**Exhibit 3.7**

 

**COMPENSATIONCOMMITTEE CHARTER**

** **

**Adopted by theBoard of Directors ofDTS, Inc.February 23, 2006**

 

# **I.**              Purpose

 

Thepurpose of the Compensation Committee (the “Committee”) of DTS, Inc. (the “Company”)is to assist the Board of Directors of the Company (the “Board”) in thedischarge of its responsibilities relating to executive and director****compensation, to oversee incentive,equity-based and other compensatory plans in which executive officers and keyemployees of the Company participate and to produce an annual report onexecutive compensation for inclusion as required in the Company’s proxystatement.

 

# **II.**            Composition

# ** **

TheCommittee shall be composed of not less than three directors, as determined bythe Board, each of whom shall (i) satisfy the independence requirements of theNasdaq National Stock Market, (ii) qualify as a “Non-employee Director” forpurposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended,and (iii) qualify as an “outside director” for purposes of Section 162(m) ofthe Internal Revenue Code of 1986, as amended. Members shall be appointed to,and removed from, the Committee by the Board.

 

# **III.**           Responsibilities

# ** **

Theauthority delegated to the Committee is set forth below. This description ofauthority is intended as a guide and the Committee may act and establishpolicies and procedures that are consistent with these guidelines or arenecessary or advisable, in its discretion, to carry out the intent of the Boardin delegating such authority and to fulfill the responsibilities of theCommittee hereunder.

 

### 1.             Develop and periodically reviewcompensation policies and practices applicable to executive officers, includingthe criteria upon which executive compensation is based, the specificrelationship of corporate performance to executive compensation and thecomposition in terms of base salary, deferred compensation and incentive orequity-based compensation and other benefits.

###  

### 2.             Review and approve, at least annually,corporate goals and objectives relevant to Chief Executive Officer (“CEO”)compensation, evaluate the CEO’s performance in light of these goals andobjectives, and set the CEO’s compensation level based on this evaluation.

###  

### 3.             Determine bases for and set compensationlevels for other executive officers.

 

----

 

### 4.             Supervise, administer and evaluateincentive, equity-based and other compensatory plans of the Company, includingapproving guidelines and size of grants and awards, making grants and awards,interpreting and promulgating rules relating to the plans, modifying orcanceling grants or awards, designating employees eligible to participate andimposing limitations and conditions on grants or awards.

###  

### 5.             Review and approve, subject tostockholder approval as required, the creation or amendment of any incentive,equity-based and other compensatory plans of the Company, other than amendmentsto tax-qualified employee benefit plans and trusts, and any supplemental plansthereunder, that do not substantially alter the costs of such plans to theCompany or are to conform such plans to applicable laws or regulations, andreserve shares of the Company’s common stock for issuance under any such plan.

###  

### 6.             Review and approve any employmentagreements, severance arrangements, change-in-control arrangements or specialor supplemental employee benefits, and any material amendments to any of theforegoing, applicable to executive officers.

###  

### 7.             Review periodically the compensation andbenefits offered to nonemployee directors and recommend changes to the Board asappropriate.

###  

### 8.             Prepare an annual report to the Company’sstockholders on executive compensation that will be included in the Company’sproxy statement for its annual stockholders’ meeting in accordance with therules and regulations of the Securities and Exchange Commission.

###  

### 9.             Make available minutes of Committeemeetings to the Board, and report to the Board on any significant mattersarising from the Committee’s work.

###  

### 10.           At least annually, evaluate theperformance of the Committee, review and reassess this Charter and, ifappropriate, recommend changes to the Board.

###  

### 11.           Perform such other duties andresponsibilities as are required by law, applicable Nasdaq (or stock exchange)rules or as may be assigned to the Committee by the Board or as designated in plandocuments.

###  

# **IV.**           Authorityand Power to Act

# ** **

In theevent that one or more members of the Committee are absent from a meeting ofthe Committee or being present at a meeting recuse themselves from an actiontaken, the remaining members of the Committee (provided there are at least twosuch members), acting unanimously, shall have the power to take any necessaryaction. No action of the Committee shall be valid unless taken pursuant to aresolution adopted and approved by at least two members of the Committee. Nomember of the Committee shall participate in any discussions or deliberationsrelating to such person’s own compensation or other matters in which suchperson has a material interest.

 

Exceptwith respect to matters relating to compensation of the Company’s ChiefExecutive Officer, with respect to which the Board delegates to the Committeeexclusive authority during 

 

2

----

 

suchperiod of time that the Committee is empanelled with at least two qualifyingmembers as described above, the Board simultaneously reserves to itself allauthority delegated hereunder to the Committee. This reservation of authoritydoes not in any way limit the Committee’s authority to act definitively onmatters delegated to it hereunder. Notwithstanding the above, the Boardreserves the right at any time to revoke or change the authority delegatedhereunder.

 

Byadopting this Charter, the Board delegates to the Committee the authority to:

 

### 1.             Perform eachof the responsibilities of the Compensation Committee described above;provided, however, that the Board retains the authority to authorize one ormore officers of the Company to designate officers and employees to berecipients of rights or options created by the Company or to determine thenumber of such rights or options to be received by such officers or employees.

###  

### 2.             Delegate such of its authority andresponsibilities as the Committee deems proper to members of the Committee.

###  

### 3.             Appoint a chair of the Committee, unlessa chair is designated by the Board.

###  

### 4.             Retain and terminate compensationconsultants, independent counsel and such other advisors as the Committeedetermines necessary to carry out its responsibilities, and approve the feesand other terms of retention of any such advisors. Compensation paid to suchparties and related expenses will be borne by the Company and the Company willmake appropriate funding available to the Committee for such purposes.

###  

### 5.             Obtain advice and assistance frominternal legal or other advisors.

 

3

----