EXHIBIT 10.34
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of
March 6, 2000, by and between Digital Theater Systems, Inc., a Delaware
corporation (the "Company"), and Xxxxxx Xxxxxxxx ("you" or "Employee") with
reference to the following facts:
WHEREAS, the Company desires Employee to remain in the employ of the
Company, and Employee desires to be so employed, on the terms and conditions
herein contained.
NOW, THEREFORE, in consideration of the various, covenants and
agreements hereinafter set forth, and other good and valuable consideration, the
parties hereto agree as follows:
1. Term of Employment. The Company hereby agrees to continue the
employment of Employee, and Employee accepts such continuing employment, subject
to the terms and conditions of this Agreement. The term of this Agreement shall
commence as of the date hereof and shall run for a period of twelve months,
unless sooner terminated, and shall automatically renew on a daily basis,
without further action of any kind by the parties, until terminated in
accordance with the provisions this Agreement (the "Term"). The phrase "term of
Employee's employment hereunder" shall mean the period of twelve (12) months
extending from the date of this Agreement or the date of expiration or other
termination hereof, which ever is later, unless you are terminated for "good
cause", as defined herein, whereupon the "term of Employee's employment
hereunder" shall be from the date of this Agreement until the date of
termination for good cause.
2. Duties. You agree to serve the Company as its Vice President
of Finance, Chief Financial Officer. Your duties will be those of similar
employees for a Company similar to the Company and such other duties as are
specified by the President and Chief Operating Officer of the Company. During
the Term of this Agreement, you will devote substantially full time to, and use
your best efforts to advance, the business and welfare of the Company.
3. Salary and Benefits.
(a) Salary. For the term of employee's employment
hereunder, the Company shall pay you a salary at the rate of $150,000 per year
payable biweekly and subject to payroll deductions as may be necessary or
customary in respect of the Company's salaried employees in general. For any
period beginning twelve (12) months from the date of this Agreement, your salary
may be increased as deemed appropriate by the Chief Executive Officer of the
Company.
(b) Vacations. You shall be entitled to three (3) weeks
paid vacation during the term of this Agreement and for each full year of
renewal thereof. Vacation shall accrue biweekly on a pro-rata basis. Any unused
pro-rata portion (not to exceed 180 hours of accumulation) of your annual paid
vacation shall be paid to you upon termination of the Agreement for any reason.
(c) Annual Bonus, Incentive, Savings and Retirement
Plans. You shall be entitled to bonuses as deemed appropriate by the Chief
Executive Officer of the Company. You shall also be entitled to participate in
all annual bonus, incentive, stock option, savings and retirement plans,
practices, policies and programs applicable generally to other employees of the
Company of a similar class (as determined by the Chief Executive Officer of the
Company) ("Similar Employees").
(1) Stock Options. You may be granted stock
options under this Agreement which, if any, will vest over four consecutive
12-month periods as per your STOCK OPTION AGREEMENT with the Company and
administered under the Company's STOCK OPTION PLAN. Additional stock options may
be granted to you during the period of this Agreement to the extent granted to
other employees of the Company of a similar class and as determined by the CEO
of the Company.
(2) Incentive Plan. You shall be entitled to
participate in Company Incentive Plans as applicable generally to other
employees of the Company of a similar class and as determined by the CEO of the
Company. You shall be entitled to bonuses as deemed appropriate by the CEO with
respect to the realization of the Company's INCENTIVE PLAN objectives.
(3) Annual Bonus. You shall be entitled to
participate in the annual bonus plan as applicable generally to other employees
of the Company of a similar class and as determined by the plan and the CEO of
the Company.
(4) Savings and Retirement Plans. You shall be
entitled to participate in savings and retirement plans and any other practices,
policies and programs applicable generally to other employees of the Company of
a similar class and as determined by the CEO of the Company.
(d) Welfare Benefit Plans. You shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company to the extent
applicable generally to Similar Employees of the Company.
