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                                                                   Exhibit 10.20

                           DIRECTED ELECTRONICS, INC.

                                  KEY EMPLOYEE
                        SALE BONUS CANCELLATION AGREEMENT

      This Sale Bonus Cancellation Agreement (the "Agreement") is made and
entered into as of the 1st day of December, 2005 by and between
______________________ (the "Employee") and Directed Electronics, Inc., a
Florida corporation formerly known as "DEI Holdings, Inc." (the "Company").

                                    RECITALS

      A. The Employee and the Company are parties to that certain Sale Bonus
Agreement, dated as of December 28, 2004, a copy of which is attached as Exhibit
A (the "Sale Bonus Agreement"), which provides the Employee with certain
compensation in the event of a Company "Sale Event" for consideration in excess
of certain specified amounts (as described in the Sale Bonus Agreement).

      B. The Company has filed a registration statement (the "Registration
Statement") on Form S-1 (File No. 333-127823) pursuant to the Securities Act of
1933, as amended.

      C. The Sale Bonus Agreement provides in Section 3 that in the event of the
Company's initial public offering of common stock, the Company and the Employee
will negotiate a fair compensation arrangement.

                                    AGREEMENT

         In consideration of the mutual covenants and premises herein contained,
the parties agree as follows:

      1. Termination of Sale Bonus Agreement and Related IPO Awards.

         (a) Schedule 1 Definitions. Attached as Schedule 1 are certain
definitions which are incorporated herein by reference. Unless otherwise
provided herein, capitalized terms used in this Agreement have the meanings
attributed thereto on Schedule 1.

         (b) Employee's Applicable Percentage. The Sale Bonus Agreement provides
that, upon the consummation of any "Sale Event," the Employee shall receive an
amount equal to ___% of the "Net Equity Proceeds" (as such terms are defined in
the Sale Bonus Agreement). Such ___% figure is referred to herein as "Employee's
Applicable Percentage."

         (c) IPO Closing. The consummation of the initial public offering of the
Company's common stock pursuant to the Registration Statement is referred to
herein as the "IPO Closing." Upon the IPO Closing, the Sale Bonus Agreement
shall be null and void and of no further effect.

         (d) IPO Awards. Upon the IPO Closing, and in consideration of the
related termination of the Sale Bonus Agreement, the Company shall:

            (i) pay to the Executive an amount (the "Cash Amount") equal to the
product of (x) the Employee's Applicable Percentage, multiplied by (y) twenty
percent (20%), multiplied by (z) the "Deemed Company Value" (as defined on
Schedule 1); and


            (ii) grant to the Employee a Restricted Stock Unit Award, pursuant
to the agreement in the form attached hereto as Exhibit B (the "RSU"), for the
number of shares of Company common stock equal to the quotient of (1) the
product of (x) the Employee's Applicable Percentage, multiplied by (y) eighty
percent (80%), multiplied by (z) the "Deemed Company Value," divided by (2) the
"IPO Price" (as defined on Schedule 1).
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      2. Effectiveness. If the IPO Closing does not occur by May 15, 2006, this
Agreement shall be null and void.

      3. Payment Dates. The Cash Payment shall be made within thirty (30) days
of the IPO Closing; provided, however, that if the IPO Closing is in 2006, the
Cash Payment shall be made in January 2007. The RSUs shall be granted within
thirty (30) days of the IPO Closing pursuant to the form attached hereto as
Exhibit B.

      4. Tax Provisions.

         (a) Tax Consequences. Employee has reviewed with Employee's own tax
advisors the federal, state, local and foreign tax consequences of the
transactions contemplated by this Agreement. Employee is relying solely on such
advisors and not on any statements or representations of the Company or any of
its agents. Employee understands that Employee (and not the Company) shall be
responsible for any tax liability that may arise as a result of the transactions
contemplated by this Agreement.

         (b) Withholding Obligations. Employee hereby authorizes withholding
from the amounts paid hereunder, as well as any payroll and any other amounts
payable to Employee, and otherwise agrees to make adequate provision for, any
sums required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company, if any, which arise in connection with the payments
to be made under this Agreement.

      5. Amendment, Modification and Entire Agreement. No provision of this
Agreement may be modified, waived or discharged unless that waiver, modification
or discharge is agreed to in writing and signed by the Employee and the
President and Chief Executive Officer of the Company. No waiver by either party
of any breach by the other party to this Agreement of any condition or provision
of this Agreement shall be deemed a waiver of any other conditions or provisions
of this Agreement. This Agreement and the Restricted Stock Units Award Agreement
constitute the entire contract between the parties hereto with regard to the
subject matter hereof. Employee further acknowledges that as of the Effective
Date, this Agreement sets forth the entire understanding between Employee and
the Company regarding the cancellation of the Sale Bonus Agreement and
supersedes all prior oral and written agreements on that subject. No agreements
or representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.

