Document:

<PAGE>

                                                                    EXHIBIT 10.2

                                    AMENDED AND RESTATED REGISTRATION RIGHTS
                                    AGREEMENT (this "Agreement") dated January
                                    27, 2000, among DIGITAL THEATER SYSTEMS,
                                    Inc., a Delaware corporation (the
                                    "Corporation"), and the INVESTORS (as herein
                                    defined).

         The Investors own or have the right to purchase or otherwise acquire
shares of Common Stock of the Corporation. The Corporation and the Series A
Investors are parties to the Original Registration Rights Agreement entered into
as a condition to and in connection with the Series A Purchase Agreement. The
Corporation and the Series B Investors are concurrently entering into the Series
B Purchase Agreement which provides, as a condition thereto, that the Original
Registration Rights Agreement be amended and restated in its entirety as set
forth in this Agreement in order to set forth the rights of the Investors in
connection with public offerings and sales of the Common Stock.

         In accordance with Section XVII of the Original Registration Rights
Agreement, Series A Investors holding more than a majority of the Registrable
Shares (as defined in the Original Registration Rights Agreement) have approved
the amendment and restatement of the Original Registration Rights Agreement as
set forth in this Agreement.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
and obligations hereinafter set forth, the Corporation and the Investors hereby
agree as follows:

         SECTION I. Definitions. As used in this Agreement, the following terms
shall have the following meanings:

                  A.       "Commission" means the Securities and Exchange
         Commission or any other Federal agency at the time administering the
         Securities Act.

                  B.       "Common Stock" means the common stock, $.0001 par
         value per share, of the Corporation.

                  C.       "Exchange Act" means the Securities Exchange Act of
         1934 or any successor Federal statute, and the rules and regulations of
         the Commission promulgated thereunder, all as the same shall be in
         effect from time to time.

                  D.       "Investors" means each of the persons set forth on
         Schedule I and each additional person who shall execute a counterpart
         signature page hereto, and includes any successor to, or assignee or
         transferee of, any such person who or which agrees in writing to be
         treated as an Investor hereunder and to be bound by the terms and
         comply with all applicable provisions hereof.

                  E.       "Original Registration Rights Agreement" means the
         Registration Rights Agreement, dated October 24, 1997, among the
         corporation and the Series A Investors.

<PAGE>

                  F.       "Other Shares" means at any time those shares of
         Common Stock which do not constitute Primary Shares or Registrable
         Shares.

                  G.       "Primary Shares" means at any time the authorized but
         unissued shares of Common Stock and shares of Common Stock held by the
         Corporation in its treasury.

                  H.       "Registrable Shares" means Restricted Shares which
         constitute Common Stock.

                  I.       "Restricted Shares" means shares of Common Stock
         issuable upon the exercise of warrants to purchase Common Stock held by
         the Investors on the date hereof. As to any particular Restricted
         Shares, once issued, such Restricted Shares shall cease to be
         Restricted Shares when (i) they have been registered under the
         Securities Act, the registration statement in connection therewith has
         been declared effective and they have been disposed of pursuant to such
         effective registration statement, (ii) they (together with all other
         Restricted Shares held by the same holder) are eligible to be sold or
         distributed pursuant to Rule 144 within any consecutive three month
         period (including, without limitation, Rule 144(k)) without volume
         limitations, or (iii) they shall have ceased to be outstanding.

                  J.       "Registration Date" means the date upon which the
         registration statement pursuant to which the Corporation shall have
         initially registered shares of Common Stock under the Securities Act
         for sale to the public shall have been declared effective.

                  K.       "Rule 144" means Rule 144 promulgated under the
         Securities Act or any successor rule thereto or any complementary rule
         thereto (such as Rule 144A).

                  L.       "Securities Act" means the Securities Act of 1933 or
         any successor Federal statute, and the rules and regulations of the
         Commission thereunder, all as the same shall be in effect from time to
         time.

                  M.       "Series B Purchase Agreement" means the Securities
         Purchase Agreement dated the date hereof, among the Corporation and the
         Series B Investors.

                  N.       "Series A Preferred" means the Series A Convertible
         Preferred Stock, $.0001 par value per share, of the Corporation, issued
         to the Series A Investors pursuant to the Series A Purchase Agreement.

                  O.       "Series B Preferred" means the Series B Redeemable
         Preferred Stock, $.0001 par value per share, of the Corporation, issued
         to the Investors pursuant to the Series B Purchase Agreement.

                  P.       "Series A Investors" means each of the persons
         identified as such on Schedule I.

                  Q.       "Series A Purchase Agreement" means the Securities
         Purchase Agreement, dated October 24, 1997, among the Corporation and
         the Series A Investors.

                                       2

<PAGE>

                  R.       "Series B Investors" means each of the persons
         identified as such on Schedule I.

         SECTION II. Required Registration. On any date after the earlier of (i)
March 31, 2001, and (ii) 180 days following the Registration Date, if the
Corporation shall be requested in writing by the holders of at least thirty
percent (30%) (on a Common Stock equivalent basis) of the Restricted Shares then
outstanding to effect the registration under the Securities Act of Registrable
Shares, the Corporation shall promptly use its best efforts to effect the
registration under the Securities Act of the Registrable Shares which the
Corporation has been so requested to register; provided, however, that the
Corporation shall not be obligated to effect any registration under the
Securities Act except in accordance with the following provisions:

                  A.       the Corporation shall not he obligated to use its
         best efforts to file and cause to become effective (i) more than two
         registration statements initiated pursuant to this Section II, (ii) any
         registration statement during any period in which any other
         registration statement (other than on Form S-4 or Form S-8 promulgated
         under the Securities Act or any successor forms thereto) pursuant to
         which Primary Shares are to be or were sold has been filed and not
         withdrawn or has been declared effective within the prior 90 days or
         (iii) any registration statement initiated pursuant to this Section II
         unless such registration statement relates to Registrable Shares having
         a minimum aggregate offering price of $10,000,000 (based on the then
         current market price or fair value of the Common Stock);

                  B.       the Corporation may delay the filing or effectiveness
         of any registration statement for a period of up to 120 days after the
         date of a request for registration pursuant to this Section II if at
         the time of such request (i) the Corporation is engaged, or has fixed
         plans to engage within 90 days of the time of such request, in a firm
         commitment underwritten public offering of Primary Shares in which the
         holders of Registrable Shares may include Registrable Shares pursuant
         to Section III or (ii) the Corporation reasonably determines that such
         registration and offering would interfere with any material transaction
         involving the Corporation, as approved by the Board of Directors or
         (iii) the Corporation has received notice in connection with the filing
         of a registration statement on behalf of the holder of Other Shares,
         provided that the Corporation may only so delay the filing or
         effectiveness of a registration statement once pursuant to clause (i)
         above and once pursuant to clause (ii) above, in each case in any
         12-month period; and

                  C.       with respect to any registration pursuant to this
         Section II, the Corporation shall give notice of such registration to
         the Investors who do not request registration hereunder and to the
         holders of all Other Shares which are entitled to registration rights
         and the Corporation may include in such registration any Primary Shares
         or Other Shares; provided, however, that if the managing underwriter
         advises the Corporation that the inclusion of all Registrable Shares,
         Primary Shares and/or Other Shares proposed to be included in such
         registration would interfere with the successful marketing (including
         pricing) of the Registrable Shares proposed to be included in such
         registration, then the number of Registrable Shares, Primary Shares
         and/or Other Shares proposed to be included in such registration shall
         be included in the following order:

                                       3

<PAGE>

                  first, the Registrable Shares requested to be included in such
         registration (or, if necessary, such Registrable Shares pro rata among
         the holders thereof based upon the number of Registrable Shares
         requested to be registered by each such holder);

                           1.       second, the Other Shares which are entitled
                  to registration rights; and

                           2.       third, the Primary Shares.

                  D.       If the method of disposition requested by the
         holders, pursuant to this Section 2, is an underwritten public
         offering, the majority of the holders of Registrable Shares shall have
         the right to designate the managing underwriter of such offering, which
         underwriter shall be a top 15 investment bank as rated by Securities
         Data Corp. at the time of the request.

                  E.       At any time before the registration statement
         covering Registrable Shares becomes effective, the holders of a
         majority of such shares may request the Corporation to withdraw or not
         to file the registration statement. In that event, if such request of
         withdrawal shall not have been caused by, or made in response to, the
         material adverse effect of an event on the business, properties,
         condition, financial or otherwise, or operations of the Corporation,
         the holders shall have used one of their demand registration, rights
         under this Section 2 and the Corporation shall no longer be obligated
         to register Registrable Shares pursuant to the exercise of such one
         registration right pursuant to this Section 2 unless the remaining
         holders shall pay to the Corporation the expenses incurred by the
         Corporation through the date of such request.

