Exhibit 10.1
May 29, 2006
Mr. Robert A. Lindeman
8462 Grennan Woods Drive
Powell, OH 43065
Dear Rob:
We are pleased to confirm our offer, and your acceptance of, of the terms of
your employment at Max & Erma’s Restaurants, Inc. (the “Company”).
Following are the terms of your employment offer:
1. Employment
     You will be employed on a full-time basis as President of the Company and
reporting to the Chief Executive Officer of the Company. You shall perform the
duties, undertake the responsibilities and exercise the authority customarily
performed, undertaken and exercised by persons employed in a similar executive
capacity.
2. Compensation
     (a) Base Salary. Your base salary compensation (“Base Salary”) will be at
annual rate of $265,000, effective the date of this letter agreement, through
the end of fiscal year 2007, payable in accordance with the normal payroll
practices of the Company. Your Base Salary shall be increased by a minimum of 7%
beginning on the first day of each of fiscal year 2008, fiscal year 2009 and
fiscal year 2010.
     (b) Executive Cash Bonus. The Compensation Committee of the Board of
Directors (the “Compensation Committee”) has amended your interest in the
Company’s 2006 Executive Cash Bonus Program as provided in this Section 2(b).
You agree that if the Company’s budgeted Adjusted Pre-Tax Income is met for
fiscal year 2006, as such target was previously set by the Compensation
Committee, you will be paid under the Company’s 2006 Executive Bonus Program (i)
$25,000 (the “2006 Minimum Bonus”), plus (ii) your scheduled payout from the
Bonus Pool (as previously defined by the Compensation Committee), which was
previously set at 40% of the Bonus Pool (the “2006 Bonus Pool Payout”).
     After fiscal 2006, you will be eligible for a cash bonus under a bonus
plan, which is determined annually at the discretion of Compensation Committee
for officers of the Company. Although bonus plan specifications for future
fiscal years are at the absolute discretion of the Compensation Committee, it is
the Company’s expectation that your bonus structure for future fiscal years will
be the similar to the 2006 Executive Cash Bonus Program with a cash bonus
subject to the achievement of one or more financial performance targets and
calculated as (i) $25,000 (each, a “Future Fiscal Year Minimum Bonus”), plus
(ii) your payout from that year’s bonus pool (each, a “Future Fiscal Year Bonus
Pool Payout”).

 

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Mr. Robert A. Lindeman
May 29, 2006
Page 2 of 4
     You agree that if you voluntarily terminate your employment with us on or
prior to the last day of fiscal year 2009, other than by death or disability,
you will repay to the Company the following bonuses, if any, earned or paid
through such date of termination:
     (x) the 2006 Minimum Bonus, if paid; and
     (y) for each of fiscal years 2007, 2008 and 2009, any Future Fiscal Year
Minimum Bonus, if paid.
     (c) Stock Option. The Company’s Compensation Committee has authorized the
grant of an option (the “Option”) to you to purchase 50,000 shares of the
Company’s common stock under the Company’s 2002 Stock Option Plan (the “Plan”),
or successor plan, exercisable at a strike price per share equal to the fair
market value of one share of the Company’s common stock at the time of the
grant, vesting and becoming exercisable 30% on the third anniversary of the date
of this letter agreement, and an additional 10% on each subsequent anniversary
thereafter, cumulatively, and expiring on the 10th anniversary of Stockholder
Approval (as defined below), unless terminated earlier pursuant to the terms of
the Plan, or successor plan. Notwithstanding anything herein to the contrary,
the actual Option grant is expressly subject to stockholder approval of an
increase in the number of shares available under the Plan or stockholder
approval of available shares under a successor plan (“Stockholder Approval”),
and such grant will be made effective on the date of such Stockholder Approval.
The Company agrees to use reasonable efforts to bring such proposal before the
stockholders at the Company’s 2007 Annual Meeting of Stockholders. If
Stockholder Approval is not obtained at or prior to the Company’s 2007 Annual
Meeting of Stockholders, the agreement to grant the Option shall be null and
void; provided, however, if the Option is deemed null and void, the Company will
provide you with an alternative incentive compensation benefit on terms and
conditions as similar as practicable to those contained in the Option.
     (d) Fringe Benefits. You will be entitled to a car allowance of up to
$750.00 a month. In addition, you will be entitled to receive employee benefits
and participate in any employee benefit plan, in accordance with their terms as
from time to time amended, that the Company maintains during your employment and
which are made generally available to all other management employees in like
positions.
     (e) Severance Agreement in Event of Change in Control for Senior Executive
Officers. The Company agrees to enter into a Severance Agreement in Event of
Change in Control for Senior Executive Officers with you, substantially in the
form as provided in Exhibit 10(m) to the Company’s Annual Report on Form 10-K
that was filed with the Securities and Exchange Commission on January 18, 2000.
3. At-Will Employment; No Limitation. Your employment is “at-will employment”
(may be terminated by either the Company or yourself at any time and for any
reason). You agree that you are not entitled to any severance upon your
termination, regardless of whether the termination is by the Company or yourself
(except as may be provided under the Severance Agreement in Event of Change in
Control for Senior Executive Officers described in Section 2(e) above). This
letter agreement is in addition to an not in place of any other obligations of
trust, confidence and ethics duty imposed on you by law. If, in the future, you
elect to terminate your employment with the Company, we request that you provide
a minimum notice of 30 days.

