HYPERSOUND HEALTH, INC. 2013 EQUITY INCENTIVE PLAN AMENDED AND RESTATED NON-STATUTORY STOCK OPTION AGREEMENT

Exhibit 10.16.1

GRANT NO. 2013-3

HYPERSOUND HEALTH, INC.
2013 EQUITY INCENTIVE PLAN
AMENDED AND RESTATED NON-STATUTORY STOCK OPTION AGREEMENT

With reference to that certain “Release Agreement” (as defined below) attached hereto as Attachment A, the Company hereby amends and restates the Option to purchase Shares that was originally granted to the Optionee named below on March 5, 2013, and Optionee agrees to such amended and restated terms as set forth in this Agreement (as defined below). The terms and conditions of the Option, as amended and restated, are set forth in this cover sheet, in the attached Nonstatutory Stock Option Agreement and in the Plan. This cover sheet is incorporated into and a part of the attached Nonstatutory Stock Option Agreement (together, this “Agreement”).

Date of Original Option Grant: March 5, 2013

Date of Amendment and Restatement of Option Grant: August 5, 2013

Name of Optionee: Kenneth F. Potashner

Number of Shares Covered by Option: 50 Shares

Exercise Price per Share: $1,000.00

Fair Market Value of a Share on Date of Option Grant: Equal to or less than $1,000.00

Expiration Date: March 5, 2018. Option will expire earlier as a result of certain events, including Optionee’s Separation From Service, as provided in this Agreement.

Vesting Schedule: The vesting of this Option is dependent upon the timely satisfaction of the applicable conditions enumerated below which include both time-based service vesting requirements and also performance or event based requirements. The satisfaction of the below vesting conditions shall in each case be determined by the Parametric Sound Corporation Board of Directors ( the “Parametric Board”) in its sole and absolute discretion.

(A) Service Vesting Condition. Subject to all the terms of this Agreement and to your continuous Service through the applicable dates of vesting, your right to purchase Shares under this Option shall vest as to three-fourths (3/4) of the total number of Shares covered by this Option, as shown above (or 37 Shares), over 12 calendar quarters based on time of service with 6.25% of the total number of Shares covered by this Option vesting on June 30, 2013 and an additional 6.25% at the end of each of the next eleven calendar quarters (with the last of such vesting occurring on March 31, 2016).

(B) FDA Milestone Vesting Condition. Subject to all the terms of this Agreement and to your continuous Service through the date the FDA Milestone Vesting Condition (as defined below) is achieved, your right to purchase the other 25% of the total number of Shares covered by this Option (or 13 Shares) shall vest based on performance as follows: 25% of the total number of Shares covered by this Option (or 13 Shares) shall vest upon FDA market clearance of the first Company owned product (the “FDA Milestone Vesting Condition”). For avoidance of doubt, the foregoing vesting may occur before or after the time-based vesting of this Option described in paragraph (A) above.

(C) Financing Vesting Condition. Notwithstanding paragraphs (A) and (B) above, vesting of any of your rights under this Option are also conditioned upon the Company obtaining new equity financing of at least $3 million from third parties by March 5, 2015 on terms and conditions satisfactory to the Parametric Board (the “Financing Vesting Condition”).

(D) Merger Termination Vesting Condition. Notwithstanding paragraphs (A), (B) and (C) above, vesting of any of your rights under this Option are also conditioned upon both (i) the termination of the Agreement and Plan of Merger by and Among Parametric Sound Corporation, Paris Acquisition Corp. and VTB Holdings, Inc. dated as of August 5, 2013, as it may be amended, (as amended, if applicable, collectively, the “Merger Agreement”) pursuant to Article VII thereof, or any successor provision thereto should the Merger Agreement be amended, and (ii) the termination of all Alternative Acquisition Agreements (if applicable) as such term is defined in Section 5.5(c) of the Merger Agreement (collectively, the “Merger Termination Vesting Condition”). Optionee acknowledges receipt of a draft of the Merger Agreement and further acknowledges that he has had ample opportunity to review and understand such Merger Agreement.