(e) Expenses. The Company shall promptly reimburse
Employee for reasonable out-of-pocket expenses incurred in connection with the
Company's business and the performance of Employee's duties hereunder, subject
to (i) such policies as the Company may from time to time establish for senior
executives of the Company, and (ii) Employee furnishing the Company with
evidence in the form of receipts satisfactory to the Company substantiating the
claimed expenditures.
(f) Other Benefits. You shall be entitled to other
benefits in accordance with the plans, practices, programs and policies as in
effect generally with respect to Similar Employees of the Company.
4. Death or Disability of Employee. If you die or become disabled
prior to the termination or other expiration of this Agreement, your employment
under this Agreement will automatically terminate. "Disability" means any
physical or mental illness that renders you unable to perform your agreed-upon
services under this Agreement for ninety consecutive days or an aggregate of 120
days, whether or not consecutive, during any consecutive 12-month period.
Disability shall be determined by a licensed physician not affiliated with you
or the Company. In the event of your death or disability, the amounts due you
pursuant to this Agreement through the date of your death or disability will be
paid to you or your beneficiaries. Such benefits shall include your stock option
benefits.
5. Termination for Cause. Your employment under this Agreement
may be terminated immediately by the Company for "good cause." If the Company
alleges good cause, they will specify in writing the reasons and you shall have
ten (10) business days from the date such notice is given in which to cure such
cause. Absent such cure within the cure period, your employment shall be deemed
terminated for good cause on the date such notice was given ("the date of
termination for good cause"). The term "good cause" is defined as any one or
more of the following occurrences:
(a) Gross negligence, material violation by you of any
duty or any other material misconduct on your part;
(b) Your conviction by, or entry of a plea of guilty or
nolo contendere in, a court of competent and final jurisdiction for any crime
punishable by imprisonment in the jurisdiction involved; or
(c) Your commission of an act of fraud, whether prior to
or subsequent to the date of this Agreement, upon the Company.
In the event of termination for "good cause," this Agreement will
terminate, and the your salary and unexercised stock options will terminate as
of the last day of the month in which proper notice of your termination was
given to you, beyond which point in time Company shall have no further
obligations to you whatsoever, unless otherwise required by law.
6. Other Termination.
(a) Severance Pay. The Company may terminate this
Agreement at any time and without cause at the Company's sole discretion,
effective five (5) days after notice to Employee, subject to the provisions of
this Agreement. Upon the termination of this Agreement for other than good
cause, the Company shall continue during the term of Employee's employment
hereunder to pay to Employee in monthly installments, as severance pay,
Employee's full Salary in effect at the time of such termination.
Subject to approval by the Administrator, as defined
in the Company's Stock Option Plan, which approval shall be sought at the time
of the consideration by the Board of Directors of this Agreement, all options
granted to you (incentive and nonstatutory) which vest at the end of the term of
Employee's employment hereunder shall provide that, in the event of termination
of this Agreement (including constructive termination) for other than "good
cause," as defined herein, that each such option (a) shall immediately vest and
(b) shall be exercisable for two years from such termination (but not in excess
of the specified maximum term of such option). You shall also be entitled to
continue to receive such benefits as you are receiving at the time of
termination of this Agreement, e.g. health plans, etc., until the end of the
term of Employee's employment hereunder, unless otherwise required by law.
(b) Mitigation. In the event of the termination of this
Agreement without cause pursuant to this section 6, Employee shall in good faith
seek new employment at a level commensurate with Employee's duties and Salary
hereunder. Employee shall report to the Company on or before the first day of
each month the status of obtaining such subsequent employment while receiving
pay and other benefits pursuant to subsection 6(a) above. Beginning six (6)
months from the date of termination of this Agreement without cause pursuant to
this Section 6, if Employee while receiving pay pursuant to subsection 6(a)
above, obtains employment with another employer, the Company thereafter and for
the remainder of the term of Employee's employment hereunder, may deduct from
payments due Employee under this Agreement, the amount of salary and benefits
actually received by Employee as a result of such subsequent employment. In the
event Employee obtains subsequent employment, Employee shall report on a monthly
basis, the amount of compensation paid and to be paid to Employee during the
unexpired Term and the nature and type of benefits received.
