Exhibit 10.1


 


	
  

  	
   

  	
  SRS LABS, INC.  2909 DAIMLER STREET     SANTA ANA, CA 92705

  
	
   

  	
  TEL: 949.442.1070     FAX: 949.852.1099

  
	
   

  	
   

  	
  www.srslabs.com    NASDAQ:SRSL

  



 


September 30,
2005


 


David Frerichs


Via
email to: d@frerichs.net


 


Dear David:


 


It is with great
pleasure that I invite you to join SRS (•) Labs, Inc. as Executive Vice
President, Strategic Marketing and Corporate Development. This is an extremely
important position, as you will optimize the use of the Company’s resources for
growth by defining and planning tactical and long-range strategies and as such,
you agree to devote your full-tune and best efforts to this position.   As the Company Spokesman you will represent
SRS on standards and industry committees to advocate our technology and raise
our visibility within the industry.


 


Your Compensation
Package is as follows:


•                Annual
Salary- $250,000 ($20,833.33 monthly)


•                Relocation
Allowance- $75,000 (before gross-up to offset tax costs) payment date to be
agreed upon


•                Change of Control provision-1.5X base
pay, plus stock acceleration and extended exercise period as described in
severance package


•                Severance
in case of termination by SRS


•    Six
months base pay and health benefits


•    Stock
Option vesting acceleration


•                If
employment is terminated in year one, 25% of Stock Option Grant will vest


•                If
employment is terminated in year two, 50% of the Stock Option Grant will vest


•                If
employment is terminated in year three, 75% of the Stock Option grant will vest


•                If employment is terminated in year
four, 100% of the Stock Option grant will vest


•    Extension
of Stock Option exercise period to one year after termination; pending legal approval


 


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 insider trading and
blackout rules.


 


In
the event, SRS rescinds this employment offer subsequent to your written
acceptance and prior to your start date, SRS agrees to pay you six months base
pay and health benefits and the relocation allowance as stated above.


 


The
introductory period for a new SRS employee is 90 days.   You will be eligible to participate in the
SRS profit sharing plan after completing the 90 day introductory period. You
will also be entitled to participate in the SRS Executive Bonus Plan for the
year 2006 and your eligibility will begin as of January 1, 2006.


 


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.
SRS also agrees to reimburse you for your personal medical coverage for the
month of November 2005 in the amount not to exceed $1,000.00.


 


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


 





















 


Your official employment
starting date will be November 14th, 2005 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 then 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, then it will
become null and void.


 


David 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/ Tom Yuen

  	
   

  
	
  Tom Yuen

  
	
  Chief Executive Officer

  



 


 


	
  Accepted:

  	
  /s/
  David Frerichs

  	
   

  	
  OCTOBER 10,
  2005

  	
   

  
	
   

  	
  Name

  	
  Date