation Committee”) authorized an additional 360,000 shares, which were approved by shareholders in August 2005.

46

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Generally, options vest within the first five years of their term, and have a duration of ten years. See Note 1 for a discussion of the fiscal 2006 acceleration of vesting of all unvested stock options. Outstanding options are exercisable for various periods through January 2017.

A summary of changes in outstanding stock options is as follows:

	Weighted Average								Available
	Exercise Price		Outstanding			Exercisable			For Grant
At March 27, 2004	$	8.32		1,372,358			1,011,979			414,204
Granted	$	23.67		108,213						(108,213	)
Became exercisable							133,421
Exercised	$	9.43		(92,288	)		(92,288	)
Canceled	$	15.42		(38,863	)		(4,889	)		38,758
At March 26, 2005	$	9.26		1,349,420			1,048,223			344,749
Authorized										360,000
Granted	$	26.09		305,400						(305,400	)
Became exercisable							576,133
Exercised	$	10.67		(138,997	)		(138,997	)
Canceled	$	18.25		(36,748	)		(6,284	)		39,913
At March 25, 2006	$	12.37		1,479,075			1,479,075			439,262
Granted	$	36.11		126,050						(126,050	)
Became exercisable	$	29.53					3,000
Exercised	$	9.82		(351,747	)		(351,747	)
Canceled	$	29.64		(14,544	)		(6,694	)		14,364
At March 31, 2007	$	15.31		1,238,834			1,123,634			327,576

The weighted-average remaining contractual term and aggregate intrinsic value of all options outstanding at March 31, 2007 was 5.0 years and $24.7 million, respectively. The weighted-average remaining contractual term and aggregate intrinsic value of all options exercisable at March 31, 2007 was 4.5 years and $24.7 million, respectively.

A summary of the status of and changes in nonvested stock options granted as of and during fiscal year 2007 is presented below:

				Weighted Average
				Grant-Date Fair Value
	Shares			(per Share)
Nonvested at March 26, 2006		0
Granted		126,050		$	11.74
Vested		(3,000	)	$	9.10
Canceled		(7,850	)	$	11.98
Nonvested at March 31, 2007		115,200		$	11.80

47

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes information about fixed stock options outstanding at March 31, 2007:

	Options Outstanding						Options Exercisable
			Weighted		Weighted				Weighted
			Average		Average				Average
Range of	Shares		Remaining		Exercise		Shares		Exercise
Exercise Prices	Under Option		Life		Price		Under Option		Price
$ 5.21 - $ 7.00		477,112		1.77		5.24		477,112		5.24
$ 7.01 - $15.00		308,612		5.15		11.91		308,612		11.91
$15.01 - $27.00		332,591		7.89		25.41		332,591		25.41
$27.01 - $37.88		120,519		9.20		36.00		5,319		30.66

In August 1994, the Board of Directors authorized a non-employee directors’ stock option plan which was approved by shareholders in August 1995. The Plan initially reserved 100,278 shares of common stock (as retroactively adjusted for stock dividends and the stock split), and provides for (i) the grant to each non-employee director as of August 1, 1994 of an option to purchase 4,559 shares of the Company’s common stock (as retroactively adjusted for stock dividends and the stock split) and (ii) the annual grant to each non-employee director of an option to purchase 4,559 shares (as retroactively adjusted for stock dividends and the stock split) on the date of the annual meeting of shareholders beginning in 1995. The options expire ten years from the date of grant at an exercise price equal to the fair market value of the Company’s common stock on the date of grant. Options issued to directors generally vest immediately upon issuance.

In May 1997 and May 1999, the Board of Directors authorized an additional 102,375 and 97,500 shares, respectively (both amounts as retroactively adjusted for stock dividends and the stock split) for issuance under the Plan. These amounts were approved by shareholders in August 1997 and August 1999, respectively.

In May 2003, the Board of Directors authorized the 2003 Non-Employee Directors’ Stock Option Plan, reserving 90,000 shares (as retroactively adjusted for the stock split) of common stock for issuance to outside directors, which was approved by shareholders in August 2003. The provisions of the Plan are similar to the 1994 Non-Employee Directors’ Stock Option Plan, except that options expire five years from the date of grant.

In June 2005, the Compensation Committee authorized an additional 50,000 shares, which were approved by shareholders in August 2005.

A summary of changes in these stock options is as follows:

	Option Price								Available
	Per Share		Outstanding			Exercisable			for Grant
At March 27, 2004	$	10.27		259,823			259,823			80,186
Exercised	$	8.83		(54,700	)		(54,700	)
Granted	$	22.86		31,913			31,913			(31,913	)
At March 26, 2005	$	12.30		237,036			237,036			48,273
Authorized										50,000
Exercised	$	12.27		(35,178	)		(35,178	)
Granted	$	28.14		31,913			31,913			(31,913	)
At March 25, 2006	$	14.47		233,771			233,771			66,360
Exercised	$	11.34		(13,674	)		(13,674	)
Granted	$	30.93		31,913			31,913			(31,913	)
At March 31, 2007	$	16.72		252,010			252,010			34,447

48

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The weighted-average remaining contractual term and aggregate intrinsic value of all options outstanding at March 31, 2007 was 2.8 years and $4.6 million, respectively. The weighted-average remaining contractual term and aggregate intrinsic value of all options exercisable at March 31, 2007 was 2.8 years and $4.6 million, respectively.

A summary of the status of and changes in nonvested stock options granted as of and during fiscal year 2007 is presented below:

				Weighted Average
				Grant-Date Fair Value
	Shares			(per Share)
Nonvested at March 26, 2006		0
Granted		31,913		$	9.12
Vested		(31,913	)	$	9.12
Nonvested at March 31, 2007		0

The following table summarizes information about fixed stock options outstanding at March 31, 2007:

	Options Outstanding						Options Exercisable
			Weighted		Weighted				Weighted
			Average		Average				Average
Range of	Shares		Remaining		Exercise		Shares		Exercise
Exercise Prices	Under Option		Life		Price		Under Option		Price
$5.00 – $8.50		68,385		2.34		6.56		68,385		6.56
$8.51 – $14.00		63,821		3.21		10.55		63,821		10.55
$14.01 – $25.00		55,997		1.88		21.56		55,997		21.56
$25.01 – $30.93		63,807		3.86		29.54		63,807		29.54

During the fiscal year ended March 31, 2007, the fair value of awards vested under the Company’s stock plans was $.3 million.

The aggregate intrinsic value in the preceding tables is based on the Company’s closing stock price of $35.10 as of the last trading day of the period ended March 31, 2007. The aggregate intrinsic value of options (the amount by which the market price of the stock on the date of exercise exceeded the exercise price of the option) exercised during the fiscal year ended March 31, 2007 was $9.3 million. As of March 31, 2007, there was $581,000 of unrecognized compensation expense related to non-vested fixed stock options that is expected to be recognized over a weighted average period of 3.2 years.

Cash received from option exercise under all stock option plans was $3.6 million and $1.9 million for the fiscal year ended March 31, 2007 and March 25, 2006, respectively.

The Company issues new shares of common stock upon exercise of stock options.

49

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 10 — EARNINGS PER COMMON SHARE

The following is a reconciliation of basic and diluted earnings per common share for the respective years:

	Year Ended Fiscal March
	2007			2006			2005
	(Amounts in thousands, except per share data)
Numerator for earnings per common share calculation:
Net Income	$	22,271		$	22,666		$	19,669
Less: Preferred stock dividends		(175	)		(102	)
Income available to common stockholders	$	22,096		$	22,564		$	19,669
Denominator for earnings per common share calculation:
Weighted average common shares, basic		13,878			13,531			13,102
Effect of dilutive securities:
Preferred stock		676			676			676
Stock options and warrants		698			815			784
Weighted average common shares, diluted		15,252			15,022			14,562
Basic earnings per common share:	$	1.59		$	1.67		$	1.50
Diluted earnings per common share:	$	1.46		$	1.51		$	1.35

The computation of diluted earnings per common share for fiscal years 2007, 2006 and 2005 excludes the effect of assumed exercise of approximately 116,000, 2,000 and 56,000, respectively, of stock options and warrants, as the exercise price of these options and warrants was greater than the average market value of the Company’s Common Stock for those periods, resulting in an anti-dilutive effect on diluted earnings per share.

NOTE 11 — OPERATING LEASES AND OTHER COMMITMENTS

The Company leases retail facilities under noncancellable lease agreements which expire at various dates through fiscal year 2027. In addition to stated minimum payments, certain real estate leases have provisions for contingent rentals when retail sales exceed specified levels. Generally, the leases provide for renewal for various periods at stipulated rates. Most of the facilities’ leases require payment of property taxes, insurance and maintenance costs in addition to rental payments, and several provide an option to purchase the property at the end of the lease term.

In recent years, the Company has entered into agreements for the sale/leaseback of certain stores and into agreements for the sale/leaseback of store equipment. The Company has lease renewal options under the real estate agreements at projected future fair market values and has both purchase and renewal options under the equipment lease agreements. Realized gains are deferred and are credited to income as rent expense adjustments over the lease terms.

50

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Future minimum payments required under noncancellable leases (including closed stores) are as follows:

			Less –
			Sublease
Year Ending Fiscal March	Leases		Income			Net
	(Dollars in thousands)
2008	$	21,542	$	(734	)	$	20,808
2009		18,892		(599	)		18,293
2010		15,521		(364	)		15,157
2011		10,599		(155	)		10,444
2012		7,669		(107	)		7,562
Thereafter		26,191		(359	)		25,832
Total	$	100,414	$	(2,318	)	$	98,096

Rent expense under operating leases, net of sublease income, totaled $20,684,000, $18,505,000 and $18,514,000 in fiscal 2007, 2006 and 2005, respectively, including contingent rentals of $347,000, $323,000 and $316,000 in each respective fiscal year. Sublease income totaled $440,000, $367,000 and $311,000, respectively, in fiscal 2007, 2006 and 2005.

The Company has entered into various contracts with parts and tire suppliers, certain of which require the Company to buy up to 100% of its annual purchases of specific products including brakes, exhaust, oil and ride control at market prices. The agreements expire at various dates through January 2012. The Company believes these agreements provide it with high quality, branded merchandise at preferred pricing, along with strong marketing and training support.

The Company amended its employment agreement (the “CEO Agreement”) in May 2005 with Robert G. Gross, its President and Chief Executive Officer. The CEO Agreement, which provides for a base salary plus a bonus, subject to the discretion of the Compensation Committee, has a term ending December 31, 2007. The CEO Agreement also provided for a special retention bonus of $250,000 payable annually which began on January 1, 2003 and ended in 2006. The CEO Agreement includes a covenant against competition with the Company for two years after termination. The CEO Agreement provides the executive with a minimum of one year’s salary and certain additional rights in the event of a termination without cause (as defined therein), or a termination in the event of change in control (as defined therein).

The Company amended its employment agreement effective May 19, 2005, with Catherine D’Amico, its Executive Vice President and Chief Financial Officer, and, in July 2005, entered into an employment agreement with Joseph Tomarchio Jr., its Executive Vice President of Store Operations, effective May 19, 2005. The agreements each provide a base salary to be reviewed annually, plus a bonus, based upon the Company’s achievement of performance targets set by the Compensation Committee. Ms. D’Amico’s and Mr. Tomarchio’s agreements both expire on June 30, 2008. The agreements include a covenant against competition with the Company for up to two years after termination. The agreements provide Ms. D’Amico and Mr. Tomarchio with a minimum of one year’s salary and certain additional rights in the event of a termination without cause (as defined therein), or a termination in the event of a change in control (as defined therein).

NOTE 12 — EMPLOYEE RETIREMENT AND PROFIT SHARING PLANS

The Company sponsors a noncontributory defined benefit pension plan for Monro employees and the former Kimmel Automotive, Inc. employees. In fiscal 2005, the previously separate Monro and Kimmel pension plans were merged. The plan provides benefits to certain full-time employees who were employed with Monro and with Kimmel prior to April 2, 1998 and May 15, 2001, respectively. Effective as of those dates, each company’s Board of Directors approved plan amendments whereby the benefits of each of the defined benefit plans would be frozen and the plans would be closed to new participants. Prior to these amendments, coverage under the plans began after

51

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

employees completed one year of service and attainment of age 21. Benefits under both plans, and now the merged plans, are based primarily on years of service and employees’ pay near retirement. The funding policy for the Company’s merged plan is consistent with the funding requirements of Federal law and regulations. The measurement date used to determine the pension plan measurements disclosed herein is March 31 for both 2007 and 2006.

See Note 1, “Significant Accounting Policies” for information regarding the Company’s adoption of SFAS 158 as of March 31, 2007. SFAS 158 requires recognition of the overfunded or underfunded status of defined benefit plans as an asset or liability. Accordingly, the overfunded status of the Company’s defined benefit plan is recognized as an asset in the Consolidated Statement of Financial Position as of March 31, 2007.

The funded status of each plan is set forth below:

	Year Ended
	Fiscal March
	2007			2006
Change in Plan Assets:
Fair value of plan assets at beginning of year	$	13,683		$	12,824
Actual return on plan assets		1,870			1,403
Employer contribution					97
Benefits paid		(567	)		(641	)
Fair value of plan assets at end of year		14,986			13,683
Change in Projected Benefit Obligation:
Benefit obligation at beginning of year		12,699			12,421
Interest cost		718			702
Actuarial (gain) loss		(357	)		217
Benefits paid		(567	)		(641	)
Benefit obligation at end of year		12,493			12,699
Funded status of plan	$	2,493			984
Unrecognized net loss					3,901
Net amount recognized				$	4,885

The projected and accumulated benefit obligations were equivalent at March 31, 2007 and March 31, 2006.

Amounts recognized in accumulated other comprehensive loss, as a result of the adoption of SFAS 158 consist of:

	Year Ended
	Fiscal March
	2007
	(Dollars in thousands)
Net transition obligation	$	0
Prior service cost		0
Net actuarial loss		2,463
Total	$	2,463

52

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Pension (income) cost included the following components:

	Year Ended Fiscal March
	2007			2006			2005
Interest cost on projected benefit obligation	$	718		$	702		$	630
Expected return on plan assets		(1,075	)		(994	)		(814	)
Amortization of unrecognized actuarial loss		286			383			233
Net pension (income) cost	$	(71	)	$	91		$	49

The weighted-average assumptions used to determine benefit obligations are as follows:

	Year Ended
	Fiscal March
	2007			2006
Discount rate		6.00	%		5.75	%

The weighted-average assumptions used to determine net periodic pension costs are as follows:

	Year Ended Fiscal March
	2007		2006		2005
Discount rate		5.75%		5.75%		5.75%
Expected long-term return on assets		8.00%		8.00%		8.00%

The expected long-term rate of return on plan assets is established based upon assumptions related to historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio.

The investment strategy of the plan is to conservatively manage the assets in order to meet the plan’s long-term obligations while maintaining sufficient liquidity to pay current benefits. This is achieved by holding equity investments while investing a portion of assets in long duration bonds to match the long-term nature of the liabilities. Going forward, the Company’s general target allocation for the plan is 40% fixed income and 60% equity securities.

The Company’s weighted average asset allocations, by asset category, are as follows:

	Year Ended
	Fiscal March
	2007			2006
Cash and cash equivalents		1.8	%		5.4	%
Fixed income		38.2	%		47.4	%
Equity securities		60.0	%		47.2	%
Total		100.0	%		100.0	%

There are no required or expected contributions in fiscal 2008 to the plan.

53

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following pension benefit payments are expected to be paid:

	Year Ended
	Fiscal March
	(Dollars in thousands)
2008	$	504
2009		532
2010		516
2011		507
2012		541
2013-2017		3,136
Total	$	5,736

The Company has a 401(K)/Profit Sharing Plan that covers full-time employees who meet the age and service requirements of the plan. The 401(K) salary deferral option was added to the plan during fiscal 2000. The first employee deferral occurred in March 2000. The Company makes matching contributions consistent with the provisions of the plan. The Company’s matching contributions for fiscal 2007, 2006 and 2005 amounted to approximately $634,000, $592,000 and $551,000, respectively. The Company may also make annual profit sharing contributions to the plan at the discretion of the Compensation Committee.

The Company has a deferred compensation plan (the “Deferred Compensation Plan”) to provide an opportunity for additional tax-deferred savings to a select group of management or highly compensated employees. The Deferred Compensation Plan permits participants to defer all or any portion of the compensation that would otherwise be payable to them for the calendar year. In addition, the Company will credit to the participants’ accounts such amounts as would have been contributed to the Company’s 401(K)/Profit Sharing Plan but for the limitations that are imposed under the Internal Revenue Code based upon the participants’ status as highly compensated employees. The Company may also make such additional discretionary allocations as are determined by the Compensation Committee. No amounts credited under the Deferred Compensation Plan are funded and the Company maintains accounts to reflect the amounts owed to each participant. At least annually, the accounts are credited with earnings or losses calculated on the basis of an interest rate or other formula as determined by the Compensation Committee. The total liability recorded in the Company’s financial statements at March 31, 2007 related to the Deferred Compensation Plan was $470,000.

The Company’s management bonus plan provides for the payment of annual cash bonus awards to participating employees, as selected by the Board of Directors, based primarily on the Company’s attaining pre-tax income targets established by the Board of Directors. Charges to expense applicable to the management bonus plan totaled $96,000, $1,053,000 and $69,000 for the fiscal years ended March 2007, 2006 and 2005, respectively.

NOTE 13 — RELATED PARTY TRANSACTIONS

The Company is currently a party to leases for certain facilities where the lessor is an officer of the Company, and in previous years, from (a) officers and directors of the Company, (b) partnerships in which such persons had interests or (c) trusts of which members of their families were beneficiaries. Payments under such operating and capital leases amounted to $588,000, $573,000 and $2,190,000 for the fiscal years ended March 2007, 2006 and 2005, respectively. Six new leases were assumed in March 2004 in connection with the Mr. Tire Acquisition. Amounts payable under these lease agreements totaled $40,000 at March 26, 2005. No amounts were payable at March 31, 2007 or March 25, 2006. No related party leases, other than the six assumed as part of the Mr. Tire Acquisition in March 2004, have been entered into, and no new leases are contemplated.

The Company has a management agreement with an investment banking firm associated with a principal shareholder/director of the Company to provide financial advice. The agreement provides for an annual fee of

54

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$300,000, plus reimbursement of out-of-pocket expenses. During each of the fiscal years 2007, 2006 and 2005, the Company incurred fees of $300,000, under this agreement. In addition, this investment banking firm, from time to time, provides additional investment banking services to the Company for customary fees. Approximately half of all payments made to the investment banking firm under the management agreement are paid to another principal shareholder/director of the Company.

NOTE 14 — SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

The following transactions represent non-cash investing and financing activities during the periods indicated:

Year ended March 31, 2007

In connection with the ProCare Acquisition (See Note 2), liabilities were assumed as follows:

Fair value of assets acquired	$	23,135,000
Goodwill recorded		15,152,000
Cash paid in FY06		(1,600,000	)
Cash paid in FY07, net of cash acquired		(13,109,000	)
Liabilities assumed	$	23,578,000

In connection with the recording of capital leases, the Company increased both fixed assets and long-term debt by $2,217,000.

In connection with the implementation of SFAS 158, other comprehensive income increased by $1,478,000, other non-current assets decreased by $2,463,000 and the deferred income tax liability was increased by $985,000.

In connection with the accounting for income tax benefits related to the exercise of stock options, the Company reduced current liabilities and increased paid-in capital by $1,076,000.

Year ended March 25, 2006

In connection with the disposal of assets, the Company reduced both fixed assets and other long-term liabilities by $147,000.

In connection with the recording of capital leases, the Company increased both fixed assets and long-term debt by $3,068,000.

During the twelve months ended March 25, 2006, the Company recorded purchase accounting adjustments for the Rice Tire Acquisition that increased goodwill by $506,000 and reduced fixed assets by $506,000.

In connection with recording the value of the Company’s interest rate swap contracts, other comprehensive income increased by $17,000, other long-term liabilities decreased by $28,000 and the deferred income tax liability was increased by $11,000.

In connection with the accounting for income tax benefits related to the exercise of stock options, the Company reduced current liabilities and increased paid-in capital by $711,000.

Year ended March 26, 2005

In connection with the disposal of assets, the Company reduced both fixed assets and other current liabilities by $266,000.

In connection with the recording of capital leases, the Company increased both fixed assets and long-term debt by $350,000.

55

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In connection with recording the value of the Company’s interest rate swap contracts, other comprehensive income increased by $58,000, other long-term liabilities decreased by $92,000 and the deferred income tax liability was increased by $34,000.

In fiscal 2005, the Company eliminated its minimum liability related to its defined benefit pension plan, which decreased current liabilities and deferred tax assets by $545,000 and $207,000, respectively, and increased other comprehensive income by $338,000.

In connection with the accounting for income tax benefits related to the exercise of stock options, the Company decreased current liabilities and increased additional paid-in capital by $644,000.

During the twelve months ended March 2005, the Company recorded purchase accounting adjustments for the Mr. Tire Acquisition that increased goodwill by $836,000 and reduced deferred income tax assets and other acquired intangible assets by the same amount.

In connection with the Rice and Henderson Acquisitions (Note 2), liabilities were assumed as follows:

Fair value of assets acquired	$	11,635,000
Common stock issued		(6,500,000	)
Cash paid, net of cash acquired		(4,539,000	)
Liabilities assumed	$	596,000

In addition, the Company recorded buildings and capital lease obligations of approximately $6 million for nine new capital leases entered into in connection with the fiscal 2005 acquisitions.

Interest and Income Taxes Paid

	Year Ended Fiscal March
	2007		2006		2005
	(Dollars in thousands)
Cash paid during the year:
Interest, net	$	4,471	$	3,373	$	2,265
Income taxes	$	10,510	$	12,977	$	10,375

NOTE 15 — LITIGATION

The Company and its subsidiaries are involved in legal proceedings, claims and litigation arising in the ordinary course of business. In management’s opinion, the outcome of such current legal proceedings is not expected to have a material effect on future operating results or on the Company’s consolidated financial position.

