**Exhibit 10.23**

**OFFICERS FORM**

NON-QUALIFIED STOCK OPTION AGREEMENT 

AGREEMENT, dated as of             , between Chicken Acquisition Corp., a Delawarecorporation (the “Company”), and              (the “Optionee”). 

W I T N E S S E T H: 

WHEREAS, the Company, acting through its Board of Directors (the“*Board*”) has granted to the Optionee, effective as of the date of this Agreement, an option to purchase shares of common stock, par value $.01, of the Company (the “*Common Stock*”) on the terms and subject to theconditions set forth in this Agreement; 

NOW, THEREFORE, in consideration of the premises and of the mutual agreements contained in thisAgreement, the parties hereto agree as follows: 

SECTION 1. Definitions. As used in this Agreement, the following terms have themeanings set forth below: 

“*Affiliate*” shall have the meaning assigned to such term in Rule 12b-2 promulgated under theExchange Act. 

“*Board*” has the meaning ascribed to such term in the first recital of this Agreement. 

“*Cause*” means action by the Optionee that constitutes misconduct, dishonesty, the failure to comply with specific directions of theBoard or the board of directors of EPL, Inc. that are consistent with the terms of any employment agreement between EPL, Inc. and the Optionee (after having been given a reasonably detailed written notice of, and a period of 20 days to cure, suchmisconduct or failure), a deliberate and premeditated act against the Company or its Affiliates, the commission of a felony or substance abuse or alcohol abuse which renders the Optionee unfit to perform his duties. Any voluntary termination ofemployment by the Optionee in anticipation of an involuntary termination of the Optionee’s employment for Cause shall be deemed to be a termination for Cause. 

“*Change in Control*” shall mean: 

 

 

 

“*Common Stock*” has the meaning ascribed to such term in the first recital of thisAgreement. 

“*Cumulative EBITDA*” means, with respect to each fiscal year of EPL, Inc., the actual aggregate amount ofEBITDA of the Company and its consolidated subsidiaries for the period commencing on January 1, 20     and ending on the last day of such fiscal year (with such period being treated as one accounting period for suchpurposes). 

“*Cumulative EBITDA Target*” means, with respect to each fiscal year of the Company, an amount as determined bythe Board in its sole discretion with respect to such year. 

“*EBITDA*” means the income of EPL, Inc. (i) before,without duplication, interest expense, amortization of deferred financing fees and acquisition related bank/financing fees, income taxes, depreciation and amortization, (ii) before gains (or losses) on the sale of EPL, Inc. operated restaurantsor other significant assets and (iii) after all bonuses and profit sharing expenses of the Company of any kind. 

“*EBITDATarget*” means, with respect to each fiscal year of EPL, Inc., an amount as determined by the Board in its sole discretion with respect to such year. 

“*EPL*,*Inc*.” shall mean El Pollo Loco, Inc., a Delaware corporation. 

“*Exercise Notice*” has the meaning ascribed to such term in Section 5 of this Agreement. 

“*FairMarket Value*” of a share of Common Stock on any date shall be, if the Common Stock is listed on a national stock exchange, the officially quoted closing price on such stock exchange, or if the Common Stock is listed on the NASDAQ NationalMarket, the officially quoted closing price on NASDAQ, or, if the Common Stock is listed on NASDAQ but not on the National Market, the average of the closing bid and asked prices reported by NASDAQ, in each case on the date as of which the value isto be determined (or if such date is not a trading day, as of the preceding trading day), or if the Common Stock is not so listed, the fair market value determined in good faith by the Board. 

“*Option*” has the meaning ascribed to such term in Section 2 of this Agreement. 

“*Option Shares*” has the meaning ascribed to such term in Section 2 of this Agreement. 

“*Option Term*” has the meaning ascribed to such term in Section 3 of this Agreement. 

“*Person*” means any individual, partnership, limited liability company, corporation, group, trust or other legal entity. 

“*Permitted Holders*” shall mean any of the following: Trimaran Fund II, L.L.C., Trimaran Parallel Fund II, L.P., Trimaran Capital,L.L.C., CIBC Employee Private Equity Fund 

 

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(Trimaran) Partners, CIBC Capital Corp., Trimaran Pollo Partners, L.L.C. (or any investment fund or other entity directly or indirectly Controlled by orunder common Control with any of the foregoing). 

