Exhibit 10.3
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 Michael Inchalik ("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 VICE
PRESIDENT-STRATEGY AND BUSINESS DEVELOPMENT 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 VICE PRESIDENTS 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 JON KIRCHNER, OR TO
HIS DESIGNEE.
3.
SALARY AND BENEFITS.
(A)
SALARY.
FOR THE TERM OF YOUR EMPLOYMENT HEREUNDER, THE COMPANY
SHALL PAY YOU A SALARY AT THE RATE OF $185,000 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 YOU ARE EMPLOYED BY THE COMPANY PURSUANT