NOTE 16 — CASH DIVIDEND

In May 2005, the Company’s Board of Directors declared its intention to pay a regular quarterly cash dividend during fiscal 2006 of $.05 per common share or common share equivalent to be paid to shareholders beginning with the first quarter of fiscal 2006. In May 2006, the Company’s Board of Directors declared its intention to pay a regular quarterly cash dividend during fiscal 2007 of $.07 per share to be paid beginning with the first quarter of 2007. The dividend amounted to $175,000 and $102,000, respectively for preferred shareholders and $3,610,000 and $2,035,000, respectively for common shareholders in 2007 and 2006. The declaration of, and any determination as to the payment of, future dividends will be at the discretion of the Board of Directors and will depend on the Company’s financial condition, results of operations, capital requirements, compliance with charter and contractual restrictions, and such other factors as the Board of Directors deems relevant.

56

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 17 — SUBSEQUENT EVENTS

In May 2007, the Company’s Board of Directors declared a regular quarterly cash dividend of $.09 per common share or common share equivalent to be paid to shareholders of record as of July 17, 2007. The dividend will be paid on July 27, 2007.

In May 2007, the Company received a $325,000 settlement from R&S and, as a result, all claims against the Company, GDJ Retail, LLC, Glen Langberg and R&S have been dismissed (See Note 2.)

In May 2007, the Company announced its intention to declare a three-for-two stock split of the Company’s common stock to be effected in the form of a 50% stock dividend. The stock split is subject to shareholder approval of an increase in the number of authorized common shares from 20,000,000 to 45,000,000. The shareholders vote to increase the number of shares of authorized common stock will take place on August 7, 2007 at Monro’s regularly scheduled Annual Shareholder’s meeting.

In January 2007, the Company’s Board of Directors approved a share repurchase program authorizing the company to purchase up to $30 million of its common stock. In conjunction with this program the Company purchased 115,900 shares at an average price per share of $34.79 during the months of April and May 2007.

57

MONRO MUFFLER BRAKE, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following table sets forth consolidated statement of income data by quarter for the fiscal years ended March 2007 and 2006. Individual line items summed by quarters may not agree to the annual amounts reported due to rounding.(b)

	Fiscal Quarter Ended
	June			Sept.		Dec.		March
	2006			2006		2006		2007
	(Amounts in thousands, except per share data)
Sales	$	98,445		$	107,285	$	103,787	$	107,708
Cost of sales		57,409			63,181		63,436		66,777
Gross profit		41,036			44,104		40,351		40,931
Operating, selling, general and administrative expensed		29,612			32,108		30,282		34,437
Operating income		11,424			11,996		10,069		6,494
Interest expense, net		636			895		1,833		1,200
Other (income) expense, net		(627	)		2,148		451		(1,238	)
Income before provision for income taxes		11,415			8,953		7,785		6,532
Provision for income taxes		3,853			3,357		2,919		2,285
Net income	$	7,562		$	5,596	$	4,866	$	4,247
Basic earnings per share	$	.55		$	.40	$	.35	$	.30
Diluted earnings per share(a)	$	.50		$	.37	$	.32	$	.28
Weighted average number of common shares used in computing earnings per share
Basic		13,705			13,848		13,951		14,001
Diluted		15,215			15,202		15,282		15,328

	June		Sept.			Dec.		March
	2005		2005			2005		2006
	(Amounts in thousands, except per share data)
Sales	$	94,625	$	95,641		$	90,188	$	88,273
Cost of sales		53,922		55,897			55,300		55,796
Gross profit		40,703		39,744			34,888		32,477
Operating, selling, general and administrative expensed		26,901		26,777			27,463		26,888
Operating income		13,802		12,967			7,425		5,589
Interest expense, net		882		810			845		941
Other expense (income), net		425		(122	)		30		(834	)
Income before provision for income taxes		12,495		12,279			6,550		5,482
Provision for income taxes		4,748		4,666			2,489		2,237
Net income	$	7,747	$	7,613		$	4,061	$	3,245
Basic earnings per share	$	.58	$	.56		$	.30	$	.24
Diluted earnings per share(a)	$	.52	$	.51		$	.27	$	.21
Weighted average number of common shares used in computing earnings per share
Basic		31,395		13,523			13,583		13,626
Diluted		14,866		14,986			15,038		15,135

(a) Earnings per share for each period was computed by dividing net income by the weighted average number of shares of Common Stock and Common Stock Equivalents outstanding during the respective quarters.

(b) There were no material, extraordinary, unusual or infrequently occurring items recognized in either of the fourth quarters shown. Fiscal 2007 was a 53 week year.

58

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of disclosure controls and procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports that the Company files or submits pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Security and Exchange Commission’s (SEC) rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In conjunction with the close of each fiscal quarter and under the supervision of the Chief Executive Officer and Chief Financial Officer, the Company conducts an evaluation of the effectiveness of the Company’s disclosure controls and procedures. It is the conclusion of the Company’s Chief Executive Officer and Chief Financial Officer, based upon an evaluation completed as of the end of the most recent fiscal quarter reported on herein, and subject to the limitations discussed below, that the Company’s disclosure controls and procedures were sufficiently effective in ensuring that any material information relating to the Company was recorded, processed, summarized and reported to its principal officers to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of March 31, 2007, the end of our fiscal year. Management has reviewed the results of its assessment with the Audit Committee of the Board of Directors. Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2007 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Inherent Limitations on Effectiveness of Controls

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls and procedures or its internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of

59

fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls’ effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Changes in Internal Controls over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2007 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART III

Item 10. Directors and Executive Officers of the Company

Information concerning the directors and executive officers of the Company is incorporated herein by reference to the section captioned “Election of Directors” and “Executive Officers”, respectively, in the Proxy Statement.

Information concerning required Section 16(a) disclosure is incorporated herein by reference to the section captioned “Compliance with Section 16(a) of the Exchange Act” in the Proxy Statement.

The Company’s directors and executive officers are subject to the provisions of the Company’s Code of Ethics for Management Employees, Officers and Directors (the “Code”), which is available in the Investor Information section of the Company’s web site, www.monro.com. Changes to the Code and any waivers are also posted on the Company’s web site in the Investor Information section.

Item 11. Executive Compensation

Information concerning executive compensation is incorporated herein by reference to the section captioned “Executive Compensation” in the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information concerning the Company’s shares authorized for issuance under its equity compensation plans at March 31, 2007 and security ownership of certain beneficial owners and management is incorporated herein by reference to the sections captioned “Security Ownership of Principal Shareholders, Directors and Executive Officers” and “Equity Compensation Plan Information” in the Proxy Statement.

Item 13. Certain Relationships and Related Transactions and Director Independence

Information concerning certain relationships and related transactions is incorporated herein by reference to the sections captioned “Compensation Committee Interlocks and Insider Participation” and “Certain Transactions” in the Proxy Statement.

Item 14. Principal Accounting Fees and Services

Information concerning the Company’s principal accounting fees and services is incorporated herein by reference to the section captioned “Approval of Independent Accountants” in the Proxy Statement.

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PART IV

Item 15. Exhibits, Financial Statement Schedules

Financial Statements

Reference is made to Item 8 of Part II hereof.

Financial Statement Schedules

Schedules have been omitted because they are inapplicable, not required, the information is included elsewhere in the Financial Statements or the notes thereto or is immaterial. Specific to warranty reserves and related activity, as stated in the Financial Statements, these amounts are immaterial.

Exhibits

Reference is made to the Index to Exhibits accompanying this Form 10-K as filed with the Securities and Exchange Commission. The Company will furnish to any shareholder, upon written request, any exhibit listed in such Index to Exhibits upon payment by such shareholder of the Company’s reasonable expenses in furnishing any such exhibit.

61

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MONRO MUFFLER BRAKE, INC.

(Registrant)

By /s/  Robert G. Gross

Robert G. Gross

President and Chief Executive Officer

Date: June 14, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of June 14, 2007.

Signature	Title
/s/  Catherine D’Amico Catherine D’Amico	Executive Vice President-Finance, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
/s/  Richard A. Berenson* Richard A. Berenson	Director
/s/  Frederick M. Danziger* Frederick M. Danziger	Director
/s/  Donald Glickman* Donald Glickman	Director
/s/  Robert E. Mellor* Robert E. Mellor	Director
/s/  Peter J. Solomon* Peter J. Solomon	Director
/s/  Lionel B. Spiro* Lionel B. Spiro	Director
/s/  Francis R. Strawbridge* Francis R. Strawbridge	Director

*By /s/  Robert G. Gross

Robert G. Gross

Chief Executive Officer,

Director and as Attorney-in-Fact

62

INDEX TO EXHIBITS

The following is a list of all exhibits filed herewith or incorporated by reference herein:

Exhibit No.			Document
	3	.01*	Restated Certificate of Incorporation of the Company, dated July 23, 1991, with Certificate of Amendment, dated November 1, 1991. (1992 Form 10-K, Exhibit No. 3.01)
	3	.01a*	Certificate of Change of the Certificate of Incorporation of the Company, dated January 26, 1996. (August 2004 Form S-3, Exhibit 4.1(b))
	3	.01b*	Certificate of Amendment to Restated Certificate of Incorporation, dated April 15, 2004. (August 2004 Form S-3, Exhibit No. 4.1(c))
	3	.02*	Restated By-Laws of the Company, dated July 23, 1991. (Amendment No. 1, Exhibit No. 3.04)
	10	.02*	1994 Non-Employee Directors’ Stock Option Plan. (March 2001 Form S-8, Exhibit No. 4.1)**
	10	.02a*	Amendment, dated as of May 12, 1997, to the 1994 Non-Employee Directors’ Stock Option Plan. (March 2001 Form S-8, Exhibit No. 4.2)**
	10	.02b*	Amendment, dated as of May 18, 1999, to the 1994 Non-Employee Directors’ Stock Option Plan. (March 2001 Form S-8, Exhibit No. 4.3)**
	10	.02c*	Amendment, dated as of August 2, 1999, to the 1994 Non-Employee Directors’ Stock Option Plan. (2002 Form 10-K, Exhibit No. 10.02c)**
	10	.02d*	Amendment, dated as of June 12, 2002, to the 1994 Non-Employee Directors’ Stock Option Plan. (2002 Form 10-K, Exhibit No. 10.02d)**
	10	.03*	1989 Employees’ Incentive Stock Option Plan, as amended through December 23, 1992. (December 1992 Form S-8, Exhibit No. 4.3)**
	10	.03a*	Amendment, dated as of January 25, 1994, to the 1989 Employees’ Incentive Stock Option Plan. (1994 Form 10-K, Exhibit No. 10.03a and March 2001 Form S-8, Exhibit No. 4.2)**
	10	.03b*	Amendment, dated as of May 17, 1995, to the 1989 Employees’ Incentive Stock Option Plan. (1995 Form 10-K, Exhibit No. 10.03b and March 2001 Form S-8, Exhibit No. 4.3)**
	10	.03c*	Amendment, dated as of May 12, 1997, to the 1989 Employees’ Incentive Stock Option Plan. (1997 Form 10-K, Exhibit No. 10.03c and March 2001 Form S-8, Exhibit No. 4.4)**
	10	.03d*	Amendment, dated as of January 29, 1998, to the 1989 Employees’ Incentive Stock Option Plan. (1998 Form 10-K, Exhibit No. 10.03d)**
	10	.04	GUST Amendment and Restatement of the Monro Muffler Brake, Inc. Retirement Plan, dated April 1, 2002.**
	10	.04a	Amendment No. 1 to GUST Restatement, dated as of July 31, 2002.**
	10	.04b	Amendment No. 2 to GUST Restatement, dated July 31, 2002.**
	10	.04c	Amendment No. 3 to GUST Restatement, dated March 29, 2005.**
	10	.04d	Amendment No. 4 to GUST Restatement, dated December 21, 2006.**
	10	.05*	Profit Sharing Plan, amended and restated as of April 1, 1993. (1995 Form 10-K, Exhibit No. 10.05)**
	10	.05a*	Amendment, dated as of March 1, 2000, to the Profit Sharing Plan. (June 2001 Form S-8, Exhibit No. 4)**
	10	.06*	Second Amended and Restated Employment Agreement, dated November 14, 2002, by and between the Company and Robert G. Gross. (2003 Form 10-K, Exhibit No. 10.06)**
	10	.06a*	Amendment to Second Amended and Restated Employment Agreement, dated June 8, 2005. (June 2005 Form 8-K, Exhibit No. 10.1)**
	10	.07*	Employment Agreement, dated July 13, 2005 and effective May 19, 2005, by and between the Company and Joseph Tomarchio, Jr. (July 2005 Form 8-K, Exhibit No. 10.1)**
	10	.08*	1998 Employee Stock Option Plan, effective November 18, 1998. (December 1998 Form 10-Q, Exhibit No. 10.3 and March 2001 Form S-8, Exhibit No. 4)**
	10	.08a*	Amendment, dated May 20, 2003, to the 1998 Employee Stock Option Plan. (2004 Form 10-K, Exhibit No. 10.08a)**

63

Exhibit No.			Document
	10	.08b*	Amendment, dated June 8, 2005, to the 1998 Employee Stock Option Plan. (April 2006 Form S-8 for the 1998 Plan, Exhibit No. 4.2)**
	10	.09*	Kimmel Automotive, Inc. Pension Plan, as amended and restated effective January 1, 1989, adopted December 29, 1994. (2003 Form 10-K, Exhibit No. 10.09)**
	10	.09a*	First amendment, dated January 1, 1989, to the Kimmel Automotive, Inc. Pension Plan. (2003 Form 10-K, Exhibit No. 10.09a)**
	10	.09b*	Second amendment, dated January 1, 1989, to the Kimmel Automotive, Inc. Pension Plan. (2003 Form 10-K, Exhibit No. 10.09b)**
	10	.09c*	Third amendment, dated May 2001, to the Kimmel Automotive, Inc. Pension Plan. (2003 Form 10-K, Exhibit No. 10.09c)**
	10	.10*	2003 Non-Employee Directors’ Stock Option Plan, effective August 5, 2003. (2004 Form 10-K, Exhibit No. 10.10)**
	10	.10a*	Amendment, dated June 8, 2005, to the 2003 Non-Employee Directors’ Stock Option Plan. (April 2006 Form S-8 for the 2003 Plan, Exhibit No. 4.1)**
	10	.11*	Credit Agreement, dated as of July 13, 2005, by and among the Company, Charter One Bank, N.A., as Administrative Agent, and certain lenders party thereto. (June 2005 Form 10-Q, Exhibit No. 10.1)
	10	.11a*	Amendment No. 1 to Credit Agreement, dated January 12, 2007, by and among the Company, Charter One Bank, N.A., as Administrative Agent, and certain lenders party thereto. (December 2006 Form 10-Q, Exhibit No. 10.11a)
	10	.12*	Security Agreement, dated as of July 13, 2005, by and among the Company, Monro Service Corporation, Monro Leasing, LLC and Charter One Bank, N.A., as Administrative Agent for the lenders party to the Credit Agreement. (June 2005 Form 10-Q, Exhibit No. 10.2)
	10	.13*	Guaranty, dated as of July 13, 2005, of Monro Service Corporation. (June 2005 Form 10-Q, Exhibit No. 10.3)
	10	.15*	Negative Pledge Agreement, dated as of July 13, 2005, by and among the Company, Monro Service Corporation, Monro Leasing, LLC and Charter One Bank, N.A., as Administrative Agent for the lenders party to the Credit Agreement. (June 2005 Form 10-Q, Exhibit No. 10.5)
	10	.18*	Resale Restriction Agreement by and between the Company and each of its executive officers and certain senior-level managers, effective as of March 24, 2006. (March 2006 Form 8-K/A, Exhibit No. 10.1)
	10	.62*	Mortgage Agreement, dated September 28, 1994, between the Company and the City of Rochester, New York. (1995 Form 10-K, Exhibit No. 10.60)
	10	.63*	Lease Agreement, dated October 11, 1994, between the Company and the City of Rochester, New York. (1995 Form 10-K, Exhibit No. 10.61)
	10	.66*	Amendment to Lease Agreement, dated September 19, 1995, between the Company and the County of Monroe Industrial Development Agency. (September 1995 Form 10-Q, Exhibit No. 10.00)
	10	.68*	Amended and Restated Employment Agreement, dated February 6, 2006 and effective as of May 19, 2005, between the Company and Catherine D’Amico. (February 2006 Form 8-K, Exhibit No. 10.1)**
	10	.69*	Supply Agreement, by and between the Company and The Valvoline Company, dated July 10, 2006 and effective as of April 1, 2006. (September 2006 Form 10-Q, Exhibit 10.1)
	10	.70*	Purchase Agreement between Walker Manufacturing Company, a division of Tenneco Automotive, and the Company, dated as of June 29, 1999. (2000 Form 10-K, Exhibit No. 10.70)
	10	.71	Supply Agreement, dated as of April 11, 2007, by and between the Company, Monro Service Corporation and AP Exhaust Products, Inc.
	10	.75*	Supply Agreement between the Company and The Valvoline Company, a division of Ashland Inc., effective November 1, 2002. (December 2002 Form 10-Q, Exhibit No. 10.79)
	10	.75a*	Automotive Filter Sales Agreement between the Company and The Valvoline Company, a division of Ashland Inc., dated November 1, 2002. (December 2002 Form 10-Q, Exhibit No. 10.80)

64

Exhibit No.			Document
	10	.76*	Tenneco Automotive Ride Control Products Supply Agreement between Tenneco Automotive Operating Company Inc. and Monro Service Corporation, effective July 1, 2001. (2002 Form 10-K, Exhibit No. 10.76)
	10	.77*	Management Incentive Compensation Plan, effective as of June 1, 2002. (2002
			Form 10-K, Exhibit No. 10.77)**
	10	.78*	Merchandising Agreement between the Company and Morse Automotive Corporation, dated September 1, 2002. (September 2002 Form 10-Q, Exhibit No. 10.78)
	10	.79*	Agreement, dated January 1, 1998, between F&J Properties, Inc. and Mr. Tire, Inc., as predecessor-in-interest to the Company, effective January 1, 1998, with respect to Store No. 750. (2004 Form 10-K, Exhibit No. 10.79)
	10	.79a*	Assignment and Assumption of Lease, dated March 1, 2004, between Mr. Tire, Inc. and the Company, with respect to Store No. 750. (2004 Form 10-K, Exhibit No. 10.79a)
	10	.79b*	Landlord’s Consent and Estoppel Certificate, dated as of February 27, 2004, by F&J Properties, Inc., with respect to Store No. 750. (2004 Form 10-K, Exhibit No. 10.79b)
	10	.79c	Renewal Letter, dated April 16, 2007, from the Company to F&J Properties, Inc. with respect to Store No. 750
	10	.80*	Agreement, dated January 1, 1997, between The Three Marquees and Mr. Tire, Inc., as predecessor-in-interest to the Company, with respect to Store No. 753. (2004 Form 10-K, Exhibit No. 10.80)
	10	.80a*	Assignment and Assumption of Lease, dated March 1, 2004, between Mr. Tire, Inc. and the Company, with respect to Store No. 753. (2004 Form 10-K, Exhibit No. 10.80a)
	10	.80b*	Landlord’s Consent and Estoppel Certificate, dated as of February 27, 2004, by The Three Marquees, with respect to Store No. 753. (2004 Form 10-K, Exhibit No. 10.80b)
	10	.80c*	Renewal Letter, dated March 6, 2006, from the Company to The Three Marquees, with respect to Store No. 753. (2006 Form 10-K, Exhibit No. 10.80c)
	10	.81*	Agreement, dated April 1, 1998, between 425 Manchester Road, LLC and Mr. Tire, Inc., as predecessor-in-interest to the Company, with respect to Store No. 754. (2004 Form 10-K, Exhibit No. 10.81)
	10	.81a*	Assignment and Assumption of Lease, dated March 1, 2004, between Mr. Tire, Inc. and the Company, with respect to Store No. 754. (2004 Form 10-K, Exhibit No. 10.81a)
	10	.81b*	Landlord’s Consent and Estoppel Certificate, dated as of February 27, 2004, by 425 Manchester Road, LLC, with respect to Store No. 754. (2004 Form 10-K, Exhibit No. 10.81b)
	10	.82*	Agreement, dated January 1, 1997, between The Three Marquees and Mr. Tire, Inc., as predecessor-in-interest to the Company, with respect to Store No. 756. (2004 Form 10-K, Exhibit No. 10.82)
	10	.82a*	Assignment and Assumption of Lease, dated March 1, 2004, between Mr. Tire, Inc. and the Company, with respect to Store No. 756. (2004 Form 10-K, Exhibit No. 10.82a)
	10	.82b*	Landlord’s Consent and Estoppel Certificate, dated as of February 27, 2004, by The Three Marquees, with respect to Store No. 756. (2004 Form 10-K, Exhibit No. 10.82b)
	10	.82c*	Renewal Letter, dated March 6, 2006, from the Company to The Three Marquees with respect to Store No. 756. (2006 Form 10-K, Exhibit No. 10.82c)
	10	.83*	Agreement, dated January 1, 1997, between The Three Marquees and Mr. Tire, Inc., as predecessor-in-interest to the Company, with respect to Store No. 758. (2004 Form 10-K, Exhibit No. 10.83)
	10	.83a*	Assignment and Assumption of Lease, dated March 1, 2004, between Mr. Tire, Inc. and the Company, with respect to Store No. 758. (2004 Form 10-K, Exhibit No. 10.83a)
	10	.83b*	Landlord’s Consent and Estoppel Certificate, dated as of February 27, 2004, by The Three Marquees, with respect to Store No. 758. (2004 Form 10-K, Exhibit No. 10.83b)
	10	.83c*	Renewal Letter, dated March 6, 2006, from the Company to The Three Marquees, with respect to Store No. 758. (2006 Form 10-K, Exhibit No. 10.83c)

65

Exhibit No.			Document
	10	.84*	Agreement, dated September 2, 1999, between LPR Associates and Mr. Tire, Inc., as predecessor-in-interest to the Company, with respect to Store No. 765. (2004 Form 10-K, Exhibit No. 10.84)
	10	.84a*	Assignment and Assumption of Lease, dated March 1, 2004, between Mr. Tire, Inc. and the Company, with respect to Store No. 765. (2004 Form 10-K, Exhibit No. 10.84a)
	10	.84b*	Landlord’s Consent and Estoppel Certificate, dated as of February 27, 2004, by LPR Associates, with respect to Store No. 765. (2004 Form 10-K, Exhibit No. 10.84b)
	10	.85*	Monro Muffler Brake, Inc. Warrant to Purchase Common Stock, dated March 1, 2004, between the Company and Atlantic Automotive Corp. (2004 Form 10-K, Exhibit No. 10.85)
	10	.86*	Supply Agreement by and between the Company and Wagner Brake, a division of Federal-Mogul Corporation, dated as of November 2, 2004 and effective as of February 1, 2005. (December 2004 Form 10-Q, Exhibit No. 10.86)
	21	.01	Subsidiaries of the Company.
	23	.01	Consent of PricewaterhouseCoopers LLP.
	24	.01	Powers of Attorney.
	31	.1	Certification of Robert G. Gross, President and Chief Executive Officer.
	31	.2	Certification of Catherine D’Amico, Executive Vice President — Finance and Chief Financial Officer.
	32	.1	Certification Pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

**

Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) hereof.