(E) Release Agreement Vesting Condition. Notwithstanding paragraphs (A), (B), (C) and (D) above, vesting of any of your rights under this Option are also conditioned upon your timely execution (and non-revocation) of the Release of Claims attached hereto as “Attachment A” (the “Release Agreement”) in the event that the Merger Termination Vesting Condition is satisfied.

(F) Acceleration of Vesting. If (and only if) the vesting conditions specified in paragraphs (C), (D) and (E) above have each previously been satisfied, the total number of then unvested Shares subject to this Option (including, for sake of clarity, those subject to the FDA Milestone Vesting Condition), shall become fully vested upon the occurrence of either of the following: (i) your Service is terminated without Cause by the Company or (ii) there is a Change in Control during your Service; provided, however, that (A) if the Company or its Parent solicits its stockholders for Section 280G Approval, then any such acceleration of vesting shall be subject to obtaining Section 280G Approval as necessary to avoid having a parachute payment within the meaning of Code Section 280G; and (B) a sale of substantially all the assets of, or the exclusive license of substantially all the technology and technology rights of, the Company shall be deemed to be a Change in Control for purposes of this Option. For avoidance of doubt, a transaction in which, after the consummation of the transaction, the Company continues to be a direct or indirect subsidiary of Parametric Sound Corporation or its successors shall not be considered to be a Change in Control.

In all cases, vesting (if any) shall occur on the latest occurrence of the vesting conditions enumerated above and the resulting aggregate number of vested Shares will be rounded down to the nearest whole number. No Shares subject to this Option will vest after your Service has terminated for any reason.

(G) Expiration Upon Closing. Notwithstanding anything to the contrary in this Agreement or otherwise including without limitation paragraphs (A) through (F) above, this Option shall automatically expire and be terminated in its entirety with no consideration to Optionee upon the closing (the “Closing”) of the merger contemplated by Section 1.2 of the Merger Agreement. For sake of clarity, no vesting of the Option shall have occurred prior to or at the Closing and no portion of this Option may be exercised prior to or at the Closing, notwithstanding anything else in this Agreement.

By signing this cover sheet, you agree to all of the terms and conditions described in this Agreement and in the Plan. You are also acknowledging receipt of this Agreement and a copy of the Plan, a copy of which is also enclosed.

Attachment

HYPERSOUND HEALTH, INC.
2013 EQUITY INCENTIVE PLAN
NONSTATUTORY STOCK OPTION AGREEMENT

By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan. Any inconsistency between this Agreement and the Plan shall be resolved by reference to the Plan.

HYPERSOUND HEALTH, INC.
NOTICE OF EXERCISE OF NONSTATUTORY STOCK OPTION BY OPTIONEE

HyperSound Health, Inc.
13771 Danielson Street, Ste. L

Poway, California 92064

Attention: Secretary

Re: Exercise of Nonstatutory Stock Option to Purchase Shares of Company Stock

[PRINT NAME OF OPTIONEE]

Pursuant to the Nonstatutory Stock Option Agreement dated ___________________, ______ between HyperSound Health, Inc., a Delaware corporation, (the “Company”) and me, made pursuant to the 2013 Equity Incentive Plan (the “Plan”), I hereby request to purchase _______ Shares (whole number only and must be not less than twenty-five Shares or the remaining number of vested Shares subject to this Option) of common stock of the Company (the “Shares”), at the exercise price of $__________ per Share. I am hereby making full payment of the aggregate exercise price by one or more of the following forms of payment in accordance with the whole number percentages that I have provided below. I further understand and agree that I will timely satisfy any and all applicable tax withholding obligations as a condition of this Option exercise.

I acknowledge that I have received, understand and continue to be bound by all of the terms and conditions set forth in the Plan and in the Nonstatutory Stock Option Agreement.

Dated: __________________

*THIS NOTICE OF EXERCISE MAY BE REVISED BY THE COMPANY AT ANY TIME WITHOUT NOTICE.

ATTACHMENT A

RELEASE OF CLAIMS

Release of Claims and Other Agreements by Kenneth F. Potashner Related to Amendment and Restatement of Incentive Stock Option Agreement between Kenneth F. Potashner and HyperSound Health, Inc.