         SECTION III. Piggyback Registration. If the Corporation at any time
proposes for any reason to register Primary Shares or Other Shares under the
Securities Act (other than on Form S-4 or Form S-8 promulgated under the
Securities Act or any successor forms thereto), it shall promptly give written
notice to the Investors of its intention to so register such Primary Shares or
Other Shares and, upon the written request, delivered to the Corporation within
30 days after delivery of any such notice by the Corporation, of the Investors
to include in such registration Registrable Shares (which request shall specify
the number of Registrable Shares proposed to be included in such registration),
the Corporation shall use its best efforts to cause all such Registrable Shares
to be included in such registration on the same terms and conditions as the
securities otherwise being sold in such registration; provided, --------
however, that if the managing underwriter advises the Corporation that the
inclusion of all Registrable Shares requested to be ------- included in such
registration would interfere with the successful marketing (including pricing)
of the Primary Shares or Other Shares proposed to be registered by the
Corporation, then the number of Primary Shares, Registrable Shares and Other
Shares proposed to be included in such registration shall be included in the
following order:

                  A.       If the Corporation proposes to register Primary
         Shares:

                           1.       first the Primary Shares; and

                           2.       second, the Registrable Shares and Other
                  Shares requested to be included in such registration (or, if
                  necessary, such Registrable Shares and Other

                                       4

<PAGE>

                  Shares pro rata among the holders thereof based upon the
                  number of Registrable Shares and Other Shares requested to be
                  registered by each such holder); or

                  B.       if the Corporation proposes to register Other Shares
         pursuant to a request for registration by the holders of such Other
         Shares:

                           1.       first, the Other Shares held by the parties
                  demanding such registration;

                           2.       second, the Registrable Shares and Other
                  Shares (other than shares registered pursuant to Section
                  3(b)(i) hereof) requested to be registered by the holders
                  thereof (or, if necessary, pro rata among the holders thereof
                  based on the number of Registrable Shares and Other Shares
                  requested to be registered by such holders); and

                           3.       third, the Primary Shares.

         SECTION IV. Registrations on Form S-3. Anything contained in Section 2
to the contrary notwithstanding, at such time as the Corporation shall have
qualified for the use of Form S-3 promulgated under the Securities Act or any
successor form thereto, the holders of at least twenty-five percent (25%) of the
Registrable Shares then outstanding shall have the right to request in writing
two registrations per twelve month period thereafter on Form S-3 or such
successor form of Registrable Shares, which request or requests shall (i)
specify the number of Registrable Shares intended to be sold or disposed of and
the holders thereof, (ii) state the intended method of disposition of such
Registrable Shares and (iii) relate to Registrable Shares having anticipated net
proceeds of at least $3,000,000. A requested registration on Form S-3 or any
such successor form in compliance with this Section 4 shall not count as a
registration statement initiated pursuant to Section 2 but shall otherwise be
treated as a registration initiated pursuant to, and shall, except as otherwise
expressly provided in this Section 4, be subject to Section 2.

         SECTION V. Holdback Agreement. If the Corporation at any time shall
register shares of Common Stock under the Securities Act (including any
registration pursuant to Sections II, III or IV hereof) for sale to the public,
the Investors shall not sell publicly, make any short sale of, grant any option
for the purchase of, or otherwise dispose publicly of, any shares of Common
Stock (other than those shares of Common Stock included in such registration
pursuant to Sections II, III or IV hereof) without the prior written consent of
the Corporation, for a period designated by the Corporation in writing to the
Investors, which period shall begin not more than 10 days prior to the
effectiveness of the registration statement pursuant to which such public
offering shall be made and shall not last more than 180 days after the effective
date of such registration statement. The Corporation shall obtain the agreement
of its executive officers and directors, and any person permitted to sell shares
of stock in a registration to be bound by and to comply with this Section V as,
if such person was an Investor hereunder.

         SECTION VI. Preparation and Filing. If and whenever the Corporation is
under an obligation pursuant to the provisions of this Agreement to use its best
efforts to effect the registration of any Registrable Shares, the Corporation
shall, as expeditiously as practicable:

                                       5

<PAGE>

                  A.       use its best efforts to cause a registration
         statement that registers such Registrable Shares to become and remain
         effective for a period of 90 days or until all of such Registrable
         Shares have been disposed of (if earlier) (it being understood that the
         Corporation may discontinue pursuant to Section III any registration);

                  B.       furnish, at least five business days before filing a
         registration statement that registers such Registrable Shares, a
         prospectus relating thereto or any amendments or supplements relating
         to such a registration statement or prospectus, to one counsel selected
         by the Investors (the "Investors' Counsel"), copies of all such
         documents proposed to be filed (it being understood that such
         five-business-day period need not apply to successive drafts of the
         same document proposed to be filed so long as such successive drafts
         are supplied to the Investors' Counsel in advance of the proposed
         filing by a period of time that is customary and reasonable under the
         circumstances);

                  C.       prepare and file with the Commission such amendments
         and supplements to such registration statement and the prospectus used
         in connection therewith as may be necessary to keep such registration
         statement effective for at least a period of 90 days or until all of
         such Registrable Shares have been disposed of (if earlier) and to
         comply with the provisions of the Securities Act with respect to the
         sale or other disposition of such Registrable Shares (it being
         understood that the Corporation may discontinue pursuant to Section 3
         any registration);

                  D.       notify in writing the Investors' Counsel promptly (i)
         of the receipt by the Corporation of any notification with respect to
         any comments by the Commission with respect to such registration
         statement or prospectus or any amendment or supplement thereto or any
         request by the Commission for the amending or supplementing thereof or
         for additional information with respect thereto, (ii) of the receipt by
         the Corporation of any notification with respect to the issuance by the
         Commission of any stop order suspending the effectiveness of such
         registration statement or prospectus or any amendment or supplement
         thereto or the initiation or threatening of any proceeding for that
         purpose and (iii) of the receipt by the Corporation of any notification
         with respect to the suspension of the qualification of such Registrable
         Shares for sale in any jurisdiction or the initiation or threatening of
         any proceeding for such purposes;

                  E.       use its best efforts to register or qualify such
         Registrable Shares under such other securities or blue sky laws of such
         jurisdictions as the Investors reasonably request and do any and all
         other acts and things which may be reasonably necessary or advisable to
         enable the Investors to consummate the disposition in such
         jurisdictions of the Registrable Shares owned by the Investors;
         provided, however, that the Corporation will not be required to qualify
         generally to do business, subject itself to general taxation or consent
         to general service of process in any jurisdiction where it would not
         otherwise be required to do so but for this paragraph (E) or to provide
         any material undertaking or make any changes in its By-laws or
         Certificate of Incorporation which the Board of Directors determines to
         be contrary to the best interests of the Corporation;

                  F.       furnish to the Investors holding such Registrable
         Shares such number of copies of a summary prospectus, if any, or other
         prospectus, including a preliminary

                                       6

<PAGE>

         prospectus, in conformity with the requirements of the Securities Act,
         and such other documents as such Investors may reasonably request in
         order to facilitate the public sale or other disposition of such
         Registrable Shares;

                  G.       use its best efforts to cause such Registrable Shares
         to be registered with or approved by such other governmental agencies
         or authorities as may be necessary by virtue of the business and
         operations of the Corporation to enable the Investors holding such
         Registrable Shares to consummate the disposition of such Registrable
         Shares;

                  H.       notify the Investors holding such Registrable Shares
         on a timely basis at any time when a prospectus relating to such
         Registrable Shares is required to be delivered under the Securities Act
         within the appropriate period mentioned in subparagraph (a) of this
         Section VI, of the happening of any event as a result of which the
         prospectus included in such registration statement, as then in effect,
         includes an untrue statement of a material fact or omits to state a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading in light of the circumstances then
         existing and, at the request of the Investors, prepare and furnish to
         such Investors a reasonable number of copies of a supplement to or an
         amendment of such prospectus as may be necessary so that, as thereafter
         delivered to the offerees of such shares, such prospectus shall not
         include an untrue statement of a material fact or omit to state a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading in light of the circumstances then
         existing;

                  I.       subject to the execution of confidentiality
         agreements in form and substance satisfactory to the Corporation, make
         available upon reasonable notice and during normal business hours, for
         inspection by the Investors holding such Registrable Shares, any
         underwriter participating in any disposition pursuant to such
         registration statement and any attorney, accountant or other agent
         retained by the Investors or underwriter (collectively, the
         "Inspectors"), all pertinent financial and other records, pertinent
         corporate documents and properties of the Corporation (collectively,
         the "Records"), as shall be reasonably necessary to enable them to
         exercise their due diligence responsibility, and cause the
         Corporation's officers, directors and employees to supply all
         information (together with the Records, the "Information") reasonably
         requested by any such Inspector in connection with such registration
         statement. Any of the Information which the Corporation determines in
         good faith to be confidential, and of which determination the
         Inspectors are so notified, shall not be disclosed by the Inspectors
         unless (i) the disclosure of such Information is necessary to avoid or
         correct a misstatement or omission in the registration statement, (ii)
         the release of such Information is ordered pursuant to a subpoena or
         other order from a court of competent jurisdiction or (iii) such
         Information has been made generally available to the public; the
         Investors agree that they will, upon learning that disclosure of such
         Information is sought in a court of competent jurisdiction, give notice
         to the Corporation and allow the Corporation, at the Corporation's
         expense, to undertake appropriate action to prevent disclosure of the
         Information deemed confidential;

