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 EXHIBIT 10.51

 
May 15, 2006

Mr. Stuart K. Gee
8052 E Kael Street
Mesa, Arizona 85207

Dear Stuart,

 
On behalf of MAIN STREET RESTAURANT GROUP, INC (MSRG). I am pleased to summarize
your compensation agreement as Chief Operating Officer.

The term of this agreement is two (2) years commencing on May 1, 2006 and ending
on April 1, 2008. Your annual salary for 2006 will be at an annual rate of
$200,000 (payable bi-weekly in the normal payroll practices of MSRG).
Compensation for the year 2006 and 2007 is to be determined and agreed to by the
Compensation Committee of the Board of Directors.

Additionally, this agreement provides for you to continue your participation in
the Company’s performance bonus, stock option and restricted stock grant
programs.

BONUS

Earned Bonus compensation is determined as a percentage of base compensation,
measured by meeting EBITDA (Cash flow) Targets as follows:

 
Ø
30% bonus if Main Street meets last year’s EBITDA target

 
Ø
45% bonus if Main Street meets Budgeted EBITDA target

 
Ø
60% bonus maximum if Main Street exceeds budgeted EBITDA by the difference of
budgeted EBITDA and last year’s actual EBITDA

By way of example only for the bonus computation, if last year’s EBITDA is $10.0
million and the current year Budgeted EBITDA target is $12.5 million, then the
following bonus percentage would apply to the base compensation if the actual
EBITDA is as follows:

-1-

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$10.0 million
 
30%
 
Achieving last year’s EBITDA
$11.0 million
 
36%
 
1.0 m / 2.5 m times 15%
$12.5 million
 
45%
 
Achieving target EBITDA
$13.0 million
 
48%
 
.5 m / 2.5 m times 15%
$15.5 million
 
60%
 
Maximum % that can be earned

STOCK OPTIONS OR RESTRICTED STOCK
 
Stock Options
 
Stock option grants for the year 2006 and 2007 will be determined and agreed to
by the compensation committee of the board of directors. The option price for
all options will be the market price on the date of approval and grant by the
compensation committee of the board of directors.

Restricted Stock Grants

Restricted stock unit grants for the year 2006 and 2007 will be determined and
agreed to by the compensation committee of the board of directors.

BENEFITS

You will be eligible for the standard employee health and welfare package in
addition to an annual, company-paid executive physical, company-paid executive
life insurance, participation in the company’s 401(K) program, deferred
compensation program and executive change of control program.

SEVERANCE UPON TERMINATION WITHOUT CAUSE

If you are terminated without cause you will be eligible to receive severance as
outlined by the company’s current, then existing severance policy.

CHANGE IN CONTROL

In the event of a Change of Control (an event where the control of MSRG becomes
vested in stockholders different than those who control today), you will become
eligible to participate in the company’s current, then existing, executive
change of control policy.

This contract supersedes any other promises, offers or previous contracts or
agreements.

-2-

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Stuart, on behalf of the Company and Board of Directors I would like to
congratulate you on the progress you have made with the company in the short
time you have been its Executive VP of Operations and wish you the best of luck
in continuing this adventure with Main Street. We believe that you have made a
substantial contribution to the organization and will direct the company to
achieving our present and future goals.

Sincerely,

/s/ William G. Shrader
 

William G. Shrader

President and CEO
Main Street Restaurant Group, Inc.
 

AGREED TO AND ACKNOWLEDGED BY:

/s/ Stuart Gee
 
5/15/06
 
Stuart Gee
 
Date
 

***-**-****
 
Social Security Number
 

 
 
-3-

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