Document:

Exhibit 10.55

 

DTS, Inc.

 

DTS EXECUTIVE INCENTIVE COMPENSATION PROGRAM SUMMARY

 

For the Fiscal Year Ending December 31, 2013

 

PLAN PROVISIONS

 

I.             PURPOSE

 

The purpose of the 2013 Executive Incentive Compensation Program is to motivate our executive officers to drive the execution of the Company’s strategic plan through the delivery of overall financial results and the execution of specific initiatives critical to the business.

 

II.                                   PLAN YEAR

 

The Plan year begins on January 1, 2013 and ends on December 31, 2013.

 

III.                              PARTICIPANTS

 

The Company’s executive officers are eligible to participate in the Plan, as determined by the Compensation Committee.  Participation by an employee for the fiscal year ending December 31, 2013 does not mean that such employee will necessarily participate in future years, nor does it mean an Incentive Compensation Plan will be authorized in future years.  The Company also retains the right to remove a participant or discontinue the entire program at its discretion, provided, however, that a participant’s bonus for the fiscal year ending December 31, 2013 shall be treated as specified below.

 

Cash bonuses payable under the Executive ICP are intended to qualify as tax deductible “performance-based compensation” under Section 162(m) of the Internal Revenue Code. Funding for the Executive ICP is contingent upon the achievement of one or more pre-established Company financial and strategic performance measures. Based on performance, a maximum bonus award is calculated for each NEO. The Committee may then exercise its discretion to reduce, but not increase, actual bonus awards based on discretionary factors such as the performance of the Company, the performance of each NEO’s functional or territory divisions (if applicable), and the NEO’s individual performance.

 

IV.          PROGRAM STRUCTURE

 

In order to motivate executives to drive the execution of the company’s strategic plan while achieving specific annual organizational and financial results, the compensation committee has a “pay for performance” philosophy and uses performance-based compensation to reward individual performance and the accomplishment of corporate goals.  Corporate goals are generally structured to challenge and motivate executives, so that reasonable “stretch” performances would yield a payout at or about 100% of target.

 

The pay for performance short-term incentive program is structured into two components: 1) overall company financial target and 2) key strategic initiatives.  The purpose of having the two components is to ensure a balance and focus on the attainment of specific annual financial metrics as well as the execution of critical goals that are imperative for the future success of the business.

 

Incentive targets and payouts are expressed as a percentage of base salary.  The base salary to be utilized will be the participant’s annualized base pay as determined by the Compensation Committee as of the February 2013 Board meeting.

 

Under the DTS Executive ICP, 65% of their target opportunity is weighted on overall company financial performance and the other 35% percent is weighted on objectives that are critical to the overall strategy.  These

 

 

performance goals are to be reviewed and approved by the Compensation Committee.

 

Lastly, following the funding of the Executive ICP based on the achievement of the financial targets and key strategic goals, an individual performance multiplier rating will be applied to recognize the specific performance for each executive.   The performance ratings will range from .5 to 1.5.

 

The formula is outlined below:

 

 

V.            PERFORMANCE TARGETS

 

Company Performance = weighted 65% of target executive bonus pool

Strategic Performance = weighted 35% of target executive bonus pool

 

The DTS corporate performance formula measures non-GAAP revenue and operating income at thresholds determined by the Compensation Committee that equate to performance factors of 50%, 100% or 150%.  Performance between thresholds shall be interpolated to derive an appropriate performance factor.

 

The DTS strategic goals formula measures accomplishment and quality completion tied to initiatives critical to the future success of the Company’s business, as determined by the Compensation Committee.   The performance factors will be either 0 or 100%.

 

VI.          PARTICIPANT MUST BE ON PAYROLL ON BONUS PAYMENT DATE

 

In order to receive an incentive payout under this Plan, the participant must work through the end of the Plan year and be employed on the day the bonus is paid.  Should the participant leave due to retirement after the Plan year but before the bonus is paid, the participant will remain eligible for the payout.  Accordingly, except in the case of retirement, if a participant leaves any time during the Plan year and prior to the bonus payout, he/she shall receive no bonus payment.

 

VII.                          “AT WILL” EMPLOYMENT RELATIONSHIP

 

This Plan is not intended to create, and should not be construed as creating, any kind of contract of employment between DTS, Inc. and the participant.  In the absence of a written agreement to the contrary, the participant’s employment with DTS at all times will remain at will.

 

This means that the participant is free to terminate his/her employment with DTS at any time without cause and without written notice and, similarly, DTS is free to terminate the participant’s employment at any time without cause and without written notice.