                                       7

<PAGE>

                  J.       use its best efforts to obtain from its independent
         certified public accountants "cold comfort" letters in customary form
         and at customary times and covering matters of the type customarily
         covered by cold comfort letters;

                  K.       use its best efforts to obtain from its counsel an
         opinion or opinions in customary form;

                  L.       provide a transfer agent and registrar (which may be
         the same entity and which may be the Corporation) for such Registrable
         Shares;

                  M.       issue to any underwriter to which the Investors
         holding such Registrable Shares may sell shares in such offering
         certificates evidencing such Registrable Shares;

                  N.       list such Registrable Shares on any national
         securities exchange on which any shares of the Common Stock are listed
         or, if the Common Stock is not listed on a national securities
         exchange, use its best efforts to qualify such Registrable Shares for
         inclusion on the automated quotation system of the National Association
         of Securities Dealers, Inc. (the "NASD"), or such other national
         securities exchange as the holders of a majority of such Registrable
         Shares shall reasonably request;

                  O.       otherwise use its best efforts to comply with all
         applicable rules and regulations of the Commission and make available
         to its securityholders, as soon as reasonably practicable, earnings
         statements (which need not be audited) covering a period of 12 months
         beginning within three months after the effective date of the
         registration statement which earnings statements shall satisfy the
         provisions of Section 11(a) of the Securities Act; and

                  P.       use its best efforts to take all other steps
         necessary to effect the registration of such Registrable Shares
         contemplated hereby.

         Each holder of the Registrable Shares, upon receipt of any notice from
the Corporation of any event of the kind described in Section VI(H) hereof,
shall forthwith discontinue disposition of the Registrable Shares pursuant to
the registration statement covering such Registrable Shares until such holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section VI(H) hereof, and, if so directed by the Corporation, such holder shall
deliver to the Corporation all copies, other than permanent file copies then in
such holder's possession, of the prospectus covering such Registrable Shares at
the time of receipt of such notice.

         SECTION VII. Expenses. All expenses (other than underwriting discounts
and commissions relating to the Registrable Shares, as provided in the last
sentence of this Section VII) incurred by the Corporation in complying with
Section VI, including, without limitation, all registration and filing fees
(including all expenses incident to filing with the NASD), fees and expenses of
complying with securities and blue sky laws, printing expenses, fees and
expenses of the Corporation's counsel and accountants and reasonable fees and
expenses of the Investors' Counsel, shall be paid by the Corporation; provided,
however, that all underwriting discounts and selling commissions applicable to
the Registrable Shares and Other Shares shall be borne by

                                       8

<PAGE>

the holders selling such Registrable Shares and Other Shares, in proportion to
the number of Registrable Shares and Other Shares sold by each such holder.

         SECTION VIII. Indemnification.

         A.       In connection with any registration of any Registrable Shares
under the Securities Act pursuant to this Agreement, the Corporation shall
indemnify and hold harmless the holders of Registrable Shares, each underwriter,
broker or any other person acting on behalf of the holders of Registrable Shares
and each other person, if any, who controls any of the foregoing persons within
the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several (or actions in respect thereof), to which any of
the foregoing persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or allegedly untrue
statement of a material fact contained in the registration statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein or otherwise filed
with the Commission, any amendment or supplement thereto or any document
incident to registration or qualification of any Registrable Shares, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or, with respect to any prospectus, necessary to make the
statements therein in light of the circumstances under which they were made not
misleading, or any violation by the Corporation of the Securities Act or state
securities or blue sky laws applicable to the Corporation and relating to action
or inaction required of the Corporation in connection with such registration or
qualification under such state securities or blue sky laws; and shall reimburse
the holders of Registrable Shares, such underwriter, such broker or such other
person acting on behalf of the holders of Registrable Shares and each such
controlling person for any legal or other expenses reasonably incurred by any of
them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Corporation shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action (including any legal or other expenses incurred) arises out of or is
based upon an untrue statement or allegedly untrue statement or omission or
alleged omission made in said registration statement preliminary prospectus,
final prospectus, amendment, supplement or document incident to registration or
qualification of any Registrable Shares in reliance upon and in conformity with
written information furnished to the Corporation through an instrument duly
executed by the holders of Registrable Shares or their counsel or underwriter
specifically for use in the preparation thereof; provided further, however, that
the foregoing indemnity agreement is subject to the condition that, insofar as
it relates to any untrue statement, allegedly untrue statement, omission or
alleged omission made in any preliminary prospectus but eliminated or remedied
in the final prospectus (filed pursuant to Rule 424 of the Securities Act), such
indemnity agreement shall not inure to the benefit of any Investor, underwriter,
broker or other person acting on behalf of holders of the Restricted Shares from
whom the person asserting any loss, claim, damage, liability or expense
purchased the Restricted Shares which are the subject thereof, if a copy of such
final prospectus had been made available to such person and such Investor,
underwriter, broker or other person acting on behalf of holders of the
Registrable Shares and such final prospectus was not delivered to such person
with or prior to the written confirmation of the sale of such Registrable Shares
to such person.

                                       9

<PAGE>

         B.       In connection with any registration of Registrable Shares
under the Securities Act pursuant to this Agreement, each holder of Registrable
Shares shall severally and not jointly indemnify and hold harmless (in the same
manner and to the same extent as set forth in the preceding paragraph of this
Section VIII) the Corporation, each director of the Corporation, each officer of
the Corporation who shall sign such registration statement, each underwriter,
broker or other person acting on behalf of the holders of Registrable Shares and
each person who controls any of the foregoing persons within the meaning of the
Securities Act with respect to any statement or omission from such registration
statement, any preliminary prospectus or final prospectus contained therein or
otherwise filed with the Commission, any amendment or supplement thereto or any
document incident to registration or qualification of any Registrable Shares, if
such statement or omission was made in reliance upon and in conformity with
written information furnished to the Corporation or such underwriter
specifically for use in connection with the preparation of such registration
statement, preliminary prospectus, final prospectus, amendment, supplement or
document; provided, however, that the maximum amount of liability in respect of
such indemnification shall be limited, in the case of each seller of Registrable
Shares, to an amount equal to the net proceeds actually received by such Seller
from the sale of Registrable Shares effected pursuant to such registration.

         C.       Promptly after receipt by an indemnified party of notice of
the commencement of any action involving a claim referred to in the preceding
paragraphs of this Section VIII, such indemnified party will, if a claim in
respect thereof is made against an indemnifying party, give written notice to
the latter of the commencement of such action. In case any such action is
brought against an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be responsible for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof; provided, however, that if any indemnified
party shall have reasonably concluded, based upon the advice of counsel, that
there may be one or more legal or equitable defenses available to such
indemnified party which are additional to or conflict with those available to
the indemnifying party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity agreement provided in
this Section 8, the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party and such indemnifying
party shall reimburse such indemnified party and any person controlling such
indemnified party for that portion of the fees and expenses of any one counsel
retained by the indemnified party which is reasonably related to the matters
covered by the indemnity agreement provided in this Section VIII.

         D.       If the indemnification provided for in this Section VIII is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, claim, damage, liability or action referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amounts paid or payable by such
indemnified party as a result of such loss, claim, damage, liability or action
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in such loss, claim,
damage, liability or action as well as any other relevant equitable

                                       10

<PAGE>

considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

         SECTION IX. Information by Holder. The Investors shall furnish to the
Corporation such written information regarding the Investors and the
distribution proposed by the Investors as the Corporation may reasonably request
in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.

         SECTION X. Exchange Act Compliance. From the Registration Date or such
earlier date as a registration statement filed by the Corporation pursuant to
the Exchange Act relating to any class of the Corporation's securities shall
have become effective, the Corporation shall comply with all of the reporting
requirements of the Exchange Act applicable to it (whether or not it shall be
required to do so, but specifically excluding Section 14 of the Exchange Act if
not then applicable to the Corporation) and shall comply with all other public
information reporting requirements of the, Commission which are conditions to
the availability of Rule 144 for the sale of the Common Stock. The Corporation
shall cooperate with the Investors in supplying such information as may be
necessary for the Investors to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of Rule 144.

         SECTION XI. No Conflict of Rights. The Corporation shall not, after the
date hereof, grant any registration rights which conflict with or impair the
registration rights granted hereby. The Investors acknowledge the registration
rights granted by the Corporation pursuant to those certain Universal and Forth
Investments Registration Rights Agreements each dated as of October 24, 1997.

         SECTION XII. Termination. This Agreement shall terminate and be of no
further force or effect when there shall no longer be any Registrable Shares
outstanding.

         SECTION XIII. Successors and Assigns. This Agreement shall bind and
inure to the benefit of the Corporation and the Investors and, subject to
Section XV, the respective successors and assigns of the Corporation and the
Investors.

         SECTION XIV. Assignment. Each Investor may assign its rights hereunder
to any purchaser or transferee of Registrable Shares; provided, however, that
such purchaser or transferee shall, as a condition to the effectiveness of such
assignment, be required to execute a counterpart to this Agreement agreeing to
be treated as an Investor whereupon such purchaser or transferee shall have the
benefits of, and shall be subject to the restrictions contained in, this
Agreement as if such purchaser or transferee was originally included in the
definition of an Investor herein and had originally been a party hereto.

