##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended May 11, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-11514
 MAX & ERMAS RESTAURANTS, INC.
  Delaware
    
    31-1041397(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    identification no.)
 4849 Evanswood Drive, Columbus, Ohio
    
    43229(Address of principal executive offices)
    
    (Zip Code)
 (614) 431-5800
 þ o
  Large accelerated filer
o
    
    Accelerated filer
o
    
    Non-accelerated filer o
    
    Smaller reporting company
þ(Do not check if a smaller reporting company)
 o þ




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONITEM 1  FINANCIAL STATEMENTSITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSItem 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKItem 4  CONTROLS AND PROCEDURESPART II  OTHER INFORMATIONItem 6  EXHIBITSSIGNATURESEXHIBIT INDEXEX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 ITEM 1  FINANCIAL STATEMENTS
MAX & ERMAS RESTAURANTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 May 11, 2008(UNAUDITED)
    
    
    October 28, 2007ASSETSCurrent Assets:Cash and Equivalents
    
    $
    2,602,518
    
    
    $
    2,465,852Inventories
    
    
    1,226,187
    
    
    
    1,320,669Other Current Assets
    
    
    5,561,464
    
    
    
    4,776,568Total Current Assets
    
    
    9,390,169
    
    
    
    8,563,089Property  At Cost
    
    
    112,615,872
    
    
    
    112,989,108Less Accumulated Depreciation and Amortization
    
    
    61,077,663
    
    
    
    57,971,840Property  Net
    
    
    51,538,209
    
    
    
    55,017,268Deferred Income Taxes and Other Assets
    
    
    14,150,689
    
    
    
    14,979,932Total
    
    $
    75,079,067
    
    
    $
    78,560,289LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Current Maturities of Long-Term Obligations
    
    $
    32,856,103
    
    
    $
    2,914,530Accounts Payable
    
    
    5,959,698
    
    
    
    9,280,424Accrued Payroll and Related Taxes
    
    
    2,616,276
    
    
    
    2,966,378Accrued Liabilities
    
    
    7,420,346
    
    
    
    6,548,035Total Current Liabilities
    
    
    48,852,423
    
    
    
    21,709,367Long-Term Obligations  Less Current Maturities
    
    
    18,811,521
    
    
    
    47,164,076Stockholders Equity:Preferred
Stock  $.10 Par Value; Authorized 500,000 Shares  None OutstandingCommon Stock  $.10 Par Value; Authorized 5,000,000 Shares,
Issued and Outstanding 2,554,474 Shares
At 05/11/08 and 2,554,474 Shares at 10/28/07
    
    
    255,446
    
    
    
    255,446Additional Paid-In Capital
    
    
    1,261,124
    
    
    
    1,165,389Retained Earnings
    
    
    5,898,553
    
    
    
    8,266,011Total Stockholders Equity
    
    
    7,415,123
    
    
    
    9,686,846Total
    
    $
    75,079,067
    
    
    $
    78,560,289
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MAX & ERMAS RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 Twelve Weeks Ended
    
    
    Twenty-eight Weeks EndedMay 11, 2008
    
    
    May 13, 2007
    
    
    May 11, 2008
    
    
    May 13, 2007REVENUES
    
    $
    40,026,587
    
    
    $
    41,134,932
    
    
    $
    95,226,454
    
    
    $
    96,655,791COSTS AND EXPENSES:Costs of Goods Sold
    
    
    10,272,214
    
    
    
    10,312,159
    
    
    
    24,505,951
    
    
    
    24,159,772Payroll and Benefits
    
    
    12,969,587
    
    
    
    13,443,100
    
    
    
    30,951,130
    
    
    
    30,912,900Other Operating Expenses
    
    
    14,373,530
    
    
    
    13,874,815
    
    
    
    32,861,650
    
    
    
    31,763,122Pre-Opening Expenses
    
    
    9,326
    
    
    
    1,190
    
    
    
    168,999
    
    
    
    13,068Impairment of Assets
    
    
    167,961
    
    
    
    
    
    
    
    591,810Administrative Expenses
    
    
    2,752,658
    
    
    
    3,224,615
    
    
    
    6,621,908
    
    
    
    7,679,407Total Operating Expenses
    
    
    40,545,276
    
    
    
    40,855,879
    
    
    
    95,701,448
    
    
    
