**EXHIBIT 10.51**

 

May 20, 2005

 

Don Bird

23309 Chase Street

West Hills, CA  91304

 

Re:          EmploymentAgreement

Dear Don:

DigitalTheater Systems, Inc. (“DTS” or the “Company”) is pleased to extend to you thefollowing employment Agreement.  Unlessotherwise set forth in this Agreement, you acknowledge that your employmentwith DTS is “at-will”.
| **Title:**         |   | Senior Vice President,  Cinema Division.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Duties:**        |   | You agree to serve the Company as its Senior Vice  President, Cinema Division. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Start Date:**    |   | May  20, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **Base Salary:**   |   | $195,000  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: (A) the Company  shall for a period of six (6) months, if the Employee is employed with the  Company for less than ten (10) years, and for a period of twelve (12) months,  if the Employee is employed with the Company for more than ten (10) years;  (I) pay to Employee in monthly installments, as severance pay, Employee’s  full Salary with a duty to mitigate as set forth in this Agreement, 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 two (2) years from such termination (but not  in excess of the specified maximum term of such option). |
| **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:      |   | $50,000.00 coverage — Blue  Cross. |   | 401k Plan:                               |   | Enrollment dates 1/1 4/1,  7/1 & 10/1. |
|       |   |                                    |   | ESPP: Enrollment — May and November |

 

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**Death or Disability of Employee****.**  If you die or become disabled prior to thetermination of this Agreement, your employment under this Agreement willautomatically terminate upon your death or the determination that you aredisabled.  “Disability” means anyphysical or mental illness that renders you unable to perform your agreed-uponservices under this Agreement for ninety (90) consecutive days or an aggregateof one-hundred twenty (120) days, whether or not consecutive, during anyconsecutive twelve (12)-month period. Disability shall be determined by a licensed physician selected by theCompany that is not affiliated with you or the Company.  In the event of your death or disability, theamounts due you pursuant to this Agreement through the date of your death ordisability will be paid to you or your beneficiaries.

# **Terminationfor Cause**. Your employment under this Agreement may be terminated immediately bythe Company for “good cause”.  Upon suchtermination you will be provided notice specifying the reasons for thetermination.  You shall have ten (10)business days from the date such notice is given in which to cure such cause,if curable.  Absent such cure within thecure period, your employment shall be deemed terminated for good cause on the dateof your termination.  The term “good cause”is defined 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.                |

 

Nothing in this section or the availability oftermination for good cause is intended to alter the at-will status ofemployment with the Company.  Either youor the company may terminate the employment relationship at any time, with orwithout cause.

**Employee’sConsideration 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)   |   | Mitigation. (1) In good faith seek  new employment at a level commensurate with Employee’s duties and Salary  hereunder, (2) report to the Company on or before the first day of each month  the status of obtaining such subsequent employment and (3) report on a  monthly basis, the amount of compensation and benefits paid to Employee  received from any such subsequent employment/consultation with others. The  Company may deduct from severance payments due Employee hereunder, the amount  of salary and benefits actually received by Employee as a result of such  subsequent employment or consultation with others.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (II)  |   | Consulting. Be  available, in person and/or by telephone, as a consultant to the Company on  projects or task as defined by the Company’s CEO or designated  representative. It is agreed that eight (8) hours per week of consultation,  in person and/or by phone, shall be reasonable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (III) |   | 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. |
| (IV)  |   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (V)   |   | 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 that any dispute arising under or inconnection with this Agreement, including any dispute involving your employmentor the termination of that employment (whether based on contract, tort orstatutory duty or prohibition, including any prohibition against discriminationor harassment), shall be submitted to binding arbitration in accordance withCalifornia Code of Civil Procedure §§ 1280 — 1294.2 before a single neutralarbitrator.  You and the Companyunderstand that each is waiving its rights to a jury trial.

Theparty demanding arbitration shall submit a written claim to the other partysetting out the basis of the claim. Demands shall be presented in the same manner as notices under thisAgreement.  You and the Company willattempt to reach agreement on an arbitrator within ten (10) business days ofdelivery of the arbitration demand. After this ten (10) business day period, either you or the Company mayrequest a list of seven professional arbitrators from the American ArbitrationAssociation or another mutually agreed service. You and the Company will alternately strike names until only one personremains and that person shall be designated as the arbitrator. The partydemanding arbitration shall make the first strike.

