**Exhibit10.2**

**THISAGREEMENT IS SUBJECT TO ARBITRATION**
| STATE OF TEXAS   |   | § |
|------------------|--------|--------|
|             |   | § |
| COUNTY OF DALLAS |   | § |

 

**AMENDEDAND RESTATED EMPLOYMENT AGREEMENT**

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”)is made and entered into as of the 30th dayof August, 2006, but effective as of the 1st day of July,2006, by and between Digital Generation Systems, Inc., a Delaware corporation(the “Corporation”), and Neil Nguyen (the “Employee”).

WHEREAS, the Corporation and Employee are parties toan Employment Agreement made and entered into as of the 29th day of March, 2005 (the “Prior Agreement”),which sets forth the terms and conditions of Employee’s employment with theCorporation; and

WHEREAS, the Corporation and Employee desire to amendand restate the Prior Agreement on the terms and conditions as set forthherein;

NOW, THEREFORE, the parties hereto, in considerationof the mutual covenants and promises hereinafter contained, do hereby agree asfollows:

# 1.             Employment.  The Corporation hereby employs Employee inthe capacity of Executive Vice President – Sales and Operations, orin such other position of the same or greater stature as the Corporation maydirect or desire (provided that the Corporation may hereafter designate thatthe responsibility for operations may be assigned to another person), andEmployee hereby accepts the employment, on the terms and subject to theconditions hereinafter set forth.

# 2.             Duties.  The Employee’s principal duties andresponsibilities shall be to manage the Corporation’s sales and operationspersonnel or such other duties consistent with his position reasonably assignedto Employee from time to time by the Chief Executive Officer.  Employee agrees to perform such services andduties and hold such offices as may be reasonably assigned to him from time totime by the Corporation, consistent with his position, and to devotesubstantially his full time, energies and best efforts to the performancethereof to the exclusion of

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# all other business activities,except any other activities as the Corporation may consent to in writing.  As the Corporation’s Executive VicePresident – Sales and Operations, all operation and sales personnelshall report to Employee.

# 3.             Term.  The term of employment hereunder shall beginon the effective date hereof and continue for three (3) years unless earlierterminated as herein provided.

# 4.             Salary and Other Compensation.  As compensation for the services to berendered by the Employee to the Corporation pursuant to this Agreement, theEmployee shall be paid the following compensation and other benefits:

## (a)           Base Salary.  $210,000 for the twelve months endingJune 30, 2007, $230,000 for the twelve months ending June 30, 2008and $240,000 for the twelve months ending June 30, 2009, each payable inequal bi-weekly installments or in accordance with the Corporation’s thenstandard practices, or such higher compensation as may be established by theCorporation from time to time (“Base Salary”).  Any increase in Base Salary shallautomatically amend this Agreement to provide thereafter that Employee’s BaseSalary shall not be less then the annual amount to which the Base Salary hasbeen increased.  If the Employee, duringany period of Partial Disability, receives any periodic payments representinglost compensation under any health and accident policy or under any salarycontinuation insurance policy, the premiums for which have been paid by theCorporation, the amount of salary that the Employee would be entitled toreceive from the Corporation during the Partial Disability shall be decreasedby the amounts of such payments.  “PartiallyDisabled,” for purposes of this subsection, means the inability because of anyphysical or emotional illness to perform his assigned duties under thisAgreement for forty (40) hours per week.

## (b)           Bonus.  Employee shall be eligible to receive anannual bonus, within 45 days after the end of each calendar year ending duringthe term of this Agreement, in an amount up to $75,000 per year, to be determinedas provided pursuant to Exhibit A hereto.

## (c)           Stock Options.  The Corporation may grant to the Employeeoptions to purchase shares of the Corporation’s common stock under itsthen-existing stock option plan at the Corporation’s sole discretion.

## (d)           Car Allowance.  The Corporation shall pay to the Employee acar allowance in an amount equal to $500 per month, in arrears, during theEmployment Term.

