**Exhibit 10.20**

 

**RETENTIONAGREEMENT**

 

This RETENTION AGREEMENT (this “Agreement”) ismade as of the         day of               ,2006 by and between REAL MEX RESTAURANTS, INC., a Delaware corporation(the “Company”), and                                    (“Executive”).

 

WHEREAS, Executive serves the Company in a position ofsubstantial authority and responsibility; and

 

WHEREAS, the Company and Executive wish to establishprotections for Executive in the event of certain cessations of his employmentwith the Company following a change of control of the Company.

 

NOW THEREFORE, in consideration of these premises andintending to be legally bound hereby, the parties agree as follows:

 

**SECTION 1.****                            SeveranceBenefits.**

 

## 1.1.                              Executive’sEntitlement. If on or after the effective date of a Change of Control (the “EffectiveDate”) and prior to the end of the 18 month period beginning upon suchChange in Control, Executive’s employment with the Company ceases due to atermination by the Company without Cause or a resignation by Executive withGood Reason, Executive will be entitled to:

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### 1.1.1.                     payment of all accrued and unpaidbase salary through the date of cessation;

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### 1.1.2.                     payment for all accrued but unusedvacation days;

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### 1.1.3.                     payment of any annual bonus earnedbut unpaid with respect to the fiscal year of the Company ending prior to thefiscal year of the Company in which such cessation occurred;

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### 1.1.4.                     waiver of the applicable premiumotherwise payable for COBRA continuation coverage for Executive (and, to theextent covered immediately prior to the date of Executive’s cessation, hisspouse and dependents) to the extent such premium exceeds the employeecontribution required for such coverage (as in effect immediately prior tocessation of employment) for a period equal to the Severance Period;

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### 1.1.5.                     continuation of hisCompany-provided group term life insurance at no cost to executive (at a levelequal to the lower of $500,000, or two times Executive’s annual base rate ofpay immediately prior to cessation of employment), or if group coverage is notpermitted, reimbursement of the premiums that Executive pays for substantiallyequivalent replacement coverage, for a period equal to the Severance Period;

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### 1.1.6.                     continuation of his car and caroperating allowance of $       /month (orsuch greater amount as in effect immediately prior to cessation of employment)for a period equal to the Severance Period; and

 

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### 1.1.7.                     monthly payments for a periodequal to the Severance Period, each equal to one-twelfth of Executive’s annualbase rate of salary (as in effect immediately prior to his cessation or, ifthat cessation is due to a resignation for Good Reason described in Section 1.2.3(ii),then at the rate in effect immediately prior to such reduction).

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Notwithstanding theforegoing, no amount will be paid or benefit or right provided under thisAgreement unless Executive executes and delivers to the Company, in a form satisfactoryto the Company, a release substantially identical to that attached hereto as Exhibit Ain a manner consistent with the requirements of the Older Workers BenefitProtection Act and all other applicable laws (the “Release”). Theseverance benefits described in this Section 1.1 will be paid (or,in the case of the benefits described inSections 1.1.4 – 1.1.7, will begin to be paid or provided) as soon asadministratively practicable following the date the Release becomes irrevocable.The payments, benefits and rights described in this Section 1.1will be offset by severance benefits due under any employment agreement,severance plan or similar arrangement maintained by the Company.

 

## 1.2.                              Definitions.For purposes of this Agreement:

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### 1.2.1.                     “Cause” means, with respectto Executive: (i) conviction of, or the entry of a plea of guilty or nocontest to, a felony or any other conduct that causes the Company or itsaffiliates public disgrace or disrepute, (ii) gross negligence or willfulmisconduct with respect to the Company or any of its affiliates (including,without limitation fraud, embezzlement, theft or proven dishonesty in thecourse of employment); (iii) alcohol abuse or use of controlled drugsother than in accordance with a physician’s prescription; (iv) refusal,failure or inability to substantially perform the duties of his position,which failure, refusal or inability (if curable) is not cured within ten daysafter delivery of notice thereof; (v) material breach of any agreementwith, policy of or duty owed to the Company or any of its affiliates, whichbreach (if curable) is not cured within ten days after delivery of noticethereof; or (vi) poor work performance. Notwithstanding the foregoing, ifExecutive and the Company (or any of its affiliates) have entered into anemployment, consulting or other similar agreement that specifically defines “cause”or any substantially similar concept, “Cause” will have the meaning of suchterm as defined in that agreement. For avoidance of doubt, a cessation ofemployment due to (a) a mental or physical condition entitling Executiveto benefits under any Company-maintained or provided disability plan or policyor (b) death, will not constitute a termination by the Company “withoutCause.”