(c) Consulting. During the period that Employee is
receiving severance pay pursuant to subsection 6(a) above, Employee shall be
available, in person and/or by telephone, as a consultant to the Company to
consult with its officers and directors regarding the business of the Company as
may be reasonable, taking into account Employee's duties and efforts at
Employee's subsequent employment or
business. It is agreed that eight (8) hours per week of consultation, in person
and/or by phone, shall be reasonable.
7. Confidential Information. You shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which you shall have obtained during your
employment by the Company or any of its affiliated companies (including the
Partnership and Digital Theater Systems Corp.) and which shall not be or become
public knowledge (other than by acts by you or your representatives in violation
of this Agreement). After termination of your employment with the Company, you
shall not, without the prior written consent of the Company, or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it in writing. You acknowledge that such actions could cause
irreparable harm to the Company and that the Company may obtain an injunction or
other equitable relief to enforce this provision. Furthermore, upon termination
of this Agreement, you will promptly deliver to the Company all books,
memoranda, records and written data in original form of every kind relating to
the business and affairs of the Company that may then be in your possession,
custody or control.
8. Non-Compete. You agree that for the period commencing on the
date of this Agreement and ending upon the completion of the term of Employee's
employment hereunder or other termination or expiration hereof, except on behalf
of the Company and its affiliates in accordance with this Agreement, you shall
not, directly or indirectly, as employee, agent, consultant, stockholder,
director, partner or in any other individual or representative capacity, own,
operate, manage, control, engage in, invest in or participate in any manner in,
act as a consultant or advisor to, render services for (alone or in association
with any person, firm, corporation or entity), or otherwise assist, for
compensation or otherwise, any person or entity that engages in or owns, invests
in, operates, manages or controls any venture or enterprise that engages in any
activity, involving the research, development, licensing or sale of
multi-channel (surround sound) digital audio encoding technology for consumer
applications, or involving the research, development, licensing, manufacture or
sale of multi-channel (surround sound) digital audio coding equipment for
theatrical applications, (the "Business"); provided, however, that nothing
contained in this Agreement shall be construed to prevent you from investing in
the stock of any competing corporation listed on a national securities exchange
or traded in the over-the-counter market, but only if you are not involved in
the business of said corporation and if you and your affiliates collectively do
not own more than an aggregate of 5% of the stock of such corporation.
9. Non-Solicitation. Without limiting the generality of the
provisions of Section 8 above, you agree that, except on behalf of the Company
and its affiliates in accordance with this Agreement, you will not interfere
with or disrupt or attempt to disrupt the Company's business relationship with
its customers or suppliers or solicit any of the employees of the Company to
leave the employment of the Company.
10. Inventions. All processes, technologies and inventions
relating to the Business (collectively, "Inventions"), including new
contributions, improvement, ideas, discoveries, trademarks copyrights and trade
names ("Intellectual Property"), conceived, developed, invented, made or found
by you, alone or with others, during you're the term of Employee's employment
hereunder, whether or not patentable and whether or not conceived, developed,
invented, made or found on the Company's time or with the use of the Company's
facilities or materials, shall be the property of the Company and shall be
promptly and fully disclosed by you to the Company. You shall perform all
necessary acts (including, without limitation, executing and delivering any
confirmatory assignments, documents or instruments requested by the Company) to
vest title to any such Inventions or other Intellectual Property in the Company
and to enable the Company, at its expense, to secure and maintain domestic
and/or foreign patents or any other rights for such Inventions and other
Intellectual Property.
