Exhibit
10.2


 


April 14, 2009


 


Brian Towne


29743 Quail Run Dr.


Agoura Hills, CA 91301


 


Re:          Employment Agreement


 


Dear Brian:


 


DTS, Inc. (“DTS” or
the “Company”) is pleased to extend to you the following employment
Agreement.  Unless otherwise set forth in
this Agreement, you acknowledge that your employment with DTS is “at-will”.


 


Title:                                                            Executive Vice
President, General Manager


 


Duties:                                                  You agree to serve the Company as its Executive Vice President, General Manager.  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: April 14, 2009.


 


Base Salary:                    $280,000 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, restricted stock, or other Company
issued equity incentives granted to you (incentive and nonstatutory) shall
(I) immediately vest and (II) where applicable, 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, General
manager 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:

  	
   

  
	
  Health

  	
  Long Term
  Disability

  
	
  Dental

  	
  Long Term Care

  
	
  Vision

  	
  Section 125:    Available for
  dependent and health care.

  
	
  Life:
  $50,000 coverage

  	
  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 the termination of this Agreement, your employment
under this Agreement will automatically terminate upon your death or the
determination that you are disabled. 
“Disability” means any physical or mental illness that renders you unable
to perform your agreed-upon services under this Agreement for ninety (90)
consecutive days or an aggregate of one-hundred twenty (120) days, whether or
not consecutive, during any consecutive twelve (12)-month period.  Disability shall be determined by a licensed
physician selected by the Company that is not affiliated with you or the
Company.  In the event of your death or
disability, the amounts due you pursuant to this Agreement through the date of
your death or disability will be paid to you or your beneficiaries.


 


Termination for Cause.  Your
employment under this Agreement may be terminated immediately by the Company
for “good cause”.  Upon such termination
you will be provided notice specifying the reasons for the termination.  You shall have ten (10) business days
from the date such termination to cure such cause, if curable.  Absent such cure within the cure period, your
employment shall be deemed terminated for good cause on the date of 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 of termination for good cause is intended
to alter the at-will status of employment with the Company.  Either you or the company may terminate the
employment relationship at any time, with or without cause.


 


Employee’s Consideration for Severance. 
As consideration for receiving severance pay and benefits provided
hereunder, during the period that Employee is receiving severance pay or
benefits hereunder, Employee shall:


 


(I)                        Consulting.  Be reasonably
available, by telephone, as a consultant to the Company on projects or task you
have 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 which shall become effective in accordance with
its terms no later than sixty (60) days following your termination.


 


Section 409A Compliance. 
This Agreement is intended to comply with, or otherwise be exempt from,
Section 409A of the Internal Revenue Code (“Section 409A”).  The Company and the Employee agree that they
will execute any and all amendments to this Agreement as they mutually agree in
good faith may be necessary to ensure compliance with the provisions of
Section 409A.  The preceding
provisions, however, shall not be construed as a guarantee by the Company of
any particular tax effect to the Employee under this Agreement.


 


For purposes of
Section 409A, the right to a series of installment payments under this
Agreement shall be treated as a right to a series of separate payments.  With respect to any reimbursement of expenses
of, or any provision of in-kind benefits to, the Employee, as specified under
this Agreement, such reimbursement of expenses or provision of in-kind benefits
shall be subject to the following conditions: (1) the expenses eligible
for reimbursement or the amount of in-kind benefits provided in one taxable
year shall not affect the expenses eligible for reimbursement or the amount of
in-kind benefits provided in any other taxable year, except for any medical
reimbursement arrangement providing for the reimbursement of expenses referred
to in Section 105(b) of the Internal Revenue Code; (2) the
reimbursement of an eligible expense shall be made no later than the end of the
year after the year in which such expense was incurred; and (3) the right
to reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.


 


No amount payable
pursuant to this Agreement which constitutes a “deferral of compensation”
subject to Section 409A shall be paid unless and until the Employee first
incurs a “separation from service” for purposes of Section 409A.  Further, to the extent that the Employee is a
“specified employee” (as defined in Section 409A) as of the date of
Employee’s separation from service, no amount that constitutes a deferral of
compensation which is payable on account of Employee’s separation from service
shall paid to Employee before the date (the “Delayed Payment Date”) which is
first day of the seventh month after the date of Employee’s separation from
service or, if earlier, the date of Employee’s death following such separation
from service.  All such amounts that
would, but for this Section, become payable prior to the Delayed Payment Date
will be accumulated and paid on the Delayed Payment Date.