## (e)           Commission.  Employee shall receive a monthly bonus in anamount equal to all ADS revenues of the Corporation and its subsidiaries, multipliedby .0007, payable in accordance with the Corporation’s then standardpractices; provided, however, that if all ADS revenues of theCorporation and its subsidiaries exceed the budgeted amount for any calendarmonth, an additional bonus equal to such revenues multiplied by .0003will be payable for such calendar month. The Corporation and the Employee shall negotiate in good faith regardingmodifications to the foregoing rates for

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## each calendaryear following 2006 so that the rates for such calendar year may be adjusted,if acceptable to the Corporation and the Employee, by February 15 of eachsuch year.

## (f)            Employee BenefitPlans. The Employee shall be eligible to participate, to the extent he maybe eligible, in any profit sharing, retirement, insurance or other employeebenefit plan maintained by the Corporation.

# 5.             Life and Health Insurance.  The Corporation, in its discretion, may applyfor and procure in its own name and for its own benefit, life insurance on thelife of the Employee in any amount or amounts considered advisable by theCorporation, and the Employee shall submit to any medical or other examinationand execute and deliver any application or other instrument in writing,reasonably necessary to effectuate such insurance.  The Corporation shall provide healthinsurance, including major medical coverage, for the Employee, as described inthe “DG Medical Options” schedule, a copy of which has been provided to theEmployee, which schedule may be modified from time to time in the discretion ofthe Corporation.  The Corporation shallbe obligated to bear the expenses of the coverage contemplated by the previoussentence, to the extent provided in such schedule.

# 6.             Expenses.  The Corporation shall pay, or reimburse theEmployee, for the reasonable and necessary business expenses of the Employee.

# 7.             Vacations and Leave.  The Employee shall be entitled to four (4)weeks paid vacation per year.

# 8.             Non-Disclosure of ConfidentialInformation.  The Employee acknowledgesthat in and as a result of his employment by the Corporation, he will be makinguse of, acquiring, and/or adding to confidential information of a special andunique nature and value relating to such matters as the Corporation’s patents,copyrights, proprietary information, trade secrets, systems, procedures,manuals, confidential reports, and lists of customers (which are deemed for allpurposes confidential and proprietary), as well as the nature and type ofservices rendered by the Corporation, the equipment and methods used andpreferred by the Corporation’s customers, and the fees paid by them.  As a material inducement to the Corporationto enter into this Agreement and to pay to Employee the compensation stated inSection 4, Employee covenants and agrees that he shall not, at any time duringor for three (3) years following the term of his employment, directly orindirectly divulge or disclose for any purpose whatsoever any confidentialinformation that has been obtained by, or disclosed to, him as a result of hisemployment by the Corporation.

# 9.             Reasonableness of Restrictions

## (a)           The Employee hascarefully read and considered the provisions of Section 8, and, having done so,agrees that the restrictions set forth in that Section are fair and reasonableand are reasonably required for the protection of the interests of theCorporation and its parent or subsidiary corporations, officers, directors,shareholders, and other Employees.

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## (b)           In the event that,notwithstanding the foregoing, any of the provisions of Section 8 shall be heldto be invalid or unenforceable, the remaining provisions thereof shallnevertheless continue to be valid and enforceable as though the invalid orunenforceable parts had not been included therein.  In the event that any provision of Section 8shall be declared by a court of competent jurisdiction to exceed the maximumrestrictiveness such court deems reasonable and enforceable, the time periodand/or areas of restriction and/or related aspects deemed reasonable and enforceableby the court shall become and thereafter be the maximum restriction in suchregard, and the restriction shall remain enforceable to the fullest extentdeemed reasonable by such court.

# 10.           Remedies for Breach of Employee’sCovenants of Non-Disclosure.  In theevent of a breach or threatened breach of any of the covenants in Section 8,the Corporation shall have the right to seek monetary damages for any pastbreach and equitable relief, including specific performance by means of aninjunction against the Employee or against the Employee’s partners, agents,representatives, servants, employers, employees, family members and/or any andall persons acting directly or indirectly by or with him, to prevent orrestrain any such breach.

# 11.           Termination.  Employment of the Employee under thisAgreement may be terminated:

## (a)           By the Employee’sdeath.

## (b)           If the Employee isTotally Disabled.  For the purposes ofthis Agreement, the Employee will be totally disabled if he is “totallydisabled” as defined in and for the period necessary to qualify for benefitsunder any disability income insurance policy and any replacement policy orpolicies covering Employee and the Employee has been declared to be totallydisabled by the insurer for a period of three (3) consecutive months.  At a minimum, “totally disabled” shall meanthat employee is unable to perform substantially all of his current duties fora continuous period of three (3) consecutive months, subject to compliance withall applicable state and federal laws relating to any requirement theCorporation may have to accommodate any such disability.

