EXHIBIT 10.51


 


May 20, 2005


 


Don Bird


23309 Chase Street


West Hills, CA  91304


 


Re:          Employment
Agreement


Dear Don:


Digital
Theater Systems, 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:

  	
   

  	
  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 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 notice is given in which 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)

  	
   

  	
  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 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


 


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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 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.


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.


 


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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 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 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.


 


 


 


 


 


	
  Don Bird

  	
   

  
	
  Employee Name (PRINT)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Don Bird

  	
  July 16, 2005

  	
   

  
	
  Employee Signature

  	
  Date

  	
   

  



 


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