*

An asterisk “*” following an exhibit number indicates that the exhibit is incorporated herein by reference to an exhibit to one of the following documents: (1) the Company’s Registration Statement on Form S-1 (Registration No. 33-41290), filed with the Securities and Exchange Commission on June 19, 1991 (“Form S-1”); (2) Amendment No. 1 thereto, filed July 22, 1991 (“Amendment No. 1”); (3) the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 1992 (“1992 Form 10-K”); (4) the Company’s Registration Statement on Form S-8, filed with the Securities and Exchange Commission on December 24, 1992 (“December 1992 Form S-8”); (5) the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 1994 (“1994 Form 10-K”); (6) the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 1995 (“1995 Form 10-K”); (7) the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1995 (“September 1995 Form 10-Q”); (8) the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 1997 (“1997 Form 10-K”); (9) the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 1998 (“1998 Form 10-K”); (10) the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1998 (“December 1998 Form 10-Q”); (11) the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2000 (“2000 Form 10-K”); (12) the Company’s Registration Statements on Forms S-8, filed with the Securities and Exchange Commission on March 22, 2001 (each a “March 2001 Form S-8”); (13) the Company’s Registration Statement on Form S-8, filed with the Securities and Exchange Commission on June 26, 2001 (“June 2001 Form S-8”); (14) the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2001 (“June 2001 Form 10-Q”); (15) the Company’s Annual Report on Form 10-K for the fiscal year ended March 30, 2002 (“2002 Form 10-K”); (16) the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 28, 2002 (“September 2002 Form 10-Q”); (17) the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 28, 2002 (“December 2002 Form 10-Q”); (18) the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2003 (“2003 Form 10-K”); (19) the Company’s Registration Statement on Form S-3 (Registration No. 333-118176), filed with the Securities and Exchange Commission on August 12, 2004 (“August 2004 Form S-3”); (20) the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 25, 2004 (“December 2004 Form 10-Q”); (21) the Company’s Annual Report on Form 10-K for the fiscal year ended March 27, 2004 (“2004 Form 10-K”); (22) the Company’s Current Report on Form 8-K, filed June 8, 2005 (“June 2005 Form 8-K”); (23) the Company’s Current Report on Form 8-K, filed July 14, 2005 (“July 2005 Form 8-K”); (24) the Company’s Quarterly Report

66

on Form 10-Q for the fiscal quarter ended June 25, 2005 (“June 2005 Form 10-Q”); (25) the Company’s Current Report on Form 8-K, filed February 7, 2006 (“February 2006 Form 8-K”); (26) the Company’s Current Report on Form 8-K/A, filed March 31, 2006 (“March 2006 Form 8-K/A”); (27) the Company’s Registration Statement on Form S-8 (Registration No. 333-133044) filed with the Securities and Exchange Commission on April 6, 2006 (“April 2006 Form S-8 for 2003 Plan”); (28) the Company’s Registration Statement on Form S-8 (Registration No. 333-133045) filed with the Securities and Exchange Commission on April 6, 2006 (“April 2006 Form S-8 for 1998 Plan”); (29) the Company’s Annual Report on Form 10-K for the fiscal year ended March 25, 2006 (“2006 Form 10-K”); (30) the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 23, 2006 (“September 2006 Form 10-Q”); and (31) the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 23, 2006 (“December 2006 Form 10-Q”). The appropriate document and exhibit number are indicated in parentheses.

67

EX-10.04

Exhibit 10.04

GUST AMENDMENT AND RESTATEMENT

OF THE

MONRO MUFFLER BRAKE, INC.

RETIREMENT PLAN

TABLE OF CONTENTS

		Page
FOREWORD			4
SECTION 1	DEFINITIONS		5
SECTION 2	PARTICIPATION		12
2.1	Age and Service Requirements		12
2.2	Information at Participation		12
2.3	Change of Classification		12
2.4	Reinstatement and Reemployment		12
2.5	Transferred Employees		13
2.6	Joint Employment		13
2.7	Termination of Participation		13
SECTION 3	BENEFITS		13
3.1	Retirement Benefits		13
3.2	Vesting		14
3.3	Pre-Retirement Survivor Annuity		15
3.4	Limitations on Benefits		16
3.5	Purchase of Annuities		17
3.6	Cessation of Benefit Accruals		17
SECTION 4	CONTRIBUTIONS		17
4.1	Employer’s Contributions		17
4.2	Irrevocability of Employer’s Contributions		17
4.3	Adjustment for Gains		18
4.4	No Employee Contributions		18
SECTION 5	DISTRIBUTIONS		18
5.1	Standard Form of Benefit		18
5.2	Time of Distribution		18
5.3	Optional Forms of Benefit Payment		21
5.4	Beneficiaries		22
5.5	Indirect Payment-of Benefits		22
5.6	Unclaimed Payments		23
5.7	Restrictions on Distributions		23
5.8	Rehire After Termination of Employment		23
5.9	Eligible Rollover Distributions		23
SECTION 6	NOTICE AND WAIVER PROCEDURES		24
6.1	Qualified Joint & One-Half Survivor Annuity		24
6.2	Explanation of Rights		25

		Page
SECTION 7	ADMINISTRATION OF THE PLAN		25
7.1	Plan Administrator		25
7.2	Appointment of the Committee		25
7.3	Responsibility of Committee		26
7.4	Claims Procedure		26
7.5	Engagement of Accountant		27
7.6	Limitation on Liability		27
7.7	Agent for Service of Process		27
7.8	Delivery of Elections to Committee		27
7.9	Delivery of Notice to Participants		27
SECTION 8	MANAGEMENT OF THE TRUST FUND		28
8.1	Trust Agreement		28
8.2	Appointment of the Trustee		28
8.3	Investment Authority		28
8.4	Form of Disbursements		28
8.5	Expenses of the Plan		28
SECTION 9	CERTAIN RIGHTS AND OBLIGATIONS OF EMPLOYERS		29
9.1	Disclaimer of Employer Liability		29
9.2	Employer-Employee Relationship		29
9.3	Nondiscriminatory Action		29
SECTION 10	NON-ALIENATION OF BENEFITS		29
10.1	Provision with Respect to Assignment and Levy		29
10.2	Alternate Application		30
10.3	Payments to Minors, etc.		30
SECTION 11	AMENDMENT AND TERMINATION OF THE PLAN		30
11.1	Right to Amend		30
11.2	Right to Terminate		31
11.3	Allocation of Assets on Termination		31
11.4	Merger		31
11.5	Appendix to the Plan		31
11.6	Prohibition Against Diversion		31
SECTION 12	MISCELLANEOUS PROVISIONS		32
12.1	Construction		32
12.2	Exhibits		32
12.3	Execution		32
12.4	Military Service		32
SECTION 13	PARTICIPATION IN THE PLAN BY SUBSIDIARIES OR GROUP MEMBERS		32
13.1	Participation by Subsidiaries or Group Members		32
13.2	Withdrawal of Participating Employers		33

		Page
SECTION 14	IN EVENT PLAN BECOMES TOP-HEAVY		33
14.1	Special Top-Heavy Definitions		33
14.2	Special Top-Heavy Provisions		34
EXHIBITS
EXHIBIT A	CALCULATION OF OPTIONAL FORMS OF BENEFIT		36
EXHIBIT B	CALCULATION OF LUMP SUMS		41
EXHIBIT C	LIMITATION ON CERTAIN BENEFITS		42

FOREWORD

Effective as of February 1, 1972, in order to provide retirement benefits for its eligible employees, Monro Muffler Brake, Inc. adopted the Monro Muffler Brake, Inc. Retirement Plan (the “Plan”).

Effective as of April 1, 1980, the Plan was amended and restated to meet the requirements of Sections 401(a) and 501(a) of the Internal Revenue Code of 1954, as amended by the Employee Retirement Income Security Act of 1974 (hereinafter “ERISA”).

Effective April 1, 1984, the Plan was amended and restated to meet the requirements of the Tax Equity and Fiscal Responsibility Act of 1982, the Deficit Reduction Act of 1984 and the Retirement Equity Act of 1984.

Effective as of April 1, 1989 (and as of such other dates as are specified in the text) the Plan is amended and restated to conform to the requirements of the Internal Revenue Code of 1986 (hereinafter the “Code”), the Tax Reform Act of 1986, the Unemployment Compensation Amendments of 1992 and other applicable rules and legislation.

The Plan is intended to continue to provide retirement and other incidental benefits to Eligible Employees (as defined herein).

The terms and provisions of the Plan as hereinafter set forth and as it hereinafter may be amended from time to time, establish the rights and obligations with respect to Participants (as defined herein) employed on or after April 1, 1989. Except to the extent otherwise provided herein, or required by applicable laws, the terms and provisions of the Plan as in effect on or after April 1, 1989 establish the rights and obligations with respect to Participants whose employment terminates on or after April 1, 1989. The rights of any person who terminated employment or who retired on or before the effective date of a particular amendment shall be determined by the terms of the Plan as in effect on the date of his or her termination of employment or retirement unless otherwise required by law; provided, however, that the time and form in which benefits, if any, will be paid, shall be determined under the terms of the Plan as in effect on his or her commencement of benefits.

The Plan is intended to comply with the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, and Sections 401(a) and 501(a) of the Internal Revenue Code of 1986.

NOW, THEREFORE, effective April 1, 1997, with respect to changes intended to comply with the Small Business Job Protection Act of 1996 (“SBJPA”); effective April 1, 1998, with respect to changes intended to comply with the Taxpayer Relief Act of 1997 (“TRA”); effective April 1, 1999, with respect to changes intended to comply with the Internal Revenue Service Restructuring and Reform Act of 1998 (“RRA”); effective December 12, 1994, with respect to changes intended to comply with the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”); effective April 1, 1995, with respect to changes intended to comply with the General Agreement on Tariffs and Trade (“GATT”); effective April 1, 2001, with respect to changes intended to comply with the Community Renewal Tax Relief Act of 2000 (“CRA”); and effective April 1, 2002 (or such other date noted herein), with respect to all other changes, the Plan is hereby amended and restated in its entirety as follows:

DEFINITIONS

The following words and phrases shall have the meanings set forth below unless a different meaning is plainly required by the context. Wherever any words are used in the singular, they shall be construed as though they were used in the plural in all appropriate cases.

“Accrued Benefit” means the retirement benefit a Participant would receive at his or her Normal Retirement Date as determined under Section 3.1(b), multiplied by a fraction, not greater than 1, the numerator of which is the Participant’s total number of Years of Service as of the date of determination and the denominator of which is the aggregate number of Years of Service the Participant would have accumulated if he or she had continued his or her employment until the earlier of his or her (a) Special Early Retirement Date or (b) Normal Retirement Date.

“Actuarial Equivalent” with respect to a benefit means a benefit of equivalent value when computed on the basis of the actuarial assumptions indicated in the applicable Exhibit to the Plan.

“Annuity Starting Date” means the first day of the first period for which an amount is paid as an annuity or any other form.

“Appropriate Form” means the written form provided or prescribed by the Committee for the particular purpose.

“Average Monthly Compensation” means the Compensation paid by the Company to a Participant during those ten last consecutive Plan Years, prior to the Plan Year in which the Participant’s retirement occurs, divided by the number of Plan Years times 12. If a Participant has less than 10 full consecutive Plan Years from his or her date of employment to his or her date of termination, his or her Average Monthly Compensation will be the Compensation paid by the Company to a participant during the most recently completed full Plan Years, but no more than ten, divided by the number of Plan Years times 12.

Compensation subsequent to termination of participation pursuant to Section 2.7 shall not be recognized.

“Beneficiary” means the person(s), estate or trust designated by a Participant pursuant to Section 5.4.

“Board of Directors” or “Board” means the Board of Directors of Monro Muffler Brake, Inc.

“Code” means the Internal Revenue Code of 1986 as amended from time to time. Reference to a specific provision of the Code shall include such provision, any valid regulation or ruling promulgated thereunder and any comparable provision of future law that amends, supplements or supersedes such provision.

“Committee” means the administrative committee appointed by the Board to manage and administer the Plan in accordance with the provisions of Section 7 hereof.

“Company” means Monro Muffler Brake, Inc. and any successor to such corporation by merger, purchase, reorganization or otherwise.

“Compensation” means the total wages, salaries or other cash payments paid by the Employer, during the Plan Year, including the amount of any payments directly made by the Company to an Employee for non-work related sickness or disability for up to the first 90 days of such sickness or disability, and the amount of any reductions in the Participant’s otherwise payable compensation attributable to any “cafeteria plan” maintained by an Employer under Code § 125, and excluding the following:

the amount of any payment (including any amount paid by an employer for insurance or annuities, or into a fund, to provide for any such payment) made to, or on behalf of, an employee or any of his or her dependents under a plan or system established by an employer which makes provision for his or her employees generally (or for his or her employees generally and their dependents) or for a class or classes of his or her employees (or for a class or classes of his or her employees and their dependents), on account of (i) sickness or accident disability which are received under a workers’ compensation law, or (ii) medical or hospitalization expenses in connection with sickness or accident disability, or (iii) death, except that this paragraph does not apply to a payment for group term life insurance to the extent that such payment is includible in the gross income of the employee,

any payment on account of sickness or accident disability, or medical or hospitalization expenses in connection with sickness or accident disability, made by an employer to, or on behalf of, an employee after the expiration of 6 calendar months following the last calendar month in which the employee worked for such employer,

the payment by an employer (without deduction from the remuneration of the employee) (i) of the tax imposed upon an employee under Code §3101, or (ii) of any payment required from an employee under a State unemployment compensation law,

imputed income,

reimbursed expenses,

any contributions or benefits arising in connection with this Plan or in connection with any other employee benefit or welfare plan of the Company (except as other wise noted elsewhere in this Section 1.11).

any payment made by an Employer to an Employee, if at the time such payment is made such Employee is entitled to disability insurance benefits under §223(a) of the Social Security Act and such entitlement commenced prior to the calendar year in which such payment is made, and if such employee did not perform any services for such employer during the period for which such payment is made; and

such other payments as determined by the Committee under uniform rules applicable to all Employees similarly situated.

The Compensation of a Participant for a Plan Year shall not exceed the lesser of $100,000, or the dollar limit set forth in Section 401(a)(17) of the Code, as adjusted for increases in the cost-of-living in accordance with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a calendar year applies to any determination period beginning in such calendar year. If a determination period consists of fewer than 12 months, the annual compensation limit is an amount equal to the otherwise applicable compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is 12.

“Direct Rollover” means a payment by the Plan to the Eligible Retirement Plan specified by the Employee, former Employee, Spouse or Surviving Spouse.

“Early Retirement” means retirement of a Participant after age 55 but before age 65 provided that the Participant has at least 10 Years of Vesting Service at the time of retirement.

“Early Retirement Date” means the date prior to Normal Retirement Date on which a Participant’s retirement benefit payments commence, which date shall be the first day of the month coincident with or next following the date on which a Participant commences Early Retirement, or such later date (prior to Normal Retirement Date) as the Participant shall select.

“Effective Date” means February 1, 1972. The Effective Date for this restatement can be found in the Foreword of the Plan. For any Employer (as defined in Section 1.19) added subsequent to the date of this restatement, Effective Date means the date on which such addition took place.

“Eligible Employee” means an Employee who has attained age 21 and who has completed his or her “Eligibility Service” (as defined below). An Eligible Employee shall participate in the Plan as set forth in Section 2.1.

The term “Eligible Employee” shall not include (a) an Employee who is represented by any collective bargaining agent, or included in any collective bargaining unit, recognized by the Company unless and until such Company and the collective bargaining agent agree that the Plan shall apply to such unit (provided that employee benefits have been the subject of good faith bargaining); (b) a leased employee as defined in Code §414(n)(2); or (c) any person engaged by the Employer as an “independent contractor,” even if it should later be determined by a governmental agency for some other purpose that such person is or was an “employee.”

An Employee shall have completed his or her “Eligibility Service” upon the first anniversary of his or her date of hire if he or she completed 1,000 or more Hours of Service during the 12 month period ending on such anniversary date. Subsequent Eligibility Service shall be measured by the completion of 1,000 or more Hours of Service during a Plan Year beginning with the Plan Year that commences during such period or in any subsequent Plan Year.

Service with a Group member shall be treated as employment with the Employer solely for purposes of determining eligibility for participation in the Plan.

“Eligible Retirement Plan” means an individual retirement account described in Code §408(a), an individual retirement annuity described in Code §408(b), an annuity plan described in Code §403(a), or a qualified trust described in Code §401(a), that accepts the Employee, former Employee, Spouse or Surviving Spouse’s Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the Surviving Spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity.

“Employee” means any person employed by the Employer or a member of the Group but does not include any person whose relationship to the Employer under common law is that of an independent contractor. To the extent provided by Section 1.26, the term Employee also shall include a Leased Employee.

“Employer” means the Company and any subsidiary or affiliated entity which, with the approval of the Board and subject to such conditions as the Board may impose, adopts this Plan, and any successor or successors of any of them. If a subsidiary of the Company or a Group member adopts the Plan pursuant to Section 13.1, it shall be deemed the Employer with respect to its employees.

“Entry Date” means either April 1st or October 1st of any Plan Year.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time-to-time. Reference to a specific provision of ERISA shall include such provision, any valid regulation or ruling promulgated thereunder and any comparable provision of future law that amends, supplements or supersedes such provision.

“Group” means the Employer and any other company which is related to the Employer as a member of a controlled group of corporations (as defined in Code §414(b)); as a trade or business under common control (as defined in Code §404(c)); any organization which is a member of an affiliated service group (as defined in Code §414(m)) which includes the Employer; and any other entity required to be aggregated with the Employer pursuant to Code §414(o). In determining the period of employment of an Employee, each such other employer shall be treated as a member of the Group only for such period or periods during which it is actually a Group member.

“Hour of Service” means:

Each hour for which an Employee is directly or indirectly paid, or entitled to payment, for the performance of duties as an Employee by an Employer or by a Group member;

Each hour for which an Employee is directly or indirectly paid, or entitled to payment by an Employer or by a Group member for reasons (such as vacation, sickness or disability) other than for the performance of duties, but counting as Hours of Service no more than 501 of such hours during any single continuous period during which no duties are performed; and

Effective as of August 5, 1993, in the case of a family and medical leave of absence, a Participant shall be credited, to the extent required by the Family and

Medical Leave Act of 1993, for purposes of eligibility for participation and vesting, with the total number of Hours of Service he or she would have worked had he or she not been on a family and medical leave of absence; and

Each hour for which back pay, irrespective of mitigation of damages, has been awarded or agreed to by an Employer or by a Group member.

In the event that an Employee is compensated on other than an hourly basis, the Employee shall be deemed to have completed 40 Hours of Service for each full week of employment, prorated on a daily basis. A Participant shall be deemed to have completed 40 Hours of Service for each full week of leave of absence approved for military service.

The same Hours of Service shall not be credited both under paragraphs (a) and (b) above, as the case may be, and paragraph (c) above, and each hour credited to an Employee under paragraphs (a), (b), or (c) above shall be credited in accordance with §2530.200b-2(b) and (c) of the U.S. Department of Labor’s Regulations, which hereby are incorporated by reference.

“Late Retirement” means the continued employment of an Active Participant after his or her Normal Retirement Date.

“Late Retirement Date” means the first day of the month coincident with or next following the actual retirement of a Participant who has been on Late Retirement.

“Leased Employee” means a person (other than an Employee of the Employer or an affiliate) who pursuant to an agreement between the Employer or an affiliate and any other person (“leasing organization”) has performed services for the Employer, its affiliates or related persons (determined in accordance with Section 414(n)(6) of the Code) on a substantially full-time basis (as defined for purposes of Section 414(n) of the Code) for a period of at least one year, and such services are performed under primary direction or control by the Employer or an affiliate. Contributions or benefits provided a Leased Employee by the leasing organization which are attributable to services performed for the Employer or an affiliate shall be treated as provided by the Employer or an affiliate.

A Leased Employee shall not be considered an Employee of the Employer or an affiliate if: (i) such employee is covered by a money purchase pension plan providing: (1) a nonintegrated employer contribution rate of at least ten percent (10%) of compensation, as defined in Section 415(c)(3) of the Code, but including amounts contributed pursuant to a salary reduction agreement which are excludable from the employee’s gross income under Section 125, Section 132(f)(4), Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b) Of the Code, (2) immediate participation, and (3) full and immediate vesting; and (ii) Leased Employees do not constitute more than twenty percent (20%) of the Employer or an affiliate’s non-highly compensated workforce.