## (c)           When the Employeereaches mandatory retirement age under any retirement policy applicable to allexecutive officers adopted by the Corporation.

## (d)           By mutual agreementof the Employee and the Corporation.

## (e)           By the dissolutionand liquidation of the Corporation (other than as part of a reorganization,merger, consolidation or sale of all or substantially all of the assets of theCorporation whereby the business of the Corporation is continued).

## (f)            By the Corporationfor Just Cause.  This Agreement and theEmployee’s employment with the Corporation may be terminated for Just Cause atany time in accordance with Section 11(g). For purposes of this Agreement “Just Cause” shall mean only thefollowing:  (i) habitual neglect of hismaterial duties or failure to perform his material obligations under thisAgreement, (ii) refusal or failure to follow lawful directives of the Board,(iii) commission of an act of fraud, theft, or embezzlement, or (iv) convictionof a felony or other crime involving moral turpitude;

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## provided,however, that Employee shall have thirty (30) days after written noticefrom the Corporation or its Board of Directors to remedy any actions allegedunder subsection (i) or (ii) in the manner reasonably specified by the Board ofDirectors (or Compensation Committee thereof). Should the Employee dispute whether he was terminated for Just Cause,then the Corporation and the Employee shall enter immediately into bindingarbitration pursuant to the Commercial Arbitration Rules of the AmericanArbitration Association, the cost of which shall be borne by the non-prevailingparty.

## (g)           Notice ofTermination.  Any purported terminationof the Employee’s employment by the Corporation for Just Cause shall becommunicated by a written Notice of Termination to the Employee.  Such notice shall recite the facts andcircumstances claimed to provide the basis for such termination and specify theDate of Termination. As used in this Agreement, “Date of Termination” shallmean the date specified in the Notice of Termination, which date shall not beless than thirty (30) nor more than sixty (60) days from the date the Notice ofTermination is given.  If within thirty(30) days from the date the Notice of Termination is given, the Employeenotifies the Corporation that a dispute exists concerning such termination, theDate of Termination shall be the date on which the dispute is finallyresolved.  The Date of Termination shallbe extended by a notice of dispute only if such notice is given in good faithand the Employee pursues the resolution of such dispute by entering immediatelyinto binding arbitration pursuant to the Commercial Arbitration Rules of theAmerican Arbitration Association, the cost of which shall be borne by thenon-prevailing party, except as otherwise required by law.

## (h)           By Employee for GoodReason.  This Agreement and the Employee’s employment with theCorporation may be terminated for Good Reason at any time within ninety (90)days of the occurrence of Good Reason. For purposes of this Agreement “Good Reason” shall mean only thefollowing:  (i) Employee is required bythe Corporation to move out of the State of California, (ii) the Corporationbreaches any material provision of this Agreement and continues the breachwithout cure for thirty (30) days after receipt of written notice of the needto cure, (iii) a reduction in title below “Executive Vice President” or theassignment of responsibilities to the Employee inconsistent with such title or(iv) in the event of a reorganization, merger, consolidation or sale of all orsubstantially all of the assets of the Corporation in which the successor tothe Corporation’s business is any other entity, but either such successor doesnot assume this Agreement or the surviving entity terminates the employment ofEmployee within one (1) year of the change in control, other than for JustCause.

## (i)            At the end of theterm provided in Section 3 above.

# 12.           Payments Upon Termination.  In the event Employee’s employment isterminated by the Corporation except for any reason covered by Sections 11(a)through 11(f) hereof, or Employee terminates his employment for Good Reason,the Corporation shall (a) pay to Employee the higher of (i) his Base Salary(and payment for accrued but unused vacation) otherwise payable to Employeethrough the term of this Agreement provided in Section 3 above or (ii) oneyear of Employee’s then annual Base Salary, in either case payable in equalbi-weekly installments or in accordance with the Corporation’s then standardpractices.  If the Employee is

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# terminated by theCorporation for any reason covered by Sections 11(a) through 11(f) hereof, orthe Employee terminates his employment without Good Reason, the Employee shallbe entitled to all arrearages of salary, expenses and accrued but unusedvacation, as of the Date of Termination, but shall not be entitled to furthercompensation.