“*Public Offering*” shall mean a public offering and sale of CompanyCommon Stock for cash pursuant to an effective registration statement under the Act, with an aggregate public offering price of at least $50,000,000. 

“*Shares*” means, collectively, the shares of Common Stock subject to the Option, whether such shares are Option Shares or Vested Shares. 

“*Stockholders Agreement*” means the Stockholders Agreement, dated as of November 18, 2005, among the Company, and certain otherstockholders of the Company, as it may be amended from time to time. 

“*Vested Shares*” means the option Shares with respectto which the Option is exercisable at any particular time. 

SECTION 2. Option; Option Price. On the terms and subject to theconditions of this Agreement, the Optionee shall have the option (the “*Option*”) to purchase up to              shares (the “Option Shares”) of Common Stockat the price of $             per Option Share (the “*Option Price*”). 

SECTION 3. Term. The term of the option (the “Option Term”) shall commence on the date hereof and expire on the tenth anniversary of the date hereof, unless the Option shall theretofore have beenterminated in accordance with the terms of this Agreement. 

SECTION 4. Time of Exercise. 

(a) Unless accelerated as otherwise provided in Section 4(b), 4(c), 15(b) of this Agreement, the Option shall become exercisable asto 100% of the Option Shares on the seventh anniversary of the date hereof. 

(b) (i) On the last day of each of theCompany’s fiscal years beginning with the fiscal year ending December 31, 200     through the fiscal year ending December 31, 20     (each, an “Accelerated VestingDate”), if the Company’s EBITDA for the fiscal year ending on such Accelerated Vesting Date is equal to or exceeds the EBITDA Target for such fiscal year, then the Option shall immediately become exercisable as to 20% of the Option Shares.

(ii) Notwithstanding any failure by the Company to meet the EBITDA Target for any fiscal year, the portion of the Optionwhich would have become exercisable pursuant to subsection (i) above on the applicable Accelerated Vesting Date shall become exercisable on a subsequent Accelerated Vesting Date if, with respect to 

 

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such subsequent Accelerated Vesting Date, the Company’s Cumulative EBITDA for the fiscal year ending on such Accelerated Vesting Date is equal to orgreater than the Cumulative EBITDA Target for such fiscal year. 

(c) In the event the Company makes any capital expendituresnot contemplated by the projections upon which the EBITDA and Cumulative EBITDA Targets are based, or consummates any mergers or acquisitions or divestitures (whether of assets or stock or other interests) or other extraordinary actions, the Boardwill determine in good faith appropriate adjustments to the EBITDA and Cumulative EBITDA Targets, which adjustments shall be final and binding. 

(d) Except as otherwise provided in Section 7, the Option shall remain exercisable as to all such Vested Shares until the expiration of the Option Term. 

SECTION 5. Procedure for Exercise. 

(a) The Option may be exercised with respect to Vested Shares, from time to time, in whole or in part (but for the purchase of whole shares only), by delivery of a written notice (the “*ExerciseNotice*”) from the Optionee to the Company, which Exercise Notice shall: 

(i) state that the Optionee elects toexercise the Option; 

(ii) state the number of Vested Shares with respect to which the Optionee is exercising the Option;

(iii) in the event that the Option shall be exercised by the representative of the Optionee’s estate pursuant toSection 12, include appropriate proof of the right of such Person to exercise the Option; 

(iv) state the date uponwhich the Optionee desires to consummate the purchase of such Vested Shares (which date must be prior to the termination of the Option); and 

(v) comply with such further provisions as the Company may reasonably require. 

(b) Paymentof the Option Price for the Vested Shares to be purchased on the exercise of the Option shall be made by certified or bank cashier’s check payable to the order of the Company, delivery of shares of Common Stock held for at least six months,valued at their Fair Market Value as of the trading day immediately prior to the date of exercise or by a combination of any of the foregoing means of payment. 

(c) As a condition to the exercise of the Option and prior to the issuance of any Vested Shares, the Optionee (or the representative ofhis estate) shall be required to execute the Stockholders Agreement with respect to the Option Shares. 

 

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(d) The Company shall be entitled to require, as a condition of delivery of the VestedShares, that the Optionee agree to remit and when due an amount in cash sufficient to satisfy all current or estimated future federal, state and local withholding, and employment taxes relating thereto. 