“Normal Retirement Date” means the first day of the month coincident with or next following the Participant’s 65th birthday.

“One-Year Break in Service” means a Plan Year during which an Employee completes no more than 500 Hours of Service. Hours of Service shall be recognized for a “permitted eave of absence” or a “maternity or paternity leave of absence” solely for purposes of determining whether a Participant has incurred a One-Year Break in Service.

Effective as of August 5, 1993, any period during which an Employee is absent from work on a family and medical leave of absence shall not constitute a period of severance to the extent required by the Family and Medical Leave Act of 1993.

To the extent required by the Family and Medical Leave Act of 1993, Years of Service credited for a family and medical leave of absence shall be that which would normally have been credited but for such absence and shall be credited solely for purposes of eligibility to participate, vesting and changes in the provisions of the Plan.

A “permitted leave of absence” means an unpaid, temporary cessation from active employment with the Employer or a Group member pursuant to a nondiscriminatory policy established by the Committee.

A “maternity or paternity leave of absence” means an absence from work for any period by reason of the Employee’s pregnancy, birth of the Employee’s child, placement of a child with the Employee in connection with the adoption of such child, or any absence for the purpose of caring for such child for a period immediately following such birth or placement. For this purpose, Hours of Service shall be credited for the Plan Year in which the absence from work begins, only if such credit is necessary to prevent the Employee from incurring a One-Year Break in Service, or, in any other case, in the immediately following Plan Year. The Hours of Service credited for a “maternity or paternity leave of absence” shall” be those which would normally have been credited but for such absence, or, in any case which the Committee is unable to determine such hours normally credited, eight Hours of Service per day. No more than 501 Hours of Service shall be credited for any maternity or paternity leave of absence.

“Participant” means any person participating in the Plan in accordance with the provisions of Section 2. “Active Participant” means a Participant who is working for an Employer and who completes at least 1,000 Hours of Service for his or her Employer(s) during a given Plan Year.

“Plan” means the Monro Muffler Brake, Inc. Retirement Plan as herein set forth, or as it may be amended from time to time.

“Plan Year” means:

the 12 consecutive month period beginning February 1, 1972 and ending January 31, 1973 and each 12 consecutive month period beginning on February 1 through February 1, 1979;

the short year beginning on February 1, 1979 and ending on March 31, 1979; the 12 consecutive month period beginning April 1, 1979 and ending March 31, 1980 and each 12 consecutive month period beginning on April 1 through March 31 thereafter.

“Predecessor Employer” means a firm absorbed by the Company through a change of name, merger, acquisition or a change of corporate status, or a firm of which the company was once a part.

“Pre-Retirement Survivor Annuity” means the annuity described in Section 3.3.

“Qualified Joint & One-Half Survivor Annuity” means an annuity payable for the life of a Participant (which is the Actuarial Equivalent of the Standard Form of Benefit for an unmarried Participant) with an annuity payable for life continuing, after the Participant’s death, to his or her Spouse. The amount continued to the Spouse shall be 1/2 of the amount payable to the Participant.

“Service” means employment with an Employer or Group member.

“Social Security Benefit” means the monthly amount available at age 65 to a Participant, as his or her Old-Age Insurance Benefit (excluding any benefit available on behalf of a spouse or other dependent) under the provisions of Title 11 of the Federal Social Security Act in effect on the earlier of age 65 or the date of his or her termination of employment with his or her Employer, whether or not such amount is actually paid without regard to any increases in the wage base or benefit levels that take effect after the date of termination of employment provided that if the Participant retires prior to his or her Social Security Retirement Age, his or her Social Security Benefit shall be estimated assuming the last full calendar years Compensation continues until he or she attains the Social Security Retirement Age. If a Participant terminates employment prior to age 55 and is eligible for a deferred vested benefit, the Social Security Benefit shall be estimated assuming the last full calendar years Compensation continues until his or her Social Security Retirement Age. Such amount shall be determined in accordance with uniform rules adopted by the Committee, and the fact that a Participant does not actually receive such amounts because of a failure to apply or continuance of employment or for any other reasons shall be disregarded.

“Special Early Retirement” means retirement of a Participant after age 60 but before age 65, provided that the Participant has at least 20 Years of Vesting Service at the time of retirement.

“Special Early Retirement Date” means the date prior to Normal Retirement Date on which a Participant’s retirement benefit payments commence, which date shall be the first day of the month coincident with or next following the date on which a Participant commences Special Early Retirement, or such later date (prior to Normal Retirement Date) as the Participant shall select.

“Spousal Consent” means written consent by the Participant’s Spouse to an election, designation of Beneficiary, or similar action by the Participant, which consent acknowledges the effect of such election, designation or action and is witnessed by a notary public; or “deemed consent” in which the Committee is satisfied that such consent cannot be obtained because there is no Spouse, because the Spouse cannot be located, or because of other circumstances which may be provided by applicable law.

Any consent or deemed consent with respect to a Spouse which satisfies these requirements shall-be-effective only with respect to such Spouse-and may not be revoked by such Spouse with respect to the election, designation or other action to which such consent pertains.

Any consent of the Spouse to a waiver of the Qualified Joint & One-Half Survivor Annuity also must consent to the election of the Participant to the form of payment selected, and any waiver of the Qualified Joint & One-Half Survivor Annuity also must provide for the consent of the Spouse to the designation of Beneficiary if the primary Beneficiary is anyone other than the Spouse.

“Spouse” or “Surviving Spouse” means a person to whom a Participant is legally married on the earlier of (a) the date on which the Participant’s retirement benefit commences, or (b) the date of the Participant’s death. For purposes of the Pre-Retirement Survivor Annuity (as defined in Section 1.33) a Spouse shall not be considered a Surviving Spouse unless the Participant and the Spouse had been married throughout the 1-year period ending on the date of the Participant’s death.

To the extent provided under a qualified domestic relations order as defined in Code §414(p), the term shall include a former spouse.

“Standard Form of Benefit” means the form of retirement benefit specified in Section 5.1.

“Trust” or “Trust Fund” means the trust fund created by the provisions of the Plan which set forth the terms under which the Trustees shall hold and administer the assets of the Plan.

“Trust Agreement” means the agreement entered into between the Company and the Trustee as provided for in Section 8, as the same is amended from time to time.

“Trustee” or “Trustees” means the person or persons who are selected by the Board of Directors who may at any time be acting as a Trustee or Trustees under the Plan.

“Year of Service” means any Plan Year, whether before or after the Effective Date, during which an Employee completes at least 1,000 Hours of Service.

Service with a Group member shall be treated as employment with the Employer solely for purposes of determining Years of Service under this Plan.

A Participant who is on a leave of absence with the Armed Forces of the United States, shall accrued Years of Service while on such leave of absence, and if such Participant does not return to active employment with an Employer within the time limit required to retain his or her reemployment rights under the applicable Federal laws, the Participant shall be considered to have terminated employment as of the beginning of the period in which he or she incurs a One-Year Break in Service.

For purposes of Section 3.1(b)(ii), Years of Service with a Predecessor Employer shall be included as Service with the Employer. Such predecessor service shall be includible as Years of Service only if the service was continued without interruption with the Employer. Predecessor service performed as a sole-proprietor or partner shall be excluded. This service shall be included only to the extent that such inclusion does not result in a duplication of benefits by reason of being covered under any other separate non-governmental pension or profit sharing plan to which the Employer contributes.

“Year of Vesting Service” means any 12 consecutive calendar month period, on or after the Effective Date, during which an Employee completes at least 1,000 Hours of Service.

Prior to April 1, 1979, such 12 consecutive month period shall be based on the Employees date of hire and each anniversary thereafter. For periods beginning on or after April 1, 1979, such 12 consecutive month period shall be the Plan Year.

Service with a Group member shall be treated as employment with the Employer solely for purposes of determining Years of Service under this Plan.

A Participant who is on a leave of absence with the Armed Forces of the United States, shall accrued Years of Vesting Service while on such leave of absence, and if such Participant does not return to active employment with an Employer within the time limit required to retain his or her reemployment rights under the applicable Federal laws, the Participant shall be considered to have terminated employment as of the beginning of the period in which he or she incurs a One-Year Break in Service.

In the case of a Participant who does not have any vested-right to an Accrued Benefit, any Years of Service completed before he or she incurs a One-Year Break in Service shall not be taken into account if the number of consecutive One-Year Breaks in Service equals or exceeds the greater of (a) 5 or (b) the Participant’s Years of Service prior to such break. Years of Service completed before a given One-Year Break in Service shall not include any Year of Service that need not be taken into account because of a prior One-Year Break in Service.

In the case of a Participant who incurs a One-Year Break in Service, Years of Service before the Break shall not be required to be taken into account until he or she has completed a Year of Service after his or her return to employment.

PARTICIPATION

Age and Service Requirements

Each person who is a Participant of the Plan on March 31, 1989 shall continue to be a Participant, subject to the other provisions of the Plan.

On and after March 31, 1989, an Employee shall become a Participant on the Entry Date coincident with or next following the date on which he or she becomes an Eligible Employee.

For the purpose of this Section 2.1, an Employee’s Service shall commence on the date on which the Employee first performs an Hour of Service.

Notwithstanding any other provision in the Plan, no Participant shall accrue any additional benefit under the Plan for services rendered or compensation earned on or after September 30, 1999 and no Employee shall become a Participant in the Plan on or after such date.

Information at Participation

Upon becoming a Participant, an Employee shall provide any information necessary for purposes of administering the Plan that may be requested by the Committee.

Change of Classification

In the event that an Employee becomes an Eligible Employee, such Eligible Employee will become a Participant of this Plan, subject to the provisions of Section 2.1. Upon becoming a Participant he or she will be granted Years of Vesting Service under the Plan from the date on which he or she became an Employee of the Employer.

If a Participant ceases to be an Eligible Employee but continues as an Employee of the Employer or a Group member, he or she will continue to earn Years of Service.

Reinstatement and Reemployment

A Participant who incurs a One-Year Break in Service and then is reinstated or reemployed shall reenter this Plan upon completion of a Year of Service after his or her reinstatement or reemployment, retroactive to the date of reinstatement or reemployment. However, such Participant shall not be granted Years of Service for the period of employment prior to the break if (a) such Participant had previously acquired no vested rights under this Plan and (b) the number of the Participant’s consecutive One-Year Breaks in Service equals or exceeds the greater of (i) 5 or (ii) his or her Years of Service prior to the break in Service.

Any (non-Participant) Employee who terminates employment and is reemployed prior to incurring a One-Year Break in Service shall be treated, for purposes of this Plan, as though he or she never terminated employment. Such an Employee shall become a Participant as of the Entry Date coincident with or next following his or her reemployment date.

Any person who was a Participant in the Plan at the time of his or her termination, and who did not incur a One-Year Break in Service, shall immediately re-enter the Plan and shall continue to vest (starting at the same point in the vesting schedule at which he or she left oft) in both his or her pre-termination and post-termination Accrued Benefit.

Transferred Employees

In the event that an Active Participant transfers to the employment of another Employer participating in this Plan, he or she shall not be deemed to have terminated his or her participation in this Plan, but shall continue to accrue Years of Service.

Joint Employment

Any Employee employed by more than one Employer shall be considered to be an Employee of each such Employer for purposes of eligibility for participation in the Plan and benefit accrual under the Plan. However, if an Employee is employed by 2 or more Employers at the same time, his or her periods of joint employment shall not create more than one period of time for the purposes of determining Years of Service or Years of Vesting Service under this Plan. His or her Compensation from all Employers shall be aggregated for purposes of determining his or her benefit, and the cost of such benefit shall be shared ratably by his or her Employers.

Termination of Participation

Participation in the Plan shall cease (a) when a Participant dies, or (b) if a Participant incurs a One-Year Break in Service before he or she has acquired any vested interest in his or her Accrued Benefit, or (c) if a Participant receives a lump sum distribution (applicable to lump sums of $5,000 or less) of the Actuarial Equivalent of his or her vested benefit, provided he or she is not then accruing benefits hereunder or (d) if a Participant receives a distribution of the Actuarial Equivalent of his or her vested benefit in the form of an annuity contract purchased on his or her behalf by the Trustees provided he or she is not then accruing benefits hereunder.

BENEFITS

Retirement Benefits

Right to Benefit

A Participant who reaches Normal Retirement Date while in the employ of the Employer or a Group member shall have a nonforfeitable right to 100% of his or her Accrued Benefit.

Amount of Retirement Benefit

Subject to the limits set forth herein, including the limits of Section 3.6, the monthly normal retirement benefit payable to an Employee eligible therefore and commencing on his or her Normal Retirement Date shall be equal to the product of (i) and (ii) below:

an amount equal to 45% of his or her Average Monthly Compensation, reduced by 45% of his or her Social Security Benefit; and

a fraction, not greater than 1, the numerator of which is the Participant’s total number of Years of Service commencing with his or her date of hire and continues as if he or she remains an Employee until his or her Normal Retirement Date and the denominator of which is 10.

Early Retirement

The amount in the Standard Form of Benefit payable for Early Retirement Will be the Accrued Benefit determined at the date on which the Participant’s Service ceases, reduced, however, for early commencement in accordance with Section 5.2(g).

Special Early Retirement

The amount in the Standard Form of Benefit payable for Special Early Retirement will be the Accrued Benefit determined at the date on which the Participant’s Service ceases, unreduced for early commencement.

Late Retirement

A Participant may continue working after his or her Normal Retirement Date, but no retirement benefit shall be paid until the earlier of the date the Participant actually retires or the April 1 following the calendar year in which the Participant attains age 70-1/2.

The amount in the Standard Form of Benefit payable to a Participant who retires on his or her Late Retirement Date shall be equal to the amount determined under Section 3.1(b) as of the date on which the Participant’s Service ceases adjusted for late commencement in accordance with Section 5.2(h).

Termination of Employment

If a Participant’s employment with an Employer terminates for any reason other than retirement or death, the Participant shall be entitled to receive a benefit equal to his or her vested Accrued Benefit. Except as provided in Sections 5.2(b) and (g), this benefit shall become payable at the Participant’s Normal Retirement Date.

Vesting

A Participant who has completed at least 5 Years of Vesting Service shall be 100% vested in his or her Accrued Benefit.

Any Participant who reaches age 65 or satisfies the requirements for Early Retirement, whichever is earlier, while in the employ of the Employer shall be 100% vested in his or her Accrued Benefit.

If a Participant’s employment with the Employer terminates for any reason other than retirement, the Participant shall be entitled to receive a benefit equal to his or her vested Accrued Benefit. Except as provided in Sections 5.2(b) and (g), this benefit shall become payable at the Participant’s Normal Retirement Date.

Any Participant who has completed fewer than 5 Years of Vesting Service and has incurred a One-Year Break in Service shall not be vested in his or her Accrued Benefit and such Participant’s Accrued Benefit shall be forfeited when such Participant has incurred the 5th consecutive One-Year Break in Service.

Pre-Retirement Survivor Annuity

In General

Subject to the conditions set forth in this Section 3.3, if a married Participant with a vested right to an Accrued Benefit under Section 3 should die before his or her Annuity Starting Date, a Pre-Retirement Survivor Annuity, determined in accordance with paragraph (c) below, shall be payable to the Participant’s Spouse, except to the extent otherwise provided in Section 1.40 with respect to Qualified Domestic Relations Orders.

There shall be no pre-retirement survivor benefit payable on behalf of a Participant who is either (i) unmarried or (ii) not vested in his or her Accrued Benefit, should he or she die before his or her Annuity Starting Date.

Amount of Pre-Retirement Survivor Annuity

If the Participant’s death occurs after he or she would have been eligible for Early Retirement, Pre-Retirement Survivor Annuity benefits shall be payable to the Participant’s Spouse, commencing with the month following the month of the Participant’s death and continuing for the then remaining lifetime of the Spouse, in an amount equal to 50% of the amount of benefit which would have been payable to the Participant if he or she had retired on the day before his or her death and retirement benefit payments had then commenced (reduced under Section 5.2(g) to reflect early commencement), in the form of a Qualified Joint & One-Half Survivor Annuity.

If the Participant’s death occurs on or before the date he or she was eligible for Early Retirement, Pre-Retirement Survivor Annuity benefits shall be payable to the Participant’s Spouse, commencing with the month in which the Participant would have first been eligible for Early Retirement had the Participant survived, and continuing for the then remaining lifetime of the Spouse, in an amount equal to 50% of the amount of retirement benefit which would have been payable to the Participant if he or she had separated from Service on the date of his or her death (or date of

separation from Service, if earlier), survived to the date the Participant would have been eligible for Early Retirement, retired and had retirement benefit payments commence (reduced under Section 5.2(g) to reflect early commencement) in the form of a Qualified Joint & One-Half Survivor Annuity, and died on the day after the date the Participant would have been first eligible for Early Retirement.

Claim for Benefits

Subject to paragraph (d), the Spouse may elect to defer commencement of the Pre-Retirement Survivor Annuity to no later than the date the Participant would have been eligible for Normal Retirement.

The Spouse must file a claim for benefits before payment of benefits will commence. The claim for benefits shall be in writing, in such form as the Committee shall designate, and shall include certifications as to the death of the Participant, the dates of birth of the Participant and of the Spouse, the date of marriage, and such other information as the Committee deems necessary.

Lump Sum Payment

If the Actuarial Equivalent value of a Pre-Retirement Survivor Annuity is $5,000 (or such greater amount as is permissible under Code §411(a)(11)) or less, payment to the Spouse shall be made in a lump sum as soon as practicable following the Participant’s death.

Limitations on Benefits

Basic Limitation

For any Plan Year, the total annual amount of a Participant’s benefit derived from Employer contributions under this Plan and under all other defined benefit plans of an Employer and of any Group member, shall not exceed the amount permitted under Code §415, increased for Active Participants as permitted under Code §415(d).

Dual Plan Limitation

If a Participant also is participating in one or more defined contribution plans of an Employer and of any Group member, the numerator of the defined benefit fraction (as defined in Code §415(e)(2)(A)) of this Plan for any Plan Year shall be limited (or reduced, if applicable) so that a “combined benefit factor” in excess of 1.0 shall not result, pursuant to Code §415(e).

Basic Limitation

Effective as of the first day of the first limitation year beginning on or after January 1, 2000 (the “Effective Date”), and notwithstanding any other provision of the Plan, the accrued benefit for any Participant shall be determined by applying the terms of the Plan implementing the limitations of Section 415 of the Code as if the limitations of Section 415 continued to include the limitations of Section 415(e) of the Code as in effect on the day immediately prior to the

Effective Date. For this purpose, the defined contribution fraction is set equal to the defined contribution fraction as of the day immediately prior to the Effective Date.

For limitation years beginning on and after April 1, 2001, for purposes of applying the limitations described in this Section 3.4 of the Plan, compensation paid or made available during such limitation years shall include elective amounts that are not includible in the gross income of the employee by reason of Section 132(f)(4) of the Code.

Purchase of Annuities

The Committee may from time to time direct the Trustee to provide the benefits due to a particular Participant or Beneficiary through the purchase of annuity contracts or otherwise.

Cessation of Benefit Accruals

Notwithstanding any other provision in the Plan, no Participant shall accrue any additional benefit under the Plan for services rendered or compensation earned on or after September 30, 1999 and no Employee shall become a Participant in the Plan on or after such date.

CONTRIBUTIONS

Employer’s Contributions

The Contributions of each Employer shall be payable at such intervals and in such amounts as may be directed by the Employer.

Irrevocability of Employer’s Contributions

Contributions made by an Employer shall be irrevocable and shall be held by the Trustees in accordance with the provisions of Section 8, except as specifically provided in this Section 4.2. In the case of a contribution made by an Employer which is made by a mistake of fact, the contribution shall be returned to the Employer within 1 year of the date on which it was made. Any earnings attributable to a contribution made by a mistake of fact shall remain in the Trust Fund; any losses shall be deducted from the amount to be returned to the Employer.

In the case of a contribution conditioned upon deductibility by the Employer under Code §404, the contribution shall be returned to the Employer, to the extent that the contribution is disallowed, within 1 year of the disallowance. All contributions hereunder are conditioned upon their deductibility.

If an Employer contribution is conditioned upon qualification of the Plan under Code §401(a), and if the Plan does not so qualify, then this Section shall not prohibit the return of such contribution to the-Employer within 1 year after the date of denial of qualification of the Plan.

Adjustment for Gains

Actuarial gains, including forfeitures and dividends, to the extent that they exceed actuarial losses, will be used to reduce future contributions to the Plan by the Employers and shall not be applied to increase the benefits any Employee would otherwise receive under the Plan.

No Employee Contributions

Employees shall not be permitted to contribute to the Plan.

DISTRIBUTIONS

Standard Form of Benefit

The Standard Form of Benefit for an unmarried Participant (or a married Participant who has waived the Qualified Joint & One-Half Survivor Annuity pursuant to Section 6) is a life annuity.

In the event that a Participant has a Spouse on the date on which his or her retirement benefit payments are to commence, the Standard Form of Benefit shall be a Qualified Joint & One-Half Survivor Annuity that is the Actuarial Equivalent of the Standard Form of Benefit under (a) above, unless the Participant has elected, in accordance with Section 6, prior to the Annuity Starting Date, not to receive his or her retirement benefit in the form of a Qualified Joint & One-Half Survivor Annuity.

Time of Distribution

In General

Retirement benefit payments shall commence on a Participant’s Normal Retirement Date, or on a Participant’s Early Retirement Date, Special Early Retirement or Late Retirement Date, whichever is applicable.

