2009 DOLBY EXECUTIVE ANNUAL INCENTIVE PLAN

Eligibility :

Eligible employees are the executive officers of the Company and its subsidiaries who are selected by the Compensation Committee.

Bonus Amounts :

The amount each executive officer may be eligible to receive under the 2009 Dolby Executive Annual Incentive Plan (the “Executive Plan”) will be determined as summarized below and pursuant to the level of achievement by the Company of certain pre-tax income and revenue goals during the 2009 fiscal year.

Target Bonus :

Target bonuses for executives will be established and approved by the Compensation Committee. Each executive’s target bonus will be a percentage of the executive’s base salary at the applicable fiscal year-end.

Actual Bonus :

The principal executive officer’s actual bonus will be determined by multiplying his base salary by his target bonus percentage, but the actual bonus amount may be less than, or exceed, the principal executive’s target bonus, depending on the extent to which the Company meets the pre-tax income and revenue goals.

The actual bonuses for all other eligible executive officers will be determined by multiplying base salary by the applicable target bonus percentage and then adjusting such number to reflect the executiv