The arbitration shall take place in or within five milesof 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

 

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powers provided in California Code of Civil Procedure §§1282.2 — 1284.2 and may provide all appropriate remedies at law or equity.

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

# **The Company will pay the arbitrator’s expenses and fees, all meeting roomcharges and any other expenses that would not have been incurred if the casewere litigated in the judicial forum having jurisdiction over it.  Unless otherwise ordered by the arbitratorpursuant to law or this Agreement, each party shall pay its own attorney fees,witness fees and other expenses incurred by the party for his or her ownbenefit.  Employee’s share of any filing,administration or similar fee shall be no more than the then current filing orother applicable fee in California Superior Court or, if applicable, otherappropriate tribunal with jurisdiction.**

## **Modification and Waiver of Breach****.**  No waiver or modification of thisAgreement shall be binding unless it is in writing signed by you and theCompany.  No waiver of a breach of thisAgreement shall be deemed to constitute a waiver of a future breach, whether ofa similar or dissimilar nature.

## **Notices****.**  All notices and othercommunications required or permitted under this Agreement shall be in writing,served personally on, or mailed by nationally recognized express mailcourier.  Notices and othercommunications served by express mail courier shall be deemed given 72 hoursafter deposit with such express mail courier duly addressed to whom such noticeor communication is to be given.  In thecase of (a) the Company, 5171 Clareton Drive, Agoura Hills, California 91301,Attention: General Counsel, or (b) to you, at the address of record provided byyou to the Company’s Human Resources department.  Either party may change their address forpurposes of this Section by giving written notice, in the manner statedherein.  You agree to promptly update theCompany’s Human Resources department with any changes to your contactinformation.

## **Counterpartsand Facsimile Signatures****.**  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 sameeffect as an original signature.

## **Constructionof 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, arbitrationor other proceeding is brought for the enforcement of this Agreement, orbecause of any alleged dispute, breach, default or misrepresentation inconnection with this Agreement, the successful or prevailing party shall beentitled to recover reasonable attorneys’ fees and other costs it incurred inthat action or proceeding, in addition to any other relief to which it may beentitled.

## **SeverabilityClause****.**  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.

## **CompleteAgreement****.**  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 PartyBeneficiaries****.**  ThisAgreement does not create, and shall not be construed as creating, any rightsenforceable by any person not a party to this Agreement, except as expresslycontemplated herein.

**Non-transferabilityof Interest****.**  Noneof the rights of Employee to receive any form of compensation payable pursuantto this Agreement shall be assignable or transferable except through atestamentary disposition or by the laws of descent and distribution upon thedeath of Employee.  Any attempted assignment,transfer, conveyance, or other disposition (other than as set forth herein) ofany interest in the rights of Employee to receive any form of compensation tobe made by the Company pursuant to this Agreement shall be void.

**OtherAgreements.**  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 andprocedures as they presently exist or as they may exist in the future andfailure to abide by such provisions may result in your termination for goodcause.  Provided, however, that theat-will status of employment may only be changed as provided below.

 

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**At-Will.**  By signing this letter, youunderstand and agree that your employment with DTS is “**at-will**.”  Your employment with DTS isvoluntarily entered into and we recognize you are free to resign at anytime.  Similarly, it is recognized thatDTS is free to conclude an employment relationship at any time we feel isappropriate.  While other terms of youremployment may change with or without notice, this at-will relationship can bechanged only in a written agreement signed by you and the President & ChiefExecutive 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/ Don Bird                           | July 16, 2005 |                       |   |
| Don Bird                               | Date          |                       |   |

 

 

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# **AGREEMENT OF AT WILL EMPLOYMENT**

 

 

I understand and agree that my employment withDTS 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 otherpersonnel policies, procedures, and benefits of DTS may change from time totime in DTS’s discretion, this at-will employment relationship can only bechanged by an express written employment agreement signed by me and an officerof DTS.

 

 

 

 

 
| Don Bird              |          |
|-----------------------|---------------|
| Employee Name (PRINT) |          |
|                  |          |
|                  |          |
|                  |          |
|                  |          |
|                  |          |
| /s/ Don Bird          | July 16, 2005 |   |
| Employee Signature    | Date          |   |

 

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