Exhibit 10.16.1

DTS, INC.
RESTRICTED STOCK GRANT NOTICE
(2003 Equity Incentive Plan)

DTS, Inc. (the “Company”), pursuant to its 2003 Equity Incentive Plan (the
“Plan”), hereby grants to the participant under the Plan (the “Participant”) the
number of shares of the Company’s common stock (the “Common Stock”) set forth
below (the “Award”).  This Award is subject to all of the terms and conditions
as set forth in this Restricted Stock Grant Notice (the “Grant Notice”), the
Restricted Stock Agreement, and the Plan, all of which are attached hereto and
incorporated herein in their entirety.

Participant:

 

 

 

Grant Number

 

 

 

Date of Grant:

 

 

 

Vesting Commencement Date:

 

 

 

Number of Shares Subject to Award:

 

 

 

Vesting Schedule:

One Hundred percent (100%) of the Shares Subject to Award on the anniversary of
the Vesting Commencement Date

Additional Terms/Acknowledgements: The undersigned Participant acknowledges
receipt of, and understands and agrees to the terms and conditions of this Grant
Notice, the Restricted Stock Agreement, and the Plan.  Participant further
acknowledges that as of the Date of Grant, this Grant Notice, the Restricted
Stock Agreement and the Plan set forth the entire understanding between
Participant and the Company regarding the acquisition of stock in the Company
and supersede all prior oral and written agreements relating thereto, with the
exception of other awards previously granted and delivered to Participant under
the Plan.

DTS, Inc.

 

Participant:

 

 

 

By:

 

 

By:

 

 

Signature

 

 

Signature

 

 

 

Title:

 

Date:

 

 

 

 

 

 

Date:

 

 

 

 

 

 

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DTS, INC.
2003 EQUITY INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (the “Agreement”), dated       , 20     , is
entered into by and between       (“Participant”) and DTS, Inc., a Delaware
corporation (the “Company”).

RECITALS

WHEREAS, the Company has adopted the DTS, Inc. 2003 Equity Incentive Plan (the
“Plan”), which provides for awards of restricted stock to the Company’s
Employees, Consultants and Directors; and

WHEREAS, Participant is currently serving as an Employee or Director of, or a
Consultant to, the Company; and

WHEREAS, in order to provide Participant incentive to continue in the employ of
the Company and his or her commitment to the success of the Company, the
Compensation Committee of the Board of Directors of the Company (the
“Committee”) has determined that Participant shall be granted an Award covering
shares of the Company’s common stock, par value $0.0001 per share (the “Common
Stock”), subject to the restrictions stated herein and in accordance with the
terms and conditions of the Plan.

NOW THEREFORE, in consideration of the foregoing, and the mutual covenants and
agreements set forth herein, the parties hereto agree as follows:

1.             Definitions

Capitalized terms not explicitly defined in this Agreement but defined in the
Plan shall have the same meanings ascribed to them in the Plan.

2.             Grant of Award

THE COMPANY HEREBY GRANTS TO PARTICIPANT, PURSUANT TO THE TERMS OF THE
RESTRICTED STOCK GRANT NOTICE (THE “GRANT NOTICE”) AND THIS AGREEMENT
(COLLECTIVELY, THE “AWARD AGREEMENT”) AN AWARD COVERING THE NUMBER OF SHARES OF
COMMON STOCK INDICATED IN THE GRANT NOTICE (THE “SHARES”) AND HEREBY ISSUES THE
SHARES TO PARTICIPANT.

3.             Agreement to Accept Shares

Participant hereby agrees to accept from the Company, and the Company hereby
agrees to issue to Participant, the Shares.

4.             Delivery of the Shares and Award Agreement

The issuance and delivery of the Shares shall be consummated as follows:

4.1.         PARTICIPANT AGREES TO EXECUTE AND DELIVER THE GRANT NOTICE AND THIS
AGREEMENT TO THE COMPANY’S CHIEF FINANCIAL OFFICER, OR TO SUCH OTHER PERSON AS
THE COMPANY MAY DESIGNATE, DURING REGULAR BUSINESS HOURS, ALONG WITH SUCH
ADDITIONAL DOCUMENTS AS THE COMPANY MAY REQUIRE.

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4.2.         IF REQUESTED BY THE COMPANY PURSUANT TO SECTION 9 BELOW,
PARTICIPANT AGREES TO EXECUTE THREE (3) COPIES OF AN ASSIGNMENT SEPARATE FROM
CERTIFICATE (WITH DATE AND NUMBER OF SHARES BLANK) IN A FORM PROVIDED BY THE
COMPANY AND TO EXECUTE JOINT ESCROW INSTRUCTIONS (OR OTHER DOCUMENTS WITH A
SIMILAR PURPOSE) IN A FORM PROVIDED BY THE COMPANY AND TO DELIVER THE SAME IN
ACCORDANCE WITH SECTION 9 BELOW.