    94,528,269Operating Income (Loss)
    
    
    (518,689
    )
    
    
    279,053
    
    
    
    (474,994
    )
    
    
    2,127,522Interest Expense
    
    
    991,502
    
    
    
    771,614
    
    
    
    2,127,708
    
    
    
    1,841,505Other Non-Operating Expense
    
    
    38,504
    
    
    
    19,252
    
    
    
    57,756
    
    
    
    38,503INCOME (LOSS) BEFORE
INCOME TAXES
    
    
    (1,548,695
    )
    
    
    (511,813
    )
    
    
    (2,660,458
    )
    
    
    247,514INCOME TAXES EXPENSE
(CREDIT)
    
    
    82,000
    
    
    
    (410,000
    )
    
    
    (293,000
    )
    
    
    (400,000
    )NET INCOME (LOSS)
    
    $
    (1,630,695
    )
    
    $
    (101,813
    )
    
    $
    (2,367,458
    )
    
    $
    647,514NET INCOME (LOSS) PER SHAREBasic and Diluted
    
    $
    (0.64
    )
    
    $
    (0.04
    )
    
    $
    (0.93
    )
    
    $
    0.25SHARES OUTSTANDING:Basic and Diluted
    
    
    2,554,474
    
    
    
    2,555,664
    
    
    
    2,554,474
    
    
    
    2,554,066
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MAX & ERMAS RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Twenty-eight Weeks EndedMay 11, 2008
    
    
    May 13, 2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    (2,367,458
    )
    
    $
    647,514Depreciation and amortization
    
    
    4,278,433
    
    
    
    4,243,527Other Non-Operating Expenses
    
    
    57,756
    
    
    
    38,503Loss on disposition of assets
    
    
    119,646
    
    
    
    183,276Impairment of fixed assets
    
    
    591,810Stock based compensation
    
    
    95,735
    
    
    
    132,332Interest paid by the issuance of notes payable
    
    
    639,941Decrease (increase) in inventories
    
    
    94,482
    
    
    
    (13,963
    )Increase (decrease) in accounts payable
    
    
    (2,418,417
    )
    
    
    495,783Increase (decrease) in accrued liabilities
    
    
    522,211
    
    
    
    467,707Changes in other assets and liabilities
    
    
    408,991
    
    
    
    (158,201
    )Net cash provided by operating activities
    
    
    2,023,130
    
    
    
    6,036,478CASH FLOWS FROM INVESTING ACTIVITIES:Property additions
    
    
    (1,878,538
    )
    
    
    (3,237,650
    )Proceeds from sale of assets
    
    
    5,389
    
    
    
    46,716Net increase in other assets
    
    
    (41,743
    )
    
    
    (87,490
    )Net cash used by investing activities
    
    
    (1,914,892
    )
    
    
    (3,278,424
    )CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments under long-term obligations
    
    
    (36,948,690
    )
    
    
    (36,229,258
    )Proceeds from long-term obligations
    
    
    37,062,000
    
    
    
    33,825,000Proceeds from exercise of stock options
    
    
    
    
    
    
    20,375Debt issue costs
    
    
    (27,126
    )
    
    
    (18,473
    )Distributions to minority interests in Affiliated Partnerships
    
    
    (57,756
    )
    
    
    (38,503
    )Net cash provided by (used by) financing activities
    
    
    28,428
    
    
    
    (2,440,859
    )NET INCREASE IN CASH AND EQUIVALENTS
    
    
    136,666
    
    
    
    317,195CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    2,465,852
    
    
    
    2,491,877CASH AND EQUIVALENTS AT END OF PERIOD
    
    $
    2,602,518
    
    
    $
    2,809,072SUPPLEMENTAL DISCLOSURES:Cash paid during the period for:Interest
    
    $
    2,285,436
    
    
    $
    2,200,447Income taxes
    
    $
    
    
    
    $
    22,832Non-cash activities:Property additions financed by accounts payable
    
    $
    529,463
    
    
    $
    784,029Property additions financed by financing lease obligations
    
    $
    1,610,936
    
    
    $
    1,537,500
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MAX & ERMAS RESTAURANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 1.
    