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### 1.2.2.                     “Change in Control” meansthe first occurrence of any of the following after the Effective Date (whetherin one transaction or a series of related transactions): (i) thesale, transfer, assignment or other disposition (including by merger orconsolidation, but excluding any sales by stockholders made as part of anunderwritten public offering of common stock) by stockholders of the Company ofmore than 50% of the voting power represented by the then outstanding capitalstock of the Company, (ii) the sale of substantially all the assets of theCompany (other than a transfer of financial assets made in the ordinary courseof business for the purpose of securitization), or (iii) the liquidationor dissolution of the Company.

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### 1.2.3.                     “Good Reason” means (i) reassignmentof Executive to a position with authority, duties or responsibilities that aresubstantially inferior to those of his existing position, 

 

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### (ii) a reduction in Executive’s annual base salary, or (iii) arelocation of Executive’s principal worksite to a location more than twenty(20) miles from his existing worksite or residence; *provided,however,*that none of the foregoing events or conditions willconstitute “Good Reason” unless: (x)  Executive provides the Company withwritten objection to the event or condition within 90 days following theoccurrence thereof, (y) the Company does not reverse or otherwise cure theevent or condition within fifteen (15) days of receiving that writtenobjection, and (z) Executive resigns his employment within thirty (30) daysfollowing the expiration of that cure period; *and providedfurther*, that notwithstanding the foregoing, if Executive and theCompany (or any of its affiliates) have entered into an employment, consultingor other similar agreement that specifically defines “good reason,” “constructivedischarge” or any substantially similar concept, “Good Reason” will have themeaning of such term as defined in that agreement.

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### 1.2.4.                     “Severance Period” means 18months reduced by the number of full or partial months (if any) transpiredsince the occurrence of a Change in Control.

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**SECTION 2.****                            Avoidanceof Golden Parachute Excise Taxes.**Notwithstanding any other provisionof this Agreement, to the extent that any payment, right and/or benefitotherwise due hereunder (when added to all other payments, rights and benefitsdue to Executive from the Company and its affiliates)(collectively, the “Payments”and each, a “Payment”) will constitute an “excess parachute payment”under Section 280G of the Internal Revenue Code (the “Code”) or anysuccessor provision, that Payment will not be paid or provided unless approvedby the stockholders of the Company in a manner, and at a time, consistent withthe requirements of Section 280G(b)(5)(B) of the Code and theregulations promulgated thereunder. The Company agrees that, if the foregoingsentence is implicated, it will timely submit the excess Payments to itsstockholders for their approval, will recommend that its stockholders vote infavor of those Payments and will otherwise exercise reasonable efforts toencourage the approval of those Payments in a manner consistent with therequirements of Section 280G(b)(5)(B) of the Code.

 

**SECTION 3.****                            Miscellaneous.**

 

## 3.1.                              NoMitigation; No Offset. Following any cessation of Executive’s employmentwith the Company, Executive will be under no obligation to seek otheremployment and there will be no offset against amounts due to Executivehereunder on account of remuneration attributable to subsequent employment ofExecutive by a third party.

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## 3.2.                              NoLiability of Officers and Directors for Severance Upon Insolvency. Notwithstandingany other provision of this Agreement and intending to be bound by thisprovision, Executive hereby (a) waives any right to claim payment ofamounts owed to him or her, now or in the future, pursuant to this Agreement fromdirectors or officers of the Company if the Company becomes insolvent, and (b) fullyand forever releases and discharges the Company’s officers and directors fromany and all claims, demands, liens, actions, suits, causes of action orjudgments arising out of any present or future claim for such amounts.

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## 3.3.                              Successorsand Assigns. This Agreement will inure to the benefit of and be bindingupon the Company and Executive and their respective successors, executors,administrators and heirs. The Company may assign this Agreement to anydirect or indirect 

 

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## subsidiary of Company, or any successor to all or substantially all ofits assets and business by means of liquidation, dissolution, merger, consolidation,transfer of assets, sale of stock or otherwise. The rights and obligations ofExecutive hereunder are personal to Executive and may not be assigned byhim.

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## 3.4.                              Notice.Any notice or communication required or permitted under this Agreement shall bemade in writing and (a) sent by overnight courier, (b) mailed bycertified or registered mail, return receipt requested or (c) sent bytelecopier, addressed as follows:

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If toExecutive, to the address set forth in his personnel file.