Cashouts

If the Actuarial Equivalent value of the vested Accrued Benefit does not exceed $5,000 (or such greater amount as is permissible under Code §411(a)(11), the Committee shall direct the earlier single sum payment of the benefit. Single sum payments shall not include the present value of any Early Retirement or Special Early Retirement subsidies which may be available under the terms of the Plan as in effect on, the date of distribution.

Rollover Distributions

Notwithstanding any provisions to the contrary, an Employee, former Employee, Spouse or Surviving Spouse who is entitled to benefits under the Plan may elect, at the time and in the manner prescribed by the Committee, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Employee, former Employer, Spouse or Surviving Spouse in a Direct Rollover.

Required Annuity Starting Date

In no event shall a Participant’s Annuity Starting Date be later than the earlier of (i) or (ii) below:

the 60th day after the close of the Plan Year in which the latest occurs:

the Participant reaches Normal Retirement Date;

the Participant’s Service terminates; or

the Participant’s 10^th anniversary of Plan participation.

the later of April 1 of the calendar year following the calendar year in which the Participant attains age 70-1/2 or retires, except that for a 5-percent owner the date shall be the April 1 of the calendar year following the calendar year in which the Participant attains age 70-1/2.

Payments While in Service

Any benefits payable under the provisions of this Section prior to the Participant’s termination of Service shall be based on the Actuarial Equivalent of the Participant’s vested Accrued Benefit as of the end of the Plan Year preceding the date of payment, and shall be redetermined as of the first day of each- subsequent Plan Year, taking into account any additional accruals.

Frequency of Payments

Retirement benefit payments shall be made monthly, in installments of 1/12 the annual amount except that the Committee in its discretion may direct that payments be made less frequently than once a month. Any periodic payments to be made less frequently than once a month shall be made at least once in a 12 month period.

Early or Special Early Retirement

The amount of benefit (as specified in Section 3.1(c)) payable for Early Retirement shall be either:

The Accrued Benefit, commencing at age 65, based on the Participant’s Average Monthly Compensation and Years of Service at the Participant’s termination of employment and the Plan provisions in effect at such date, or

The Accrued Benefit, commencing at the optional Early Retirement Date, based on the Participant’s Average Monthly Compensation and Years of Service up to his or her actual termination of employment and the Plan provisions in effect at such date, but reduced as follows:

For Participants electing to commence early retirement before age 65 but at or after age 60, the normal retirement benefit shall be reduced by 1/15 for each year by which the Participant’s actual retirement precedes his or her Normal Retirement Date, and

For Participant’s electing to commence early retirement before age 60, the normal retirement benefit shall be further reduced by 1/30 for each year by which the Participant’s actual retirement date precedes the date of his or her 60th birthday.

The reductions shown above shall be prorated for a partial
year.

The amount of benefit (as specified in Section 3.1(d)) payable for Special Early Retirement shall be retirement benefit payments commencing at either age 65 or the optional Special Early Retirement Date, based on the Participant’s Average Monthly Compensation and Years of Service at the Participant’s termination of employment and the Plan provisions in effect at such date unreduced for early commencement.

If a Participant satisfies the service requirement for Early Retirement or Special Early Retirement at the time his or her employment terminates, and if the Participant subsequently attains the age at which he or she would have been eligible for Early Retirement or Special Early Retirement if his or her employment had not terminated, the Participant may elect to receive benefit payments commencing on the first day of any month after he or she attains such age. The benefit payable shall be determined as set forth in the preceding paragraph.

Late Retirement

The amount of benefit (as specified in Section 3.1(e)) payable for Late Retirement shall be the normal retirement benefit payments commencing at after age 65 based on the Participant’s Average Monthly Compensation and Years of Service at his or her Normal Retirement Date and the Plan provisions in effect at such date multiplied by the factor set forth in the table below for late commencement.

NUMBER OF YEARS LATE
RETIREMENT DATE FOLLOWS
NORMAL RETIREMENT DATE	FACTOR
1		1.06
2		1.12
3		1.19
4		1.26
5		1.34
6		1.42
7		1.50
8		1.58
9		1.67
10		1.76

The above factors shall be prorated for a partial year (counting a partial month as a complete month). Factors for numbers of years beyond 10 shall be determined using a consistently applied reasonable actuarial equivalent method.

Suspension of Benefits

Benefit payments suspended pursuant to §2530.203-3 of the U.S. Department of Labor’s Regulations shall, upon the Employee’s subsequent termination of

employment, be resumed no later than the first day of the third month after the Employee ceases to be in “§203(a)(3)(B) service” pursuant to such Regulations, and any initial payment on resumption shall include the payment for the month of resumption and amounts withheld between the cessation of “§203(a)(3)(B) service” and the resumption of payments.

Optional Forms of Benefit Payment

Elections

Subject to the provisions of Section 6, each Participant may elect to receive his or her retirement benefit in one of the optional forms specified in Section 5.3(b).

Such election shall be made on the Appropriate Form within the 90-day period ending on the Annuity Starting Date and shall require Spousal Consent, where applicable under Section 1.39.

However, if the Actuarial Equivalent value of a Participant’s retirement benefit before his or her Annuity Starting Date is $5,000 (or such greater amount as is permissible under Code §41 l(a)(11)) or less, payment shall be made in a single sum without the consent of the Participant or the Participant’s Spouse.

A Participant may change his or her election of an optional form of benefit payment at any time prior to the Annuity Starting Date. A Participant may revoke his or her option election at any time prior to his or her Annuity Starting Date and receive the Standard Form of Benefit. No change may be made after the Annuity Starting Date. However, if a Participant retires on Early Retirement or Special Early Retirement and then is reemployed and again becomes an Active Participant in the Plan, he or she shall be entitled to elect an optional form of benefit payment, or to change such an election, as if he or she had never been retired.

Optional Forms

The optional forms of benefit payment which a Participant may elect are as follows:

Joint & Survivor Option

An annuity that is the Actuarial Equivalent of the Standard Form of Benefit and is payable for the life of a Participant, with the provision that after the Participant’s death his or her Beneficiary shall receive, for life, 100%, 66-2/3%, or 50% of the amount payable to the Participant.

Life & Period Certain Annuity Option

An annuity that is the Actuarial Equivalent of the Standard Form of Benefit and is payable for the life of a Participant or for a stated minimum period of years, whichever is longer, with the provision that after the Participant’s death his or her Beneficiary shall receive the balance of payments (if any) due during the stated minimum period of years. The Participant shall select a minimum period of 5, 10 or 15 years, provided that such minimum shall not exceed the life expectancy of the Participant.

If both the Participant and his or her designated Beneficiary die before the stated minimum period of years has expired, the balance of the payments due shall be paid to the estate of the Participant, or the party or parties entitled by law to receive such payment.

If a Participant who has elected this option dies before his or her Annuity Starting Date or before his or her first benefit payment is due, his or her election shall be considered null and void.

If a Participant’s designated Beneficiary predeceases him or her, the Participant may designate another Beneficiary. A Participant may change his or her designated Beneficiary at any time by filing a written notice of the change with the Committee, subject to Spousal Consent.

Life Annuity Option

An annuity that is payable for the life of a Participant.

If a Participant who has elected this option dies before his or her Annuity Starting Date and before his or her first benefit payment is due, his or her election shall be considered null and void.

Beneficiaries

Each Participant may designate on the Appropriate Form a Beneficiary or Beneficiaries to receive any payment(s) due under the Plan in the event of his or her death. The designation of a Beneficiary other than a Participant’s Spouse must be made with Spousal Consent. If a Participant fails to designate a Beneficiary, or if for any reason his or her designation is legally ineffective, or if no designated Beneficiaries survive to the date that a payment is due, payment shall be made to the Participant’s Spouse, if the Participant is married; otherwise, to the Participant’s estate.

A Participant may change his or her designated Beneficiary by filing written notice of the change with the Committee. Such a change must be made with Spousal Consent, and may be made at any time prior to the Annuity Starting Date or, with respect to optional forms of payment, at the times specified in 5.3(a) and/or 5.3(b)(ii).

Indirect Payment of Benefits

If any Participant or designated Beneficiary is, in the judgment of the Committee, legally, physically, or mentally incapable of personally receiving and receipting for any payment due under this Plan, the Committee may direct that payment be made to the guardian or other legal representative of that Participant or Beneficiary, or, if there is none, to the person or institution then maintaining or having custody of that Participant or Beneficiary. Such payments shall constitute a full discharge with respect hereto.

Unclaimed Payments

If any amount is payable from the Trust Fund to any person and, after written notice from the Committee mailed to such person’s last known address, and such person shall not have presented himself or herself to the Committee within 2 years after the mailing of such notice, such amount shall be forfeited and applied to reduce Employer contributions; provided however, that the forfeited amount shall be restored and paid to the proper payee upon any ultimate claim for benefits by such proper payee.

Restrictions on Distributions

Any option which is available shall provide that the period over which payments are to be made to the Participant and his or her designated Beneficiary may not exceed the joint life and last survivor expectancy at actual retirement of the Participant and his or her Beneficiary; provided, however, that if the designated Beneficiary is other than the Spouse, the Participant must anticipate receiving more than 50% of the Actuarial Equivalent of his or her benefit calculated as of the date of his or her retirement.

No balance to be paid on the death of a Participant prior to the Participant’s Annuity Starting Date or upon the death of the Spouse shall be paid in installments over a period longer than 5 years from the date of death unless:

Payments are being made to the Participant’s Spouse and begin no later than the later of 1 year after the Participant’s death or the date on which the Participant would have reached age 70-1/2, and are to be paid over a period not longer than the lifetime (or life expectancy) of the Spouse; or

Payments are being made to a non-Spouse over a period no longer than the life (or life expectancy) of the Beneficiary, and distribution to the Beneficiary commences no later than 1 year after the Participant’s death (or Spouse’s death, where applicable).

Distributions made after the death of the Participant must be made at least as rapidly as under the method of distribution in effect prior to the Participant’s death.
Distributions will be made in accordance with Code §401(a)(9) and the regulations issued thereunder and such provisions shall override any distribution options in the Plan inconsistent with Code §401(a)(9).

Rehire After Termination of Employment

If a Former Participant again becomes a Participant, such renewed participation shall not result in duplication of benefits. Accordingly, if he or she has received a distribution of a vested Accrued Benefit under the Plan by reason of prior participation (and such distribution has not been repaid to the Plan with interest at the rate determined under Code §411(c)(2)(C), compounded annually from the date of distribution to the date of repayment, before the earlier of 5 years after the first date on which he or she is subsequently re-employed or the fifth consecutive One-Year Break in Service after the distribution), his or her Normal Retirement Benefit and Accrued Benefit shall be reduced by the Actuarial Equivalent (at the date of distribution) of the present value of the Accrued Benefit as of the date of distribution.

Eligible Rollover Distributions

Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee’s election under this Article, a Distributee may elect, at the time and in the manner prescribed by the Committee, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

For purposes of this Section, the following terms have the meanings indicated below:

An “Eligible Rollover Distribution” is any distribution of all or any portion of the vested balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; any hardship distribution described in Section 401(k)(2)(B)(i)(IV) of the Code; and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

An “Eligible Retirement Plan” is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the Distributee’s Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity.

A “Distributee” includes an Employee or former Employee. In addition, the Employee’s or former Employee’s surviving spouse and the Employee’s or former Employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are Distributees with regard to the interest of the spouse or former spouse.

A “Direct Rollover” is a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

NOTICE AND WAIVER PROCEDURES

Qualified Joint & One-Half Survivor Annuity

At least 30 days but not more than 90 days before the Participant’s Annuity Starting Date, the Committee will supply the Participant with the Appropriate Form to describe the Qualified Joint & One-Half Survivor Annuity and provide a general explanation of the financial effect on the Participant’s benefit if he or she decides to accept the Qualified Joint & One-Half Survivor Annuity. The explanation will also explain the effect of an election option under Section 5.3. A Participant may waive this benefit and confirm any election of option within the 90 day period prior to his or her Annuity Starting Date, subject to Spousal Consent. Such a Participant who has waived the Qualified Joint &

One-Half Survivor Annuity may revoke such waiver at any time prior to his or her Annuity Starting Date, on the Appropriate Form, subject to Spousal Consent. For purposes of this paragraph, the Qualified Joint & One-Half Survivor Annuity payable with respect to a Participant who is unmarried shall be the Standard Form of Benefit payable under Section 5.1. Notwithstanding the above, a Participant may elect (with any applicable spousal consent) to waive any requirement that the written explanation be provided at least 30 days before the annuity starting date if the distribution commences more than 7 days after such explanation is provided.

Explanation of Rights

Any description under Section 6.1 above shall explain:

the terms and conditions of the Qualified Joint & One-Half Survivor Annuity;

the Participant’s right to waive, and the effect of a waiver of the Qualified Joint & One-half Survivor Annuity;

the need for Spousal Consent; and

the right to revoke, and the effect of a revocation, of a waiver of the Qualified Joint & One-Half Survivor Annuity

ADMINISTRATION OF THE PLAN

Plan Administrator

Monro Muffler Brake, Inc. shall be the “plan administrator” of the Plan within the meaning of §3(16) of ERISA, and the Plan’s “named fiduciary” for the purposes of §402(a) of ERISA. Administration of the Plan shall be the responsibility of the Committee except to the extent that authority to act for the Company has otherwise been reserved to the Board of Directors.

Appointment of the Committee

The Board may appoint one or more individuals to serve as the Committee who shall, on behalf of the Company, perform the duties of plan administrator. Any individuals, including but not limited to Employees and Participants, may be appointed to serve as members of the Committee. Such individuals shall. file a written consent to serve as a Committee member. Each Committee member shall serve until his or her resignation or dismissal by the Board. Vacancies shall be filled in the same manner as the original appointment. To resign, a Committee member shall give written notice which shall be effective on the earlier of the appointment of his or her successor or the passing of 60 days after such notice is mailed or personally delivered to the Board.

The Committee shall elect a Chairperson from their number and a Secretary who may, but need not be a member of the Committee; may appoint from their number such committees with Such powers as they shall determine; may authorize one or more of their number as agent to execute or deliver any instrument or make any payment on behalf of the Committee; and may retain counsel, employ agents and obtain clerical, consulting

and accounting services as the Committee may require or deem advisable from time to time. The Committee shall hold meetings upon notice, at such place or places, and at such time or times and in such manner (by telephone or by use of a facsimile machine) as it may from time to time determine.

A majority of the Committee then in office shall constitute a quorum for the transaction of business at any meeting of the Committee. The vote of a majority of the members present at the time of the vote, if a quorum is present at such time, shall be the act of the Committee. Any action required or permitted to be taken at any meeting of the Committee may be taken without a meeting, if all the Committee members consent or have consented thereto in writing.

Responsibility of Committee

Subject to Section 7.1, the Committee shall be responsible for the administration, operation and interpretation of the Plan. The Committee shall establish rules from time to time for the transaction of its business. It shall have the exclusive right to interpret the Plan and to decide any and all matters arising thereunder or in connection with the administration of the Plan, and it shall endeavor to act, whether by general rules or by particular decisions, so as not to discriminate in favor of any person or class of person. Such decisions, actions and records of the Committee shall be conclusive and binding upon an Employer and all persons having or claiming to have any right or interest in or under the Plan.

The Committee shall maintain accounts to the extent it deems necessary or appropriate showing the fiscal transactions of the Plan.

Claims Procedure

In the event that any Participant or other payee claims to be entitled to a benefit under the Plan, and the Committee determines that such claim should be denied in whole or in part, the Committee shall, in writing, notify such claimant within 90 days of receipt of such claim that his or her claim has been denied, setting forth the specific reasons for such denial. Such notification shall be written in a manner reasonably expected to be understood by such Participant or other payee and shall set forth the pertinent sections of the Plan relied on, and where appropriate, an explanation of how the claimant can obtain review of such denial. Within 60 days after receipt of such notice, such claimant may request, by mailing or delivery of written notice to the Committee, a review by the Committee of the decision denying the claim. If the claimant fails to request such a review within such 60 day period, it shall be conclusively determined for all purposes of this Plan that the denial of such claim by the Committee is correct. If such claimant requests a review within such 60 day period, the Participant or other payee shall have 30 days after filing a request for review to submit additional written material in support of the claim. Within 60 days after the later of its receipt of the request for review or the request to submit additional written material, the Committee shall determine whether such denial of the claim was correct and shall notify such claimant in writing of its determination. If such determination is favorable to the claimant, it shall be binding and conclusive. If such determination is adverse to such claimant, it shall be binding and conclusive unless the claimant notifies the Committee within 90 days after the mailing or delivery to him or her by the Committee of its determination; that the claimant intends to institute legal proceedings challenging the determination of the Committee, and actually institutes such legal proceedings within 180 days after such mailing or delivery.

Engagement of Accountant

The Company shall engage a “qualified public accountant” to prepare such audited financial statements of the operation of the Plan as shall be required by ERISA.

Limitation on Liability

The Committee shall not be liable for any act or omission on its part, excepting only its own willful misconduct or gross negligence or except as otherwise expressly provided by ERISA. To the extent permitted by applicable law, the Company shall indemnify and save harmless the Committee against any and all claims, demands, suits or proceedings in connection with the Plan and Trust Fund that may be brought by Participants or their beneficiaries, Employees of participating Employers, or by any other person, corporation, entity, government or agency thereof; provided, however that such indemnification shall not apply with respect to acts or omissions of willful misconduct or gross negligence. The Board at the expense of the Company, may settle such claim or demand asserted, or suit or proceedings brought, against the Committee when such settlement appears to be in the best interest of the Company.

Agent for Service of Process

The Committee or such other person as may from time to time be designated by the Committee shall be the agent for service of process under the Plan.

Delivery of Elections to Committee

All elections, designation, requests, notices, instructions and other communications required or permitted under the Plan from the Employer, a Participant, Beneficiary or other person to the Committee shall be on the Appropriate Form, shall be mailed by first-class mail or delivered to such location as shall be specified by the Committee, and shall be deemed to have been given or delivered only upon actual receipt thereof by the Committee at such location.

Delivery of Notice to Participants

All notices, statements, reports and other communications required or permitted under the Plan from the Employer or the Committee to any Employee, Participant, Beneficiary or other person, shall be deemed to have been duly given when delivered to, or when mailed by first class mail, postage prepaid, and addressed to such person at this address last appearing on the records of the Committee.

MANAGEMENT OF THE TRUST FUND

Trust Agreement

All assets of the Plan shall be held as a Trust Fund under a Trust Agreement with the Trustee for the exclusive benefit of Participants and their beneficiaries under the Plan, and paying the expenses of the Plan not paid directly by the Employer, and prior to the satisfaction of all liabilities with respect to such persons, no part of the corpus or income of the Trust Fund shall be used for or diverted to purposes other than for the exclusive benefit of such persons. No such person, nor any other person, shall have any interest in or right to any part of the earnings of the Trust Fund, or any rights in, to or under the Trust Fund or any part of its assets, except to the extent expressly provided in the Plan.

Appointment of the Trustee

All contributions to the Trust Fund shall be delivered to the Trustee, who shall be appointed by the Committee, with such powers in the Trustee as to control and disbursement of the Trust Fund as shall be in accordance with the Plan and Trust Agreement. The Committee may remove the Trustee at any time, upon reasonable notice, and upon such removal or upon the resignation of the Trustee, the Committee shall designate a successor Trustee.

Investment Authority

Subject to the provisions of the Trust Agreement, the Committee may appoint, and shall retain the power to discharge or replace, an investment manager or managers to manage any assets of the Plan. Such investment manager or managers shall: (a) be registered as an investment advisor under the Investment Advisers Act of 1940; (b) be a bank, as defined in the Investment Advisers Act of 1940; or (c) be an insurance company qualified to manage, acquire or dispose of qualified plan assets under the laws of more that one State; and shall acknowledge in writing to the Trustee and the Committee that it is a fiduciary with respect to the Plan. Notwithstanding anything in the Plan to the contrary, the Trustee shall be relieved of the authority and discretion to manage and solely control the assets of the Plan to the extent that authority to acquire, dispose of, or otherwise manage the assets of the Plan is delegated to one or more investment managers in accordance with this Section.

Form of Disbursements

The Trustees shall determine the manner in which the Trust Fund shall be disbursed in accordance with the Plan and the provisions of the Trust Agreement, including the form of voucher or warrant to be used in authorizing disbursements and the qualifications of persons authorized to approve and sign the same and any other matters incident to the disbursement of the Trust Fund.

Expenses of the Plan

Unless paid by the Employer, the expenses of the administration of the Plan shall be deemed to be expenses of the Trust Fund.

CERTAIN RIGHTS AND OBLIGATIONS OF EMPLOYERS

Disclaimer of Employer Liability

It is the intention of the Employer to continue this Plan and to make contributions regularly each year, but nothing in the Plan shall be deemed to require an Employer to make contributions under this Plan, and no Employer shall be under any legal obligation to contribute to this Plan, except to the extent provided by law.

No liability shall attach to any Employer for payment of any benefit or claim under the Plan, and Participants and their Beneficiaries, and all persons claiming with respect to them, shall have recourse only to the Trust Fund for payment of any benefit or claim.

The rights of the Participants of the Plan, their Beneficiaries, and other persons are hereby expressly limited and shall be only the rights accorded them under the provisions of the Plan.

Employer-Employee Relationship

The establishment of this Plan shall not be construed as conferring any legal or other rights upon any Employee or any person for a continuation of employment, nor shall it interfere with the rights of an Employer to discharge any Employee or otherwise act with relation to such person.

Nondiscriminatory Action

Any discretionary acts to be taken under the provisions of this Plan by an Employer or by the, Committee, with respect to the classification of employees, contributions, or distribution of benefits, shall be uniform and applicable to all Participants or Beneficiaries or other persons similarly situated.

NON-ALIENATION OF BENEFITS

Provision with Respect to Assignment and Levy

No benefit under this Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, levy, or charge, and any attempt to do so shall be void; nor shall any benefit under this Plan be in any manner liable for or subject to the debts, contracts, liabilities, engagements or torts of the person entitled to such benefit.