    PresentationThe accompanying unaudited condensed consolidated financial statements have been prepared in
accordance with the instructions to Form 10-Q and include all of the information and disclosures
required by accounting principles generally accepted in the United States of America for interim
reporting, which are less than those required for annual reporting. In the opinion of
management, all adjustments, consisting of only normal recurring accruals, considered necessary
for a fair presentation have been included.The Company and its Affiliated Partnership each have a 52-53 week fiscal year, which ends on the
last Sunday in October. Fiscal 2008 and 2007 each consist of 52 weeks and includes one
sixteen-week and three twelve-week quarters.2.
    
    New Financial Accounting StandardsIn June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes
(FIN 48). FIN 48 is an interpretation of FASB Statement No. 109, Accounting for Income Taxes,
and seeks to reduce the diversity in practice associated with certain aspects of measurement and
recognition in accounting for income taxes. In addition, FIN 48 requires expanded disclosure
with respect to the uncertainty in income taxes. FIN 48 was adopted in the first quarter of
2008 (see note 7).In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements(SFAS 157), to
eliminate the diversity in practice that exists due to the different definition of fair value
and the limited guidance for applying those definitions in accounting principles generally
accepted in the United States of America that are dispersed among the many accounting
pronouncements that require fair value measurements. SFAS 157 will apply to fiscal years
beginning after November 15, 2007. The Company does not expect the impact of adopting SFAS 157
to be material to its consolidated financial statements.In February 2007, the FASB issued SFAS No. 159, Establishing the Fair Value Option for Financial
Assets and Liabilities(SFAS 159) to permit all entities to choose to elect to measure eligible
financial instruments at fair value. SFAS 159 applies to fiscal years beginning after November
15, 2007, with early adoption permitted for an entity that has also elected to apply the
provisions of SFAS No. 157. An entity is prohibited from retrospectively applying SFAS No. 159,
unless it chooses early adoption. The Company is currently evaluating the impact of SFAS No.
159 on its consolidated financial statements.
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3.
    
    Net Income Per ShareBasic income per share amounts are based on the weighted average number of shares of common
stock outstanding during the years presented. Diluted income per share amounts are based on the
weighted average number of shares of common stock and dilutive stock options outstanding during
the periods presented. Options to purchase 488,150 shares of common stock were outstanding at
May 11, 2008, but were not included in the computation of diluted earnings per share because the
Company reported a net loss for the quarter and the year-to-date period, and, therefore, the
effect would be anti-dilutive. Options to purchase 391,450 shares of common stock were
outstanding at May 13, 2007, but were not included in the computation of diluted earnings per
share because the exercise prices were greater than the average market price of the common
shares or the assumed proceeds resulted in a lower number of shares outstanding and, therefore,
the effect would be anti-dilutive. The difference between basic shares outstanding and diluted
shares outstanding were as follows:
 Twelve Weeks Ended
    
    
    Twenty-eight Weeks EndedMay 11, 2008
    
    
    May 13, 2007
    
    
    May 11, 2008
    
    
    May 13, 2007Basic Shares
Outstanding
    
    
    2,554,474
    
    
    
    2,555,664
    
    
    
    2,554,474
    
    
    
    2,554,066Dilutive Effect of
Stock Options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted Shares
Outstanding
    
    
    2,554,474
    
    
    
    2,555,664
    
    
    
    2,554,474
    
    
    
    2,554,066
 4.
    
    Stock OptionsDuring the twenty-eight weeks ended May 11, 2008, the Companys stock option activity and
weighted average exercise prices were as follows:
 Shares
    
    
    Exercise PriceOutstanding, October 28, 2007
    
    
    301,150
    
    
    $
    11.42Granted
    
    
    200,000
    
    
    
    4.50Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (13,000
    )
    
    
    13.30Outstanding, May 11, 2008
    
    
    488,150
    
    
    $
    8.54
 Stock-based employee compensation expense for the twenty-eight weeks ended May 11, 2008 was
$95,735 ($132,332 expense for the sixteen weeks ended May 12, 2007) leaving a remaining
unrecognized compensation expense at May 11, 2008 of $372,000, to be recognized over a weighted
average period of 6.3 years.
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5.
    
