**EXHIBIT 10.47**

 

May 20, 2005

 

Blake Welcher

1860 Calle Alberca

Camarillo CA 93010

 

Re:          Employment Agreement

Dear Blake:

Digital Theater Systems,Inc. (“DTS” or the “Company”) is pleased to extend to you the followingemployment Agreement.  Unless otherwise setforth in this Agreement, you acknowledge that your employment with DTS is“at-will”.
| **Title:**           |   | Executive Vice President, Legal, General Counsel,  Corporate Secretary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|----------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Duties:**          |   | You  agree to serve the Company as its Executive Vice President, Legal, General Counsel, Corporate  Secretary. Your duties are as defined in  Company’s job description for the position or as otherwise specified by the  President and Chief Executive Officer of the Company. During the Term of this  Agreement, you will devote full time to, and use your best efforts to  advance, the business and welfare of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Status:**          |   | Salary Exempt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **Effective  Date:** |   | May 20, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **Base  Salary:**    |   | $225,000 per year payable biweekly and subject to  payroll deductions as may be necessary or customary in respect of the  Company’s salaried employees in general.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Bonus:**           |   | Participation in the  bonus plan will be on a level commensurate with other executives, and subject  to completion of individual and company milestone achievements per mutual  agreement on targets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Stock  Options:**  |   | All Stock options  granted to you are conditioned on Board of Directors approval and shall vest over four consecutive 12-month periods as  per your **Stock Option Agreement** with the  Company and administered under the respective Company’s **Stock  Option Plan**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **Vacation:**        |   | You  shall be provided with One Hundred sixty (160) hours of  vacation, which shall be automatically replenished upon use. However,  vacation hours will not be replenished during any period where you are not  actively working for the Company, until you have resumed actively working for  at least one full workweek.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **Holidays:**        |   | Per Company’s annual  published schedule (commonly 12 days per year); plan is subject to change. The salary includes holiday pay and you are not  entitled to any additional salary or compensation for work on a holiday.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **Severance:**       |   | Upon  the termination of this Agreement by the Company for other than good cause,  including constructive termination: (A) the Company shall for a period of  Twelve (12) months; (I) pay to Employee in monthly installments, as severance  pay, Employee’s full Salary, and (II) provide Employee the same level of  benefits Employee was receiving as of the time of termination of this  Agreement, unless otherwise required by law, (B) all options granted to you  (incentive and nonstatutory) shall (I) immediately vest and (II) be  exercisable for Five (5) years from such termination (but not in excess of  the specified maximum term of such option). Constructive Termination shall mean any material  failure by the Company to fulfill its obligations under this Agreement which  is not cured within thirty (30) days after receipt of written notice from you  specifying the nature of the failure, including, but not limited to, (a) your  removal, other than removal as a result of a termination for cause or your  voluntary termination, as Executive Vice President, Legal, General Counsel,  Corporate Secretary of the Company, (b) any material change by the Company in  your functions, duties or responsibilities from those in which you were  engaged under this Agreement without your consent, or (c) a material,  non-voluntary reduction in your base salary and eligibility for bonus  amounts. |
| **Benefits:**        |   | The following are the  Company supplied Benefits as of the date of this Agreement. Benefit coverage  is subject to change at company election that may result in elimination of  benefits or increased co-pay. Unless otherwise set forth below, eligibility  begins the first day of the month after hire date. Please see the applicable  plan documents for additional information. In the event of any conflict  between this description and the plan document, the plan document will  prevail.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

 

 
| Insurance: |   |                         |   | Disability                               |   |                                      |
|------------|--------|------------------------------|--------|------------------------------------------|--------|-------------------------------------------|
| Health     |   | Blue  Cross                  |   | Long  Term:                              |   | Coverage  through UNUM.                   |
| Dental:    |   | Aetna                        |   | Short Term:                              |   | Coverage through UNUM.                    |
| Vision:    |   | Coverage through VSP         |   | Section 125:                             |   | Available for dependent and health care.  |
| Life:      |   | $50,000 coverage -Blue Cross |   | 401k Plan:                               |   | Enrollment dates 1/1 4/1, 7/1 & 10/1. |
|       |   |                         |   | ESPP: Enrollment — May and November |