      6. Transferability and Assignment. The rights and obligations under this
Agreement are not assignable or transferable by the Employee in whole or in part
otherwise than by will or under the applicable laws of descent and distribution.
In addition, the payments due under this Agreement shall not be assigned,
negotiated, pledged or hypothecated in any way (whether by operation of law or
otherwise), and the payments shall not be subject to execution, attachment or
similar process. The provisions of this Agreement shall inure to the benefit of,
and be binding upon, the Company and its successors and assigns and upon
Employee, Employee's assigns and the legal representatives, heirs and legatees
of Employee's estate, whether or not any such person shall have become a party
to this Agreement and have agreed in writing to join herein and be bound by the
terms hereof. The Company may assign its rights and obligations under this
Agreement to any person or entity selected by the Board.

      7. Employment At Will. Nothing in this Agreement shall confer upon
Employee any right to continue in the service of the Company or its affiliates
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Company (or its affiliates employing or retaining
Employee) or of Employee, which rights are hereby expressly reserved by each, to
terminate Employee's service at any time for any reason, with or without cause.
If Employee's employment with the Company or any affiliate is terminated (i) by
the Company prior to the IPO Closing for "Cause," (ii) by the Company at least
three months prior to the IPO Closing without "Cause," or (iii) voluntarily by
the Employee prior to the IPO Closing, this Agreement and the Sale Bonus
Agreement shall be automatically terminated, and Employee shall not be entitled
to receive any payment or other compensation hereunder or thereunder. For
purposes hereof, the term "Cause" shall mean (i) the failure by the Employee to
perform his duties as employee as reasonably requested by the Company's
President, as documented in writing to the Employee, (ii) the failure by the
Employee to observe all material policies of the Company generally applicable to
executives of the Company, (iii) gross negligence or willful misconduct by the
Employee in the performance of his duties, (iv) the commission by the Employee
of an act of fraud or embezzlement against the Company or the conviction of any
felony or act involving moral turpitude, (v) material breach by the Employee of
his obligations under any contract or agreement with the Company, (vi) chronic
absenteeism, or (vii) substance abuse.


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      8. Notices. Any notice required to be given under this Agreement shall be
in writing and shall be deemed effective upon personal delivery or upon deposit
in the U.S. mail, registered or certified, postage prepaid and properly
addressed to the party entitled to such notice at the address indicated below
such party's signature line on this Agreement or at such other address as such
party may designate by ten (10) days' advance written notice under this
paragraph to all other parties to this Agreement.

      9. No Trust or Fund Created. Neither this Agreement nor the grant of the
RSUs shall create or be construed to create a trust or separate fund of any kind
or a fiduciary relationship between the Company and the Employee or any other
person. The payments subject to this Agreement represent only the Company's
unfunded and unsecured promise. To the extent that the Employee or any other
person acquires a right to receive payments from the Company pursuant to this
Agreement, that right shall be no greater than the right of any unsecured
general creditor of the Company.

      10. Employee Undertaking. Employee hereby agrees to take whatever
additional action and execute whatever additional documents the Company may deem
necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either Employee or the shares of Company
Common Stock deliverable pursuant to the RSUs.

      11. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California without regard to the
conflict-of-laws rules thereof or of any other jurisdiction.

      12. Interpretation. The Employee accepts this payments made under this
Agreement subject to all the terms and provisions of this Agreement. The
undersigned Employee hereby accepts as binding, conclusive and final all
decisions or interpretations of the Company's Board of Directors upon any
questions arising under this Agreement.

      13. Section 409A Amendments. The Company agrees to cooperate with Employee
to amend this Agreement to the extent either the Company or Employee deems
necessary to avoid imposition of any additional tax or income recognition prior
to actual payment to Employee under Code Section 409A and any temporary or final
Treasury Regulations and Internal Revenue Service guidance thereunder, but only
to the extent such amendment would not have an adverse effect on the Company and
would not provide Employee with any additional rights, in each case as
determined by the Company, in its sole discretion.

      14. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.


      15. Headings. Headings are given to the Paragraphs and Subparagraphs of
this Agreement solely as a convenience to facilitate reference. The headings
shall not be deemed in any way material or relevant to the construction or
interpretation of this Agreement or any provision thereof.