 

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Mr. Robert A. Lindeman
May 29, 2006
Page 3 of 4
4. Confidential Information; Assignment of Inventions.
          (a) Confidential Information Defined. You agree to maintain in strict
confidence all information and materials belonging to, used by, or in the
possession of Company (i) which have been disclosed or made known to, or has
come into your possession as a consequence of or through your relationship with
the Company before or after the date hereof, (ii) which are related to the
Company’s customers, suppliers, business strategies or policies, operating
practices, operating manuals, recipes, financial results, sales and management
techniques, marketing plans, strategic plans, and research or development, and
(iii) which have not generally been made available to the general public by the
Company pursuant to a specific authorization in the ordinary course of business
by the Company (“Confidential Information”). Notwithstanding the foregoing, you
may release Confidential Information if (1) required by law, (2) necessary to
establish a lawful claim or defense against the Company, (3) necessary to
establish a lawful claim or defense against a person or entity other than the
Company, but only with the permission, which shall not be unreasonably withheld,
of the Company, or (4) necessary to respond to process or appropriate
governmental inquiry, but in each case of items (1) to (4) hereof, only with
prompt and reasonable prior notice to the Company to enable the Company to seek
appropriate protective orders or otherwise protect the Confidential Information.
          (b) Assignment of Inventions. You agree that you will promptly
disclose and grant and do hereby grant to the Company your entire right, title
and interest in and to all customer lists, developments, plans, designs,
improvements, inventions, recipes, formulae, software, documentation, processes,
techniques, know-how, patents, trade secrets and trademarks, copyrights and all
other data conceived, developed or acquired by you before or after the date
hereof, whether or not patentable or registrable under copyright or similar
statutes, made or conceived or reduced to practice or learned by you, either
alone or jointly with others, that result from or are conceived during the
performance of tasks assigned to you by Company or result from use of property,
equipment, or premises owned, leased or contracted for by the Company
(“Inventions”). You agree to execute and deliver, from time to time, such
documents as may be necessary or convenient to effectuate the transfer of such
Confidential Information to the Company and shall cooperate with and assist the
Company in every proper way (at the expense of the Company) in obtaining and
from time to time enforcing patents, copyrights, trade secrets, other
proprietary rights and protections relating to Inventions in any and all
countries;
5. Governing Law; Jurisdiction and Venue. You agree that jurisdiction and venue
in any action brought pursuant to this letter agreement to enforce its terms or
otherwise with respect to the relationships between the parties shall properly
lie in either the United States District Court for the Southern District of
Ohio, Eastern Division, Columbus, Ohio, or the Court of Common Pleas of Franklin
County, Ohio. Such jurisdiction and venue is exclusive. This letter agreement
shall be governed by the laws of the State of Ohio, without reference to its
choice of law rules.
6. Complete and Final Agreement. This letter agreement constitutes the complete
agreement between the parties with respect to the subject matter hereof and
supersedes and replaces any existing oral or written agreement or understanding
between you and the Company relating to the same subject matter and may be
modified only by an agreement in writing signed by both you and a duly
authorized representative of the Company.

 

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Mr. Robert A. Lindeman
May 29, 2006
Page 4 of 4
     By accepting this offer, you represent and warrant that you are not a party
to any agreement that would prevent you from performing your duties for the
Company or which would expose the Company to a risk of suit by reason of your
employment by the Company.

     
 
  Sincerely,
 
 
  /s/ Todd B. Barnum           
 
  Todd B. Barnum
 
  Chief Executive Officer

AGREED AND ACCEPTED:
/s/ Robert A. Lindeman                                                        
Robert A. Lindeman