[SRS SOUND DESIGN LETTERHEAD]

**Exhibit 10.12**

*VIA FEDERAL EXPRESS*

November 4, 2002

Ms. Janet Biski24601 Ridgewood CircleEl Toro, CA 92630

Dear Janet:

It is with great pleasure that I invite you to joinSRS Labs, Inc. (the “Company”) as Chief Financial Officer. This is an extremelyimportant position as you will be responsible for managing and controlling allaspects 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 eligibilityrequirement, you will be entitled to participate in the SRS Bonus Plan. A copyof the plan provisions will be provided to you during the first week of youremployment.

You will be eligible on your first day to enroll inour benefits plan, which includes medical, dental and vision insurance for youand 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 youremployment. A copy of the benefit plan will be provided to you during yourfirst week of employment.

The Company also offers a total of ten (10) paidholidays per year. A copy of the employee handbook is provided to each employeeduring the first week of employment.

As an added incentive, we are pleased to grant you astock option for 250,000 shares of SRS Labs, Inc. stock after you beginemployment. The Compensation Committee of the Board of Directors will set thegrant date and price of the options shortly after your start date. TheCompany’s Stock Option Program will govern these stock options, and a copy ofthe 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 eachyear. Your vacation eligibility will begin after the completion of your 90-dayintroductory period when you may take what you have earned.

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

Finally, per our discussions, SRS Labs agrees that ifSRS Labs should terminate your employ with the Company without cause, SRS Labsshall continue to pay your base salary then in effect for one full yearfollowing 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 thesubmission of proof of your eligibility to work in the United States and thesigning of the SRS Labs, Inc. At-Will Employment Agreement and theConfidentiality, Non-Competition and Compliance Agreement.

This offer replaces and supersedes any otheremployment offer, service agreement and understanding between the Company andyourself.

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Janet, if this offer meetswith your approval, please indicate your acceptance in the space providedbelow. We look forward to having you as part of our team as we establish SRSLabs 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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