EX-10.1



 







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”).



 









 





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.






 









 








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.




 









 








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