 

Ifto Company:

 

RealMex Restaurants, Inc.5660 Katella AvenueSuite 100Cypress, CA 90630Attention: Chairman of the BoardFacsimile No.: (562) 346-1465

 

or to such other address as either party may fromtime to time specify by notice given to the other party in the manner describedabove.

 

## 3.5.                              EntireAgreement; Amendments. This Agreement contains the entire agreement andunderstanding of the parties hereto relating to the subject matter hereof, andmerges and supersedes all prior and contemporaneous discussions, agreements andunderstandings of every nature relating to the subject matter hereof, except asotherwise specifically provided for herein. This Agreement may not bechanged or modified, except by an Agreement in writing signed by each of theparties hereto.

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## 3.6.                              Waiver.Any waiver by either party of any breach of any term or condition in thisAgreement shall not operate as a waiver of any other breach of such term orcondition or of any other term or condition, nor shall any failure to enforceany provision hereof operate as a waiver of such provision or of any otherprovision hereof or constitute or be deemed a waiver or release of any otherrights, in law or in equity.

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## 3.7.                              GoverningLaw. This Agreement shall be governed by, and enforced in accordance with,the laws of the State of California, without regard to the application of theprinciples of conflicts of laws.

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## 3.8.                              Severability.Whenever possible, each provision of this Agreement will be interpreted in suchmanner as to be effective and valid under applicable law. However, if anyprovision of this Agreement is held to be invalid, illegal or unenforceable inany respect, such invalidity, illegality or unenforceability will not affectany other provision, and this Agreement will be reformed, construed and enforcedas though the invalid, illegal or unenforceable provision had never been hereincontained.

 

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## 3.9.                              Section Headings.The section headings in this Agreement are for convenience only; they form nopart of this Agreement and shall not affect its interpretation.

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## 3.10.                        Withholding. Anypayments due to Executive hereunder will be subject to withholding for alltaxes or other amounts required to be withheld pursuant to applicable law.

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## 3.11.                        Compliance with Section 409A.Notwithstanding any other provision of this Agreement, all payments to be madehereunder shall be structured, both as to amount and time of payment, to themaximum extent possible, to comply with section 409A of the Code asinterpreted in good faith and in accordance with guidance on the application ofsection 409A published by the Internal Revenue Service (“Section 409A”).Unless and until precluded by final guidance issued under Section 409A,the Company and the Executive agree to negotiate in good faith to restructureany payments to be made under this Agreement to the extent reasonably necessaryto comply with the requirements of Section 409A.

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## 3.12.                        Counterparts and Facsimiles.This Agreement may be executed, including execution by facsimile signature,in one or more counterparts, each of which shall be deemed an original and allof which together will be deemed to be one and the same instrument.

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## 3.13.                        Termination. ThisAgreement shall terminate and be of no force or effect if the Effective Datehas not occurred within one year after the date hereof.

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IN WITNESS WHEREOF, the Company has caused thisAgreement to be executed by its duly authorized officer, and Executive hasexecuted this Agreement, in each case as of the date first above written.

 
|   | **REAL  MEX RESTAURANTS, INC.** |
|--------|--------------------------------------|
|   |                                 |
|   |                                 |
|   | By:                                  |   |   |
|   |                                 |
|   | Name &  Title:              |   |   |
|   |                                 |
|   |                                 |
|   | **EXECUTIVE**                        |
|   | ** **                           |
|   | ** **                           |
|   | ** **                           | ** ** |
|        |                                      |  |  |  |  |  |

 

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Exhibit A

 

**GENERALRELEASE AND NON-DISPARAGEMENT AGREEMENT**

 

THIS GENERAL RELEASE AND NON-DISPARAGEMENT AGREEMENT(this “Release”) is made as of the        day of               ,              by and between                      (“Executive”) and REAL MEX RESTAURANTS, INC. (the “Company”).

 

WHEREAS, Executive’s employment by the Company hasterminated; and

 

WHEREAS, pursuant to Section 1.1****of the Retention Agreement by and between the Company andExecutive dated as of               ,2006 (the “Retention Agreement”), the Company has agreed to payExecutive certain amounts and to provide Executive with certain benefits,subject to the execution of this Release.

