EXHIBIT 10.4

AMERICAN TECHNOLOGY CORPORATION
SUMMARY SHEET
OF
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION

Compensation of Directors

We currently have no standard arrangements pursuant to which our directors are
compensated for services provided as a director or committee member, other than
in the form of reimbursement of expenses of attending directors’ or committee
meetings. Our directors have received in the past, and may receive in the
future, stock option grants. During fiscal 2005, the Compensation Committee will
be reevaluating our director compensation program.

Compensation of Executive Officers

The executive officers of the Company serve at the discretion of the Board of
Directors. From time to time, the Compensation Committee of the Board of
Directors reviews and determines the salaries that are paid to the Company’s
executive officers. The following table sets forth the annual salary rates for
the Company’s current executive officers as of the date of this report on Form
10-Q:

Elwood G. Norris, Chairman $200,000  Kalani Jones, President and Chief Operating
Officer $220,000  Michael A. Russell, Chief Financial Officer and Secretary
$185,000  Bruce Gray, Vice President of the Commercial Products Group $200,000 

Employment Arrangements with Current Executive Officers

The following discussion summarizes the employment arrangements between us and
our current executive officers as of the date of this report on Form 10-Q:

Mr. Elwood G. Norris - Effective September 1, 1997, we entered into a three year
employment contract with Mr. Norris, for his services as Chief Technology
Officer. The three-year term expired on August 31, 2000, but the agreement
remains in effect until one party gives thirty days advance notice of
termination to the other. Mr. Norris now serves as Chairman under the term of
this agreement. The agreement, as amended by the Compensation Committee,
provides for a base salary of $16,667 per month. The agreement provides that Mr.
Norris will participate in bonus, benefit and other incentives at the discretion
of the Board of Directors. Mr. Norris has agreed not to disclose trade secrets
and has agreed to assign certain inventions to us during employment. We are also
obligated to pay Mr. Norris certain royalties. See “Certain Relationships and
Related Transactions” in our Form 10-K/A filed March 18, 2005.

Mr. Kalani Jones - We entered into a letter agreement dated as of August 28,
2003, as amended on October 20, 2003, under which Mr. Jones was employed as our
Senior Vice President of Operations. Mr. Jones has since been promoted to
President and Chief Operating Officer. Mr. Jones has also assumed the duties of
Vice President of the Government and Force Protection Systems Group until we
locate a replacement. The letter agreement provides for an annual base salary of
$140,000, and an annual performance bonus of up to 30% of base salary to be
determined by the Compensation Committee and the Board of Directors. Mr. Jones’
base salary was $200,000 per year at September 30, 2004.

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On January 27, 2005, our Compensation Committee increased Mr. Jones’ current
annual base salary to $220,000.  For fiscal 2005, the Compensation Committee
determined that Mr. Jones’ bonus should be based upon a target bonus of 50% of
base salary given his increased responsibilities as President and Chief
Operating Officer. We expect future bonus determinations for Mr. Jones to be
made based upon a target bonus of 50% of base salary. Mr. Jones’ employment is
terminable at-will by us or by Mr. Jones for any reason, with or without notice.

Mr. Michael Russell - We entered into a letter agreement dated June 15, 2004,
under which Mr. Russell was employed as our Chief Financial Officer. Mr. Russell
has also been appointed as our Secretary. The letter agreement provides for an
annual base salary of $185,000, and an annual performance bonus of up to 25% of
base salary to be determined by the Compensation Committee and the Board of
Directors. Mr. Russell’s employment is terminable at-will by us or by Mr.
Russell for any reason, with or without notice.

Mr. Bruce Gray - We entered into a letter agreement with Mr. Bruce Gray, under
which Mr. Gray was employed as our Vice President of the Commercial Products
Group effective March 21, 2005. The letter agreement provides for an annual base
salary of $200,000, and an annual sales bonus of up to $100,000, payable on a
quarterly basis, based on attaining quarterly and annual goals to be
established. Mr. Gray’s employment is terminable at-will by us or by Mr. Gray
for any reason, with or without notice.

Executive officers in charge of revenue producing business segments also
participate in a broad-based commission arrangement. Under our existing
commission arrangement, commissions are awarded for each of our business
segments based on achievement of operating plan revenue within the segment, with
commissions increasing in percentage if operating plan is exceeded. Executive
officers in charge of each business unit recommend an allocation of such
commissions amongst sales personnel and themselves, which recommendation is
reviewed and approved by the Chairman and the President. All commissions payable
to executive officers are then reviewed and approved by the Compensation
Committee.

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