EXHIBIT 10.2  




	








March 15, 2005





Bruce Gray
11477
Winding Ridge
San Diego, CA 92131





Dear Bruce,



American Technology
Corporation (“Company”) is very pleased to confirm our offer of employment. This
offer is contingent upon satisfactory results of all reference, education, and background
checks and is based on the following terms and conditions:



	
Title:
	
Vice President of the Business Group.







	
Start Date:
	
We have an anticipated your start date as Monday, March 21, 2005







	
Salary:
	
Your  starting salary as an exempt employee will be $7,692.31 gross bi-weekly which is an annual  wage of
$200,000.00.







	
Sales Bonus:
	
You will be eligible
for an annual  sales bonus up to  $100,000.00.  The bonus will be based on the Business
Group  attaining  quarterly and annual goals. The detailed quarterly and annual
goals will be created  jointly by you and Kalani Jones by April 30, 2005. This bonus is
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 Board of Directors, that, as an inducement material to you entering into
employment with the  Company, you be
granted stock options to purchase 100,000 shares of common stock.  The grant will
occur at the first meeting of the Board of Directors held after your start  date, or by
unanimous written consent. The recommended options will have an exercise price  equal to
the fair market value of our common stock on the date the Board of Directors  approves
the grant.  The recommended options will be exercisable for five (5) years  after
grant, subject to earlier termination upon termination of your continuous  service.  The
recommended options will vest over four (4) years, with one fourth  (1/4) of the shares
vesting twelve (12) months after grant date, and the balance vesting  in equal quarterly
installments through and including the fourth anniversary of the grant  date.  These
recommended options will be issued outside of the 2002 Stock Option  Plan, and
accordingly will be non-statutory stock options and will not qualify for  incentive stock
option (ISO) treatment under the Internal Revenue Code.











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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 for 100% of all health benefit premiums,  including
dependents and you can elect HMO or PPO medical coverage. You may pay for any  qualified
out-of-pocket expense on a pre-tax basis through a Section 125 plan. Benefits  begin the
first day of the month following your hire date.







	
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. Any hours in excess of 200 will be paid out in the first  pay
period of December. In the event of short-term illness, you will be provided time to
convalesce at home and will be paid your regular salary for this time. Sick time is not
accrued but rather is taken as needed.







	
 
	
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.)







	
Arbitration:
	
As  a contingency of
this offer, you will be required to sign the attached Mutual Agreement to  Arbitrate (“Arbitration
Agreement”).








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 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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We sincerely hope that
you decide to join American Technology Corp. Please acknowledge your acceptance of our
offer by signing below and returning a copy of this letter to us not later than close of
business Friday, March 18, 2005. If we do not receive your response by close of business
March 18, 2005 this offer will be withdrawn.



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



Sincerely,





/s/ Kalani Jones



Kalani Jones

President/COO









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: /s/ Bruce Gray	Date: March 18, 2005 










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