 

NOW THEREFORE, in consideration of these premises andthe mutual promises contained herein, and intending to be legally bound hereby,the parties agree as follows:

 

**SECTION 1.****                            Consideration.**Executive acknowledges that: (i) the payments and benefits set forthin Section 1.1 of the Retention Agreement constitute fullsettlement of all his rights under the Retention Agreement, and (ii) [exceptas otherwise provided specifically in this Release,] he has no entitlementunder any other severance or similar arrangement maintained by the Company, and(iii) except as otherwise provided specifically in this Release, theCompany does not and will not have any other liability or obligation to him. Executivefurther acknowledges that, in the absence of his execution of this Release, theseverance benefits specified in Section 1.1 of the RetentionAgreement would not otherwise be due to him.

 

**SECTION 2.****                            GeneralRelease and Covenant Not to Sue.**

 

## 2.1.                              Executivehereby fully and forever releases and discharges the Company and its parents,affiliates and subsidiaries, including all predecessors and successors,assigns, officers, directors, trustees, employees, agents and attorneys, pastand present (each, a “Released Person”), from any and all claims,demands, liens, agreements, contracts, covenants, actions, suits, causes ofaction, obligations, controversies, debts, costs, expenses, damages, judgments,orders and liabilities, of whatever kind or nature, direct or indirect, in law,equity or otherwise, whether known or unknown, arising at any time, up to andincluding the date of this Release. This general release covers and includes,and therefore releases (without limitation) all claims arising from or relatingto the Employee’s employment with the Company, the termination of his/heremployment with the Company, or any act or omission provided for or authorizedby this Release. Among the specific claims that the Employee is releasing bysigning this Release are (without limitation) the following: all claims arisingunder (i) any law prohibiting discrimination on the basis of any protectedcharacteristic (such as age, race, sex, national origin, religion, anddisability status), including (but not limited to) all claims arising under theAge Discrimination in Employment Act (“ADEA”), Title VII of the Civil RightsAct of 1964, the Americans with Disabilities Act, and any similar state andlocal laws, including (but not limited to) the California Fair Employment andHousing Act; (ii) any law governing the payment of wages or the provisionof employee benefits, including (but not limited to) the Employee RetirementIncome Security Act, the California Labor Code, and the California Workers’Compensation Act; (iii) the 

 

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## common law of any jurisdiction, including (but not limited to) allclaims for breach of contract, wrongful termination or discharge, infliction ofemotional distress, fraud, negligence, and defamation; and (iv) any otherlaw (or cause of action), whether federal, state, or local, governing theemployment relationship, including (without limitation) the Family and MedicalLeave Act.”

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## 2.2.                              Executiveexpressly represents that he has not filed a lawsuit or initiated any otherproceeding against any Released Person and that he has not assigned any claimagainst a Released Person to any other person or entity. Executive furtherpromises not to initiate, join, or accept any relief in a lawsuit or any otherproceeding against any Released Person asserting any claims released by thisRelease.

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## 2.3.                              ThisRelease will not prevent Executive from filing a charge with the EqualEmployment Opportunity Commission or participating in any investigationconducted by the Equal Employment Opportunity Commission; provided, however,that any claims by Executive for personal relief in connection with such acharge or investigation (such as reinstatement or monetary damages) would bebarred.

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## 2.4.                              Executiveacknowledges that he is familiar with and expressly waives all rights affordedby Section 1542 of the Civil Code of the State of California (“Section 1542”).Section 1542 reads substantially as follows:

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*A general release does not extend to claims which the creditor does notknow or suspect to exist in his favor at the time of executing the release,which if known by him must have materially affected his settlement with thedebtor.*

 

## Notwithstanding the provisions of Section 1542, and for thepurpose of implementing a full and complete release, Executive understands andagrees that this Release is intended to include all claims described above thathe may have, even if not now known or suspected, and that this Releaseextinguishes all such claims.

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## 2.5.                              Theforgoing will not be deemed to release the Company from (a)  claims solelyto enforce Section 1.1 of the Retention Agreement, (b) claimsfor indemnification under the Company’s By-Laws, [or] (c) claims solely toenforce the terms of any equity incentive award agreement between Executive andthe Company[, or (d) claims for amounts due under Section 2.4(d) ofthat certain Executive Employment Agreement between Executive and the Companydated August 2, 2004].(1)

 

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(1) For Fred Wolfeonly.

 

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**SECTION 3.****                            Non-Disparagement.**Executive will not disparage any Released Person or otherwise take anyaction which could reasonably be expected to adversely affect the personal orprofessional reputation of any Released Person. Similarly, the Company(meaning, solely for this purpose, the Company’s directors, executive officersand other individuals authorized to make official communications on Company’sbehalf) will not disparage Executive or otherwise take any action which couldreasonably be expected to adversely affect Executive’s personal or professionalreputation.