         SECTION XV. Entire Agreement. This Agreement amends and restates in its
entirety the Original Registration Rights Agreement. This Agreement and the
Securities Purchase

                                       11

<PAGE>

Agreements each dated as of the date hereof, and the Stockholders Agreement (as
defined in the Series A Purchase Agreement), dated as of October 24, 1997, and
the other writings referred to herein or therein or delivered pursuant hereto or
thereto, contain the entire agreement among the Corporation and the Investors
with respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or understandings with respect thereto.

         SECTION XVI. Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally-recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party to the other parties:

         (i)      if to the Corporation, to:

                  Digital Theater Systems, Inc.
                  5171 Clareton Drive
                  Agoura Hills, CA 91301
                  Telephone: (818) 706-3525
                  Telecopy: (818) 706-8355
                  Attention: Blake Welcher, General Counsel

                  with a copy to:

                  Troy & Gould, Professional Corporation
                  1801 Century Park East, 16th Floor
                  Los Angeles, CA
                  Telecopy: (310) 201-4746
                  Attention: Lawrence Schnapp, Esq.

         (ii)     if to the Investors, to their respective addresses set forth
                  on Schedule I hereto, and in the case of the Series A
                  Investors, with a copy to:

                  O'Sullivan Graev & Karabell, LLP
                  30 Rockefeller Plaza
                  New York, NY 10112
                  Attention: John J. Suydam, Esq.
                  Fax: (212) 408-2420

                  and, in the case of the Series B Investors, with a copy to:

                  Gray Cary Ware Freidenrich, LLP
                  4365 Executive Drive, Suite 1600
                  San Diego, California 92121
                  Attention: James Cartoni
                  Fax: (858) 677-1477

                                       12

<PAGE>

All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by
telecopy, on the date of such delivery, (b) in the case of dispatch by
nationally-recognized overnight courier, on the next business day following such
dispatch and (c) in the case of mailing, on the third business day after the
posting thereof.

         SECTION XVII. Modifications; Amendments, Waivers. The terms and
provisions of this Agreement may not be modified or amended, nor may any
provision be waived, except pursuant to a writing signed by the Corporation and
the holders of at least a majority of the Registrable Shares then outstanding;
provided, however, that any amendment to or modification of this Agreement which
would have a disproportionate adverse affect on the rights of any Investor shall
require the written consent of such Investor.

         SECTION XVIII. Counterparts; Facsimile Signatures. This Agreement may
be executed in any number of counterparts, and each such counterpart hereof
shall be deemed to be an original instrument, but all such counterparts together
shall constitute but one agreement. Facsimile counterpart signatures to this
Agreement shall be acceptable at the Closing (as defined in the Securities
Purchase Agreement) if the originally executed counterpart is delivered within a
reasonable period thereafter.

         SECTION XIX. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.

         SECTION XX. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts made and to be performed wholly therein.

                                       13

<PAGE>

                           CORPORATION SIGNATURE PAGE

         IN WITNESS WHEREOF, the Corporation has executed this Agreement as of
the date first written above.

                                    DIGITAL THEATER SYSTEMS, INC.

                                    By:    /s/ Jon Kirchner
                                        ----------------------------------------
                                    Name: Jon Kirchner
                                    Title: Executive Vice President, Operations

<PAGE>

                        SERIES A INVESTORS SIGNATURE PAGE

         IN WITNESS WHEREOF, the following Series A Investors owning more than a
majority of the Registrable Shares (as defined in the Original Registration
Rights Agreement) have executed this Agreement as of the date first above
written.

                                    WESTON PRESIDIO CAPITAL II

                                           /s/ James B. McElwee
                                    --------------------------------------------
                                    General Partner

<PAGE>

                        SERIES A INVESTORS SIGNATURE PAGE

         IN WITNESS WHEREOF, the following Series A Investors owning more than a
majority of the Registrable Shares (as defined in the Original Registration
Rights Agreement) have executed this Agreement as of the date first above
written.

                                    WESTON PRESIDIO CAPITAL II

                                    By: ________________________________________
                                        Name: James B. McElwee
                                        Title: General Partner

                                    EOS PARTNERS SBIC, L.P.

                                    By: EOS SBIC GENERAL, L.P.
                                        Its General Partner

                                    By: EOS SBIC, INC.
                                        Its General Partner

                                    By:    /s/ Steven M. Friedman
                                        ----------------------------------------
                                        Name:
                                        Title:

                                Eos Partners SBIC, L.P.
                                by Eos SBIC General, L.P., its General Partner
                                by Eos SBIC, Inc., its Managing General Partners
                                by Steven M. Friedman, President

<PAGE>

                        SERIES A INVESTORS SIGNATURE PAGE

         IN WITNESS WHEREOF, the following Series A Investors owning more than a
majority of the Registrable Shares (as defined in the Original Registration
Rights Agreement) have executed this Agreement as of the date first above
written.

                                    SCRIPPS VENTURES, LLC

                                    By:    /s/ Benjamin A. Burditt
                                        ----------------------------------------
                                        Benjamin A. Burditt, Senior Vice
                                        President

<PAGE>

                        SERIES B INVESTORS SIGNATURE PAGE

         IN WITNESS WHEREOF, the Series B Investors have executed this Agreement
as of the date first written above.

                                    WESTON PRESIDIO CAPITAL II

                                           /s/ James B. McElwee
                                    --------------------------------------------
                                    General Partner

<PAGE>

                        SERIES B INVESTORS SIGNATURE PAGE

         IN WITNESS WHEREOF, the Series B Investors have executed this Agreement
as of the date first written above.

                                           /s/ Steven M. Friedman
                                    --------------------------------------------

                                Eos Partners SBIC, L.P.
                                by Eos SBIC General, L.P., its General Partner
                                by Eos SBIC, Inc., its Managing General Partners
                                by Steven M. Friedman, President

<PAGE>

                                   SCHEDULE I

                                    INVESTORS

Series A Investors:
Weston Presidio Capital II
EOS Partners SBIC, L.P.
Scripps Ventures, L.L.C.

Series B Investors:
Weston Presidio Capital II
EOS Partners SBIC, L.P.<PAGE>

                                                                    EXHIBIT 10.3

                                               STOCKHOLDERS AGREEMENT dated as
                                    of October 24, 1997, among DIGITAL THEATER
                                    SYSTEMS, INC., a Delaware corporation (the
                                    "Company"), and the stockholders of the
                                    Company listed on Schedule A hereto (the
                                    "Stockholders").

         The Company and the Stockholders agree that it is in their respective
interests that provision be made for the continuity and stability of the
business and policies of the Company and, to that end, the Company and the
Stockholders hereby set forth their agreement with respect to the Stockholder
Shares (as defined below) that are owned or may be acquired by the Stockholders.
The Company and the Stockholders are entering into this Agreement as a condition
to and in connection with the execution and delivery of the Securities Purchase
Agreement (as defined below).

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:

         1.       Definitions.

         As used in this Agreement, the following terms shall have the meanings
ascribed to them below:

         "Affiliate" means, with respect to any Person, any of (a) a director,
officer or partner of such Person, (b) a spouse, parent, sibling or descendant
of such Person or a spouse, parent, sibling or descendant of a director,
officer, or partner of such Person and (c) any other Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, another Person. The term "control" includes,
without limitation, the possession, directly or indirectly, of the power to
direct the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.

         "Agreement" means this Stockholders Agreement.

         "Board" means, with respect to the Company or any Subsidiary, the board
of directors of the Company or such Subsidiary, as applicable.

         "Common Stock" means (i) the Common Stock, par value $.0001 per share,
of the Company, and (ii) any other class of capital stock of the Company
authorized after the date hereof that is not entitled to at least a fixed sum or
percentage of par or stated value in respect of the rights of the holders
thereof to participate in dividends or in the distribution of assets upon any
liquidation, dissolution or winding up of the Company.

         "Common Stock Equivalent" means a share of Common Stock or the right to
acquire, whether or not immediately exercisable, a share of Common Stock,
whether evidenced by an option, warrant, convertible security or other
instrument or agreement.

         "Company" has the meaning set forth in the caption to this Agreement.

<PAGE>

         "Company Charter" means the Certificate of Incorporation of the
Company, as amended, supplemented, or otherwise modified from time to time, and
any certificate of designations filed in connection therewith, in each case
pursuant to the General Corporation Law of the State of Delaware.

         "Convertible Securities" means any stock or securities convertible,
directly or indirectly, into or exchangeable for Common Stock or Preferred
Stock.

         "Eos" means Eos Partners SBIC, L.P.

         "Equity Securities" means all shares of capital stock of the Company,
all securities convertible into or exchangeable for shares of capital stock of
the Company, and all options, warrants, and other rights to purchase or
otherwise acquire from the Company shares of such capital stock, or securities
convertible into or exchangeable for shares of such capital stock.