# ** **

 

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# **Deathor Disability of Employee**.  If you die or become disabledprior to the termination of this Agreement, your employment under thisAgreement will automatically terminate upon your death or the determinationthat you are disabled.  “Disability”means any physical or mental illness that renders you unable to perform youragreed-upon services under this Agreement for ninety (90) consecutive days oran aggregate of one-hundred twenty (120) days, whether or not consecutive,during any consecutive twelve (12)-month period.  Disability shall be determined by a licensedphysician selected by the Company that is not affiliated with you or theCompany.  In the event of your death ordisability, the amounts due you pursuant to this Agreement through the date ofyour death or disability will be paid to you or your beneficiaries.

# **Termination for Cause**.  Youremployment under this Agreement may be terminated immediately by the Companyfor “good cause”.  Upon such terminationyou will be provided notice specifying the reasons for the termination.  You shall have ten (10) business days fromthe date such termination to cure such cause, if curable.  Absent such cure within the cure period, youremployment shall be deemed terminated for good cause on the date of yourtermination.  The term “good cause” isdefined as any one or more of the following occurrences:

| (I)   |   | Negligence or a material violation by you of any  duty or any other material  or repetitive misconduct or failure on your part;                                                                  |
|-------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (II)  |   | Your  conviction by, or entry of a plea of guilty or nolo contendere in, a court of  competent and final jurisdiction for any crime punishable by imprisonment in  the jurisdiction involved; or |
| (III) |   | Your  commission of an act of fraud, prior to or subsequent to the date of this  Agreement, upon the Company.                                                                                    |
| (IV)  |   | Failure to execute and  deliver to the Company any  document(s) required by all employees of the Company, or employees of a  similar position, at the location you are employed.                 |

 

Nothingin this section or the availability of termination for good cause is intendedto alter the at-will status of employment with the Company.  Either you or the company may terminate theemployment relationship at any time, with or without cause.

**Employee’s Consideration for Severance.**  As consideration for receiving severance payand benefits provided hereunder, during the period that Employee is receivingseverance pay or benefits hereunder, Employee shall:
| (I)   |   | Consulting.  Be reasonably available, by telephone, as a consultant to the Company on  projects or task you had previously been involved in. It is agreed that eight  (8) hours per week of consultation, by phone, shall be reasonable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (II)  |   | Non-Compete.  You agree that for the period commencing on the date of this Agreement and  ending upon the date of the last severance payment hereunder, Employee shall  not, directly or indirectly, as employee, agent, consultant, stockholder,  director, partner or in any other individual or representative capacity, own,  operate, manage, control, engage in, invest in or participate in any manner  in, act as a consultant or advisor to, render services for (alone or in  association with any person, firm, corporation or entity), or otherwise  assist, for compensation or otherwise, any person or entity that engages in  or owns, invests in, operates, manages or controls any venture or enterprise  that is a direct competitor of DTS; provided, however, that nothing contained  in this Agreement shall be construed to prevent you from investing in the  stock of any competing corporation listed on a national securities exchange  or traded in the over-the-counter market, but only if: (1) you are not  involved in the business of said corporation, and (2) if you and your  affiliates collectively do not own more than an aggregate of 5% of the stock  of such corporation, and (3) such investment does not violate the Company’s  Insider Trading Policy. |
| (III) |   | Non-Solicitation. You agree that you will not interfere with or  disrupt or attempt to disrupt the Company’s business relationship with its  customers or suppliers or solicit any of the employees of the Company to  leave the employment of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (IV)  |   | Severance Agreement. You shall enter into a severance agreement and  general release with the company in the form designated by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

 

**Arbitration****. **You and the Company agree thatany dispute arising under or in connection with this Agreement, including anydispute involving your employment or the termination of that employment(whether based on contract, tort or statutory duty or prohibition, includingany prohibition against discrimination or harassment), shall be submitted tobinding arbitration in accordance with California Code of Civil Procedure §§1280 — 1294.2 before a single neutral arbitrator.  You and the Company understand that each iswaiving its rights to a jury trial.