 

**SECTION 4.****                            Cooperation.**Executive further agrees that, subject to reimbursement of his reasonableexpenses, he will cooperate fully with the Company and its counsel with respectto any matter (including litigation, investigations, or governmentalproceedings) which relates to matters with which he was involved during hisemployment with Company. Executive will render such cooperation in a timelymanner on reasonable notice from the Company.

 

**SECTION 5.****                            RescissionRight. Executive expressly acknowledges and recites that (a) he hasread and understands this Release in its entirety, (b) he has entered intothis Release knowingly and voluntarily, without any duress or coercion; (c) hehas been advised orally and is hereby advised in writing to consult with anattorney with respect to this Release before signing it; (d) he wasprovided 21 calendar days after receipt of the Release to consider its termsbefore signing it; and (e) he is provided seven calendar days from thedate of signing to terminate and revoke this Release, in which case thisRelease shall be unenforceable, null and void. Executive may revoke thisRelease during those seven days by providing written notice of revocation tothe Company at the address specified in Section 3.4 of theRetention Agreement.**

 

**SECTION 6.****                            Challenge.**If Executive violates or challenges the enforceability of any provision ofthis Release, no further payments, rights or benefits under Section 1.1of the Retention Agreement will be due to Executive. While this Release willserve to release any ADEA claims referenced above in Section 2, this Section 6will not apply to any claims challenging the validity of this Agreement underthe ADEA.

 

**SECTION 7.****                            Miscellaneous.**

 

## 7.1.                              NoAdmission of Liability. This Release is not to be construed as an admissionof any violation of any federal, state or local statute, ordinance orregulation or of any duty owed by the Company to Executive. There have been nosuch violations and the Company specifically denies any such violations.

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## 7.2.                              NoReinstatement. Executive agrees that he will not apply for reinstatementwith the Company or seek in any way to be reinstated, re-employed or hired bythe Company in the future. Executive (i) agrees that, if he does seek suchreinstatement, then the denial of such shall be considered legitimate, proper,and non-discriminatory for all purposes, as well as an exercise of the Company’srights under this section; and (ii) releases the Company and the otherReleased Persons from all claims arising from exercise of their rights underthis Section 7.2 (including the claims referenced above in Section 2).

 

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## 7.3.                              Successorsand Assigns. This Release shall inure to the benefit of and be binding uponthe Company and Executive and their respective successors, executors,administrators and heirs. Executive may not make any assignment of thisRelease or any interest herein, by operation of law or otherwise. The Company may assignthis Release to any successor to all or substantially all of its assets andbusiness by means of liquidation, dissolution, transfer of assets, orotherwise.

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## 7.4.                              Severability.Whenever possible, each provision of this Release will be interpreted in suchmanner as to be effective and valid under applicable law. However, if anyprovision of this Release is held to be invalid, illegal or unenforceable inany respect, such invalidity, illegality or unenforceability will not affectany other provision, and this Release will be reformed, construed and enforcedas though the invalid, illegal or unenforceable provision had never been hereincontained.

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## 7.5.                              EntireAgreement; Amendments. Except as otherwise provided herein, this Releasecontains the entire agreement and understanding of the parties hereto relatingto the subject matter hereof, and merges and supersedes all prior andcontemporaneous discussions, agreements and understandings of every naturerelating to the subject matter hereof, except as otherwise specificallyprovided for herein. This Release may not be changed or modified, exceptby an Agreement in writing signed by each of the parties hereto.

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## 7.6.                              GoverningLaw. This Release shall be governed by, and enforced in accordance with,the laws of the State of California without regard to the application of theprinciples of conflicts of laws.

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## 7.7.                              Counterpartsand Facsimiles. This Release may be executed, including execution byfacsimile signature, in one or more counterparts, each of which shall be deemedan original, and all of which together shall be deemed to be one and the sameinstrument.

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IN WITNESS WHEREOF, the Company has caused thisRelease to be executed by its duly authorized officer, and Executive hasexecuted this Release, in each case as of the date first above written.

 

 
|   | **REAL  MEX RESTAURANTS, INC.** |
|--------|--------------------------------------|
|   |                                 |
|   |                                 |
|   | By:                                  |   |   |
|   |                                 |
|   | Name &  Title:              |   |   |
|   |                                 |
|   |                                 |
|   | **EXECUTIVE**                        |
|   | ** **                           |
|   | ** **                           |
|   | ** **                           | ** ** |
|        |                                      |  |  |  |  |  |

 

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