EXHIBIT
10.52


May 20, 2005


Brian Towne


29743 Quail Run
Dr.


Agoura Hills, CA 91301


Re:          Employment Agreement


Dear Brian:


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, Consumer/Pro
  Division

  
	
  Duties:

  	
   

  	
  You
  agree to serve the Company as its Senior Vice President,
  Consumer/Pro 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.

  
	
  Effective
  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 three (3) 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 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 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)

  	
   

  	
  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/ Brian Towne

  	
  July 8, 2005

  	
   

  	
   

  
	
  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 Towne

  	
   

  
	
  Employee Name (PRINT)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Brian Towne

  	
  July 8, 2005

  	
   

  
	
  Employee Signature

  	
  Date

  	
   

  



 


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