The party demandingarbitration shall submit a written claim to the other party setting out thebasis of the claim.  Demands shall bepresented in the same manner as notices under this Agreement.  You and the Company will attempt to reachagreement on an arbitrator within ten (10) business days of delivery of thearbitration demand.  After this ten (10)business day period, either you or the Company may request a list of sevenprofessional arbitrators from the American Arbitration Association or anothermutually agreed service.  You and theCompany will alternately strike names until only one person remains and thatperson shall be designated as the arbitrator. The party demanding arbitrationshall make the first strike.

Thearbitration shall take place in or within five miles of Agoura Hills,California, at a time and place determined by the arbitrator.  Each party shall be entitled to discovery ofessential documents and witnesses and to deposition discovery, as determined bythe arbitrator, taking into account the mutual desire to have a fast,cost-effective, dispute-resolution mechanism. You and company will attempt to cooperate in the discovery processbefore seeking the determination of the arbitrator.  Except as otherwise determined by thearbitrator, you and the Company will each be limited to no more than three (3)depositions.  The arbitrator shall havethe powers provided in California Code of Civil Procedure §§ 1282.2 — 1284.2and may provide all appropriate remedies at law or equity.

Thearbitrator will have the authority to entertain a motion to dismiss and/or amotion for summary judgment by either you or the Company and shall apply thestandards governing such motions under California law, unless the standards ofanother judicial forum supercede California law.  The Arbitrator shall render, within sixty(60) days of the completion of the arbitration, an award and a written, reasonedopinion in support of that award. Judgment on the award may be entered in any court having jurisdiction.

# **The Companywill pay the arbitrator’s expenses and fees, all meeting room charges and anyother expenses that would not have been incurred if the case were litigated inthe judicial forum having jurisdiction over it. Unless otherwise ordered by the arbitrator pursuant to law or thisAgreement, each party shall pay its own attorney fees, witness fees and otherexpenses incurred by the party for his or her own benefit.  Employee’s share of any filing,administration or similar fee shall be no more than the then current filing orother**

 

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# **applicablefee in California Superior Court or, if applicable, other appropriate tribunalwith jurisdiction.**

## **Modificationand Waiver of Breach****.**  No waiver or modification of this Agreementshall be binding unless it is in writing signed by you and the Company.  No waiver of a breach of this Agreement shallbe deemed to constitute a waiver of a future breach, whether of a similar ordissimilar nature.

## **Notices****.**  All notices and other communications requiredor permitted under this Agreement shall be in writing, served personally on, ormailed by nationally recognized express mail courier.  Notices and other communications served byexpress mail courier shall be deemed given 72 hours after deposit with suchexpress mail courier duly addressed to whom such notice or communication is tobe given.  In the case of (a) the Company,5171 Clareton Drive, Agoura Hills, California 91301, Attention: GeneralCounsel, or (b) to you, at the address of record provided by you to theCompany’s Human Resources department. Either party may change their address for purposes of this Section bygiving written notice, in the manner stated herein.  You agree to promptly update the Company’sHuman Resources department with any changes to your contact information.

## **Counterparts and FacsimileSignatures****.**  This instrument may be executed in one ormore counterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same Agreement.  The parties agree that a signature deliveredby facsimile transmission will be treated in all respects as having the same effectas an original signature.

## **Construction of Agreement****.**  This Agreement shall be construed inaccordance with, and governed by, the internal laws of the State of Californiaand both parties irrevocably agree to the exclusive jurisdiction and venue ofthe state and local courts of the County of Los Angeles, California.