# 13.           Indemnification.  The Corporation shall pay for legal counselof the Corporation’s choosing to defend and also shall fully indemnify Employeein connection with any claim, dispute or action arising from Employeeterminating his current employment relationship and entering into therelationship with the Corporation contemplated by this Agreement.

# 14.           Resignation Upon Termination.  In the event of termination of this Agreementother than for death, the Employee hereby agrees to resign from all positionsheld in the Corporation, including without limitations any position as adirector, officer, agent, trustee or consultant of the Corporation or anyaffiliate of the Corporation.

# 15.           Waiver.  A party’s failure to insist on compliance orenforcement of any provision of this Agreement, shall not affect the validityor enforceability or constitute a waiver of future enforcement of thatprovision or of any other provision of this Agreement by that party or anyother party.

# 16.           Governing Law.  This Agreement shall in all respects besubject to, and governed by, the laws of the State of California.

# 17.           Severability.  The invalidity or unenforceability of anyprovision in the Agreement shall not in any way affect the validity orenforceability of any other provision and this Agreement shall be construed inall respects as if such invalid or unenforceable provision had never been inthe Agreement.

# 18.           Notice.  Any and all notices required or permittedherein shall be deemed delivered if delivered personally or if mailed byregistered or certified mail to the Corporation at its principal place ofbusiness and to the Employee at the address hereinafter set forth following theEmployee’s signature, or at such other address or addresses as either party mayhereafter designate in writing to the other.

# 19.           Assignment.  This Agreement, together with any amendmentshereto, shall be binding upon and shall inure to the benefit of the partieshereto and their respective successors, assigns, heirs and personalrepresentatives, except that the rights and benefits of either of the partiesunder this Agreement may not be assigned without the prior written consent ofthe other party.

# 20.           Amendments.  This Agreement may be amended at any time bymutual consent of the parties hereto, with any such amendment to be invalidunless in writing, signed by the Corporation and the Employee.

# 21.           Entire Agreement.  This Agreement amends and restates in itsentirety the terms and conditions of Employee’s employment with theCorporation, notwithstanding the terms and conditions of any previousemployment agreement between the Corporation and Employee, including the PriorAgreement.  This Agreement, along withthe Corporation handbook to the

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# extent it does notspecifically conflict with any provision of this Agreement, contains the entireagreement and understanding by and between the Employee and the Corporationwith respect to the employment of the Employee, and no representations,promises, agreements, or understandings, written or oral, relating to theemployment of the Employee by the Corporation not contained herein shall be ofany force or effect.

22.           Burdenand Benefit.  This Agreement shall bebinding upon, and shall inure to the benefit of, the Corporation and Employee,and their respective heirs, personal and legal representatives, successors, andassigns.

23.           Referencesto Gender and Number Terms.  Inconstruing this Agreement, feminine or number pronouns shall be substituted forthose masculine in form and vice versa, and plural terms shall be substitutedfor singular and singular for plural in any place where the context sorequires.

24.           Headings.  The various headings in this Agreement areinserted for convenience only and are not part of the Agreement.

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INWITNESS WHEREOF, the Corporation and Employee have duly executed this Agreementas of the day and year first above written.
| ** ** | **CORPORATION:**                   |
|------------|------------------------------------|
| ** ** | ** **                         |
|       | DIGITAL GENERATION SYSTEMS, INC.   |
|       |                               |
|       |                               |
|       | By:                                | /s/ SCOTT K. GINSBURG |
|       | Name:                              | Scott K. Ginsburg |
|       | Title:                             | Chief Executive Officer |
|       |                               |
|       | Address for Notice:                |
|       |                               |
|       | Digital Generation Systems, Inc.   |
|       | 750 West John Carpenter Freeway    |
|       | Suite 700                          |
|       | Irving, Texas 75039                |
|       | Attention: Chief Financial Officer |
|       |                               |
|       |                               |
|       |                               |
| ** ** | **EMPLOYEE:**                      |
| ** ** | ** **                         |
| ** ** | **/s/**NEIL NGUYEN                 |
|       | Neil Nguyen, individually          |
|            |                                    |  |  |  |

 

 

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