5.             Vesting

Subject to the limitations contained herein, the Shares issued to Participant
shall vest as provided in the Grant Notice, provided, however, that vesting
shall cease upon the Termination of Participant’s service as an Employee,
Director or Consultant.

6.             Securities Law Compliance

Notwithstanding anything to the contrary contained herein, the Company shall not
deliver any Shares under the Award Agreement unless the Shares are then
registered under the Securities Act or, if such Shares are not then so
registered, the Company has determined that such issuance and transfer would be
exempt from the registration requirements of the Securities Act.  The issuance
and transfer of the Shares also must comply with other applicable laws and
regulations governing such Award, and the Company shall not issue the Shares if
the Company determines that such issuance and transfer would not be in material
compliance with such laws and regulations.

7.             Right of Reacquisition

In the event of the Termination of Participant’s service as an Employee or
Director of, or a Consultant to, the Company, the Company shall have a right to
reacquire (the “Reacquisition Rights”) the Shares that have not yet vested in
accordance with the Vesting Schedule in the Grant Notice (the “Unvested
Shares”).  The Company shall, simultaneously with Participant’s Termination of
service, as an Employee, Director or Consultant, automatically reacquire all of
the Unvested Shares, without payment by the Company of any amount with respect
thereto, unless the Company agrees to waive its Reacquisition Rights to any or
all of the Unvested Shares.  Any such waiver shall be exercised by the Company
by written notice to Participant or his or her representative (with a copy to
the escrow agent, broker or other person who can control the transferability of
the Shares) within 30 days after Participant’s Termination.  If the Company does
not waive its Reacquisition Rights to any or all of the Unvested Shares, the
escrow agent, broker, etc., shall be notified accordingly and instructed to
return or otherwise credit the Company for the Unvested Shares.

8.             Corporate Transactions

In the event of a Fundamental Transaction or Change in Control pursuant to
Section 10.3 or Section 10.4 of the Plan, the Reacquisition Rights may be
assigned by the Company to the successor of the Company (or such successor’s
parent company), if any, in connection with such corporate transaction.  To the
extent the Reacquisition Rights remain in effect following such corporate
transaction, such rights shall apply to the new capital stock or other property
received in exchange for the Common Stock in consummation of the corporate
transaction, but only to the extent the Common Stock was at the time covered by
such rights.

9.             Escrow of Unvested Shares

Typically the Company expects that the Shares will be registered on a
bookkeeping entry basis with a broker selected by the Company.  Although
Participant will be the beneficial owner of the Shares,

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the broker will be instructed not to permit transfer of the Shares by
Participant prior to the time the Shares vest in accordance with the Grant
Notice.  If the Company should at any time utilize a different method of share
transfer, the Company may require Participant, and Participant hereby agrees, to
execute an escrow agreement or similar documents (including an assignment
separate from certificate) to secure the Company’s Reacquisition Rights with
respect to any Unvested.

10.          Rights as Stockholder

Subject to the provisions of this Agreement (most specifically that Participant
may not dispose of, encumber, or otherwise convert to gain any Unvested Shares),
Participant shall exercise all rights and privileges of a stockholder of the
Company with respect to the Shares, regardless of whether vested or unvested. 
Participant shall be deemed to be the holder of the Shares for purposes of
receiving any dividends that may be paid with respect to such Shares and for
purposes of exercising any voting rights relating to such Shares, even if some
or all of the Shares have not yet vested and been released from the Company’s
Reacquisition Rights.

11.          Limitations on Transfer

In addition to any other limitation on transfer created by applicable securities
laws, Participant agrees not to sell, assign, hypothecate, donate, encumber or
otherwise dispose of any interest in the Shares, except by will or by the laws
of descent and distribution, while the Shares are subject to the Reacquisition
Rights.

12.          Restrictive Legends

The stock certificates evidencing the Shares issued under the Award Agreement
shall bear appropriate legends determined by the Company.

13.          Award not a Service Contract

The Award Agreement is not an employment or service contract, and nothing in the
Award Agreement shall be deemed to create in any way whatsoever any obligation
on the Company or an Affiliate to continue Participant’s employment or service. 
In addition, nothing in the Award Agreement shall obligate the Company or an
Affiliate, their respective stockholders, Boards of Directors, officers or
Employees to continue any relationship that Participant may have as an Employee
or Director of, or a Consultant to, the Company or an Affiliate.

14.          Withholding Obligations

14.1.       Participant understands and agrees that Participant is solely
responsible for any and all federal, state, local and foreign tax withholding
obligations in connection with the Award.  Participant further agrees to make
adequate provision for any sums required to satisfy the federal, state, local
and foreign tax withholding obligations of the Company or an Affiliate, if any,
which arise in connection with the Award and any lapse of Reacquisition Rights
relating to the Shares subject to the Award.

