Exhibit 10.5
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of January 3,
2005, by and between DTS Digital Images, Inc. (the "Company"), an indirect
wholly owned subsidiary of Digital Theater Systems, Inc., a Delaware corporation
("DTS"), and Ian Godin ("you" or "Employee") with reference to the following
facts:
WHEREAS, concurrently with the execution and delivery of this Agreement, DTS is
acquiring from the Employee all of Employee's shares of common stock of Lowry
Digital Images, Inc. pursuant to the terms of an Agreement and Plan of Merger
made as of the date hereof (the "Merger Agreement").
The Merger Agreement
requires that this Agreement be executed and delivered by each of the Company
and Employee as a condition to the consummation of the transactions contemplated
thereby.
NOW, THEREFORE, in consideration of the various, covenants and agreements
hereinafter set forth, and other good and valuable consideration, the parties
hereto agree as follows:
1.
TERM OF EMPLOYMENT.
THE COMPANY HEREBY
AGREES TO EMPLOY EMPLOYEE, AND EMPLOYEE ACCEPTS SUCH EMPLOYMENT, SUBJECT TO THE
TERMS AND CONDITIONS OF THIS AGREEMENT.
THE INITIAL TERM OF THIS AGREEMENT
SHALL COMMENCE AS OF THE DATE HEREOF AND SHALL RUN FOR A PERIOD OF 36 MONTHS,
UNLESS SOONER TERMINATED, AND SHALL AUTOMATICALLY RENEW THEREAFTER FOR ONE
ADDITIONAL 12-MONTH PERIOD, WITHOUT FURTHER ACTION OF ANY KIND BY THE PARTIES,
UNLESS NOTICE OF NON-RENEWAL IS GIVEN BY EITHER PARTY WITHIN 30 DAYS OF THE END
OF THE INITIAL 36-MONTH TERM, OR UNLESS THIS AGREEMENT IS OTHERWISE TERMINATED
IN ACCORDANCE WITH ITS TERMS (THE "TERM").
THE PHRASE "TERM OF EMPLOYEE'S
EMPLOYMENT HEREUNDER" SHALL MEAN THE PERIOD OF THIRTY-SIX (36) MONTHS EXTENDING
FROM THE DATE OF THIS AGREEMENT OR THE 12-MONTH PERIOD EXTENDING FROM THE DATE
OF THE RENEWAL PERIOD, AS APPLICABLE, UNLESS YOU ARE TERMINATED FOR "CAUSE", AS
DEFINED HEREIN, WHEREUPON THE "TERM OF EMPLOYEE'S EMPLOYMENT HEREUNDER" SHALL BE
FROM THE DATE OF THIS AGREEMENT UNTIL THE DATE OF TERMINATION FOR CAUSE.
2.
DUTIES.
YOU AGREE TO SERVE THE COMPANY
AS A SOFTWARE ENGINEER OR IN SUCH OTHER CAPACITY AS THE COMPANY MAY FROM TIME TO
TIME REQUIRE.
YOUR DUTIES WILL INCLUDE SUCH DUTIES AS ARE CUSTOMARILY PERFORMED
BY SOFTWARE ENGINEERS FOR COMPANIES SIMILAR TO THE COMPANY, AND SUCH OTHER
DUTIES AS ARE SPECIFIED BY THE CHIEF EXECUTIVE OFFICER OF THE COMPANY (THE
"CEO").
DURING THE TERM OF THIS AGREEMENT, YOU WILL DEVOTE SUBSTANTIALLY FULL
TIME TO, AND USE YOUR BEST EFFORTS TO ADVANCE, THE BUSINESS AND WELFARE OF THE
COMPANY.
YOU SHALL REPORT DIRECTLY TO JOHN LOWRY OR TO SUCH OTHER INDIVIDUAL AS
MAY BE DESIGNATED BY THE CEO.
3.
SALARY AND BENEFITS.
(A)
SALARY.
FOR THE TERM OF YOUR EMPLOYMENT
HEREUNDER, THE COMPANY SHALL PAY YOU A SALARY AT THE RATE OF $100,000 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 ("BASE
SALARY").
(B)
VACATIONS.
YOU SHALL BE ENTITLED TO THREE
WEEKS PAID VACATION DURING EACH 12-MONTH PERIOD THAT