11. WAIVER OF JURY. WITH RESPECT TO ANY DISPUTE ARISING UNDER OR
IN CONNECTION WITH THIS AGREEMENT, EACH OF YOU AND THE COMPANY IRREVOCABLY
WAIVES ALL RIGHTS IT MAY HAVE TO DEMAND A JURY TRIAL. YOU SHALL BE ENTITLED TO A
TRIAL BEFORE A JUDGE, OR ELECT TO PARTICIPATE IN BINDING ARBITRATION. THIS
WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE AND EACH PARTY
ACKNOWLEDGES THAT NONE OF THE OTHER PARTIES NOR ANY PERSON ACTING ON BEHALF OF
THE OTHER PARTIES HAS MADE ANY REPRESENTATION OF FACT TO INDUCE THIS WAIVER OF
TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE PARTIES EACH
FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY
TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT
THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. THE PARTIES
EACH FURTHER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE MEANING AND
RAMIFICATIONS OF THIS WAIVER PROVISION.
12. Miscellaneous.
12.1 Modification and Waiver of Breach. No waiver or
modification of this Agreement shall be binding unless it is in writing signed
by you and the Company. No waiver of a breach of this Agreement shall be deemed
to constitute a waiver of a future breach, whether of a similar or dissimilar
nature.
12.2 Notices. All notices and other communications
required or permitted under this Agreement shall be in writing, served
personally on, or mailed by certified or registered United States mail to, the
party to be charged with receipt thereof. Notices and other communications
served by mail shall be deemed given hereunder 72 hours after deposit of such
notice or communication in the United States Post Office as certified or
registered mail with postage prepaid and duly addressed to whom such notice or
communication is to be given, in the case of (a) the Company, 0000 Xxxxxxxx
Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention: Chief Executive Officer, or
(b) to you, to the address set forth below your name on the signature page of
this Agreement. You and the Company may change their address for purposes of
this Section by giving to the party intended to be bound thereby, in the manner
provided herein, a written notice of such change.
12.3 Counterparts. This instrument may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
12.4 Construction of Agreement. This Agreement shall be
construed in accordance with, and governed by, the internal laws of the State of
California.
12.5 Legal Fees. If any legal action, arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of any
alleged dispute, breach, default or misrepresentation in connection with this
Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs it incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
12.6 Severability Clause. If any provision of this
Agreement or the application thereof is held invalid, the invalidity shall not
affect other provisions or applications of the Agreement which can be
given effect without the invalid provisions or applications and to this end the
provisions of this Agreement are declared to be severable.
12.7 Complete Agreement. This instrument constitutes and
contains the entire agreement and understanding concerning your employment and
the other subject matters addressed in this Agreement between you and the
Company, and supersedes and replaces all prior negotiations and all agreements
proposed or otherwise, whether written or oral, concerning the subject matters
hereof (including any agreements relating to your employment with Digital
Theater System Corp. or the Partnership). This is an integrated document.
12.8 Third Party Beneficiaries. This Agreement does not
create, and shall not be construed as creating, any rights enforceable by any
person not a party to this Agreement, except as expressly contemplated herein.
12.9 Non-transferability of Interest. None of the rights
of Employee to receive any form of compensation payable pursuant to this
Agreement shall be assignable or transferable except through a testamentary
disposition or by the laws of descent and distribution upon the death of
Employee. Any attempted assignment, transfer, conveyance, or other disposition
(other than as aforesaid) of any interest in the rights of Employee to receive
any form of compensation to be made by the Company pursuant to this Agreement
shall be void.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
day and year first above written.
EMPLOYEE: THE COMPANY:
DIGITAL THEATER SYSTEMS,
INC.
/s/ Xxxxxx Xxxxxxxx By: /s/ Xxx Xxxxxxx
-------------------------------- --------------------------------
XXXXXX XXXXXXXX XXX XXXXXXX
VICE CHAIRMAN, CEO
Address: Address of Record
with DTS Human
Resources Dept.