Notwithstanding any provision in the Plan to the contrary, the Committee shall take such steps as are necessary under the Plan to comply with the terms of any applicable “Qualified Domestic Relations Order” (as defined by Code §414(p)). The accrued benefits of any Participants subject to such an order shall be adjusted to reflect any payments made pursuant to such Order.

The Committee shall adopt such procedures as it deems necessary and appropriate to carry out the provisions of this Section.

Alternate Application

If any Participant or Beneficiary under this Plan becomes bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge any benefit under this Plan, except as may be specifically provided in the Plan, or if any benefit is levied upon, garnisheed, or attached, then payment of such benefit shall, at the discretion of the Committee, cease and terminate, and in that event the Committee may hold or apply such benefit or any part thereof for the benefit of the Participant or Beneficiary or his or her spouse, children, or other dependents in such manner and in such proportion as the Committee may .deem proper.

Payments to Minors, etc.

In the event any portion of the Trust Fund becomes distributable under the Plan to a minor or other person under legal disability, the Committee, in its sole discretion, may make such distribution in one or more of the following methods:

Directly to the minor or other person;

To the legal guardian or conservator of the minor or other person; or

To the spouse, parent, sibling, child, or other relative of the minor or other person for the use of the minor or other person.

The Committee shall not be required to see to the application of any distributions so made to any of such persons, but the receipts thereof shall be a full discharge of the liability of the Committee and the Trust Fund to such minor or other person.

AMENDMENT AND TERMINATION OF THE PLAN

Right to Amend

The Company reserves the right to modify or amend any or all of the provisions of this Plan, in whole or in part, at any time and from time to time, by action of the Board; provided however, that the Committee may adopt amendments which do not materially affect the cost of the Plan or which may be necessary or appropriate to facilitate. the administration, management or interpretation of the Plan or to conform the Plan thereto, or to qualify or to maintain the Plan and Trust as a plan and trust meeting the requirements of Code Sections 401(a) and 501(a), or any other applicable provisions of the law (including ERISA) and the regulations. Each participating Employer by its adoption of the Plan shall be deemed to have delegated authority to the Board and the Committee.

Anything in this Plan to the contrary notwithstanding, but consistent with applicable law, the Board in its sole discretion may make any modifications or amendments, additions or deletions in this Plan, as to benefits or otherwise, and retroactively if necessary, and regardless of the effect on the rights of any particular Participants, which it deems appropriate in order to bring this Plan into conformity with or to satisfy the conditions of any applicable laws or regulations, and in order that the Plan and the Trust may qualify and continue to qualify under Code §§401(a) and 501(a).

Right to Terminate

The Company reserves the right to terminate the Plan in full or in part at any time. Each Employer reserves the right to terminate this Plan with respect to its participating Employees. Upon the termination or partial termination of the Plan (if the Participant is affected by such partial termination), either with respect to the entire Plan or with respect to any Employer, participating in the Plan, every affected Participant shall be 100% vested in his or her Accrued Benefit.

Allocation of Assets on Termination

If the Plan is terminated, the assets of the Plan available to provide benefits shall be allocated among the Participants and Beneficiaries receiving or entitled to receive benefits in accordance with the priority classes established by ERISA. The respective amounts allocated to such priority classes shall be distributed to or set aside for the benefit of the persons entitled thereto in such manner as is determined by the Committee.

After the Plan has been terminated, the allocated assets shall be distributed to Participants and their Beneficiaries in the form of annuities, or, if the Actuarial Equivalent value of any benefit is $5,000 (or such greater amount as is permissible under Code §411(a)(11)) or less, in cash. Any residual assets shall be distributed to the Employer if all of the Plan’s liabilities to Participants and their Beneficiaries have been satisfied, and if the distribution does not contravene any provision of law.

Merger

Neither the merger of any Employer with any other company nor the merger or consolidation of this Plan with any other retirement plan whereby assets or liabilities are transferred shall result in the termination of this Plan, or be deemed a termination of employment with respects to any Employee.

The Plan may not merge, consolidate with or transfer assets or liabilities to another plan unless if the Plan then terminated, each Participant would be entitled to receive a benefit immediately after the merger, consolidation, or transfer which is equal to or greater than the benefit he or she would have been entitled to receive immediately before the merger, consolidation, or transfer, if the Plan had then terminated.

Appendix to the Plan

Notwithstanding any provision in the Plan to the contrary, the Board of Directors may elect to have special provisions apply with respect to a member of the Group and the employees of such Group member. Such special provisions, which may differ from the provisions of the Plan applicable to other employees, will be stated in an Appendix to the Plan which shall be applicable to such Group member and its employees.

Prohibition Against Diversion

No part of the corpus or income of the Trust Fund shall, by reason of any modification of or amendment to the Plan, or otherwise, be used for or diverted to purposes other than for the exclusive benefit of Participants and their Beneficiaries under the Plan and for the payment of administrative expenses of the Plan, except as provided in Section 11.3.

MISCELLANEOUS PROVISIONS

Construction

The provisions of this Plan shall be construed, regulated, and administered according to the laws of the State of New York and ERISA.

Exhibits

Any Exhibits attached hereto, are hereby incorporated by reference and made a part of this Plan.

Execution

This Plan has been established by the Employer in accordance with the resolutions adopted by its Board and may be executed in any number of counterparts, each of which shall be deemed to be an original. All the counterparts shall constitute one instrument, which may be sufficiently evidenced by any one counterpart.

Military Service

Notwithstanding any provision of this Plan to the contrary, effective as of December 12, 1994, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code.

PARTICIPATION IN THE PLAN BY SUBSIDIARIES OR GROUP MEMBERS

Participation by Subsidiaries or Group Members

Any subsidiary of the Company or Group member may, with the consent of the Board of Directors, become a party to this Plan by adopting the Plan for some or all of its Employees and by executing the Trust Agreement if required under such Trust Agreement. Upon the filing with the Committee of a certified copy of the resolutions or other documents evidencing the adoption of this Plan and a written instrument showing the consent of the Board to participation by such subsidiary or Group member and upon the execution of the Trust Agreement by such subsidiary or Group member, if required under such Trust Agreement, it shall be bound by all the terms thereof as they relate to its employees. Any contributions provided for in the Plan and made by such Employer shall become a part of the Trust Fund and shall be held by the Trustee subject to the terms and provisions of the Trust Agreement.

With the approval of the Company, a participating Employer may elect to have special provisions apply with respect to its Eligible Employees. Such special provisions, which may differ from the provisions of the Plan applicable to Employees of other Employers, shall be stated in an Appendix to the Plan which is applicable to such Employer.

Withdrawal of Participating Employers

In the event that an organization which has become a participating Employer pursuant to the provisions of Section 13.1, should cease to be a Group member or subsidiary of the Company, such organization shall forthwith be deemed to have withdrawn from the Plan and the Trust Agreement. Any one or more of the employers may voluntarily withdraw from the Plan by giving 6 months notice in writing of such intention to withdraw to the Board of Directors and to the Trustee (unless a shorter notice shall be agreed to by the Board of Directors and by the Trustee).

Upon any such withdrawal by any such Employer the Trustee shall determine that portion of the Trust Fund allocable to the Participants and their beneficiaries thereby affected, consistent with the provisions of ERISA and the regulations thereunder. Subject to the provisions of ERISA and regulations thereunder the Trustee shall then set aside from the trust assets then held by them, such securities and other property as they shall deem to be equal in value to the portion of the Trust Fund so allocable to the withdrawing Employer. At the discretion of the Trustee and subject to the provisions of ERISA and regulations thereunder the Trustee shall either (a) hold such assets so set aside and to apply the same for the exclusive benefit of the Participants and beneficiaries so affected on the same basis as if the Trust had been terminated pursuant to Section 11.2 upon the date of such withdrawal, or (b) deliver such assets to a Trustee to be selected by such withdrawing Employer.

IN EVENT PLAN BECOMES TOP-HEAVY

Special Top-Heavy Definitions

For purposes of this Section 14, the following terms shall have the following meanings:

“Determination Date” means, with respect to any Plan Year, the last Valuation Date of the preceding Plan Year.

“Key Employee” means a Participant or former Participant who is a “key employee” as defined in Code §416(i).

“Permissive Aggregation Group” means, with respect to a given Plan Year, this Plan and all other plans of the Employer and Group members (other than those included in the Required Aggregation Group) which, when aggregated with the Plans in the Required Aggregation Group, continue to meet the requirement of Code §§401(a)(4) and 410.

“Present Value of Accrued Benefit” means, in determining the value of any individual’s account or the present value of his or her accrued pension under this Plan or any other plan in the Aggregation Group:

the value of such account or the present value of such Accrued Benefit shall be increased by the aggregate distributions made with respect to such individual from such Plan Year during the 5 year period ending on the Determination Date;

rollover contributions and transfers from other plans shall not be taken into account to the extent provided under Code §416 and the regulations thereunder;

for Plan Years beginning after December 31, 1984, if any person had not performed any services for the Employer or any Group member at any time during the 5 year period ending on the Determination Date, then the Participant’s Present Value of Accrued Benefit and account balances shall not be taken into account; and

the present value of such Accrued Benefit for a defined benefit plan shall be determined by using actuarial assumptions set forth in the applicable Exhibit to the Plan.

“Required Aggregation Group” means with respect to a given Plan Year, (i) this Plan, (ii) each other plan of the Employer and a Group member in which a Key Employee is a participant, and (iii) each other plan of the Employer and a Group member which enables a plan described in (i) or (ii) to meet the requirements of Code §401(a)(4) or Code §410, regardless of whether the plan has terminated.

“Top-Heavy” means, with respect to the Plan for a Plan Year that the Present Value of Accrued Benefit of Key Employees exceeds 60% of the Present Value of Accrued Benefit of all Participants. For the purpose of making a determination as to the topheaviness of this Plan under Code §416(g), this Plan will be aggregated with any other plan maintained by the Employer and/or a Group member in the Aggregation Group. Pursuant to Code §416(g), the Top-Heavy Ratio for Key Employees for any Plan Year shall be determined as of the Determination Date based on the actuarial assumptions set forth in the applicable Exhibit to the Plan and the Present Value of Accrued Benefit determined by such assumptions as of the “Valuation Date.” For purposes of this Exhibit, the Valuation Date is any day within the Plan Year in which such Determination Date occurs on which the plan is valued for determining Plan costs.

Effective December 31, 1987, the Present Value of Accrued Benefit under any defined benefit plan used in testing whether the plan is top heavy shall be determined as if pensions accrue ratably unless the same accrual rate is used for all plans maintained by the Employer.

“Top-Heavy Group” means, with respect to a given Plan Year, a group of plans of the Employer which, in the aggregate, meet the requirements of the definition contained in Code §416(g)(2)(b).

Special Top-Heavy Provisions

Notwithstanding any other provisions of the Plan to the contrary, the following provisions of this Section 14.2 shall automatically become operative and shall supersede any conflicting provisions of the Plan if, in any Plan Year, the Plan is Top-Heavy.

The Minimum Pension shall be payable to any Employee who is not a Key Employee equal to 2% of annual compensation, averaged over the consecutive Top-Heavy Plan Years (not in excess of 5) that produce the highest average, for each Year of Service as a Participant completed after December 31, 1983 during which any Top-Heavy Plan Year ended, to a maximum of 20%. Such Minimum Pension shall commence to a single Participant in the form of a single life annuity only (with no ancillary benefits) at Normal Retirement Date; provided, however, that if payments commence other than at Normal Retirement Date, the Minimum

Pension must be at least the Actuarial Equivalent of the Minimum Pension payable at Normal Retirement Date.

This provision shall not apply to the extent minimum pension or contributions required under Code §416 are provided under another qualified plan maintained by the Employer.

In order to comply with the requirements of Code §416(h), in the case of a Participant who is or has also participated in a defined contribution plan of the Employer (or any Group member that is required to be aggregated with the Employer in accordance with Code §415(h)) in any Plan Year in which the Plan is Top-Heavy, there shall be imposed under such defined contribution plan the following limitation in addition to any limitation which may be imposed as described in Section 3.4(b). In any such year, for purposes of satisfying the aggregate limit on contributions and benefits imposed by Code §415(e), benefits payable from this Plan shall, except as hereinafter described, be reduced so as to comply with a limit determined in accordance with Code §415(e), but with the number “1.0” substituted for the number “1.25” in the defined benefit plan fraction” (as defined in Code §415(e)(2)) and in the “defined contribution plan fraction” (as defined in Code §415(e)(3)).

The following vesting schedule shall be substituted for the provision appearing in Section 3 of the Plan:

Years of Vesting Service	Vested Percentage
At least 2	20%
At least 3	40%
At least 4	60%
5 or more	100%

In the event that a Plan Year which follows a Top-Heavy Plan Year is not in itself a Top-Heavy Plan Year, then the vested percentage of each Participant who completed less than 3 Years of Service at the end of the last Top-Heavy Plan Year shall be determined without regard to this Article 14 but in no event shall his or her vested percentage of his or her Accrued Benefit at the date the Plan ceases to be Top-Heavy be reduced. A Participant who has 3 or more Years of Service at the end of a Top-Heavy Plan Year shall always be vested under either Section 3 of the Plan or this Section 14, whichever provision provides the more favorable vesting for such Participant.

In the event that Congress should provide by statute, or the Treasury Department should provide by regulation or ruling, that the limitations provided in this Section 14 are no longer necessary for the Plan to meet the requirements of Code §401 or other applicable law then in effect, such limitations shall become void and shall no longer apply, without the necessity of further amendment to the Plan.

IN WITNESS WHEREOF, and as evidence of the adoption of the amended and restated Plan Retirement Plan by the Company, it has caused the same to be signed by its officer duly authorized, and its corporate seal, if applicable, to be affixed this       day of                     , 2002.

ATTEST:	MONRO MUFFLER BRAKE, INC.
	By:
Secretary		Chief Financial Officer

EXHIBIT A
CALCULATION OF OPTIONAL FORMS OF BENEFIT
DETERMINATION OF ACTUARIAL EQUIVALENCE -
OTHERWISE PAYABLE BENEFIT MULTIPLIED BY APPROPRIATE ADJUSTMENT
FACTOR
(MONTHLY RETIREMENT ANNUITY PER $1 PER MONTH)
[FOR PURPOSES OF THESE TABLES AGE MEANS AGE AT NEAREST BIRTHDAY]

The amount of a benefit to be paid in an optional form shall be equal to the product of (a) the Employee’s Accrued Benefit and (b) the Straight Life Adjustment Factor divided by the applicable optional form adjustment factor.

	LIFE ANNUITY
AGE	STRAIGHT LIFE ADJUSTMENT FACTORS
50	129.16
51	127.74
52	126.25
53	124.71
54	123.11
55	121.45
56	119.71
57	117.91
58	116.02
59	114.05
60	112.02
61	109.91
62	107.75
63	105.52
64	103.21
65	100.85
66	98.45
67	96.03
68	93.60
69	91.18
70	88.76
71	86.36
72	83.99
73	81.62
74	79.23
75	76.79

CERTAIN AND LIFE ANNUITY

	CERTAIN PERIOD ADJUSTMENT FACTORS
AGE	60 MONTHS	120 MONTHS	180 MONTHS
50	129.76	131.38	133.68
51	128.40	130.17	132.68
52	126.98	128.91	131.65
53	125.51	127.61	130.60
54	123.98	126.28	129.53
55	122.40	124.90	123.45
56	120.75	123.47	127.36
57	119.03	122.01	126.26
58	117.25	120.51	125.16
59	115.41	118.98	124.07
60	113.51	117.43	122.98
61	111.55	115.86	121.90
62	109.55	114.29	120.83
63	107.50	112.72	119.79
64	105.41	111.14	118.77
65	103.29	109.58	117.78
66	101.16	108.02	116.82
67	99.03	106.50	115.91
68	96.92	105.00	115.05
69	94.83	103.53	114.24
70	92.75	102.10	113.48
71	90.69	100.73	112.78
72	88.66	99.40	112.13
73	86.64	98.13	111.53
74	84.61	96.91	110.98
75	82.60	95.74	110.48

50% JOINT & SURVIVOR ANNUITY ADJUSTMENT FACTORS

Age of Contingent
Annuitant	50	55	60	65	70	75
50	135.17	130.22	124.45	117.83	110.78	104.19
51	134.93	129.92	124.07	117.36	110.23	103.59
52	134.72	129.62	123.69	116.89	109.67	102.97
53	134.49	129.33	123.31	116.41	109.09	102.34
54	134.29	129.03	122.92	115.91	108.50	101.68
55	134.07	128.74	122.54	115.41	107.89	101.01
56	133.87	128.44	122.14	114.90	107.26	100.32
57	133.66	128.15	121.74	114.37	106.62	99.60
58	133.44	127.85	121.33	113.83	105.96	98.86
59	133.23	127.55	120.91	113.27	105.28	98.10
60	133.02	127.25	120.49	112.70	104.59	97.31
61	132.81	126.95	120.06	112.13	103.88	96.51
62	132.61	126.65	119.62	111.55	103.18	95.70
63	132.41	126.34	119.18	110.95	102.46	94.88
64	132.20	126.03	118.74	110.36	101.74	94.03
65	131.99	125.71	118.29	109.75	101.02	93.18
66	131.77	125.39	117.64	109.16	100.31	92.33
67	131.56	125.08	117.40	108.59	99.62	91.49
68	131.36	124.78	116.98	108.04	98.96	90.67
69	131.17	124.50	116.58	107.54	98.33	89.87
70	130.98	124.23	116.22	107.07	97.72	89.09
71	130.82	124.00	115.89	106.65	97.16	88.34
72	130.68	123.80	115.62	106.27	96.62	87.62
73	130.57	123.63	115.38	105.92	96.11	86.92
74	130.47	123.49	115.15	105.57	95.59	86.23
75	130.38	123.34	114.92	105.21	95.07	85.53

66 & 2/3% JOINT & SURVIVOR ANNUITY ADJUSTMENT FACTORS

Age of Contingent
Annuitant	50	55	60	65	70	75
50	137.17	133.14	128.59	123.49	118.12	113.32
51	136.86	132.74	128.08	122.87	117.37	112.52
52	136.57	132.34	127.58	122.24	116.64	111.70
53	136.27	131.95	127.07	121.39	115.87	110.86
54	135.99	131.56	126.56	120.94	115.08	109.98
55	135.71	131.17	126.04	120.26	114.27	109.09
56	135.43	130.77	125.52	119.58	113.43	108.16
57	135.16	130.39	124.99	118.88	112.58	107.21
58	134.87	129.98	124.44	118.15	111.69	106.22
59	134.58	129.59	123.88	117.41	110.79	105.20
60	134.31	129.19	123.31	116.65	109.86	104.15
61	134.03	128.79	122.74	115.89	108.93	103.09
62	133.76	128.38	122.16	115.11	107.98	102.01
63	133.50	127.98	121.57	114.32	107.03	100.91
64	133.22	127.56	120.98	113.52	106.07	99.78
65	132.93	127.13	120.38	112.72	105.11	98.65
66	132.64	126.71	119.78	111.93	104.16	97.51
67	132.36	126.30	119.19	111.17	103.24	96.39
68	132.09	125.90	118.63	110.44	102.36	95.29
69	131.84	125.52	118.10	109.77	101.52	94.23
70	131.59	125.16	117.62	109.14	100.71	93.18
71	131.37	124.85	117.19	108.58	99.96	92.18
72	131.19	124.58	116.82	108.07	99.24	91.23
73	131.04	124.36	116.50	107.61	98.56	90.30
74	130.90	124.17	116.20	107.14	97.87	89.37
75	130.78	123.97	115.89	106.67	97.17	88.44

100% JOINT & SURVIVOR ANNUITY ADJUSTMENT FACTORS

Age of
Contingent
Annuitant	50	55	60	65	70	75
50	141.17	138.99	136.88	134.81	132.80	131.59
51	140.71	138.39	136.12	133.88	131.70	130.39
52	140.27	137.79	135.36	132.93	130.58	129.16
53	139.83	137.21	134.60	131.96	129.42	127.89
54	139.41	136.61	133.83	130.98	128.24	126.58
55	138.99	136.03	133.06	129.97	127.02	125.23
56	138.57	135.44	132.27	128.94	125.77	123.85
57	138.15	134.85	131.47	127.89	124.49	122.42
58	137.72	134.25	130.65	126.80	123.16	120.94
59	137.30	133.66	129.81	125.69	121.80	119.40
69	136.88	133.06	128.96	124.56	120.42	117.83
61	136.46	132.46	128.10	123.40	119.01	116.24
62	136.06	131.85	127.23	122.24	117.59	114.61
63	135.66	131.24	126.35	121.06	116.17	112.97
64	135.24	130.61	125.46	119.86	114.73	111.28
65	134.81	129.97	124.56	118.65	113.28	109.57
66	134.38	129.33	123.66	117.47	111.87	107.88
67	133.95	128.72	122.78	116.32	110.49	106.20
68	133.55	128.12	121.93	115.23	109.16	104.54
69	133.17	127.56	121.15	114.23	107.90	102.95
70	132.80	127.02	120.42	113.28	106.69	101.38
71	132.47	126.55	119.77	112.44	105.55	99.88
72	132.20	126.15	119.22	111.68	104.48	98.46
73	131.97	125.82	118.74	110.98	103.46	97.05
74	131.78	125.53	118.29	110.29	102.42	95.67
75	131.59	125.23	117.83	109.57	101.38	94.26

EXHIBIT B

CALCULATION OF LUMP SUMS

Morality:

The Applicable Mortality Table as defined under Treasury Regulations §1.417(e)-l (or successor Regulations).

Interest:

The annual interest rate on 30-year Treasury securities as specified by the Commissioner for the month of February preceding the Plan Year of the distribution. For purposes of these assumptions, February shall be the “lookback month” and the Plan Year shall be the “stability period” as defined under Treasury Regulations §1.417(e)-l.