14.2.       If Participant does not deliver to the Company’s Chief Financial
Officer at least five (5) days prior to any date on which any Reacquisition
Rights relating to the Shares will lapse (each, a “Vesting Date”) a written
notice of Participant’s election to satisfy by cash, check or other manner
agreeable to the Company, all federal, state, local or foreign tax withholding
obligations related to such Shares, Participant and the Company agree that the
Company shall retain that number of the Shares, based on the fair market value
of the Company’s common stock on such Vesting Date, with an aggregate value

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equal to the amount of all federal, state, local or foreign tax withholding
obligations that Participant, the Company, or an Affiliate would incur as a
result of the lapse of Reacquisition Rights relating to such Shares.

14.3.       Unless and until the tax withholding obligations of the Company or
any Affiliate are satisfied, the Company shall have no obligation to issue a
certificate for, or permit the transfer, alienation, etc. of, any of the Shares.

15.          Section 83(b) Election

Participant understands that Section 83(a) of the Code taxes as ordinary income
the difference between the amount paid for the Shares and the fair market value
of the Shares as of the date any restrictions on the Shares lapse.  In this
context, “restriction” means the Reacquisition Rights of the Company pursuant to
Section 7 of this Agreement.  Despite the fact that it might be unusual to make
the following election in the circumstances of this Agreement (because of the
significant taxes potentially due in the year of the election as described
below), Participant understands that Participant may elect to be taxed at the
time the Shares are granted, rather than when and as the Reacquisition Rights
expire, by filing an election under Section 83(b) (an “83(b) Election”) of the
Code with the Internal Revenue Service within 30 days from the date the Shares
were granted.  A form of such election is attached hereto as Attachment III. 
The difference between the fair market value of the Shares at the time of the
execution of this Agreement and the amount Participant is paying for the Shares,
if any, makes it unlikely that Participant will choose to make an 83(b)
Election, as such election would require that Participant pay taxes on that
difference at the time the Shares are purchased.  However, the 83(b) Election
must be made if Participant wishes to avoid additional income under Section
83(a) in the future.  Accordingly, Participant understands the decision to file
or not file such an election has potentially dramatic tax consequences, and if
the decision is made to file such an election it must be filed in a timely. 
Elections which are filed late can never be effective.  Participant further
understands that an additional copy of such election form should be filed with
his or her federal income tax return for the calendar year in which the date of
this Agreement falls.  Participant acknowledges that the foregoing is only a
summary of the effect of United States federal income taxation with respect to
purchase of the Shares hereunder, and does not purport to be complete. 
Participant further acknowledges that the Company has directed Participant to
seek independent advice regarding the applicable provisions of the Code, the
income tax laws of any municipality, state or foreign country in which
Participant may reside, the tax consequences of Participant’s death and the
decision as to whether or not to file an 83(b) Election in connection with the
acquisition of the Shares.

PARTICIPANT ACKNOWLEDGES THAT IT IS THE PURCHASER’S SOLE RESPONSIBILITY AND NOT
THE COMPANY’S TO TIMELY FILE THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN
IF PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON
PARTICIPANT’S BEHALF.

16.          Representations

Participant has reviewed with his or her own tax advisors the federal, state,
local and foreign tax consequences relating to the Award and the transactions
contemplated by the Award Agreement.  Participant is relying solely on such
advisors and not on any statements or representations of the Company or any of
its agents.  Participant understands that he or she (and not the Company) shall
be responsible for any tax liability that may arise as a result of the Award or
the transactions contemplated by the Award Agreement.

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17.          Data Privacy Consent

Participant hereby explicitly and unambiguously consents to the collection, use
and transfer, in electronic or other form, of Participant’s personal data as
described in this document by and among, as applicable, the Company and its
Affiliates for the exclusive purpose of implementing, administering and managing
Participant’s participation in the Plan.  Participant understands that the
Company and its Affiliates hold certain personal information about Participant,
including, but not limited to, name, home address and telephone number, date of
birth, social security or insurance number or other identification number,
salary, nationality, job title, any shares of stock or directorships held in the
Company, details of all options or any other entitlement to shares of stock
awarded, canceled, purchased, exercised, vested, unvested or outstanding in
Participant’s favor for the purpose of implementing, managing and administering
the Plan (“Data”).  Participant understands that the Data may be transferred to
any third parties assisting in the implementation, administration and management
of the Plan, that these recipients may be located in Participant’s country or
elsewhere and that the recipient country may have different data privacy laws
and protections than Participant’s country.  Participant understands that he or
she may request a list with the names and addresses of any potential recipients
of the Data by contacting the Secretary of the Company.  Participant authorizes
the recipients to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the purposes of implementing, administering and
managing Participant’s participation in the Plan, including any requisite
transfer of such Data, as may be required to a broker or other third party with
whom Participant may elect to deposit any shares acquired under the Plan. 
Participant understands that Data will be held only as long as is necessary to
implement, administer and manage participation in the Plan.  Participant
understands that he or she may, at any time, view Data, request additional
information about the storage and processing of the Data, require any necessary
amendments to the Data or refuse or withdraw the consents herein, in any case
without cost, by contacting the Secretary of the Company in writing. 
Participant understands that refusing or withdrawing consent may affect
Participant’s ability to participate in the Plan.  For more information on the
consequences of refusing to consent or withdrawing consent, Participant
understands that he or she may contact the Secretary of the Company.