         "Excluded Securities" means (i) any options issued or issuable pursuant
to a Stock Option Plan and any shares of Common Stock issuable upon exercise of
any options granted pursuant to a Stock Option Plan; provided, that any shares
of Common Stock which are so issued or issuable shall not exceed 1,660,466
shares of Common Stock in the aggregate, (ii) stock issued upon the conversion
of any Convertible Securities or the exercise of any options, warrants or other
rights to acquire capital stock of the Company issued on or before the date
hereof, including without limitation the Existing Shareholder Warrants, the
Spielberg Warrants, the Universal Warrants, the H&Q Warrants and the Imperial
Bank Warrants (iii) stock issued in connection with any stock split, stock
dividend or recapitalization by the Company, (iv) Common Stock issued in a
Public Offering and (v) Series A Preferred Stock issued pursuant to a Strategic
Investment (and any Common Stock issuable upon conversion thereof).

         "Existing Shareholders" has the meaning set forth in the Securities
Purchase Agreement.

         "Existing Shareholder Warrants" means warrants issued by the Company to
the Existing Shareholders that are exercisable for an aggregate of 4,253,327
shares of the Company's Common Stock, at an exercise price per share of $6.057.

         "Fully Diluted Basis" means in the case of (i) any calculation of the
number of shares of Common Stock deemed outstanding, that effect is first given
to (A) all shares of Common Stock outstanding at the time of determination, (B)
all shares of Common Stock issuable upon the exercise of any option, warrant or
other right outstanding and exercisable at the time of determination (provided
any such option, warrant or right shall only by considered to be outstanding if
the per share exercise price thereof is less than the fair value of a share of
Common Stock at such time), and (C) all shares of Common Stock issuable upon the
exercise of any conversion or exchange right contained in any security
outstanding at the time of determination that is convertible into or
exchangeable for shares of Common Stock; and (ii) any calculation of value, that
effect is first given to (A) the securities referred to in clause (i) above and
(B) the payment of any consideration payable upon the exercise, conversion or
exchange of any option, warrant, security or other right referred to in clause
(i) above if such option, warrant, security or other right were exercisable at
the time of determination.

         "Group" means:

                                       2

<PAGE>

                  (i)      in the case of any Stockholder which is a
         partnership, (A) such partnership and any of its limited or general
         partners, (B) any corporation or other business organization to which
         such partnership shall sell all or substantially all of its assets or
         with which it shall be merged and (C) any Affiliate of such
         partnership;

                  (ii)     in the case of any Stockholder which is a
         corporation, (A) such corporation, (B) any corporation or other
         business organization to which such corporation shall sell or transfer
         all or substantially all of its assets or with which it shall be merged
         and (C) any Affiliate of such corporation; and

                  (iii)    in the case of any Stockholder that is an individual,
         such individual's (A) spouse, (B) parents, (C) siblings, (D) children
         or grandchildren (whether natural or adopted), and (E), any one or more
         trusts solely for the benefit of the Persons described in this clause
         (iii).

         "H&Q Warrants" means warrants for capital stock of the Company issued
to H&Q Digital Theater Systems Investors, L.P. on or before the date hereof.

         "Imperial Bank Warrants" means warrants for capital stock of the
Company issued to Imperial Bank on or before the date hereof.

         "Investor" means any Stockholder that is not a Management Stockholder
and any other Person which or who has executed an Investor Joinder.

         "Investor Joinder" means a joinder agreement, substantially in the form
of Exhibit B hereto, by which a Person may become an Investor on or after the
date hereof.

         "Liquidation" has the meaning set forth in the Company Charter.

         "Major Stockholder" means any Stockholder or Stockholder Group that
owns, acquires or controls five percent (5%) or more of the issued and
outstanding capital stock of the Company (based upon Common Stock Equivalents).

         "Management Stockholder" means those individuals identified on Annex I
and any other Person which or who has executed a Management Joinder.

         "Management Joinder" means a joinder agreement, substantially in the
form of Exhibit A hereto, by which a Person may become a Management Stockholder
on or after the date hereof.

         "Original Issuance Price" has the meaning set forth in the Company
Charter.

         "Other Stockholders" has the meaning set forth in Section 5.

         "Person" shall be construed broadly and shall include, without
limitation, an individual, a partnership, an investment fund, a limited
liability company, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.

                                       3

<PAGE>

         "Preferred Stock" means (i) the Series A Preferred Stock and (ii) any
other class or series of the capital stock of the Company that is entitled to at
least a fixed sum or percentage of par or stated value in respect of the rights
of the holders thereof to participate in dividends or in the distribution of
assets upon any liquidation, dissolution or winding up of the Company.

         "Public Offering" means, with respect to any Person, the sale, in an
underwritten public offering registered under the Securities Act, of shares of
the capital stock of such Person.

         "Purchase" has the meaning ascribed thereto in the Securities Purchase
Agreement.

         "Qualified Public Offering" means an initial Public Offering of Common
Stock underwritten on a firm commitment basis which results in aggregate gross
cash proceeds to the Company of not less than $20,000,000 at an offering price
per share of Common Stock equal to or in excess of three hundred percent (300%)
of the Series A Conversion Price (as such term is defined in the Company
Chatter) then in effect.

         "Qualified Sale Transaction" means any sale in which the holders of the
Series A Preferred Stock receive, in respect of such shares, or the shares of
Common Stock received upon conversion thereof, cash or marketable securities in
a per share amount equal to at least three hundred percent (300%) of the Series
A Conversion Price then in effect.

         "Relatively Equivalent Terms" means, as of any date of determination,
(A) with respect to any share of Common Stock proposed to be sold pursuant to a
Sale Notice, the Relatively Equivalent Terms for a share of a series of
Preferred Stock shall equal the product of (1) the amount payable in respect of
such share of Common Stock and (2) the number of shares of Common Stock into
which such share of Preferred Stock is convertible in the event of an optional
conversion of such share of Preferred Stock pursuant to the Company Charter as
of such date of determination, and (B) with respect to any share of Preferred
Stock proposed to be sold pursuant to a Sale Notice, the Relatively Equivalent
Terms for a share of Common Stock shall equal the divisor of (1) the amount
payable in respect of such share of Preferred Stock, over (2) the number of
shares of Common Stock into which such share of Preferred Stock is convertible
in the event of an optional conversion of such share of Preferred Stock pursuant
to the Company Charter as of such date of determination. The form of
consideration paid in respect of such different classes of capital stock shall
be identical.

         "Sale Notice" has the meaning set forth in Section 5.

         "Scripps" means Scripps Ventures, LLC.

         "Securities Act" means the Securities Act of 1933, as the same may be
amended or supplemented from time to time, or any successor statute, and the
rules and regulations thereunder, as the same are from time to time in effect.

         "Securities Purchase Agreement" means the Securities Purchase Agreement
dated the date hereof among the Company and the Purchasers dated as of the date
hereof, as amended from time to time.

         "Selling Notice" has the meaning set forth in Section 5.

                                       4

<PAGE>

         "Selling Stockholder" has the meaning set forth in Section 5.

         "Series A Conversion Price" has the meaning set forth in the Company
Charter.

         "Series A Preferred Stock" means the Series A Convertible Preferred
Stock of the Company, par value $.0001 per share.

         "Series A Warrants" means the warrants issued pursuant to the
Securities Purchase Agreement.

         "Spielberg" means Steven Spielberg or an entity not less than
majority-owned or controlled by Steven Spielberg and his or its Affiliates.

         "Spielberg Warrants" means warrants for capital stock of the Company
issued to Spielberg.

         "Stockholder" has the meaning set forth in the caption to this
Agreement.

         "Stockholder Shares" means (i) any Common Stock or Preferred Stock
purchased or otherwise acquired by any Stockholder, (ii) any Common Stock or
Preferred Stock issued upon the exercise or conversion of any Convertible
Security, and (iii) any equity securities issued or issuable directly or
indirectly with respect to the Common Stock or Preferred Stock referred to in
clause (i) and clause (ii) above by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. For purposes of this Agreement, holders of any portion
of any Convertible Security (other than Preferred Stock) shall be deemed to be
holders of Stockholder Shares issuable upon exercise of such Convertible
Security and therefore shall be subject to the provisions and restrictions of
this Agreement. As to any particular shares constituting Stockholder Shares,
such shares will cease to be Stockholder Shares when they have been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them or sold pursuant to Rule 144.

         "Stock Option Plan" means any stock option plan adopted by the Company
and any other grants of stock options made by the Company, in each case granted
to employees, directors and independent contractors to the Company or its
Subsidiaries.

         "Strategic Investment" means an investment in Series A Preferred Stock
by a Person or Persons satisfactory to the Board of up to $5,000,000 in the
aggregate, at prices per share at the higher of fair market value or $2.019,
after the date hereof and on or before March 31, 1998.

         "Subsidiary" means any Person of which the Company owns securities
having a majority of the ordinary voting power in electing the board of
directors (or comparable governing body) directly or through one or more
subsidiaries.

         "Tag-Along Notice" has the meaning set forth in Section 5.

                                       5

<PAGE>

         "Termination Date" means the earlier to occur of the date of
consummation of any (i) Qualified Public Offering; (ii) Qualified Sale
Transaction; (iii) redemption in fall of all Series A Preferred Stock; or (iv)
Liquidation.

         "Transfer" means the sale, transfer, assignment, pledge or other
disposal (whether with or without consideration and whether voluntarily or
involuntarily or by operation of law) of any interest in any Stockholder Share.