EXHIBIT C

LIMITATION ON CERTAIN BENEFITS

Anything in the Plan to the contrary notwithstanding, the following limitations shall apply to the payment of certain benefits:
For distributions made before January 1, 1994:

(1) Employer contributions on behalf of any of the 25 highest paid employees at the time the plan is established and whose anticipated annual benefit exceeds $1,500 will be restricted as provided in paragraph (2) upon the occurrence of the following conditions:

(a)	The plan is terminated within 10 years after its establishment,
(b)	The benefits of such highest paid employee became payable within 10 years after the establishment of the plan, or
(c)	If Code §412 (without regard to Code §412(h)(2)) does not apply to this plan, the benefits of such employee become payable after the plan has been in effect for 10 years, and the full current costs of the plan for the first 10 years have not been funded.

(2) Employer contributions which may be used for the benefit of an employee described in paragraph (1) shall not exceed the greater of $20,000, or 20% of the first $50,000 of the employee’s compensation multiplied by the number of years between the date of the establishment of the plan and:

(a)	If 1(a) applies, the date of the termination of the plan,
(b)	If 1(b) applies, the date the benefits become payable, or
(c)	If 1(c) applies, the date of the failure to meet the full current costs.

(3) If the plan is amended so as to increase the benefit actually payable in the event of the subsequent termination of the plan, or the subsequent discontinuance of contributions thereunder, then the provisions of the above paragraphs shall be applied to the plan as so changed as if it were a new plan established on the date of the change. The original group of 25 employees (as described in (1) above) will continue to have the limitations in (2) apply as if the plan had not been changed. The restrictions relating to the change of plan should apply to benefits or funds for each of the 25 highest paid employees on the effective date of the change except that such restrictions need not apply with respect to any employee in this group for whom the normal annual pension or annuity provided by employer contributions prior to that date and during the ensuing ten years, based on his rate of compensation on that date, could not exceed $1,500.

The employer contributions which may be used for the benefit of the new group of 25 employees will be limited to the greater of:

(a)	The employer contributions (or funds attributable thereto) which would have been applied to provide the benefits for the employee if the previous plan had been continued without change;
(b)	$20,000; or
(c)	The sum of (i) the employer contributions (or funds attributable thereto) which would have been applied to provide benefits for the employee under the previous plan if it had been terminated the day before the effective date of change, and (ii) an amount computed by multiplying the number of years for which the current costs of the plan after that date are met by (A) 20 percent of his annual compensation, or (B) $10,000, whichever is smaller.

(4) Notwithstanding the above limitations, the following limitations will apply if they would result in a greater amount of employer contributions to be used for the benefit of the restricted employee:

(a)

In the case of a substantial owner (as defined in §4022(b)(5) of ERISA), a dollar amount which equals the present value of the benefit guaranteed for such employee under §4022 of ERISA, or if the plan has not terminated, the present value of the benefit that would be guaranteed if the plan terminated on the date the benefit commences, determined in accordance with regulations of the Pension Benefit Guaranty Corporation (PBGC); and

(b)

In the case of other restricted employees, a dollar amount which equals the present value of the maximum benefit described in §4022(b)(3)(B) of ERISA (determined on the earlier of the date the plan terminates or the date benefits commence, and determined in accordance with regulations of PBGC) without regard to any other limitations in §4022 of ERISA.

(5) If, as of the date this plan terminates, the value of plan assets is not less than the present value of all Accrued Pensions (whether or hot nonforfeitable) distributions of assets to each Member equal to the present value of that Member’s Accrued Pension will not be discriminatory if the formula for computing benefits as of the date of termination is not discriminatory.

All present values and the value of plan assets will be computed using assumptions satisfying §4044 of ERISA.

Upon the occurrence of the above situation the amount by which the value of plan assets exceed the present value of Accrued Pensions (whether or not nonforfeitable) will revert to the employer.

(6) Notwithstanding the otherwise applicable restrictions on distributions of benefits incident to early plan termination, a Member’s otherwise restricted benefit may be distributed in full upon depositing with an acceptable depository property having a fair market value equal to 125% of the amount which would be repayable had the plan terminated on the date of the lump sum distribution. If the market value of the property held by the depository falls below 110% of the amount which would be repayable if the plan were then to terminate, additional property necessary to bring the value of the property held by the depository up to 125% of such amount will be deposited.

For Distributions made on or after January 1, 1994:

(7) (a) The benefits provided by Employer contributions for Highly Compensated Employees and Highly Compensated Former Employees (as described in Code §414(q)) shall be limited upon the Plan’s termination to a benefit that is nondiscriminatory under Code §401(a)(4); and

(b) Subject to the provisions of Section (b) of this Exhibit B, the annual I payment of benefits provided by Employer contributions for the 25 highest-paid Highly Compensated Employees and Highly Compensated Former Employees (as described in Code §414(q)) shall not exceed the annual payments that would be made under a single life annuity that is the actuarial equivalent of the Member’s accrued benefit and other benefits under the Plan.

The restrictions contained in sub-Section (b) above do not apply if:

(i)	after payment of benefits to a Member described in sub-Section (b) above the value of the Plan’s assets equals or exceeds 110% of its current liabilities (as defined in Code §412(1)(7); or
(ii)	the value of the benefits payable to a Member described in sub-Section (b) above is $5,000 or less; or
(iii)	the value of the benefits payable to a Member described in sub-Section (b) is less than 1% of its current liabilities (as defined in Code §412(l)(7)); or
(iv)	prior to receipt of a distribution the Member agrees that upon distribution he or she Will promptly deposit in escrow with an acceptable depository property, having a fair market value equal to at least 125% of the Restricted Amount (as defined below). Alternatively, the repayment agreement may be secured by a bank letter of credit or by posting a bond equal to at least 100% of the Restricted Amount. For this purpose, the bond must be furnished by an insurance company, bonding company or other surety approved by the U.S. Treasury Department as an acceptable surety for federal bonds, and
(v)	the Member agrees with the following provisions of this sub-Section (b)(v):

(A)	amounts in the escrow account in excess of 125% of the Restricted Amount may be paid to the Member. Where the repayment obligation has been secured by a bank letter of credit or a bond, any liability in excess of 100% of the Restricted Amount may be released; and
(B)	the Member has the right to receive any income from the property placed in escrow, provided however, that if the market value of the property in the escrow account falls below 110% of the Restricted Amount, the Member must deposit additional property to bring the value of the property held by the depository up to 125% of the Restricted Amount; and
(C)	A depository may not redeliver to a Member any property held under a repayment agreement, other than amounts in excess of 125% of the Restricted Amount, and a surety or bank may not release any liability on a bond or letter of credit unless the Committee certifies to the depository, surety or bank that the Member (or the Member’s estate) is no longer obligated to repay any amount under the repayment agreement. The Committee will make such a certification if any time after the distribution commences either (I) the value of Plan assets equals or exceeds 110% of the value of current liabilities; or (II) the value of the

Member’s future Nonrestricted Limit (as defined below) constitutes less than 1% of the value of current liabilities; or (III) the value of the Member’s future Nonrestricted Limit does not exceed $5,000; or (IV) the Plan has terminated and the benefit received by the Member is nondiscriminatory.

For purposes of the above, the following definitions shall apply:
“Restricted Amount” is the excess of the Accumulated Amount (as defined below) of distributions made to the Member over the Accumulated Amount of the Member’s Nonrestricted Limit (as defined below).

“Nonrestricted Limit” is equal to the payments that could have been distributed to the Member, commencing when the distribution commenced to the Member, had the Member received payments in the form described in Section (7)(b) of this Exhibit B.

“Accumulated Amount” is the amount of a payment increased by a reasonable amount of interest from the date the payment was made (or would have been made) until the date for the determination of the Restricted Amount.

In the event that Congress should provide by statute, or the Treasury Department should provide by regulation or ruling, that the limitations provided in this Exhibit C are no longer necessary for the Plan to meet the requirements of Section 401 or other applicable law then in effect, such limitations shall become void and shall no longer apply, without the necessity ,of further amendment to the Plan.

EX-10.04.A

Exhibit 10.04a

AMENDMENT TO THE
MONRO MUFFLER BRAKE, INC.
RETIREMENT PLAN

WHEREAS, Monro Muffler Brake, Inc. (the “Employer”) adopted the Monro Muffler Brake, Inc. Retirement Plan (the “Plan”) for the benefit of its eligible employees; and WHEREAS, the Employer wishes to amend the Plan; NOW, THEREFORE, the Plan is hereby amended as follows:

     1. The list of Code Sections in Item (1) of the second paragraph of Section 1.26 of the Plan is amended to include “Section 402(g)(3),” effective for limitation years beginning after December 31, 1997.

     2. A new paragraph is added to the end of Section 3.4(c) to read as follows, effective for limitation years beginning after December 31, 1997:

For limitation years beginning on and after December 31, 1997, for purposes of applying the limitations described in this Section 3.4 of the Plan, compensation paid or made available during such limitation years shall include any elective deferral (as defined in Section 402(g)(3) of the Code).

     3. The third paragraph of Section 4.2 is amended to read as follows, effective April 1, 2002:

If an Employer contribution is conditioned upon initial qualification of the Plan under Code §401(a), and if the Plan does not so qualify (and provided that the application for determination relating to initial qualification is filed by the due date of the Employer’s return for the taxable year in which the Plan was adopted), then this Section shall not prohibit the return of such contribution to the Employer within 1 year after the date of denial of qualification of the Plan.

     4. Exhibit B of the Plan is amended to read as follows, effective April 1, 1995:

EXHIBIT B
FACTORS FOR CALCULATION OF LUMP SUMS AND SECTION 415 LIMITATIONS

Mortality:

The Applicable Mortality Table as defined under Treasury Regulations §1.417(e)-1 (or successor Regulations).

Interest:

The annual interest rate on 30-year Treasury securities as specified by the Commissioner for the month of February preceding the Plan Year of the distribution. For purposes of these assumptions, February shall be the “lookback month” and the Plan Year shall be the “stability period” as defined under Treasury Regulations §1.417(e)-1.

IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed this 31 day of July, 2002.

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

EX-10.04.B

Exhibit 10.04b

MONRO MUFFLER BRAKE, INC.
RETIREMENT PLAN

Amendment No. 2 to GUST Restatement

Pursuant to Section 11.1, the Company hereby amends the Plan as follows:

I. EGTRRA

     The Company hereby amends the Plan to reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). These amendments are intended as good faith compliance with the requirements of EGTRRA and are to be construed in accordance with EGTRRA and guidance issued thereunder. Notwithstanding other provisions of the Plan to the contrary, effective January 1, 2002 (unless otherwise specified) the changes noted below shall apply. These amendments shall supersede other provisions of the Plan to the extent those provisions are inconsistent with these amendments.

1.1 Direct Rollovers of Plan Distributions

     Section 1.17 of the Plan is deleted in its entirety and replaced with the following new provision:

1.17 “Eligible Retirement Plan” means a plan described in Section 5.9(b)(ii) of the Plan.

     Section 5.9(b)(ii) of the Plan is deleted in its entirety and replaced with the following new provision:

(ii) An “Eligible Retirement Plan” is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), and annuity plan described in Code Section 403(a), or a Plan described in Sections 401(a), 403(b), or 457(b) of the Code that accepts the Distributee’s Eligible Rollover Distribution.

1.2 Modification of Top-Heavy Provisions

     Section 14 of the Plan is amended by adding to the end thereof the following new Section 14.3:

14.3 Modification of Top-Heavy Provisions for EGTRRA

a. Determination of top-heavy status.

     1. Key Employee. Key Employee means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the determination date was an officer of the Company having annual compensation greater than $130,000 (as adjusted under section 416(1) of the Code for Plan Years beginning after December 31, 2002), a 5-percent owner of the Company, or a 1-percent owner of the Company having annual compensation of more than $150,000. For this purpose, annual compensation means compensation within the meaning of section 415(c)(3) of the Code. The determination of who is a Key Employee will be made in accordance with section 416(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder.

     2. Determination of present values and amounts. This Section shall apply for purposes of determining the present values of accrued benefits of Employees as of the determination date.

     3. Distributions during year ending on the determination date. The present values of accrued benefits of an Employee as of the determination date shall be increased by the distributions made with respect to the Employee under the Plan and any plan aggregated with the Plan under section 416(g)(2) of the Code during the 1-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting “5-year period” for “1-year period.”

     4. Employees not performing services during year ending on the determination date. The accrued benefits of any individual who has not performed services for the Company during the 1-year period ending on the determination date shall not be taken into account.

b. Minimum benefits. For purposes of satisfying the minimum benefit requirements of section 416(c)(1) of the Code and the Plan, in determining years of service with the Company, any service with the Company shall be disregarded to the extent that such service occurs during a Plan Year when the Plan benefits (within the meaning of section 410(b) of the Code) no Key Employee or former Key Employee.

II. Minimum Required Distributions

     The following new Section 5.10 shall be added to the Plan:

5.10 Minimum Required Distributions

Subsection 1. General Rules

1.1. Effective Date. The provisions of this Section will apply for purposes of determining required minimum distributions beginning January 1, 2003.

1.2. Precedence. The requirements of this Section 5.10 will take precedence over any inconsistent provisions elsewhere in the Plan.

1.3. Requirements of Treasury Regulations Incorporated. All distributions required under this Section will be determined and made in accordance with the Treasury regulations under section 401(a)(9) of the Internal Revenue Code.

1.4. TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Section, other than subsection 1.3, distributions may be made under a designation made before January 1, 1984, in accordance with section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to section 242(b)(2) of TEFRA

Subsection 2. Time and Manner of Distribution.

2.1. Required Beginning Date. A Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant’s required beginning date.

2.2. Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows:

     (a) If the Participant’s surviving spouse is the Participant’s sole designated Beneficiary, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70¹/2, if later.

     (b) If the Participant’s surviving spouse is not the Participant’s sole designated Beneficiary, distributions to the designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.

     (c) If there is no designated Beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

     (d) If the Participant’s surviving spouse is the Participant’s sole designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this subsection 2.2, other than subsection 2.2(a), will apply as if the surviving spouse were the Participant.

For purposes of this subsection 2.2 and subsection 5, distributions are considered to begin on the Participant’s required beginning date (or, if subsection 2.2(d) applies, the date distributions are required to begin to the surviving spouse under subsection 2.2(a)). If annuity payments irrevocably commence to the Participant before the Participant’s required beginning date (or to the Participant’s surviving spouse before the date distributions are required to begin to the surviving spouse under subsection 2.2(a)), the date distributions are considered to begin is the date distributions actually commence.

2.3. Form of Distribution. Unless the Participant’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with subsections 3, 4 and 5 of this Section. If the Participant’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of section 401(a)(9) of the Code and the Treasury regulations. Any part of the Participant’s interest which is in the form of an individual account described in section 414(k) of the Code will be distributed in a manner satisfying the requirements of section 401(a)(9) of the Code and the Treasury regulations that apply to individual accounts.

Subsection 3. Determination of Amount to be Distributed Each Year.

3.1. General Annuity Requirements. If the Participant’s interest is paid in the form of annuity distributions under the Plan, payments under the annuity will satisfy the following requirements:

     (a) the annuity distributions will be paid in periodic payments made at intervals not longer than one year;

     (b) the distribution period will be over a life (or lives) or over a period certain not longer than the period described in subsection 4 or 5;

     (c) once payments have begun over a period certain, the period certain will not be changed even if the period certain is shorter than the maximum permitted;

     (d) payments will either be non-increasing or increase only as follows:

     (1) by an annual percentage increase that does not exceed the annual percentage increase in a cost-of-living index that is based on prices of all items and issued by the Bureau of Labor Statistics;

     (2) to the extent of the reduction in the amount of the Participant’s payments to provide for a survivor benefit upon death, but only if the Beneficiary whose life was being used to determine the distribution period described in subsection 4 dies or is no longer the Participant’s Beneficiary pursuant to a qualified domestic relations order within the meaning of section 414(p);

     (3) to provide cash refunds of employee contributions upon the Participant’s death; or

     (4) to pay increased benefits that result from a Plan amendment.

3.2. Amount Required to be Distributed by Required Beginning Date. The amount that must be distributed on or before the Participant’s required beginning date (or, if the Participant dies before distributions begin, the date distributions are required to begin under subsection 2.2(a) or (b)) is the payment that is required for one payment interval. The second payment need not be made until the end of the next payment interval even if that payment interval ends in the next calendar year. Payment intervals are the periods for which payments are received, e.g., bi-monthly, monthly, semi-annually, or annually. All of the Participant’s benefit accruals as of the last day of the first distribution calendar year will be included in the calculation of the amount of the annuity payments for payment intervals ending on or after the Participant’s required beginning date.

3.3. Additional Accruals After First Distribution Calendar Year. Any additional benefits accruing to the Participant in a calendar year after the first distribution calendar year will be distributed beginning with the first payment interval ending in the calendar year immediately following the calendar year in which such amount accrues.

Subsection 4. Requirements For Annuity Distributions That Commence During Participant’s Lifetime.

4.1. Joint Life Annuities Where the Beneficiary Is Not the Participant’s Spouse. If the Participant’s interest is being distributed in the form of a joint and survivor annuity for the joint lives of the Participant and a nonspouse Beneficiary, annuity payments to be made on or after the Participant’s required beginning date to the designated Beneficiary after the Participant’s death must not at any time exceed the applicable percentage of the annuity payment for such period that would have been payable to the Participant using the table set forth in Q&A-2 of section 1.401 (a)(9)-6T of the Treasury regulations. If the form of distribution combines a joint and survivor annuity for the joint lives of the Participant and a nonspouse Beneficiary and a period certain annuity, the requirement in the preceding sentence will apply to annuity payments to be made to the designated Beneficiary after the expiration of the period certain.

4.2. Period Certain Annuities. Unless the Participant’s spouse is the sole designated Beneficiary and the form of distribution is a period certain and no life annuity, the period certain for an annuity distribution commencing during the Participant’s lifetime may not exceed the applicable distribution period for the Participant under the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury regulations for the calendar year that contains the annuity starting date. If the annuity starting date precedes the year in which the Participant reaches age 70, the applicable distribution period for the Participant is the distribution period for age 70 under the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury regulations plus the excess of 70 over the age of the Participant as of the Participant’s birthday in the year that contains the annuity starting date. If the Participant’s spouse is the Participant’s sole designated Beneficiary and the form of distribution is a period certain and no life annuity, the period certain may not exceed the longer of the Participant’s applicable distribution period, as determined under this subsection 4.2, or the joint life and last survivor expectancy of the Participant and the Participant’s spouse as determined under the Joint and Last Survivor Table set forth in section 1.401(a)(9)-9 of the Treasury regulations, using the Participant’s and spouse’s attained ages as of the Participant’s and spouse’s birthdays in the calendar year that contains the annuity starting date.

Subsection 5. Requirements For Minimum Distributions Where Participant Dies Before Date Distributions Begin.

5.1. Participant Survived by Designated Beneficiary. If the Participant dies before the date distribution of his or her interest begins and there is a designated Beneficiary, the Participant’s entire interest will be distributed, beginning no later than the time described in subsection 2.2(a) or (b), over the life of the designated Beneficiary or over a period certain not exceeding:

     (a) unless the annuity starting date is before the first distribution calendar year, the life expectancy of the designated Beneficiary determined using the Beneficiary’s age as of the Beneficiary’s birthday in the calendar year immediately following the calendar year of the Participant’s death; or

     (b) if the annuity starting date is before the first distribution calendar year, the life expectancy of the designated Beneficiary determined using the Beneficiary’s age as of the Beneficiary’s birthday in the calendar year that contains the annuity starting date.

5.2. No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no designated Beneficiary as of September 30 of the year following the year of the Participant’s death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

5.3. Death of Surviving Spouse Before Distributions to Surviving Spouse Begin. If the Participant dies before the date distribution of his or her interest begins, the Participant’s surviving spouse is the Participant’s sole designated Beneficiary, and the surviving spouse dies before distributions to the surviving spouse begin, this subsection 5 will apply as if the surviving spouse were the Participant, except that the time by which distributions must begin will be determined without regard to subsection 2.2(a).

Subsection 6. Definitions.

6.1. Designated Beneficiary. The individual who is designated as the Beneficiary under the Plan and is the designated Beneficiary under section 401(a)(9) of the Internal Revenue Code and section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.

6.2. Distribution Calendar Year. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant’s required beginning date. For distributions beginning after the Participant’s death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to subsection 2.2.

6.3. Life Expectancy. Life expectancy as computed by use of the Single Life Table in section 1.401(a)(9)-9 of the Treasury regulations.

6.4. Required Beginning Date. The date specified in Section 5.2(d) of the Plan.

III.	Applicable Interest Rate and Applicable Mortality Table
	Exhibit B is replaced with the new Exhibit B attached hereto.

     IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this Plan amendment on its behalf this 2nd day of December, 2002.

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

EXHIBIT B

CALCULATION OF LUMP SUMS

Mortality:

     The “applicable mortality table” prescribed in Code section 417(e)(3)(A), as amended.

     Interest:

The “applicable interest rate” prescribed in Code section 417(e)(3)(A), as amended, for the month of February preceding the Plan Year of the distribution. For purposes of these assumptions, February shall be the “lookback month” and the Plan Year shall be the “stability period” as defined under Treasury Regulations §1.417(e)-(1).

