EXHIBIT
10.5


 


[SRS LABS, INC.
LETTERHEAD]


 


November 9, 2004


 


Michael S. Oswald


28072 Camellia Ct.


Laguna Niguel, CA 92677


 


Dear Michael:


 


It is with great pleasure that I invite you to join SRS (•) Labs, Inc.
as Vice President, General Counsel.  This
is an extremely important position, as you will have overall responsibility and
authority for all legal matters involving the Company.  You will provide legal advice and services
directly, and will be responsible for engaging and managing the services of
outside counsel as needed.  Activities
include:


 


1.     Corporate,
Corporate Governance and Transaction Matters


2.     Contract
Management


3.     Intellectual
Property


4.     Litigation
Management


 


Your position will have a monthly salary of $15,000
($180,000 annual salary).  The
introductory period for a new SRS employee is 90-days.  Upon completion of the eligibility
requirement, you will be entitled to participate in the SRS bonus plan on the
same terms as other executive personnel. 
As an executive you will also participate in the SRS Executive Bonus
Plan,


 


You will be eligible on your first day of employment
to enroll in our benefits plan, which includes medical, dental and vision
insurance, for you and your family, as well as life insurance for yourself in
the amount of $50,000.  Coverage will
begin on the first day of the month following your employment.  A copy of the plan will be provided to you
during your first week of employment.


 


As an added incentive, we are pleased to grant you a
stock option of 150,000 shares of SRS Labs stock The Board of Directors will
set the grant date.  The Company Stock
Option program will govern these stock options and a copy of the plan will be
provided to you.  As an employee of SRS
Labs, Inc. you are considered an “insider”. 
As such, you will need to comply with the company’s blackout rules.


 


You will be eligible to take two weeks vacation each
year.  Your vacation eligibility will
begin after the completion of your 90-day introductory period, when you may
take what you have earned.  The Company
also offers a total of ten (10) paid holidays per year.  A copy of the employee handbook is provided
to each employee during the first week of employment.


 


SRS also offers employees the option to participate in
an Employer Matching Contributory 401(k) plan. 
You are eligible to participate in this Plan after completing a 90-day
introductory period.  The entry dates of
the plan fail on the first day of the each month.  A copy of the plan will be provided to you
during your first week of employment.


 


Your official employment starting date will be
November 17, 2004 and you will be reporting to Torn Yuen, Chairman and
CEO.


 


Any offer of employment will be contingent on the
submission of proof of your eligibility to work in the United States and the
signing of the SRS Labs, Inc. At-Will Employment Agreement and the
Confidentiality, Non-Competition, and Compliance Agreement, copies of which
will be provided during your first week of employment.


 





















 


This offer replaces and supersedes any other
employment offer, service agreement and understanding between SRS Labs, Inc.
and yourself.  If this offer of
employment letter is not accepted by the close of business on November 23rd,
2004 then it will become null and void.


 


Michael, if this offer meets with your approval,
please indicate your acceptance in the space provided below.  We look forward to having you as part of our
team as we establish SRS (•) as the industry standard in contemporary audio and
voice processing.


 


	
  Sincerely,

  
	
   

  
	
  /S/ THOMAS C.K. YUEN

  	
   

  
	
   

  
	
  Thomas C.K. Yuen

  
	
  C.E.O.

  
	
  SRS Labs, Inc.

  



 


6 month salary
continuation in event position is eliminated. 
Employee must complete 90 day introductory period before this is
effective.


 


	
  I Accept:

  	
  /S/ MICHAEL S. OSWALD

  	
   

  	
  12 November 2004

  	
   

  
	
   

  	
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