Exhibit 10.1

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June 29, 2006

Charles Peacock

Dear Charles,

American Technology Corporation (“Company”) is very pleased to confirm our offer
of employment.

 

Title:    Vice President, Government and Military Sales Start Date:    June 30,
2006 Salary:    A semi-monthly salary in the amount of $7,500 ($180,000
annually) Sales Commission Plan:    You will be eligible to participate in
American Technology Sales Commission Plan. The commission will be based on the
Government and Military Group attaining quarterly and annual goals. The detailed
quarterly and annual goals will be created jointly by you and John Zavoli by
October 1, 2006 for FY07. During the first three months of your employment
(July, August, September 2006) you will receive a 1.5% override on all
Government and Military sales. Commissions are payable on a quarterly basis and
will be paid on the second pay period of the month following the end of the
commission quarter. Stock Options:    Management will recommend to the
Compensation Committee at its first meeting following your start date, that you
be granted stock options to purchase 100,000 shares of common stock. The
Compensation Committee has the discretion to approve or deny the grant. The
recommended options will have an exercise price equal to the fair market value
of our common stock (determined in accordance with our 2005 Stock Option Plan)
on the date the Compensation Committee approves the grant, and will be
exercisable for five (5) years after grant, subject to earlier termination as
set forth in the 2005 Stock Option Plan. The recommended options will vest over
four (4) years with 25% vesting on

 

 

13114 Evening Creek Dr. S. San Diego, CA 92128    Ÿ    Tel:
858.679.2114    Ÿ    Fax: 858.679.0545    Ÿ    www.atcsd.com

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   grant, and will be exercisable for five (5) years after grant, subject to
earlier termination as set forth in the 2005 Stock Option Plan. The recommended
options will vest over four (4) years with 25% vesting on the first anniversary
of grant, and then in equal quarterly installments over the following three
years of continuous service with the Company. Health Benefits:    The Company
offers a comprehensive benefits plan that includes medical, dental, vision,
short-term disability, long-term disability and life insurances. The company
pays 100% of the premiums for you and your dependents. The company reserves the
right to amend the terms of the benefit programs, including premiums, at any
time. Benefits begin the first day of the month following your hire date. Except
for the 401(k), this has quarterly enrollments. Paid Time Off & Holidays:    You
will receive 15 days of accrued Paid Time Off (PTO) annually, in use for
vacation or for personal time off. PTO hours are accrued per pay period.    The
Company offers 9-paid holidays each calendar year. You must be on active status
the day before and the day after the holiday to receive holiday pay. Retirement:
   A 401k package is available with multiple investment options and the company
matches 25% of the employee’s deferral up to 6% of your annual earnings. (Note:
Some IRS limitations may apply.)

Due to the enactment of the Immigration Reform and Control Act of 1986, this
offer is contingent on your ability to produce acceptable documentation
verifying your eligibility to work in the United States. You will be required to
present the necessary documents on the day you begin work at American Technology
Corp.

Additionally, as a condition of this offer and of your employment with American
Technology Corp., you will be required to preserve the Company’s proprietary and
confidential information and you must comply with the Company’s policies and
procedures. Accordingly, you will be required to execute the Company’s
Non-Disclosure Agreement and other policies on your first date of employment.

If accepted, your employment will be at-will with no specified period or term of
employment. This means that either you or the Company may terminate employment
at anytime, with or without reason. The Company may also transfer, promote,
demote or otherwise alter your position and/or status at any time and for any
reason. An employment agreement for a specified period of time, which
contradicts this at-will agreement, may only be entered into in writing, signed
by the President of the Corporation.

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If there are any questions, please do not hesitate to call me.

Sincerely,

/s/ John Zavoli

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John Zavoli

President

I understand and agree to the terms and conditions set forth in this letter. I
further understand that any misrepresentations that I have made on my employment
application or resume can result in termination. I acknowledge that no statement
contradicting this letter, oral or written, has been made to me, that I am not
relying on any statement or term not contained in this letter, and that no
agreements exist which are contrary to the terms and conditions set forth in
this letter.

Accepted by: CW Peacock                                         
                                        Date: 6/30/06