18.          Acknowledgment

Participant acknowledges and agrees that notwithstanding any terms or conditions
of the Plan to the contrary, in the event of involuntary Termination (whether or
not in breach of local labor laws), the Participant’s right to receive benefits
under the Award Agreement, if any, will terminate effective as of the date that
Participant is no longer actively employed and will not be extended by any
notice period mandated under local law (e.g., active employment would not
include a period of “garden leave” or similar period pursuant to local law);
furthermore, in the event of involuntary Termination (whether or not in breach
of local labor laws), Participant’s right to receive benefits under the Award
Agreement after Termination, if any, will be measured by the date of termination
of Participant’s active employment and will not be extended by any notice period
mandated under local law.

19.          Notices

Any notices provided for in the Award Agreement or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by mail by the Company to Participant, five (5) days after
deposit in the United States mail, postage prepaid, addressed to Participant at
the last address provided by Participant to the Company.

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20.          Survival of Terms

The Award Agreement shall apply to and bind Participant and the Company and
their respective permitted assignees and transferees, heirs, legatees,
executors, administrators and legal successors.

21.          Failure to Enforce not a Waiver

The failure of the Company to enforce at any time any provision of the Award
Agreement shall in no way be construed to be a waiver of such provision or of
any other provision hereof.

22.          Amendments

The Award Agreement may be amended or modified at any time only by an instrument
in writing signed by each of the parties hereto.

23.          Authority of the Committee

The Committee shall have full authority to interpret and construe the terms of
the Award Agreement.  The determination of the Committee as to any such matter
of interpretation or construction shall be final, binding and conclusive.

24.          Miscellaneous

24.1.       The rights and obligations of the Company under the Award Agreement
shall be transferable to any one or more persons or entities, and all covenants
and agreements hereunder shall inure to the benefit of, and be enforceable by
the Company’s successors and assigns.

24.2.       PARTICIPANT AGREES UPON REQUEST TO EXECUTE ANY FURTHER DOCUMENTS OR
INSTRUMENTS NECESSARY OR DESIRABLE IN THE SOLE DETERMINATION OF THE COMPANY TO
CARRY OUT THE PURPOSES OR INTENT OF THE AWARD AGREEMENT.

24.3.       PARTICIPANT ACKNOWLEDGES AND AGREES THAT HE OR SHE HAS REVIEWED THE
AWARD AGREEMENT IN ITS ENTIRETY, HAS HAD AN OPPORTUNITY TO OBTAIN THE ADVICE OF
COUNSEL PRIOR TO EXECUTING AND ACCEPTING THE AWARD AGREEMENT AND FULLY
UNDERSTANDS ALL PROVISIONS OF THE AWARD AGREEMENT.

24.4.       IF PARTICIPANT HAS RECEIVED THIS OR ANY OTHER DOCUMENT RELATED TO
THE PLAN TRANSLATED INTO A LANGUAGE OTHER THAN ENGLISH AND IF THE TRANSLATED
VERSION IS DIFFERENT THAN THE ENGLISH VERSION, THE ENGLISH VERSION WILL CONTROL.

24.5.       THE AWARD AGREEMENT MAY BE SIGNED IN COUNTERPARTS, EACH OF WHICH
SHALL BE DEEMED AN ORIGINAL, AND ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE AND
THE SAME INSTRUMENT.

25.          Governing Plan Document

The Award is subject to all the provisions of the Plan, the provisions of which
are hereby made a part of Participant’s Award, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan.  In the event of any conflict
between the provisions of the Award and those of the Plan, the provisions of the
Plan shall control.  Participant represents that he or she has read this
Agreement, the Grant Notice and the Plan, and is familiar with their terms and
provisions.  Participant hereby agrees to accept as binding, conclusive and

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final all decisions or interpretations of the Committee upon any questions
arising under the Award Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.

DTS, Inc.

 

Participant:

 

 

 

By:

 

 

By:

 

 

Signature

 

 

Signature

 

 

 

Name:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

[SIGNATURE PAGE TO RESTRICTED STOCK AGREEMENT]

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