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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