EX-10.04.C

Exhibit 10.04c

MONRO MUFFLER BRAKE, INC.
RETIREMENT PLAN

Amendment No. 3 to GUST Restatement

     Pursuant to Section 11.1, the Plan is amended, effective March 28, 2005, by deleting current Section 5.2(b) and substituting in its place the following:

     Notwithstanding any other provision of the Plan, if a Participant has terminated employment and the present value of his Accrued Benefit under this Plan is $5,000 or less, this present value shall be distributed under the terms of this Section 5.2(b) in lieu of all benefits to which the Participant is otherwise entitled under this Plan. Effective March 28, 2005, cashouts of benefits having a present value of more than $1,000 but $5,000 or less shall be permitted only after such time (but no later than December 31, 2005) as the Company has established rollover IRAs for mandatory cashouts. At such time as the rollover IRAs are available, if the present value of a Participant’s nonforfeitable Accrued Benefit is more than $1,000 but $5,000 or less, and he fails to elect to have his benefit paid in cash or transferred to an IRA of his own designation, his entire nonforfeitable Accrued Benefit shall be paid automatically to a rollover IRA of the Company’s designation. If a Participant terminates participation in the Plan at a time when the present value of his nonforfeitable Accrued Benefit attributable to Company contributions is $1,000 or less, the present value of his entire nonforfeitable Accrued Benefit shall be paid to him automatically in cash.

     IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this amendment on its behalf this 29th day of March, 2005.

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

EX-10.04.D

Exhibit 10.04d

MONRO MUFFLER BRAKE, INC.
RETIREMENT PLAN

Amendment No. 4 to GUST Restatement

     Pursuant to Section 11.1, the Plan is amended, effective January 1, 2004, by adding the following new provision to the end of Section 1.2:

     Notwithstanding anything in the Plan to the contrary, with respect to the Code section 415 limit, for purposes of adjusting the annual benefit to a straight life annuity, the equivalent annual benefit shall be the greater of the equivalent annual benefit computed using the Plan’s interest rate and Plan mortality table (or other tabular factor) and the equivalent annual benefit computed using five percent (5%) interest rate assumption and the “applicable mortality table.” However, for purposes of adjusting the annual benefit to a straight life annuity, if the annual benefit is paid in any form other than a non-decreasing life annuity payable for a period not less than the life of a Participant or, in the case of a Pre-Retirement Survivor Annuity, the life of the surviving spouse, then the equivalent annual benefit shall be the greater of the equivalent annual benefit computed using the Plan interest rate and Plan mortality table (or other tabular factor) and the equivalent annual benefit computed using the “applicable interest rate” and the “applicable mortality table.” With respect to Plan Years beginning in 2004 and 2005 and any subsequent Plan Year as provided by law, for purposes of adjusting the annual benefit to a straight life annuity, if the annual benefit is paid in any form other than a non-decreasing life annuity payable for a period not less than the life of a Participant or, in the case of a Pre-Retirement Survivor Annuity, the life of the surviving spouse, then the equivalent annual benefit shall be the greater of the equivalent annual benefit computed using the Plan interest rate and Plan mortality table (or other tabular factor) and the equivalent annual benefit computed using five and one-half percent (5.5%) and the “applicable mortality table.”

     IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this amendment on its behalf this 21st day of December, 2006.

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

EX-10.71

Exhibit 10.71

     PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH PORTIONS ARE DESIGNATED “***”.

     THIS SUPPLY AGREEMENT (“Agreement”), is made and entered into as of the 1st day of February, 2007 (the “Effective Date”), between AP Exhaust Products, Inc., a North Carolina corporation, with a mailing address of 300 Dixie Trail, Goldsboro, NC 27530 ATTN: Executive Vice President (“Supplier”), and Monro Service Corporation (“Customer” and, together with the Supplier, the “Parties”), a Delaware corporation, with a mailing address of 200 Holleder Parkway, Rochester, NY 14615 ATTN: Vice President — Merchandising and General Counsel.

W I T N E S S E T H:

     WHEREAS, the Customer purchases and supplies products used at the retail locations operated by Monro Muffler Brake, Inc. (“Monro”), which are identified on the attached Schedule A, which Schedule will be amended from time to time to reflect locations opened, acquired or closed by Monro during the term hereof (the “Monro Locations”);

     IN CONSIDERATION OF THE MUTUAL PROMISES SET FORTH IN THIS AGREEMENT, and other good, valuable and sufficient consideration, the receipt and adequacy of which are hereby acknowledged, Supplier hereby agrees to sell and deliver, and Customer hereby agrees to purchase, receive and pay for, the products described below for use at the Monro Locations on the following terms and conditions:

1. TERM. This Agreement shall be in effect for a term of sixty (60) months commencing February 1, 2007 and continuing through January 31, 2012. This Agreement shall remain in effect unless terminated pursuant to the provisions of Section 8 hereof. This Agreement has an established term and shall not automatically renew upon its expiration.

2. PRODUCTS. From time to time, Supplier shall sell and deliver, and Customer shall purchase, pay and provide safe access for the delivery of certain automotive exhaust-related products, including mufflers, tail pipes, exhaust pipes, catalytic converters, tubing and other related or ancillary exhaust items (together, the “Products”) for purposes of stocking and selling such Products at the Monro Locations. Supplier shall provide Customer with promotional materials sufficient to supply Customer’s stores, and include Supplier in any marketing programs that are offered in the marketplace for promotion of the Products at the sole discretion of the supplier.

3. PRICE/PAYMENT. Supplier shall furnish a copy of its published “Jobber” price sheet, also known as its “Blue Sheet” to the Customer for all Products available at the time of this Agreement, incorporated in this Agreement as the attached Schedule B, and shall from time to time provide the Customer with updates as new Products become available. Pricing in effect as of the Effective Date of this Agreement shall remain in force for a period of one (1) year without increase. Customer shall be invoiced at the net price of the published “Jobber” price sheet ***. Any and all subsequent price adjustments shall not exceed industry published increase percentages and shall be priced in order that the customer is charged at the lowest price of any equivalent gross volume customer of the supplier. Customer shall have the right to audit Suppliers compliance with this pricing policy by providing seventy-two (72) hours notice. Supplier shall furnish customer a letter certifying compliance with this pricing policy on an annual basis on the anniversary of the agreement. If compliance with law prevents Supplier from charging or Customer from paying the price provided in this Agreement, any resulting failure to perform shall be excused pursuant to Section 5 hereof. Each delivery hereunder shall be considered a separate sale.

     Customer shall remit payment for Products sold and delivered by Supplier on an invoice-by-invoice basis with payment terms ***.

4. PRODUCT IDENTIFICATION. Supplier shall have the right at any time to change or discontinue use of any trademark, service mark, grade designation, trade dress, trade name or other indication of source of origin (“Marks”) under which the Products are sold. If Supplier discontinues the use of any Mark which the Customer, in its sole discretion, deems as being detrimental to its on-going business, the Customer shall have the right to terminate this Agreement under the conditions outlined below. Customer shall use commercial best efforts to maintain the quality, good name and reputation of Supplier and the Products. Supplier grants to Customer a license to use the Marks only to identify the Products. Customer shall not bring or cause to be brought any proceedings, either administrative or judicial in nature, contesting Supplier’s ownership of rights to, or registrations of the Marks.

5. FORCE MAJEURE. The Parties to this Agreement shall not be responsible for any delay or failure to perform under this Agreement (other than to make payments when due hereunder) if delayed or prevented from performing by act of God; transportation difficulty; strike or other industrial disturbance; any law, regulation,

ruling, order or action of any governmental authority; any allocation or shortage of product, as determined by Supplier in its sole discretion; or any other cause or causes beyond such party’s reasonable control whether similar or dissimilar to those stated above.

6. COMPLIANCE WITH LAWS/TAXES. Each Party shall, at its own expense:

(i)	comply with all applicable laws, regulations, rulings and orders, including without limitation those relating to taxation, workers’ compensation, and environmental protection; and
(ii)	obtain all licenses and permits necessary to fulfill it obligations hereunder.

     Further, Customer shall pay directly, or shall otherwise reimburse Supplier on demand if paid by Supplier, all taxes, inspection fees, import fees, and other governmental charges imposed upon this Agreement, the Products, or on the sale, purchase, handling, storage, advertising, distribution, or resale of the Products.

7. SUPPLIER’S RIGHT TO INSPECT. Upon no less than seventy-two (72) hours prior written notice to Customer, Supplier, or its authorized agents, shall have the right, but not the obligation, to inspect, a Monro Location during business hours.

8. TERMINATION; REMEDIES. This Agreement may be terminated prior to the expiration hereof only by mutual consent of the Parties in writing or if any one or more of the following events occur during the term:

(i)	by Supplier, if Customer defaults in the performance of or breaches any provision of Section 4 of this Agreement and fails to cure such default within sixty (60) days;
(ii)	by either Party if the other party materially defaults in the performance of or breaches any other provision of this Agreement and does not cure the same within sixty (60) days after notice of such default or breach;
(iii)	by either of the Parties if, with respect to the other party, any proceeding in bankruptcy is filed, or any order for relief in bankruptcy is issued, by or against such party, or if a receiver for such party or its premises is appointed in any suit or proceeding brought by or against party, or if there is an assignment by such party for the benefit of that party’s creditor(s);
(iv)	by Customer, if Supplier is acquired, either directly or indirectly, through the sale of assets, merger, or otherwise;
(v)	by Supplier, if the Customer is acquired, either directly or indirectly, through the sale of assets, merger, or otherwise; or
(vi)	by Customer, immediately in the event that a change of control of Supplier shall result in a party, person or corporate entity controlling a majority share of Supplier and such party, person or corporate entity shall be a citizen of, or based in, a country which is, or becomes, listed on the United States of America’s Department of State’s Office of Defense Trade Control’s Embargo Reference Chart.

     Nothing contained herein shall be deemed to limit or otherwise restrict any right, power, or remedy of the Parties. All rights, powers, and remedies shall be cumulative and concurrent and the exercise of one or more rights, powers or remedies existing under this Agreement or now or hereafter existing at law or in equity, shall not preclude the subsequent exercise by either party of any other right, power or remedy.

9. NOTICE. Any written notice required or permitted to be given under this Agreement shall be sufficient for all purposes hereunder if in writing and personally delivered or sent by any means providing for return receipt to the address and authorized representative(s) provided for the party in question in the heading of this Agreement. Either of the Parties may change the mailing address or other information provided for it in the heading hereof by written notice given in accordance with this Section.

10. FREIGHT. Supplier agrees to deliver Products to the Customer at up to five (5) warehouse destinations, ***.

     Supplier agrees to allow the Customer to, from time to time, elect to transport an order from the Supplier’s designated shipping/receiving point. If Customer shall elect to transport an order to or from Supplier, Supplier will issue a credit to the Customer equaling the prevailing freight charge of the Supplier’s preferred motor carrier.

11. TURN TIME. Except for events contemplated by Section 5, Supplier shall ship all orders placed by Customer within fourteen (14) working days from receipt of order. Supplier shall notify Customer within forty-eight (48) hours of receipt of a purchase order as to any Products, which will not be shipped to Customer for that specific purchase order. Supplier shall not hold or back order any products to Customer, and all orders shall be designated as “ship or cancel” by both Parties. It is acknowledged if Supplier is unable to ship all or any portion of Customer’s orders in accordance with the terms of this Section 11, then Customer may obtain similar products from another source, including, but not limited to, a competitor of Supplier.

12. INITIAL STOCK READJUSTMENT. Notwithstanding Section 13, Supplier shall accept a return *** of Customer’s existing inventory imbalance and overstock of exhaust-related products. The amount shall be calculated as the sum of the applicable price per each item accepted by Supplier, as such price is reflected on the books and records of Customer. Such return shall be executed immediately upon the Effective Date of this Agreement ***.

13. STOCK ADJUSTMENT. Supplier shall accept a return of any Products that are declared “obsolete” by Supplier. Such return shall occur no less often than once per year and shall include any items declared “obsolete” by Supplier or by Supplier’s predecessor.

     *** Supplier shall accept a return of any of Customer’s inventory where the Supplier’s provided Product is not an exact duplicate of the preceding supplier and Customer shall purchase replacement Product for such items from Supplier.

     *** Supplier shall accept a return of any remaining inventory that was purchased from the preceding supplier.

     All returns contemplated in this Section 13 shall be reimbursed to Customer at the Customer’s then average cost per item, and a credit shall be issued in full to Customer ***, Section 12 not withstanding.

14. PRODUCT DEFECT/WARRANTY.

(i)	Supplier shall be liable for quality of materials and workmanship in the production of Product, so long as Product has not been installed on a vehicle belonging to a patron of Customer.
(ii)	Notwithstanding Section 14.i, in the event of Product recall or production problem resulting in a “batch” or “lot” of Product defects, Customer may return such Product for replacement Products.
(iii)	Provisions of this Section shall pertain retroactively to all exhaust-related products existing in the Customer’s inventory as of the Effective Date of this Agreement.

15. ETHICAL BUSINESS PRACTICE. Customer and Supplier, respectively, acknowledge that each of its employees are required to maintain the highest standards of honesty, integrity and trustworthiness. In particular, reference is made to Monro’s “Code of Ethics” which applies to all employees of Customer. As such, both Parties affirm that they will conduct themselves with respect to this Agreement in accordance with these standards.

16. PRODUCT CATALOGS. Supplier agrees to provide complete and accurate catalog information to Customer. Such information shall be provided annually in physical booklet form with sufficient quantity to supply all Monro Locations. Additionally, Supplier shall provide electronic catalog data on a regular basis, or as often as requested by Customer’s electronic catalog operation. All electronic data must be supplied in the then current format specified by the Automotive Aftermarket Industry Association (“AAIA”).

(i)	Electronic information Product coverage will be provided for a minimum of 95% of all vehicles serviced by Customer during the current and preceding twenty (20) years, with the exception of any items declared obsolete by the Supplier or its predecessor;
(ii)	Electronic information will be updated at least annually, and provided in its entirety;
(iii)	Corrections of identified erroneous electronic information will be provided monthly;

(iv)	Electronic information will provide the correct part information for the specific vehicle application, without regard to Customer’s decision to stock such part; and
(v)	Supplier shall provide, upon release of same, a quantity of each catalog, specification guide or other such media, in an amount sufficient to supply each location operated or managed by Customer and Monro.

     Failure to provide catalog information as outlined above will result in Customer obtaining the information and/or print catalog editions in a manner most expeditious and beneficial to Customer. Supplier agrees to reimburse Customer for any and all costs associated with having to obtain catalog information from alternate source(s) ***.

17. INDEPENDENT CONTRACTOR. The business conducted by Customer at Customer’s premises shall be the independent business of Customer, and the entire control and direction of the activities of such business shall be and remain with Customer. Customer shall not be the employee or agent of Supplier, and Customer shall make no representation to the contrary.

18. TIME OF THE ESSENCE/WAIVER. In performing all obligations under this Agreement, time is of the essence. The failure of either of the Parties hereto to exercise any right such party may have with respect to breach of any provision of this Agreement shall not impair or be deemed a waiver of such party’s rights with respect to any continuing or subsequent breach of the same or any other provision of this Agreement.

19. EXECUTION AND ACCEPTANCE. This Agreement or any modification hereof shall not be binding until it has been duly accepted by Supplier, as evidenced by the signature of one of Supplier’s authorized officers or representatives in Supplier’s Goldsboro, North Carolina offices, and accepted by Customer, as evidenced by the signature of one of Customer’s authorized officers or representatives in Customer’s Rochester, New York offices with executed counterparts delivered to the each of the other Parties. Commencement of business between the Parties prior to such acceptance, signature and delivery of a counterpart shall not be construed as a waiver of this condition.

20. ENTIRETY OF CONTRACT. This writing is intended by the Parties as the final, complete and exclusive statement of the terms, conditions and specifications of their agreement and is intended to supersede all previous oral or written agreements and understandings between the parties relating to its specific subject matter. No employee or agent of Supplier has authority to make any statement, representation, promise or agreement not contained in this Agreement. No prior stipulation, agreement, understanding or course of dealing between the parties or their agents with respect to the subject matter of this Agreement shall be valid or enforceable unless embodied in this Agreement. No amendment, modification or waiver of any provision of this Agreement shall be valid or enforceable unless in writing and signed by all parties to this Agreement. This Agreement shall supersede, and shall not be modified or amended in any way by the terms of, any purchase order which may be issued by Customer for the purchase of product hereunder.

21. SEVERABILITY. If any provision of this Agreement or the application of any such provision to any person or circumstance is held invalid, the application of such provision to any other person or circumstance and the remainder of this Agreement will not be affected thereby and will remain in full effect.

22. GOVERNING LAW. THIS AGREEMENT HAS BEEN DELIVERED AND ACCEPTED AND SHALL BE DEEMED TO HAVE BEEN MADE AT ROCHESTER, NEW YORK. Any dispute, claim or controversy arising out of or related to this Agreement (or any of the Agreements attached hereto as exhibits) or breach, termination or validity thereof, may be, by mutual consent of the Parties, settled by arbitration conducted expeditiously in accordance with the commercial Arbitration Rules of the American Arbitration Association (“AAA”). Within ten (10) business days of the filing of arbitration, the Parties shall select a sole independent and impartial arbitrator in accordance with such Rules. If the Parties mutually agree to arbitration, but are unable to agree upon an arbitrator within such period, the AAA will appoint an arbitrator on the eleventh (11^th) day, which arbitrator shall be experienced in commercial matters. The arbitrator will issue findings of fact and conclusions of law to support his/her opinion and is not empowered to award damages in excess of compensatory damages. The place of arbitration shall be Rochester, New York. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. Notwithstanding any of the foregoing, either party may seek

remedy through the courts, including, without limitation, injunctive relief, prior and without prejudice to arbitration in accordance with this provision. THE PARTIES HEREBY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING DIRECTLY OR INDIRECTLY HEREUNDER.

     Notwithstanding anything contained in this Agreement, neither party shall be liable in any arbitration, litigation or other proceeding for anything other than actual, compensatory damages.

     IN WITNESS WHEREOF, the parties hereto have set their hands as of the date first written above.

Monro Service Corporation	AP Exhaust Products, Inc.
By:	By:
Print Name:	Print Name:
Title:	Title:
Witness:	Witness:

EX-10.79.C

Exhibit 10.79c

April 16, 2007

Via Certified Mail — Return Receipt Request

Mr. Fred Tomarchio
F&J Properties, Inc.
P.O. Box 55
Glenelg, MD 21737

RE: Lease Agreement dated January 1, 1998 by and between F&J Properties, nc. (“Landlord”) and Monro Muffler Brake, Inc., as successor in interest to Mr. Tire, Inc. (“Tenant”) for premises situate at 5910 Liberty Road, Baltimore, MD [MMB #750]

Please accept this letter as Monro Muffler Brake, Inc.’s official notification of our intent to renew said lease agreement for the ten-year renewal period commencing on January 1, 2008 and expiring December 31, 2017. The rent for said renewal shall be increased annually by 1% as shown below.

1/1/2008 — 12/31/2008	$	5,426.01
1/1/2009 — 12/31/2009	$	5,480.27
1/1/2010 — 12/31/2010	$	5,535.08
1/1/2011 — 12/31/2011	$	5,590.43
1/1/2012 — 12/31/2012	$	5,646.33
1/1/2013 — 12/31/2013	$	5,702.79
1/1/2014 — 12/31/2014	$	5,759.82
1/1/2015 — 12/31/2015	$	5,817.42
1/1/2016 — 12/31/2016	$	5,875.59
1/1/2017 — 12/31/2017	$	5,934.35

Tenant shall have one ten-year renewal option remaining.

Please do not hesitate to contact me at 800-876-6676 ext. 3384 if you have any questions relative to the renewal.

Yours truly,

/s/ Thomas M. Aspenleiter
      VP Real Estate

TMA:mc

EX-21.01

Exhibit 21.01

SUBSIDIARIES OF THE COMPANY

Monro Service Corporation

EX-23.01

Exhibit 23.01

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (File Nos. 333-34290, 333-57438, 333-57432, 333-57450, 333-133044, 333-133045) and on Form S-3 (File Nos. 333-118176, 333-125964) of Monro Muffler Brake, Inc. of our report dated June 14, 2007 relating to the financial statements, management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

 
PRICEWATERHOUSECOOPERS LLP

 
Rochester, New York
June 14, 2007

EX-24.01

Exhibit 24.01

POWER OF ATTORNEY

     KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, a director of Monro Muffler Brake, Inc., a New York corporation (the “Corporation”), constitutes and appoints ROBERT G. GROSS to be his true and lawful attorney-in-fact and agent, with full powers of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities in connection with the filing of the Annual Report on Form 10-K of the Corporation for the fiscal year ended March 31, 2007 (the “Form 10-K”) with the Securities and Exchange Commission, to sign the Form 10-K and any and all amendments related thereto and to file the same, with any exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, or his substitutes, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully for all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this power of attorney has been signed by the following directors on June 13, 2006.

/s/ Richard A. Berenson

Richard A. Berenson

/s/ Frederick M. Danziger

Frederick M. Danziger

/s/ Donald Glickman

Donald Glickman

/s/ Robert E. Mellor

Robert E. Mellor

/s/ Peter J. Solomon

Peter J. Solomon

/s/ Lionel B. Spiro

Lionel B. Spiro

/s/ Francis R. Strawbridge

Francis R. Strawbridge

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Robert G. Gross, President and Chief Executive Officer, certify that:

1.	I have reviewed this annual report on Form 10-K of Monro Muffler Brake, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 14, 2007

/s/  Robert G. Gross

Robert G. Gross

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Catherine D’Amico, Executive Vice President — Finance and Chief Financial Officer, certify that:

1.	I have reviewed this annual report on Form 10-K of Monro Muffler Brake, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 14, 2007

/s/  Catherine D’Amico

Catherine D’Amico

Executive Vice President — Finance and

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

Pursuant to, and solely for purposes of, 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002), each of the undersigned hereby certifies in the capacity and on the date indicated below that:

1. The Annual Report of Monro Muffler Brake, Inc. (“Monro”) on Form 10-K for the period ended March 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Monro.

/s/  Robert G. Gross Robert G. Gross	Dated: June 14, 2007 President and Chief Executive Officer
/s/  Catherine D’Amico Catherine D’Amico	Dated: June 14, 2007 Executive Vice President — Finance and Chief Financial Officer