 

 

VIII.                     INTERPRETATION OF THIS PLAN

 

Interpretation and/or application of this Plan shall be made by the Chief Executive Officer of DTS after consultation with the Compensation Committee of the Board of Directors and such decisions shall be final and binding.Exhibit 10.13

 

The Compensation Committee of the Board of Directors has approved the following form of First Amendment to Employment Agreement to address a technical tax issue. This Amendment is to be entered into by each of the following executive officers of the Bank:  Laurence E. Bensingor, Michael T. Flynn, James H. Langmead, Antonio F. Marquez, Thomas D. Murphy, Susan G. Riel and Janice Williams.

 

FORM OF

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

 

This First Amendment to Employment Agreement (“Amendment”) is made and entered into as of                       , 2013, by and between EagleBank, a Maryland chartered commercial bank (the “Bank”), and                            (“Officer”).

 

RECITALS:

 

WHEREAS, the Bank and Officer are parties to an Employment Agreement dated as of                               , 201   (the “Agreement); and

 

WHEREAS, it has come to the attention of the parties that language in certain provisions of the Agreement may not be in compliance with the requirements of Section 409A (as defined in the Agreement); and

 

WHEREAS, Internal Revenue Service (“IRS”) Notice 2010-6, as modified by Notice 2010-80 (together the “Notices”), provides procedures under which certain documentary noncompliance with Section 409A may be corrected; and

 

WHEREAS, the parties desire to enter into this Amendment in order to modify the Agreement so that it is in compliance with Section 409A as implemented by the Notices.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.            Defined Terms.  All capitalized terms used but not defined in this Amendment shall have the meanings set forth for such terms in the Agreement.

 

2.            Amendments to Agreement.  The Agreement is amended as follows:

 

a.             Section 7.7 of the Agreement is amended by deleting the first sentence thereof and by inserting the following in lieu thereof:

 

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Provided that Officer signs and delivers to the Bank no later than twenty-one (21) days after the Termination Date a General Release and Waiver in the form attached to this Agreement as Exhibit A (the Release”), and except as set forth in the immediately following sentence, if the Term is terminated by the Bank during the Term without Cause, the Bank shall, for a period of one (1) year following the date on which the Release is executed and delivered to the Bank, (i) continue to pay Officer, in the manner set forth below, Officer’s Salary at the rate being paid as of the Termination Date, and (ii) if Officer timely elects to continue his health insurance benefits under COBRA, pay to the insurer Officer’s premiums for health insurance benefits continuation (for so long as Officer remains qualified for such continuation under COBRA).  Notwithstanding the foregoing: (a) if the twenty-one (21) day period in which Officer may deliver the Release begins in one calendar year and ends in the following calendar year, the date on which payments will commence under this Section 7.7 shall be the first day of such following calendar year or, if later, the date on which the Release is delivered to the Bank; and (b) Officer shall not be entitled to any payments pursuant to this Section 7.7 if he is otherwise entitled to payments pursuant to Section 9.4 in relation to a Change in Control.

 

b.             Section 9.4 of the Agreement is amended by deleting the text thereof and by inserting the following in lieu thereof:

 

If there is a Change in Control Termination pursuant to Section 9.2 or Officer resigns after the Action Period pursuant to Section 9.3, Officer shall be paid a lump-sum cash payment (the “Change Payment”) equal to 2.99 times Officer’s Salary at the highest rate in effect during the twelve (12) month period immediately preceding his Termination Date, such Change Payment to be made to Officer on the date forty-five (45) days after the later of (i) the Termination Date or (ii) the date of the Change in Control; provided, however, that the Bank shall be relieved of its obligation to pay the Change Payment if Officer fails to sign and deliver to the Bank no later than twenty-one (21) days after the Termination Date a General Release and Waiver in the form attached to this Agreement as Exhibit A.  Notwithstanding anything to the contrary in this Section 9.4, any payment pursuant to this Section 9.4 shall be subject to (i) any delay in payment required by Section 10.2  hereof and (ii) any reduction required pursuant to Section 10.1.2 hereof, as applicable.

 

3.             No Other Changes.  In all other respects the provisions of the Agreement are hereby reaffirmed and ratified.

 

[signature page follows]

 

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IN WITNESS WHREOF, the parties have executed this First Amendment to Employment Agreement as of the date first written above.

 

 

	
 
    	
EAGLEBANK
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name: 
    	
Ronald D. Paul
    
	
 
    	
Title: 
    	
Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
OFFICER
    
	
 
    	
 
    
	
 
    	
 
    

 

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