    Long-Term ObligationsOn October 29, 2007, the first day of fiscal 2008, the Company issued a $2.0 million, 8.5%
convertible promissory note to a director of the Company. The proceeds of the note were used to
increase working capital. The note provided that one million dollars was due ten days after the
Company receives a construction allowance from the landlord of one of the restaurants that
opened during the fourth quarter of fiscal 2007. The second million dollars was due on the
earlier of April 16, 2009, or upon the recapitalization or sale of the Company and is
convertible into shares of common stock at the lesser of $5.00 per share of the equity price per
share realized in an equity financing transaction. In connection with the agreement to merge
with G&R Acquisition, the Company entered into a waiver and consent agreement with the director.
Under this waiver and consent agreement, the director consented to the execution and delivery
of the merger agreement by the company and the performance of the Companys obligations
thereunder. The director also agreed that the execution, delivery and performance of the merger
agreement does not constitute an event of default under the convertible promissory note, all
such defaults being waived. In addition, if the director elects to exercise his conversion
rights at the closing of the merger, the conversion price shall be $4.00; provided, however,
that in the event the closing of the merger does not occur and in all other situations, the
rights of the director, including the conversion price and the receipt of principal and interest
will be as stated in the convertible promissory note.At May 11, 2008, the Company was in compliance with the minimum quarterly adjusted EBITDA
covenant of $1.5 million required by its bank loan agreement and senior subordinated note
agreement. In conjunction with the proposed merger discussed below (See note 8), the buyer has
agreed to complete the refinancing of approximately $31.0 million of the Companys long-term
obligations within 60 days of the effective date of the merger, which is expected to occur in
July, 2008. The proposed merger would result in certain defaults under each of the Companys
three loan agreements. All three lenders have granted a waiver of such defaults pending the
refinancing of the Companys debt. If the refinancing has not occurred by March 31, 2009 or
within 60 days of closing of the merger with respect to the senior subordinated note, the
Companys lenders could declare the outstanding balances due and payable. As a result, the
Company has classified its debt as current. Any failure to comply with the debt refinancing
covenant or the related waivers associated with the merger could result in an event of default
under the borrowing agreements, in which case the lenders could elect to declare all amounts
outstanding thereunder to be due and payable, which could have a material adverse effect on the
Companys financial condition and negatively affect the Companys status as a going concern.6.
    
    Asset ImpairmentDuring the first quarter of 2008, the Company recorded a $424,000 asset impairment charge
primarily for the write-down of restaurant assets and goodwill at two under-performing locations
and goodwill at four locations (including the two above-mentioned). In the second quarter of
2008, the Company recorded a $168,000 asset impairment charge for the write down of restaurant
assets at one under-performing location. Testing for impairment of long-lived assets requires
significant management judgment regarding future cash flows, asset lives and discount rates.
Changes in estimates could result in future impairment charges.
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7.
    
    Income Taxes and Deferred Tax AssetThe Company adopted the provisions of Financial Accounting Standards Board (FASB)
Interpretation No. 48, Accounting for Uncertainty in Income Taxesan interpretation of FASB
Statement No. 109 (FIN 48), in the first quarter of 2008. FIN 48 clarifies the accounting
for uncertainty in income taxes recognized in an enterprises financial statements in accordance
with FASB Statement 109, Accounting for Income Taxes, and prescribes a recognition threshold
and measurement process for financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods, disclosure and
transition.
Based on our evaluation, the Company has concluded that there are no significant uncertain tax
positions requiring recognition in our financial statements. The evaluation was performed for
the tax years ended October 26, 2003, October 31, 2004, October 30, 2005, October 29, 2006 and
October 28, 2007, the tax years which remain subject to examination by major tax jurisdictions
as of April 13, 2008.The Company may from time to time, be assessed interest or penalties by major tax jurisdictions,
although any such assessments historically have been minimal and immaterial to its financial
results. In the event the Company has received an assessment for interest and/or penalties, it
has been classified in the financial statements as selling, general and administrative expense.For the twenty-eight weeks of 2008, the Company reported a tax credit of $293,000, which
reflects the tax benefit of the reported loss before income taxes and $827,000 of FICA tax on
tips credit earned during the period, both of which were offset by a $1.1 million increase to
the deferred tax asset valuation allowance. For the twenty-eight weeks of 2007, the Company
recorded a tax credit of $400,000, which reflects the benefit of the FICA tax on tips and work
opportunity tax credits of approximately $500,000. The Company has determined that it is more
likely than not that it will not realize the entire value of its deferred tax asset. The
Company has recorded a valuation allowance totaling $2.4 million at May 11, 2008 related to a
portion of the FICA tax on tips credit that may expire before being utilized. Due to changes in
facts and circumstances and the significant management judgments and estimates involved in
determining the proper valuation allowance, differences between actual future events and prior
judgments and estimates could result in adjustments. Decreases in the expected future taxable
income of our company may trigger adjustments in future periods. In the event we were to
determine it is more likely than not that we will not fully recognize the remaining net deferred
tax assets, an adjustment to the deferred tax assets would be charged to income in the period
such determination was made.8.
    
