[SRS SOUND DESIGN LETTERHEAD]


Exhibit 10.12


VIA FEDERAL EXPRESS


November 4, 2002


Ms. Janet Biski

24601 Ridgewood Circle

El Toro, CA 92630


Dear Janet:


It is with great pleasure that I invite you to join
SRS Labs, Inc. (the “Company”) as Chief Financial Officer. This is an extremely
important position as you will be responsible for managing and controlling all
aspects of the Company’s financial and corporate administrative activities.


Your position will have a monthly salary $16,666.67
($200,000 annual salary). Upon completion of the six-month eligibility
requirement, you will be entitled to participate in the SRS Bonus Plan. A copy
of the plan provisions will be provided to you during the first week of your
employment.


You will be eligible on your first day 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 benefit plan will be provided to you during your
first week of employment.


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.


As an added incentive, we are pleased to grant you a
stock option for 250,000 shares of SRS Labs, Inc. stock after you begin
employment. The Compensation Committee of the Board of Directors will set the
grant date and price of the options shortly after your start date. The
Company’s Stock Option Program will govern these stock options, and a copy of
the plan document will be provided to you. Since you are considered an
“insider”, you will be subject to the Company’s Blackout Policy 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.


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 fall on the first day of each month. A copy of the plan document will
be provided to you during your first week of employment.


Finally, per our discussions, SRS Labs agrees that if
SRS Labs should terminate your employ with the Company without cause, SRS Labs
shall continue to pay your base salary then in effect for one full year
following the date of such termination.


Your official starting date will be TBD, or sooner,
and you will be reporting to Tom Yuen, Chief Executive Officer.


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.


This offer replaces and supersedes any other
employment offer, service agreement and understanding between the Company and
yourself.











Janet, 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
Labs as the industry standard in contemporary audio and voice processing.


Sincerely,


SRS LABS, INC.


	
  By:

  	
   

  	
  /s/ Thomas C.K. Yuen

  	
   

  	
   

  
	
   

  	
   

  	
  Thomas C.K. Yuen

  	
   

  	
   

  
	
   

  	
   

  	
  Chief Executive Officer

  	
   

  	
   

  



 


	
  I accept:

  	
   

  	
  /s/ Janet Biski

  	
   

  	
  11-11-02

  
	
   

  	
   

  	
  Janet Biski

  	
   

  	
  Date

  



 



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