         "Universal" means Universal City Studios, Inc. and its affiliates.

         "Universal Warrants" means warrants for capital stock of the Company
issued to Universal on or before the date hereof.

         "Weston" means Weston Presidio Capital II.

         2.       Election of Directors; Voting.

                  (a)      Each Stockholder shall vote all of his or its
Stockholder Shares (to the extent such Stockholder Shares possess the right to
so vote) and shall take all other necessary or desirable actions within his or
its control (whether in such Stockholder's capacity as a stockholder of the
Company or otherwise, and including, without limitation, attendance at meetings
in person or by proxy for purposes of obtaining a quorum and execution of
written consents in lieu of meetings), and the Company shall take all necessary
and desirable actions within its control (including, without limitation, calling
special Board and stockholder meetings), so that:

                           (i)      The authorized number of directors on the
         Board of the Company shall be established at seven (7) directors.

                           (ii)     The following persons shall be elected to
         the Board of the Company and each committee thereof:

                                    (A)      two (2) representatives, designated
         by the holders of a majority of the Stockholder Shares set forth on
         Annex I hereto, as determined by a majority in interest;

                                    (B)      one (1) representative designated
         by Eos (who shall be a Series A Director (as defined in the Certificate
         of Designations));

                                    (C)      one (1) representative designated
         by Weston (who shall be a Series A Director (as defined in the
         Certificate of Designations));

                                    (D)      one (1) representative designated
         by Universal;

                                    (E)      one (1) representative designated
         by Spielberg;

                                    (F)      one (1) representative who shall be
         designated and approved by a majority of the other members of the
         Board.

                                       6

<PAGE>

                           (iii)    In the event that a party elects not to
         designate one or more directors which such party is entitled to
         designate in accordance with Section 2(a)(ii), the Stockholders agree
         not to vote to fill such vacancy other than with an individual
         designated by such party as provided in Section 2(a)(ii).

                           (iv)     The designation of a representative pursuant
         to Section 2(a)(ii) at any time shall be effective only upon written
         notice thereof to the Company by the party or parties making such
         designation. Such written notice shall be recorded as soon as
         reasonably practical in the minutes of the Company and may be relied
         upon by the Company as conclusive until such time as the Company is in
         receipt of a subsequent written notice making a new designation.

                  (b)      Scripps shall have the right to designate one (1)
representative to attend as observer all meetings of the Board. The Company
shall deliver to such observer all notices and other materials, and provide such
observer with such reimbursements and other benefits, as are generally delivered
or provided to members of the Board. Such observer shall agree to be bound by
any confidentiality obligations generally applicable to the directors.

         3.       Future Stockholders/Limitations on Transfers.

                  (a)      The Company shall require each person or entity
(other than parties hereto) that acquires Equity Securities, other than
Stockholder Shares, from the Company after the date hereof in an amount
sufficient to cause such person or entity to become a Major Stockholder, as a
condition to the effectiveness of such acquisition, to execute a counterpart to
this Agreement, whereupon such Person shall be bound by, and entitled to the
benefits of, this Agreement.

                  (b)      Each Transfer of any Stockholder Shares before the
Termination Date shall not become effective unless and until the transferee
executes and delivers to the Company a counterpart to this Agreement, agreeing
to be treated in the same manner as the transferring Stockholder. Upon such
Transfer and such execution and delivery, the transferee shall be bound by, and
entitled to the benefits of, this Agreement with respect to the transferred
Shares.

         4.       Management Stockholders.

         No Management Stockholder shall Transfer any Stockholder Shares;
provided however, subject to the terms and conditions of this Agreement, a
Transfer of Stockholder Shares by a Management Stockholder shall be permitted if
such Transfer is: (i) made pursuant to Section 5; or (ii) in the case of any
Management Stockholder who is an individual, (A) among such Management
Stockholder's Group, provided that the transferee immediately assigns by proxy
all of his or her voting rights with respect to the Stockholders Shares being
Transferred to the Management Stockholder making the Transfer, or (B) to a
current or former spouse of the Management Stockholder pursuant to any order,
judgment or decree issued upon the divorce of the Management Stockholder from
such transferee, provided such transferee immediately assigns by proxy all of
his or her voting rights with respect to the Stockholders Shares being
Transferred to the Management Stockholder making the Transfer; or (iii) part of
a Qualified Public Offering or Qualified Sale Transaction.

                                       7

<PAGE>

         5.       Co-Sale.

                  (a)      Except as provided in Section 5(f) and (g) below, if
any Major Stockholder proposes to Transfer Stockholder Shares to any third party
before a Qualified Public Offering or Qualified Sale Transaction, such Major
Stockholder shall, at least 30 days before such Transfer, deliver a notice (the
"Sale Notice") to the Company and the other Stockholders (the "Other
Stockholders") specifying the identity of the proposed transferee and disclosing
in reasonable detail the terms and conditions of the proposed Transfer including
whether the offer to purchase such shares is irrevocable for a period of at
least 30 days.

                  (b)      The Major Stockholder shall not consummate the
Transfer until 30 days after the Sale Notice has been given to the Company and
the Other Stockholders, unless the Company and all of the Other Stockholders
consent in writing to an earlier consummation of the proposed Transfer.

                  (c)      Within 15 days after delivery of the Sale Notice,
each Other Stockholder may elect to participate in the proposed Transfer by
delivering to such Major Stockholder a notice (the "Tag-Along Notice")
specifying the Stockholder Shares (class, series, number) with respect to which
the Other Stockholder exercises its right under this Section 5.

                  (d)      Any shares included in any Tag-Along Notice that are
of the same series and class of shares as the shares of Stockholder Shares
proposed to be transferred in the Sale Notice shall be transferred on the same
terms and conditions set forth in the Sale Notice. Any shares included in the
Tag-Along Notice that are of a different class or series than the shares
proposed to be transferred in the Sale Notice shall be transferred upon the same
conditions and Relatively Equivalent Terms as set forth in the Sale Notice.

                  (e)      Each of the Other Stockholders shall be entitled to
Transfer up to a number of Stockholder Shares equal to its pro rata amount of
the aggregate number of Stockholder Shares subject to the Transfer.

                  (f)      Transfers to Affiliates shall not be subject to this
Section 5; provided, however, that such Affiliates must execute a counterpart of
this Agreement, whereupon such Person shall be bound by, and entitled to the
benefits of, this Agreement.

                  (g)      The provisions of Section 5(a) through (e) shall not
be applicable to Spielberg's transfer of up to 50% of his Stockholder Shares for
no or de minimus consideration to an organization qualified under Section 501(c)
of the Internal Revenue Code of 1986, as amended; provided, however that
Spielberg shall not transfer pursuant to this Section 5(g) any amount of
Stockholder Shares that in the aggregate would result in Spielberg having legal
or beneficial ownership of less than 5% of the Company's Common Stock on a Fully
Diluted Basis.

         6.       First Offer Rights to the Stockholders.

                  (a)      If the Company authorizes the issuance and sale of
any shares of capital stock or any other securities containing options or rights
to acquire any shares of capital stock, (including, without limitation,
convertible debt), other than the Excluded Securities, the Company shall first
offer to sell to each of the Stockholders a portion of such securities equal to

                                       8

<PAGE>

the percentage determined by dividing (1) the number of Stockholder Shares held
by such Stockholder, by (2) the number of shares of Common Stock deemed
outstanding on a Fully Diluted Basis. Each holder of Stockholder Shares shall be
entitled to purchase such securities at the same price and on the same terms as
such securities are to be offered.

                  (b)      Each Stockholder must elect to exercise its purchase
rights hereunder within 15 days after receipt of written notice from the Company
describing in reasonable detail the stock or securities being offered, the
purchase price thereof (if known), the payment terms and such Stockholder' s
percentage allotment.

                  (c)      Upon the expiration of the offering period set forth
in Section 6(b), the Company shall be free to sell such stock or securities
which the Stockholders have not elected to purchase during the 60 days following
such expiration on terms and conditions no more favorable to the purchasers
thereof than those offered to the Stockholders. Any stock or securities offered
or sold by the Company after such 60-day period must be re-offered to the
Stockholders pursuant to the terms of this Section 6(c).

                  (d)      The provisions of this Section 6 shall not apply to
issuances by the Company pursuant to a Strategic Investment.

         7.       Additional Restrictions on Transfer of Stockholder Shares.

                  (a)      Legend. The certificates representing the Stockholder
Shares shall bear a legend substantially in the following form:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
         AS OF OCTOBER ___, 1997, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
         ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED
         IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
         AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED
         BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
         TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN A STOCKHOLDERS
         AGREEMENT DATED AS OF OCTOBER __, 1997, AMONG DIGITAL THEATER SYSTEMS,
         INC, (THE "COMPANY") AND CERTAIN OF ITS STOCKHOLDERS. A COPY OF SUCH
         AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S
         PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."

                  (b)      Transfers in Violation of Agreement. Any Transfer or
attempted Transfer of any Stockholder Shares in violation of any provision of
this Agreement shall be void, and the Company shall not record such Transfer on
its books or treat any purported transferee of such Stockholder Shares as the
owner of such stock for any purpose.

