Exhibit 10.37

 

DTS, Inc.

 

EXECUTIVE INCENTIVE COMPENSATION PROGRAM SUMMARY

 

For the Fiscal Year Ending December 31, 2015

 

PROGRAM PROVISIONS

 

I.                                        PURPOSE

 

The purpose of the DTS, Inc. (the “Company”) 2015 Executive Incentive
Compensation Program (the “Program”) is to motivate our executive officers to
drive the execution of the company’s strategic plan through the delivery of
overall financial results and the execution of specific initiatives critical to
the business.

 

II.                                   PLAN YEAR

 

The Program Year begins on January 1, 2015 and ends on December 31, 2015.  This
Program is adopted as a Cash-Bash Award under the Company’s 2012 Equity
Incentive Plan.

 

III.                              PARTICIPANTS

 

Name

 

Title

 

 

 

Jon Kirchner

 

Chairman & CEO

Brian Towne

 

Executive Vice President, President DTS Asia

Mel Flanigan

 

Executive Vice President, CFO

Blake Welcher

 

Executive Vice President, GC & Corporate Secretary

Fred Kitson

 

Executive Vice President, CTO

Patrick Watson

 

Executive Vice President, Corporate Strategy & Development

Kris Graves

 

Executive Vice President, Human Resources

Kevin Doohan

 

Executive Vice President, Chief Marketing Officer

Geir Skaaden

 

Senior Vice President, Corporate Business Development, Digital Content and Media
Solutions

 

Participation by an employee for the fiscal year ending December 31, 2015 does
not mean that such employee will necessarily participate in future years, nor
does it mean an Incentive Compensation Program will be authorized in future
years.  The Company also retains the right to remove a participant or
discontinue the entire Program at its discretion, provided, however, that a
participant’s bonus for the fiscal year ending December 31, 2015 shall be
treated as specified below.

 

Funding for the Program is contingent upon the achievement of one or more
pre-established Company financial and strategic performance measures. Based on
performance, a maximum bonus award is calculated for each NEO. The Compensation
Committee of the Board of Directors of the Company (the “Committee”) may then
exercise its discretion to reduce, but not increase, actual bonus awards based
on discretionary factors such as the performance of the Company, the performance
of each NEO’s functional or territory divisions (if applicable), and the NEO’s
individual performance.

 

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IV.                               PROGRAM STRUCTURE

 

In order to motivate executives to drive the execution of the company’s
strategic plan while achieving specific annual organizational and financial
results, the compensation committee has a “pay for performance” philosophy and
uses performance-based compensation to reward individual performance and the
accomplishment of corporate goals.  Corporate goals are generally structured to
challenge and motivate executives, so that reasonable “stretch” performances
would yield a payout at or about 100% of target.

 

The pay for performance short-term incentive program is structured into two
components: 1) overall company financial targets, 2) key strategic
initiatives.    The purpose of having the two components is to ensure a balance
and focus on the attainment of specific annual financial metrics as well as the
execution of critical goals that are imperative for the future success of the
business.

 

Incentive targets and payouts are expressed as a percentage of base salary.  The
base salary and bonus targets to be utilized will be the participant’s
annualized base and target pay as determined by the Committee as of the
Committee’s February, 2015 meeting.

 

Under the Program, 65% of the target opportunity is based on overall company
financial performance and the other 35% is based on achieving objectives that
are critical to the overall strategy.   These performance goals are to be
reviewed and approved by the Committee.

 

Lastly, following the funding of the Program based on the achievement of the
financial targets and key strategic goals, an individual performance multiplier
rating will be applied to recognize the specific performance for each
executive.   The performance ratings will range from 0 to 1.5.

 

The formula is outlined below:

 

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V.                                    PERFORMANCE TARGETS

 

Company Performance = weighted 65% of target executive bonus pool

Strategic Performance = weighted 35% of target executive bonus pool

 

 

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Company Performance

 

The Company corporate performance formula measures non-GAAP revenue and
operating income independently and they are weighted equally.  Performance
between these metrics shall be interpolated to derive an appropriate funding
factor.

 

Strategic Performance

 

The Company strategic goals formula measures accomplishment and quality
completion tied to initiatives critical to the future success of our business.  
The performance factors will range between 0% and 100%.

 

VI.                               INTERPRETATION OF THIS PROGRAM, FUNDING &
PAYMENT

 

Interpretation and/or application of this Program shall be made by the Committee
after consultation with the Chief Executive Officer of the Company and such
decisions shall be final and binding.

 

In order to receive an incentive payout under this Program, the participant must
work through the end of the Program Year and be employed on the day the bonus is
paid.  Should the participant leave due to retirement after the Program Year but
before the bonus is paid, the participant will remain eligible for the payout. 
Accordingly, except in the case of retirement, if a participant leaves any time
during the Program Year and prior to the bonus payout, he/she shall receive no
bonus payment.

 

VII.                          “AT WILL” EMPLOYMENT RELATIONSHIP

 

This Program is not intended to create, and should not be construed as creating,
any kind of contract of employment between the Company and the participant.  In
the absence of a written agreement to the contrary, the participant’s employment
with the Company at all times will remain at will.

 

This means that the participant is free to terminate his/her service with the
Company at any time without cause and without written notice and, similarly, the
Company is free to terminate the participant’s service at any time without cause
and without written notice.

 

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