SECTION 6. Dividends. Upon the payment of a dividend with respect to the Common Stock, the Optionee shall be entitled to receive the economicequivalent of such dividend as if all Options had been exercised for Common Stock prior to the payment of the dividend. 

SECTION 7.Termination of Employment. All or any part of the Option, to the extent unexercised, shall terminate immediately upon the Optionee’s termination of employment with the Company or any of its Affiliates, except that the Optionee shall haveninety (90) days following the date of such termination of employment to exercise any portion of the Option that he could have exercised on the date of such termination of employment; provided, however, that such exercise must beaccomplished prior to the expiration of the Option Term. Notwithstanding the foregoing, if the Optionee’s termination of employment is due to his retirement, total and permanent disability (as determined by the Board) or death, the Optionee, orthe representative of the estate of the Optionee, as the case may be, may exercise any portion of the Option which the Optionee could have exercised on the date of such termination for a period of nine months thereafter; provided,however, that such exercise must be accomplished prior to the expiration of the Option Term. Notwithstanding the foregoing, in the event of a termination of the Optionee’s employment with the Company or any of its Affiliates for Cause,the unexercised portion of the Option shall terminate immediately and the Optionee shall have no right thereafter to exercise any part of the Option. Notwithstanding the preceding, any portion of the Option which is not exercisable at the time oftermination of the Optionee’s employment (for any reason) shall terminate and become null and void. 

SECTION 8.Non-Competition. (a) The Optionee agrees that during the term of employment and until the first anniversary of the date of termination of the Optionee’s employment with the Company or any direct or indirect subsidiary of theCompany, as the case may be, such Optionee will not directly or indirectly, (i) engage in any business that operates quick service restaurants that compete directly with the business of EPL, Inc. or its Affiliates in any market in which EPL,Inc. or its Affiliates presently operate restaurants or have targeted operating restaurants at the time of termination of such Optionee’s employment (a “Competitive Business”), (ii) enter the employ of, or render any services to,any Person engaged in a Competitive Business, (iii) acquire a financial interest in, or otherwise become actively involved with, any person engaged in a Competitive Business, directly or indirectly, as an individual, partner, shareholder,officer, director, principal, agent, trustee or consultant, or (iv) interfere with business relationships (whether formed before or after the date of this Agreement) between the Company or any of its Affiliates and customers, suppliers,Partners, members or investors of the Company or its Affiliates. Notwithstanding the foregoing, the Optionee may, directly or indirectly own, solely as an investment, securities of any Person engaged in the business of the Company or its Affiliateswhich are publicly traded on a national or regional stock exchange or on the over-the-counter market if the Optionee (i) is not a controlling Person of, or a member of 

 

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a group which controls, such Person and (ii) does not, direct or indirectly, own 5% or more of any class of securities of such Person. 

(b) It is expressly understood and agreed that although Optionee and Company consider the restrictions contained in this Section 8 and the followingSection 9 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Optionee, theprovisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if anycourt of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the otherrestrictions contained herein. 

SECTION 9. Non-Solicitation. The Optionee further agrees that during the term of employment anduntil the first anniversary of the date of termination of the Optionee’s employment with the Company or any direct or indirect subsidiary of the Company, such Optionee will not, directly or indirectly, (i) solicit or encourage any employeeof the Company or its Affiliates to leave the employment of the Company or its Affiliates, (ii) hire any such employee who was employed by the Company or its Affiliates as of the date of Optionee’s termination of employment with theCompany or who left the employment of the Company or its Affiliates within two years prior to or after the termination of Optionee’s employment with the Company, or (iii) solicit or encourage to cease to work with the Company or itsAffiliates any consultant then under contract with the Company or its Affiliates. 

SECTION 10. No Rights as a Stockholder. Except asset forth in Section 6, the Optionee shall not have any rights or privileges of a stockholder with respect to any Shares unless and until certificates representing such Shares shall be issued by the Company to such Optionee. 

SECTION 11. Additional Provisions Related to Exercise. In the event of the exercise of the Option at a time when there is not in effect aregistration statement under the Securities Act of 1933, relating to the Shares, the Optionee hereby represents and warrants, and by virtue of such exercise shall be deemed to represent and warrant to the Company that the Option Shares are beingacquired for investment only and not with a view to the distribution thereof, and the Optionee shall provide the Company with such further representations and warranties as the Board may reasonably require in order to ensure compliance withapplicable federal and state securities, “blue sky” and other laws. No Shares shall be purchased upon the exercise of the Option unless and until the Company and/or the Optionee shall have complied with all applicable federal or stateregistration, listing and/or qualification requirements and all other requirements of law or of any regulatory agencies having jurisdiction. 