                  (c)      Pledges. Notwithstanding any provision in this
Agreement to the contrary, no holder of Stockholder Shares may pledge any
Stockholder Shares on or after the date hereof.

                                       9

<PAGE>

         8.       Binding Effect; Joinders; Additional Shares.

                  (a)      Any transferee of Stockholder Shares from an Investor
(other than the Company or a Management Stockholder) shall, as a condition to
such Transfer, be deemed an Investor for purposes of this Agreement and be bound
by and subject to the terms and provisions of this Agreement applicable to
Investors, and if not already a signatory to this Agreement as an Investor, such
Person shall execute and deliver to the Company an Investor Joinder. Any
transferee of Stockholder Shares of the Company from a Management Stockholder
(other than the Company or an Investor) shall, as a condition to such Transfer,
be deemed a Management Stockholder for purposes of this Agreement and be bound
by and subject to the terms and provisions of this Agreement applicable to
Management Stockholders, and if not already a signatory to this Agreement as a
Management Stockholder, such Person shall execute and deliver to the Company a
Management Joinder.

                  (b)      In the event additional Stockholder Shares are issued
by the Company to a Stockholder at any time during the term of this Agreement,
such additional Stockholder Shares shall, as a condition to such issuance, be
deemed subject to the terms and provisions of this Agreement.

                  (c)      In the event the Company issues to any employee or
officer of, or consultant to, the Company or any of its Subsidiaries or an
Affiliate or designee thereof at any time during the term of this Agreement,
Common Stock or securities of the Company convertible into or exercisable or
exchangeable for shares of Common Stock in amounts in excess of the lesser of
(i) 100,000 shares of Common Stock (on an as-converted basis) or (ii) 1.0% of
all Common Stock on a Fully Diluted Basis, such employee, officer, Affiliate or
designee, as a condition to receiving such shares of Common Stock or securities
of the Company convertible into or exercisable or exchangeable for shares of
Common Stock, shall be deemed a Management Stockholder for purposes of this
Agreement and be bound by and subject to the terms and provisions of this
Agreement applicable to Management Stockholders and, if not already a signatory
to this Agreement as a Management Stockholder, such Person shall execute and
deliver to the Company a Management Joinder.

         9.       No Conflicting Agreements.

         No Stockholder shall enter into any stockholder agreements or
arrangements of any kind with any Person with respect to any Stockholder Shares
on terms inconsistent with the provisions of this Agreement (whether or not such
agreements or arrangements are with other Stockholders or with Persons that are
not parties to this Agreement), including, but not limited to, agreements or
arrangements with respect to the acquisition or disposition of Stockholder
Shares in a manner that is inconsistent with this Agreement.

         10.      Further Assurances.

         Each party hereto shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments and documents as any other
party hereto reasonably may request in order to carry out the provisions of this
Agreement and the consummation of the transactions contemplated hereby.

                                       10

<PAGE>

         11.      Termination.

                  (a)      All of the provisions of this Agreement shall
terminate and, except as otherwise expressly provided herein, shall be of no
further force or effect and shall not be binding upon any party hereto, upon the
first to occur of (i) a Termination Date and (ii) the approval of such
termination by each of (A) the Company, (B) the holders of a majority in voting
power of the Series A Preferred Stock subject to this Agreement, (C) Spielberg,
(D) Universal, and (E) the holders of a majority in voting power of the shares
set forth on Annex I.

                  (b)      As to any particular Stockholder, this Agreement
shall no longer be binding or of further force or effect as to such Stockholder,
except as otherwise expressly provided herein, as of the date such Stockholder
has transferred all such Stockholder's interest in the Company's securities and
each transferee of such securities, if required by this Agreement, shall have
become a party hereto; provided, however, that no such termination shall be
effective if such Stockholder is in breach of this Agreement immediately before
or after giving effect to such Transfer(s).

         12.      General Provisions.

                  (a)      Amendment: Waiver and Release. Except as otherwise
provided herein, no modification, amendment or waiver of any provision of this
Agreement shall be effective unless such modification, amendment or waiver is
approved in writing by (i) the Company, (ii) the Stockholders holding at least a
majority in voting power of the Stockholder Shares subject to this Agreement,
(iii) Spielberg (so long as Spielberg continues to hold 50% or more of the
Stockholder shares held by Spielberg that are subject to this Agreement), (iv)
Universal (so long as Universal continues to hold 50% or more of the Stockholder
Shares held by Universal that are subject to this Agreement) and (v) the holders
of a majority in voting power of the shares set forth on Annex I. The failure of
any party to enforce any of the provisions of this Agreement shall in no way be
construed as a waiver of such provisions and shall not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.

                  (b)      Severability. It is the desire and intent of the
parties hereto that the provisions of this Agreement be enforced to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
provision of this Agreement shall be adjudicated by a court of competent
jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of this Agreement or affecting the validity or enforceability of
such provision in any other jurisdiction. Notwithstanding the foregoing, if such
provision could be more narrowly drawn so as not to be invalid, prohibited or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

                  (c)      Entire Agreement. Except as otherwise expressly set
forth herein, this document embodies the complete agreement and understanding
among the parties hereto with

                                       11

<PAGE>

respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.

                  (d)      Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and, so long as Stockholder Shares are held by such Person, each
Person which or who is a Stockholder on the date hereof and each subsequent
Stockholder. None of the provisions hereof shall create, or be construed or
deemed to create, any right of employment in favor of any Person by the Company
or any of its Subsidiaries. This Agreement is not intended to create any third
party beneficiaries.

                  (e)      Counterparts. This Agreement may be executed in
separate counterparts each of which shall be an original and all of which taken
together shall constitute one and the same agreement.

                  (f)      Remedies. The Company and the Stockholders shall be
entitled to enforce their rights under this Agreement specifically to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in their favor. The Company and the
Stockholders agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that the Company
and any Stockholder may in its or his sole discretion apply to any court of law
or equity of competent jurisdiction for specific performance and/or injunctive
relief (without posting a bond or other security) in order to enforce or prevent
any violation of the provisions of this Agreement.

                  (g)      Notices. All notices, requests, demands, claims, and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, telecopied, sent by nationally
recognized overnight courier or mailed by registered or certified mail (return
receipt requested), postage prepaid, to the parties at the following addresses
(or at such other address for a parry as shall be specified by like notice):

                           (i)      If to the Company, to:

                           Digital Theater Systems, Inc.
                           31336 Via Colinas #101
                           Westlake Village, CA 91362
                           Attention: Jon Kirchner, CFO
                           Telephone: (818) 706-3525
                           Telecopy: (818) 706-8355

                           with a copy to:

                           Troy & Gould Professional Corporation
                           1801 Century Park East
                           Los Angeles, CA

                                       12

<PAGE>

                           Attention: Lawrence P. Schnapp, Esq.
                           Telephone: (310) 553-4441
                           Telecopy: (310) 201-4746

                           (ii)     If to a Stockholder set forth on Schedule A
         hereto, to:

                           the related address or telecopier number
                           set forth on Schedule A hereto.

                           with a copy to:

                           the Person set forth immediately across from the name
                           of such Stockholder on Schedule A hereto, at the
                           related address or telecopier number set forth on
                           Schedule A hereto.

                           If to a Stockholder not set forth on Schedule A
                           hereto, to:

                           the related address or telecopier number set forth in
                           the last Joinder executed and delivered by such
                           Stockholder to the Company.

                           with a copy to:

                           the Person designated to receive copies in the such
                           Joinder, at the related address or telecopier number
                           set forth in such Joinder.

         All such notices and other communications shall be deemed to have been
given and received (a) in the case of personal delivery or delivery by telecopy,
on the date of such delivery, (b) in the case of delivery by nationally
recognized overnight courier, on the third business day following such dispatch
and (c) in the case of mailing, on the seventh business day following such
mailing.

                  (h)      GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF
THE STATE OF NEW YORK, OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF
ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK TO BE APPLIED, EXCEPT TO THE
EXTENT THAT THIS AGREEMENT RELATES TO THE INTERNAL AFFAIRS OF THE CORPORATION,
WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING
PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE
TO BE APPLIED TO SUCH MATTERS. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW
OF THE STATE OF NEW YORK OR THE STATE OF DELAWARE, AS THE CASE MAY BE, WILL
CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER
SUCH JURISDICTION'S CHOICE OF LAW OR

                                       13

<PAGE>

CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD
ORDINARILY APPLY.

                  (i)      Descriptive Headings. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.

                  (j)      Construction. Where specific language is used to
clarify by example a general statement contained herein, such specific language
shall not be deemed to modify, limit or restrict in any manner the construction
of the general statement to which it relates. The language used in this
Agreement shall be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction shall be applied against
any party.

                  (k)      WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

                  (l)      Nouns and Pronouns. Whenever the context may require,
any pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice-versa.

                                     * * * *

                                       14

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement on the day and year first above written.

                                           DIGITAL THEATER SYSTEMS, INC.

                                           By: /s/ Jon Kirchner
                                               --------------------------------
                                               Name: Jon Kirchner
                                               Title: Chief Financial Officer

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement on the day and year first above written.