    Proposed Merger with G&R Acquisition, Inc.On April 28, 2008, Max & Ermas Restaurants, Inc. (the Company) entered into an Agreement and
Plan of Merger (the Merger Agreement) with G&R Acquisition, Inc. (Buyer), and G&R
Acquisition Subsidiary, Inc., a wholly-owned subsidiary of Buyer (Merger Sub). Under the
Merger Agreement, Merger Sub will be merged with and into the Company (the Merger), with the
Company continuing after the Merger as the surviving
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corporation and a subsidiary of Buyer. At the effective time of the Merger, each issued and
outstanding share of the Companys common stock (the Common Stock) will be converted into the
right to receive $4.00 in cash, without interest (the Merger Consideration). In addition,
each holder of a vested option to purchase shares of Common Stock will be entitled to receive a
per share cash payment equal to the amount by which the Merger Consideration exceeds the
exercise price of such option (if any), less any applicable withholding taxes.The Company has made customary representations and warranties and agreed to customary covenants
in the Merger Agreement. The completion of the Merger is subject to approval of the Merger
Agreement by the Companys stockholders and other customary closing conditions. The transaction
is not subject to any financing condition. The Merger Agreement contains certain termination
rights and provides that, upon the termination of the Merger Agreement under specified
circumstances, the Company may be required to pay Buyer a termination fee equal to $800,000 plus
expenses, not to exceed $500,000.Following the Merger, the Company will cease to be a reporting company under the Securities
Exchange Act of 1934, as amended, and its Common Stock will cease to be traded on the NASDAQ
Capital Market.If the Merger does not occur by September 30, 2008, there could be a material adverse effect on
the Companys financial condition due to a lack of liquidity, the possible violations of loan
covenants and the inability to obtain waivers or refinancing of loans and the costs of
Sarbanes-Oxley compliance.
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ITEM 2
 MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OVERVIEW
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YEAR-TO-YEAR COMPARISONS AND ANALYSIS
 RESULTS OF OPERATIONS
  Twelve
    
    
    Twelve
    
    
    Twenty-eight
    
    
    Twenty-eightWeeks Ended
    
    
    Weeks Ended
    
    
    Weeks Ended
    
    
    Weeks EndedMay 11, 2008
    
    
    May 13, 2007
    
    
    May 11, 2008
    
    
    May 13, 2007Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of Goods Sold
    
    
    (25.7
    )
    
    
    (25.1
    )
    
    
    (25.7
    )
    
    
    (25.0
    )Payroll & Benefits
    
    
    (32.4
    )
    
    
    (32.7
    )
    
    
    (32.5
    )
    
    
    (32.0
    )Other Operating Expenses
    
    
    (35.9
    )
    
    
    (33.7
    )
    
    
    (34.5
    )
    
    
    (32.9
    )Pre-Opening Expenses
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    Impairment of Assets
    
    
    0.4
    
    
    
    
    
    
    
    (0.6
    )
    
    
    Administrative Expenses
    
    
    (6.9
    )
    
    
    (7.8
    )
    
    
    (7.0
    )
    
    
    (7.9
    )Interest Expense
    
    
    (2.5
    )
    
    
    (1.9
    )
    
    
    (2.2
    )
    
    
    (1.9
    )Minority Interest
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.1
    )
    
    
    Income Tax Expense Credit
    
    
    (0.2
    )
    
    
    1.0
    
    
    
    0.3
    
    
    
    0.4Net Income (Loss)
    
    
    (4.1
    )%
    
    
    (0.2
    )%
    
    
    (2.5
    )%
    
    
    0.7
    %
 REVENUES
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COSTS AND EXPENSES
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ASSET IMPAIRMENT
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ADMINISTRATIVE EXPENSES
  INTEREST EXPENSE
  3 4
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INCOME TAXES AND DEFERRED TAX ASSET
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LIQUIDITY AND CAPITAL RESOURCES
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Same-Store Sales
  Asset Impairment
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Self-Insurance Reserves
  Income Taxes and Deferred Tax Asset
  Classification of Debt as Long-Term
  INFLATION
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SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
   