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      16. Representations. Employee acknowledges and agrees that Employee has
reviewed this Agreement in its entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Agreement, and fully understands all
provisions of this Agreement. Without limiting the generality of the foregoing,
Employee also represents and warrants to the Company as follows:

         (a) Authorization of Transaction; Agreement Binding. Employee has full
power and authority to execute and deliver, and to perform his obligations
under, this Agreement. This Agreement constitutes the valid and legally binding
obligation of Employee, enforceable in accordance with its terms, except as such
enforcement may be limited by general equitable principles or by applicable
bankruptcy, insolvency or similar laws which affect creditors' rights generally.

         (b) No Conflict. The execution, delivery and performance of this
Agreement by Employee do not and will not violate, conflict with, or result in a
breach of or default under: (A) any applicable law, order, judgment or decree;
or (B) any agreement, contract or other obligation to which Employee is a party,
in each case except to the extent that such violation, conflict, default or
breach could not reasonably be expected to impair Employee's ability to perform
its obligations hereunder.

         (c) Opportunity to Ask Questions. Employee has had an opportunity to
ask questions and receive answers concerning the capitalization of the Company,
the terms of this Agreement, the Registration Statement, and the financial
condition and results of operations of the Company, and has had full access to
such other information concerning the Company as Employee has requested.

         (d) Certain Risk Factors. Employee has reviewed, or has had an
opportunity to review, copies of the Registration Statement and the "Risk
Factors" set forth therein. Employee has also reviewed, or has had an
opportunity to review, such other documents and information requested by
Employee to Employee's satisfaction. Employee understands the speculative nature
of and risks involved in the proposed investment in the Company, and all matters
relating to the structure and the operations of the Company have been discussed
and explained to Employee's satisfaction, including the risks described in the
Registration Statement.

         (e) Deemed Company Value. Employee understands and acknowledges that
the "Deemed Company Value" reflects the deduction of various expense amounts
that might not be applicable in connection with a Company "Sale Event."


EMPLOYEE:                                DIRECTED ELECTRONICS, INC.:


-------------------------                --------------------------------------
[name]                                   James E. Minarik
                                         President and Chief Executive Officer


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                                   Schedule 1
                                   DEFINITIONS

      "Associate Gain Program Amount" means $2,000,000.

      "Base Equity Value" means the sum of (i) the Starting Value plus (ii) the
Share Price Increase minus (iii) the Share Price Decrease, minus (iv) the Shares
Issued Decrement.

      "Deemed Company Value" means the remainder of (i) the Equity for Gain
Share Program, minus (ii) $89,750,000.

      "Equity for Gain Share Program" means the remainder of (i) the product of
(x) the Base Equity Value multiplied by (y) 93% minus (ii) the Estimated IPO
Payments, minus (iii) the Warrant Value.

      "Estimated IPO Payments" means the sum of (i) the Minarik Catch Up
Payment, plus (ii) the Sub Debt Payment, plus (iii) the Trivest Termination
Payment, plus (iv) the Miscellaneous Estimated IPO Expenses, plus (v) the
Associate Gain Program Amount (i.e., a total of $84,975,973).

      "IPO Price" means the initial public offering price per share reflected in
the final Rule 430A prospectus included in the Registration Statement.

      "Minarik Catch Up Payment" means $2,235,973.

      "Miscellaneous Estimated IPO Expenses" means $2,500,000.

      "Shares Issued Decrement" means the product of (x) the excess, if any, of
5,937,500 over the number of shares of Company Common Stock actually sold by the
Company (and not the "Selling Shareholders") pursuant to the Registration
Statement, multiplied by (y) the IPO Price.

      "Share Price Decrease" means the product of (x) the excess, if any, of
$16.00 over the IPO Price multiplied by (y) $25,937,500.

      "Share Price Increase" means the product of (x) the excess, if any, of the
IPO Price over $16.00 multiplied by (y) $25,937,500.

      "Starting Value" means $415,000,000, which is based on an anticipated IPO
Price of $16.00 and the Company's anticipated sale of 5,937,500 shares pursuant
to the Registration Statement.

      "Sub Debt Payment" means $74,740,000.

      "Trivest Termination Payment" means $3,500,000.

      "Warrant Value" means the product of (x) 1,420,037, multiplied by (y) the
IPO Price.
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                                    EXHIBIT A
                              SALE BONUS AGREEMENT
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                                    EXHIBIT B
                      RESTRICTED STOCK UNIT AWARD AGREEMENT
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Schedule to Exhibit 10.20: The form of Key Employee Sale Bonus Cancellation
Agreement was executed by the following persons:

Employee

Kevin Duffy
Glenn Busse
Mark Rutledge
Michael Smith
Rich Hirshberg
KC Bean
Jim Jardin
Mike Wilhelm
Al Fontane
Jeff Blair
Arlene Watson
Patricia Merson
James Turner
Kevin Hunter
Chris Rudder
Jeff Burt
Ralf Engelbrecht
Mark Chasey
Minas Minassian