                                           EOS PARTNERS SBIC, L.P,

                                           By: Eos SBIC General, L.P.,
                                               its General Partner

                                           By: Eos SBIC, Inc.,
                                               its General Partner

                                           By: /s/ Marc Michel
                                               --------------------------------
                                               Name: Marc Michel
                                               Title: General Partner

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement on the day and year first above written.

                                           WESTON PRESIDIO CAPITAL II

                                           By /s/ James McElwee
                                              --------------------------------
                                              James B. McElwee
                                              General Partner

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement the day and year first above written.

                                           SCRIPPS VENTURES, LLC

                                           By /s/ illegible
                                              --------------------------------
                                              Name:
                                              Title:

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement the day and year first above written.

                                           THE PHOENIX PARTNERS IV LIMITED
                                           PARTNERSHIP

                                           By: The Phoenix Management IV,
                                               L.L.C.,
                                               Its General Partner

                                           By /s/ David Johnston
                                              --------------------------------
                                              David B. Johnston
                                              Managing Member

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement the day and year first above written.

                                           H&Q DIGITAL THEATER SYSTEMS
                                           INVESTORS, L.P.

                                           By /s/ Jackie Berterretche
                                              ---------------------------
                                              Name:  Jackie Berterretche
                                              Title: Attorney-in-Fact

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement the day and year first above written.

                                           UNIVERSAL CITY STUDIOS, INC.

                                           By /s/ Brian Mulligan
                                              --------------------------------
                                              Name:
                                              Title:

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement the day and year first above written.

                                           FORTH INVESTMENTS, LLC

                                           By /s/ Michael Rutman
                                              --------------------------------
                                              Name: Michael Rutman
                                              Title: Chief Financial Officer

<PAGE>

                                           AT Communications KK

                                           /s/ Takec Asano
                                           -------------------------------------
                                           Name: Takec Asano
                                           Title: Managing Director

                                           _____________________________________
                                           William Neighbors

                                           _____________________________________
                                           Buzz Knudson

                                           _____________________________________
                                           Jon Kirchner

                                           _____________________________________
                                           Julie Koppel

                                           _____________________________________
                                           Mr. John C. Dyatt

                                           _____________________________________
                                           Mrs. John C. Dyatt

                                           _____________________________________
                                           Dan Slusser

                                           _____________________________________
                                           Richard Koppel

                                           _____________________________________
                                           Salah Hassanein

                                           _____________________________________
                                           Terry Beard

<PAGE>

                                           /s/ Anastasia Welp
                                           -------------------------------------
                                           Anastasia M. Welp

                                           _____________________________________
                                           Joe Dellaria

                                           _____________________________________
                                           Karen Sullivan

                                           _____________________________________
                                           Mike Smyth

                                           _____________________________________
                                           Ming Yan

                                           _____________________________________
                                           Mr. W.L. Neighbors

                                           _____________________________________
                                           Mrs. W.L. Neighbors

                                           _____________________________________
                                           Nancy Montgomery

                                           _____________________________________
                                           Patricia Gadomski

                                           _____________________________________
                                           Patrick Watson

                                           _____________________________________
                                           Ron Booth

                                           _____________________________________
                                           Steve Cheung

                                           _____________________________________
                                           Andrea Nee

<PAGE>

                                           /s/ Patrick Beard
                                           -------------------------------------
                                           Patrick Beard

                                           /s/ James Ketcham
                                           -------------------------------------
                                           James Ketcham

<PAGE>

                                   SCHEDULE A

                                  STOCKHOLDERS

<TABLE>
<CAPTION>
Stockholder:                                    With copies to:
-----------                                     --------------
<S>                                             <C>
Eos Partners SBIC, L.P.                         O'Sullivan Graev & Karabell, LLP
c/o Eos Partners, L.P.                          30 Rockefeller Plaza
320 Park Avenue                                 41st Floor
22nd Floor                                      New York, NY 10112
New York, NY 10022                              Attn: John J. Suydam, Esq.
Attn: Mr. Steve Friedman                        Telephone: (212) 408-2400
Telephone: (212) 832-5800                       Telecopy: (212) 408-2420
Telecopy: (212) 832-5805

Weston Presidio Capital
343 Sansome Street
Suite 1210
San Francisco, CA 94104-1316
Attn: Mr. James B. McElwee
Telephone: (415) 398-0770
Telecopy: (415) 398-0990

Scripps Ventures, L.L.C.                        Baker & Hostetler, LLP
200 Madison Avenue                              3200 National City Center
New York, NY 10016                              1900 East Ninth Street
Attn: Benjamin Burditt                          Cleveland, OH 44114-3485
Telephone: (212) 293-8700                       Attn: Gerardo C. Orlando, Esq.
Telecopy: (212) 293-8717

The Phoenix Partners IV Limited Partnership
c/o Phoenix Partners
1000 Second Avenue
Suite 3600
Seattle, WA 98104
Attn: David Johnston
Telephone: (206) 624-8968
Telecopy: (206) 624-1907

H&Q Digital Theater Systems Investors, L.P.
c/o Hambrecht & Quist LLC
One Bush Street
San Francisco, CA 94133
Attn: Norman Colbert
Telephone: (415) 439-3000
</TABLE>

<PAGE>

<TABLE>
<S>                                             <C>
Universal City Studios, Inc.                    Munger, Tolles & Olsen
100 Universal City Plaza                        355 South Grand Avenue
Universal City, CA 91608                        35th Floor
Attn: Brian Mulligan                            Los Angeles, CA 90071
Telecopy: (818) 866-5277                        Attn: Ruth Fisher, Esq.
Attn: General Counsel                           Telephone: (213) 683-9100
Telecopy: (818) 866-                            Telecopy: (213) 687-3702

Forth Investments, LLC                          Gang Tyre Ramer & Brown
c/o Gerald Breslauer                            132 South Rodeo Drive
Provident Financial Manager                     Beverly Hills, CA 90212
10345 Olympic Boulevard                         Attn: Harold Brown, Esq.
Los Angeles, CA 90064

Anastasia M. Welp
c/o the Company (see address in Agreement)

Joe Dellaria
c/o the Company (see address in Agreement)

Karen Sullivan
c/o the Company (see address in Agreement)

Mike Smyth
c/o the Company (see address in Agreement)

Ming Yan
c/o the Company (see address in Agreement)

Mr. and Mrs. W.L. Neighbors
c/o the Company (see address in Agreement)

Nancy Montgomery
c/o the Company (see address in Agreement)

Patricia Gadomski
c/o the Company (see address in Agreement)

Patrick Watson
c/o the Company (see address in Agreement)

Ron Booth
c/o the Company (see address in Agreement)
</TABLE>

<PAGE>

Hing Tong Cheung
c/o the Company (see address in Agreement)

Andrea Nee
c/o the Company (see address in Agreement)

AT Communications KK
c/o the Company (see address in Agreement)

Bill Neighbors
c/o the Company (see address in Agreement)

Robert Knudson
c/o the Company (see address in Agreement)

Jon Kirchner
c/o the Company (see address in Agreement)

Julie Koppel
c/o the Company (see address in Agreement)

Mr. and Mrs. John C. Dyatt
c/o the Company (see address in Agreement)

Dan Slusser
c/o the Company (see address in Agreement)

Richard Koppel
c/o the Company (see address in Agreement)

Salah Hassanein
c/o the Company (see address in Agreement)

Terry Beard
c/o the Company (see address in Agreement)

<PAGE>

                                     ANNEX I

                            (MANAGEMENT SHAREHOLDERS)

Terry Beard

Patrick Beard

James Ketcham

<PAGE>

                                    EXHIBIT A

                               MANAGEMENT JOINDER

                  By execution of this Management Joinder, the undersigned
agrees to become a party to that certain Stockholders Agreement dated as of
October ___, 1997 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Stockholders Agreement"), among Digital Theater
Systems, Inc., a Delaware corporation, and certain of its stockholders. The
undersigned shall have all the rights, and shall observe all the obligations,
applicable to a Management Stockholder (as defined in the Stockholders
Agreement).

Name: _______________________

Address for                                with copies
Notices:                                   to:

_____________________________              _____________________________
_____________________________              _____________________________
_____________________________              _____________________________
_____________________________              _____________________________

                                           Signature: __________________________

Date: _______________________

<PAGE>

                                    EXHIBIT B

                                INVESTOR JOINDER

         By execution of this Investor Joinder, the undersigned agrees to become
a party to that certain Stockholders Agreement dated as of October ___, 1997 (as
the same may be amended, supplemented or otherwise modified from time to time,
the "Stockholders Agreement"), among Digital Theater Systems, Inc., a Delaware
corporation, and certain of its stockholders. The undersigned shall have all the
rights, and shall observe all the obligations, applicable to an Investor (as
defined in the Stockholders Agreement).

Name: _______________________

Address for                                with copies
Notices:                                   to:

_____________________________              _____________________________
_____________________________              _____________________________
_____________________________              _____________________________
_____________________________              _____________________________

                                           Signature: __________________________

Date: _______________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00051-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00051-of-00352.parquet"}]]