AMERICAN TECHNOLOGY CORPORATION
INDUCEMENT STOCK OPTION GRANT NOTICE
AMERICAN TECHNOLOGY CORPORATION (the "Company") hereby grants to the Optionee named
below, an employee of the Company, as an inducement material to the Optionee's entering into employment with
the Company, a stock option to purchase the number of shares of the Company's common stock set forth below.
This option is subject to all of the terms and conditions as set forth herein and the Stock Option Agreement
(attached hereto) which is incorporated herein in its entirety.
(1) The closing price reported on Nasdaq on the trading day prior to the Date of Grant.
ADDITIONAL TERMS/ACKNOWLEDGMENTS: The undersigned Optionee acknowledges receipt of, and
represents that the Optionee has read, understands, accepts and agrees to the terms of this Grant Notice and the
Stock Option Agreement. Optionee hereby accepts the Option subject to all of its terms and conditions and
further acknowledges that as of the Date of Grant, this Grant Notice and the Stock Option Agreement set forth
the entire understanding between Optionee and the Company regarding the acquisition of stock in the Company
and supersede all prior oral and written agreements pertaining to this particular option.
Optionee: Michael A. Russell
Grant No: I-101
Date of Grant: June 30, 2004
Shares Subject to Option: 100,000
Exercise Price Per Share: $5.92 (1)
Expiration Date: June 30, 2009
Intended to be Incentive Stock Option: No
Vesting Start Date Vesting Schedule
June 30, 2004 Subject to continuing Service (as defined in the
Stock Option Agreement) this option becomes