## **Legal Fees****.**  If any legal action, arbitration or otherproceeding is brought for the enforcement of this Agreement, or because of anyalleged dispute, breach, default or misrepresentation in connection with thisAgreement, the successful or prevailing party shall be entitled to recoverreasonable attorneys’ fees and other costs it incurred in that action orproceeding, in addition to any other relief to which it may be entitled.

## **Severability Clause****.**  If any provision of this Agreement or theapplication thereof is held invalid, the invalidity shall not affect otherprovisions or applications of the Agreement which can be given effect withoutthe invalid provisions or applications and to this end the provisions of thisAgreement are declared to be severable.

## **Complete Agreement****.**  This instrument constitutes and contains theentire agreement and understanding concerning your employment and the othersubject matters addressed in this Agreement between you and the Company, andsupersedes and replaces all prior negotiations and all agreements proposed orotherwise, whether written or oral, concerning the subject matters hereof.  This is an integrated document.

**Third Party Beneficiaries****.**  This Agreement does not create,and shall not be construed as creating, any rights enforceable by any personnot a party to this Agreement, except as expressly contemplated herein.

**Non-transferability of Interest****.**  None of the rights of Employee toreceive any form of compensation payable pursuant to this Agreement shall beassignable or transferable except through a testamentary disposition or by thelaws of descent and distribution upon the death of Employee.  Any attempted assignment, transfer,conveyance, or other disposition (other than as set forth herein) of anyinterest in the rights of Employee to receive any form of compensation to bemade by the Company pursuant to this Agreement shall be void.

**Other Agreements.**  A condition of employment with DTS is asigned Confidentiality and Non-Disclosure Agreement, Employee InventionAgreement, the DTS Worldwide Business Conduct Policy, and receivingsatisfactory confirmation of an employee background check.  Your failure to agree to these conditions andcomplete these documents in a timely manner may result in your termination forgood cause.  You also understand andagree that, except as expressly provided in this Agreement, you are subject toall of the Company’s general business and human resources polices and proceduresas they presently exist or as they may exist in the future and failure to abideby such provisions may result in your termination for good cause.  Provided, however, that the at-will status ofemployment may only be changed as provided below.

**At-Will.**  By signing this letter, you understand andagree that your employment with DTS is “**at-will**.”  Youremployment with DTS is voluntarily entered into and we recognize you are freeto resign at any time.  Similarly, it isrecognized that DTS is free to conclude an employment relationship at any timewe feel is appropriate.  While otherterms of your employment may change with or without notice, this at willrelationship can be changed only in a written agreement signed by you and thePresident & Chief Executive Officer of DTS.

Sincerely,

 
| /s/ Jon Kirchner                      |   | /s/ Susan R. Ryan         |
|---------------------------------------|--------|---------------------------|
| Jon Kirchner                          |   | Susan R. Ryan             |
| President and Chief Executive Officer |   | Director, Human Resources |

 

 

Acceptance:

 
| /s/ Blake A. Welcher   | June 3, 2005 |   |
|------------------------|--------------|--------|
| Blake A. Welcher  | Date         |   |

 

 

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# **AGREEMENTOF AT WILL EMPLOYMENT**

 

 

I understand and agree that my employment with DTS is on an **at-will** basis.  This means that either DTS or I or mayterminate the employment relationship at any time at their sole discretionwithout cause.

 

I further understand that while other personnel policies, procedures,and benefits of DTS may change from time to time in DTS’s discretion, thisat-will employment relationship can only be changed by an express writtenemployment agreement signed by me and an officer of DTS.

 

 

 

 

 
| Blake Welcher         |         |
|-----------------------|--------------|
| Employee Name (PRINT) |         |
|                  |         |
| /s/ Blake Welcher     | June 3, 2005 |   |
| Employee Signature    | Date         |   |

 

 

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