SECTION 12. Restriction on Transfer. 

(a) The Option may not be transferred, pledged, assigned, hypothecatedor otherwise disposed of in any way by the Optionee and may be exercised during the lifetime of 

 

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the Optionee only by the Optionee. If the Optionee dies, the Option shall thereafter be exercisable, during the period specified in Section 7, by therepresentative of his estate to the full extent to which the Option was exercisable by the Optionee at the time of his death. The Option shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge,hypothecation or other disposition of the Option contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the Option, shall be null and void and without effect. 

(b) Any shares issued to the Optionee upon exercise of the Option shall be subject to the restrictions contained in the StockholdersAgreement and shall be deemed Stock (as defined in the Stockholders Agreement) for all purposes thereunder. 

SECTION 13. RestrictiveLegend. All stock certificates representing shares issued upon exercise of the Option shall, unless otherwise determined by the Board, have affixed thereto a legend substantially in the following form: 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS’ AGREEMENT AMONG EPL HOLDINGS, INC., EPL INTERMEDIATE,INC. AND CERTAIN MINORITY STOCKHOLDERS NAMED THEREIN, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BEMADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS’ AGREEMENT. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH STOCKHOLDERS’ AGREEMENT.”

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVEBEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF EITHER AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDERSAID ACT.” 

SECTION 14. Optionee’s Employment. Nothing in the Option shall confer upon the Optionee any right to continuein the employ of the Company or any of its Affiliates or interfere in any way with the right of the Company or its Affiliates or stockholders, as the case may be, to terminate the Optionee’s employment or to increase or decrease theOptionee’s compensation at any time. 

SECTION 15. Adjustment. 

(a) Subject to Section 12(b), if the Common Stock is changed by reason of a stock split, reverse stock split, stock dividend orrecapitalization, or converted into or 

 

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exchanged for other securities as a result of a merger, consolidation or reorganization, the Board shall make such adjustment in the number and class ofshares of stock subject to the Option, and such adjustments to the Option Price, as shall be equitable and appropriate in its good faith judgment under the circumstances. 

(b) The following rules shall apply in connection with the occurrence of a Public Offering or Change in Control, as applicable:

(i) If the Public Offering occurs less than two years following the Effective Date, the Optionee shall be given(A) written notice of such Public Offering at least 20 days prior to its proposed effective date (as specified in such notice) and (B) an opportunity during the period commencing with delivery of such notice and ending 10 days prior tosuch proposed effective date, to exercise (x) the Vested Shares and (y) fifty percent (50%) of the Shares subject to the Option that are unvested as of the date of the notice (the “Accelerated Shares”), contingent upon theeffectiveness of such Public Offering. Upon the occurrence of the Public Offering, the Vested Shares and the Accelerated Shares shall thereafter be fully vested and remain exercisable in accordance with the terms of the original grant. The otherfifty percent (50%) of the Shares subject to the Option that remain unvested upon the occurrence of the Public Offering shall automatically terminate and the Optionee shall be entitled to receive a grant of restricted stock in the companysubject to the initial public offering with an economic value equal to Fair Market Value (measured at the close of business of the first day of public trading) of the shares underlying the terminated unvested Options minus the aggregate exerciseprice of such options. 

(ii) If a Public Offering occurs more than two years following the Effective Date or if a Change inControl occurs following the Effective Date, the Optionee shall be given (A) written notice of such Public Offering or Change in Control, as applicable, at least 20 days prior to its proposed effective date (as specified in such notice) and(B) an opportunity during the period commencing with delivery of such notice and ending 10 days prior to such proposed effective date, to exercise the Option in full, contingent upon the effectiveness of such Public Offering or Change inControl. Upon the occurrence of the Public Offering, the Option shall thereafter be fully vested and remain exercisable in accordance with the terms of the original grant. Upon the occurrence of a Change in Control, the Option shall be fully vestedprovided however that, to the extent the Option is not exercised, the Option shall automatically terminate unless provision is made in connection with the Change in Control, as applicable for the assumption of the Option by, or the substitution forthe Option of new options covering the stock of, the surviving successor of purchasing corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number, kind and option price of shares subject to the Option. 