 Item 3
 QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
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Item 4
 CONTROLS AND PROCEDURES
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PART
II  OTHER INFORMATION
 
 Item 6
 EXHIBITS
 Exhibit 2.1
    
    Agreement and Plan of Merger, dated April 28, 2008, among Max & Ermas
Restaurants, Inc., G&R Acquisition, Inc. and G&R Acquisition Subsidiary, Inc. (the
schedules and exhibits to this agreement have been omitted pursuant to item 601 (b) (2)
of Regulation S-K*) (Reference is made to Exhibit 2.1 of Report on Form 8-K filed April
28, 2008).Exhibit 10.1
    
    Waiver and Consent, dated April 28, 2008, among Max & Ermas Restaurants, Inc.
and National City Bank (Reference is made to Exhibit 10.1 of Report on Form 8-K filed
April 28, 2008).Exhibit 10.2
    
    Second Amendment to Note Purchase Agreement and Consent, dated April 28, 2008,
among Max & Ermas Restaurants, Inc. and Friedberg Milstein
Private Capital Fund I
(Reference is made to Exhibit 10.2 of Report on Form 8-K filed April 28, 2008).Exhibit 10.3
    
    Waiver and Consent, dated April 28, 2008, between Max & Ermas Restaurants,
Inc. and Donald H. Malenick (Reference is made to Exhibit 10.3 of Report on Form 8-K
filed April 28, 2008).Exhibit 31.1*
    
    Rule 13a-14(a) Certification of Principal Executive OfficerExhibit 31.2*
    
    Rule 13a-14(a) Certification of Principal Financial OfficerExhibit 32.1+
    
    Section 1350 Certification of Principal Executive OfficerExhibit 32.2+
    
    Section 1350 Certification of Principal Financial Officer
 
 *
    
    Filed with this report.+
    
    Furnished with this report. 23




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##### Table of Contents



SIGNATURES
  MAX & ERMAS RESTAURANTS, INC.Registrant/s/ Robert A. LindemanRobert A. LindemanPresident and CEO(Principal Executive Officer)/s/ William C. Niegsch, Jr.William C. Niegsch, Jr.Executive Vice President andChief Financial Officer(Principal Financial andAccounting Officer)
 June 20, 2008Date
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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Exhibit
    
    Page No.Exhibit 2.1
    
    Agreement and Plan of Merger, dated April 28, 2008, among
Max & Ermas Restaurants, Inc., G&R Acquisition, Inc. and
G&R Acquisition Subsidiary, Inc. (the schedules and exhibits
to this agreement have been omitted pursuant to item 601 (b) (2)
of Regulation S-K*) (Reference is made to Exhibit 2.1 of Report
on Form 8-K filed April 28, 2008).Exhibit 10.1
    
    Waiver and Consent, dated April 28, 2008, among Max & Ermas
Restaurants, Inc. and National City Bank (Reference is made to  Exhibit 10.1 of Report on Form 8-K filed April 28, 2008).Exhibit 10.2
    
    Second Amendment to Note Purchase Agreement and Consent,
dated April 28, 2008, among Max & Ermas Restaurants, Inc. and
Friedberg Milstein Private Capital Fund I (Reference is made to
Exhibit 10.2 of Report on Form 8-K filed April 28, 2008).Exhibit 10.3
    
    Waiver and Consent, dated April 28, 2008, between Max & Ermas
Restaurants, Inc. and Donald H. Malenick (Reference is made to
Exhibit 10.3 of Report on Form 8-K filed April 28, 2008).Exhibit 31.1*
    
    Rule 13a-14(a) Certification of Principal Executive Officer
    
    Page 26Exhibit 31.2*
    
    Rule 13a-14(a) Certification of Principal Financial Officer
    
    Page 28Exhibit 32.1+
    
    Section 1350 Certification of Principal Executive Officer
    
    Page 30Exhibit 32.2+
    
    Section 1350 Certification of Principal Financial Officer
    
    Page 31
 
 *
    
    Filed with this report.+
    
    Furnished with this report. 25