 


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


 


The party demanding arbitration shall submit a written claim to the
other party setting out the basis of the claim. 
Demands shall be presented in the same manner as notices under this
Agreement.  You and the Company will
attempt to reach agreement on an arbitrator within ten (10) business days
of delivery of the arbitration demand. 
After this ten (10) business day period, either you or the Company
may request a list of seven professional arbitrators from the American
Arbitration Association or another mutually agreed service.  You and the Company will alternately strike
names until only one person remains and that person shall be designated as the
arbitrator. The party demanding arbitration shall make the first strike.


 


The arbitration 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 of
essential documents and witnesses and to deposition discovery, as determined by
the 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 process
before seeking the determination of the arbitrator.  Except as otherwise determined by the
arbitrator, you and the Company will each be limited to no more than three
(3) depositions.  The arbitrator
shall have the 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 a motion to dismiss
and/or a motion for summary judgment by either you or the Company and shall
apply the standards governing such motions under California law, 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
room charges and any other expenses that would not have been incurred if the
case were litigated in the judicial forum having jurisdiction over it.  Unless otherwise ordered by the arbitrator
pursuant 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 own
benefit.  Employee’s share of any filing,
administration or similar fee shall be no more than the then current filing or
other applicable fee in California Superior Court or, if applicable, other
appropriate tribunal with jurisdiction.


 


Modification and Waiver of Breach.  No waiver or
modification of this Agreement shall be binding unless it is in writing signed
by you and the Company.  No waiver of a
breach of this Agreement shall be deemed to constitute a waiver of a future
breach, whether of a similar or dissimilar nature.


 


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


 


Counterparts and Facsimile Signatures.  This
instrument may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement.  The parties agree that a
signature delivered by facsimile transmission will be treated in all respects
as having the same effect as an original signature.


 


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


 


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


 


Severability Clause.  If any
provision of this Agreement or the application thereof is held invalid, the
invalidity shall not affect other provisions or applications of the Agreement
which can be given effect without the invalid provisions or applications and to
this end the provisions of this Agreement are declared to be severable.


 


Complete Agreement.  This
instrument constitutes and contains the entire agreement and understanding
concerning your employment and the other subject matters addressed in this
Agreement between you and the Company, and supersedes and replaces all prior
negotiations and all agreements proposed or otherwise, 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 person not a party to this Agreement, except as expressly
contemplated herein.


 


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


 


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


 


At-Will.  By signing this letter, you understand and
agree that your employment with DTS is “at-will.”  Your
employment with DTS is voluntarily entered into and we recognize you are free
to resign at any time.  Similarly, it is
recognized that DTS is free to conclude an employment relationship at any time
we feel is appropriate.  While other
terms of your employment may change with or without notice, this at-will
relationship can be changed only in a written agreement signed by you and the
President & Chief Executive Officer of DTS.


 


Sincerely,


 


 


	
  /s/
  Jon E. Kirchner

  	
   

  	
  /s/
  Sharon K. Faltemier

  
	
  Jon
  Kirchner

  	
   

  	
  Sharon
  Faltemier

  
	
  President
  and Chief Executive Officer

  	
   

  	
  Senior
  Vice President, Human Resources

  



 


 


Acceptance:


 


	
  /s/
  Brian D. Towne

  	
   

  	
  May 8,
  2009

  	
   

  	
   

  
	
  Brian
  Towne

  	
   

  	
  Date

  	
   

  	
   

  



 


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AGREEMENT OF 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 may terminate the employment relationship at any time at their sole
discretion without cause.


 


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


 


 


	
  Brian
  D. Towne

  	
   

  	
   

  
	
  Employee
  Name (PRINT)

  	
   

  	
   

  



 


 


	
  /s/
  Brian D. Towne

  	
   

  	
  May 8,
  2009

  	
   

  	
   

  
	
  Employee
  Signature

  	
   

  	
  Date

  	
   

  	
   

  



 


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