 

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(c) The following rules shall apply in connection with Section 15(a) and(b) above: 

(i) no fractional shares shall be issued as a result of any such adjustment, and any fractional sharesresulting from the computations pursuant to Section 15(a) or (b) shall be eliminated without consideration from the Option; 

(ii) no adjustment shall be made for the issuance to stockholders of rights to subscribe for additional shares of Common Stock or other securities; and 

(iii) any adjustment referred to in Section 15(a) or (b) shall be made by the Board in its sole discretion and shall beconclusive and binding on the Optionee. 

SECTION 16. Notices. All notices, claims, certificates, requests, demands and othercommunications hereunder shall be in writing and shall be deemed to have been duly given and delivered if personally delivered or if sent by nationally recognized overnight courier, by telecopy or by registered or certified mail, return receiptrequested and postage prepaid, addressed as follows: 

(a) if to the Company, to it at: 

Chicken Acquisition Company 

c/o TrimaranCapital Partners 

622 Third Avenue, 35th Floor 

New York, NY 10017 

Attn: Steven Flyer 

With a copy to:

General Counsel 

El PolloLoco 

3333 Michelson Drive, Suite 550 

Irvine, CA 92612 

Facsimile: (949) 251-1703 

(b) if to the Optionee, to him at such Optionee’s address as most recently supplied to the Company and set forth in theCompany’s records or to such other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such notice or communication shall be deemed to have been received (i) inthe case of personal delivery, on the date of such delivery (or if such date is not a business day, on the next business day after the date sent), (ii) in the case of nationally-recognized overnight courier, on the next business day after thedate sent, (iii) in the case of telecopy transmission, when received (or if not sent on a business day, on the next business day after the date sent), and (iv) in the case of mailing, on the third business day following the date on whichthe piece of mail containing such communication is posted. 

 

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SECTION 17. Waiver of Breach. The waiver by either party of a breach of any provision of thisAgreement must be in writing and shall not operate or be construed as a waiver of any other or subsequent breach. 

SECTION 18.Optionee’s Undertaking. The Optionee hereby agrees to take whatever additional actions and execute whatever additional documents the Company may in its reasonable judgment deem necessary or advisable in order to carry out or effect oneor more of the obligations or restrictions imposed on the Optionee pursuant to the provisions of this Agreement. 

SECTION 19.Amendment. This Agreement may not be amended, terminated, suspended or otherwise modified except in a written instrument, duly executed by both parties. 

SECTION 20. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware (without giving effect to choice or conflict of law principles). 

SECTION 21. Consent to Jurisdiction. Each party hereby agrees that any action to enforce which arises out of or in any way relates to any ofthe provisions of this Agreement shall be brought and prosecuted exclusively in any federal or state court located within the City of New York; and the parties irrevocably and unconditionally submit to the jurisdiction of such courts and to serviceor process by registered mail, return receipt requested, or by any other manner provided by New York law. 

SECTION 22. Counterparts.This Agreement may be executed in one or more counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts together shall constitute but one agreement. 

SECTION 23. Entire Agreement. This Agreement (and the other writings incorporated by reference herein) constitute the entire agreement between theparties with respect to the subject matter hereof and supersede all prior written or oral negotiations, commitments, representations and agreements with respect thereto. 

SECTION 24. Severability. In the event any one or more of the provisions of this Agreement should be held invalid, illegal or unenforceable in any respect in any jurisdiction, the validity, legality andenforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby. 

SECTION 25. CodeSection 409A Compliance. Notwithstanding any provision of this Agreement, to the extent that the Committee determines that any Option granted under this Agreement is subject to Section 409A of the Code and fails to comply with therequirements of Section 409A of the Code, notwithstanding anything to the contrary contained in this Agreement, the Committee reserves the right to, in good faith, amend, restructure, or replace the Option in order to cause the Option to eithernot be subject to Section 409A of the Code or to comply with the applicable provisions of such section and in order to provide the Optionee with substantially the same economic benefits without violating Section 409A. 

*     *     * 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Non-Qualified Stock Option Agreement as of thedate first written above. 

 

CHICKEN ACQUISITION CORP.

By:
    
Name:
 
Title:

OPTIONEE

By:
    
Name:

 

Annex I - 12