This Release of Claims is made in connection with the Agreement and Plan of Merger by and Among Parametric Sound Corporation (“Parametric”), Paris Acquisition Corp. and VTB Holdings, Inc. of even date herewith, as it may be amended, (as amended if applicable, the “Merger Agreement”). Kenneth F. Potashner (“Potashner”) acknowledges receipt of a draft of the Merger Agreement in advance of this Release of Claims and further acknowledges that he has had ample opportunity to review and understand such Merger Agreement.

Potashner was granted, on March 5, 2013, options with regard to the purchase of 50 shares of stock in HyperSound Health, Inc. (“Potashner HHI Stock Option Agreement”). The Potashner HHI Stock Option Agreement has been amended and restated as set forth in the Amended and Restated Incentive Stock Option Agreement of even date herewith (“Potashner Restated Option Agreement”). Potashner is executing this Release of Claims concurrent with his execution of the Potashner Restated Stock Option Agreement. If Potashner revokes or attempts to revoke this Release of Claims at or before the closing of the Merger Agreement, or, if Parametric consummates an Alternative Transaction (defined below) and Potashner revokes or attempts to revoke this Release of Claims at or before the closing of the Alternative Transaction, then Potashner will be fully liable to Parametric for any consequential, indirect, or direct damages suffered by Parametric relating in any way to Potashner’s revocation of this Release of Claims, including, but not limited to attorneys’ fees and expenses.

In exchange for the payment of $100.00 and other good and valuable consideration, Potashner, on behalf of himself, his executors, heirs, administrators, and any related or affiliated corporations, partnerships, or entities, including any officers, directors, partners, employees, shareholders, subsidiaries, agents, representatives, attorneys, assigns, predecessors and successors-in-interest, and all others claiming by or through Potashner, hereby releases and forever discharges (1) Parametric, a Nevada corporation, and its parents, subsidiaries, related entities, and affiliates, including but not limited to HyperSound Health, Inc., a Delaware corporation, and its parents, subsidiaries, related entities, and affiliates, and the directors, officers, shareholders, employees, attorneys, agents, assigns, representatives, insurers, predecessors and successors-in-interest of said corporations and entities, and each of them; and (2) VTB Holdings, Inc., a Delaware corporation (“VTBH”), and its parents, subsidiaries, related entities, and affiliates, and the directors, officers, shareholders, employees, attorneys, agents, assigns, representatives, insurers, predecessors and successors-in-interest of said corporations and entities, and each of them (collectively, the "Parametric and VTBH Released Parties"), from any and all obligations, liabilities, demands, costs, expenses, damages, claims, actions and causes of action, of whatever nature, character or description, known or unknown (collectively, “Potashner Claims”), that Potashner has or may have against the Parametric and VTBH Released Parties, or any of them, arising at any time up to and including the date Potashner executes this Release of Claims, with the exception of (1) claims under Potashner’s Employment Agreement with Parametric dated April 3, 2012, (2) claims pursuant to directors’ and officers’ indemnification agreements, (3) any rights of indemnification under Parametric’s by-laws or other corporate formation documents, (4) any statutory claims for age discrimination, (5) counterclaims or cross-claims by Potashner against a director or officer of Parametric in their individual capacity, if such director or officer initiates litigation against Potashner in his or her individual capacity in order to assert claims against Potashner for damages suffered by him or her personally, (6) claims pursuant to the Parametric 2012 Stock Option Plan, grants, and agreements, and (7) claims pursuant to Parametric’s directors’ and officers’ insurance policies.

Without limitation to the forgoing and for sake of clarity, the above release and discharge of Potashner Claims is intended to include Potashner Claims based upon, related to, or arising from the modification of the Potashner HHI Stock Option Agreement as set forth in the Potashner Restated Option Agreement.

Furthermore, it is understood and agreed that any and all rights granted to Potashner under California Civil Code Section 1542 are hereby expressly waived. California Civil Code Section 1542 reads as follows:

Section 1542. Certain claims not affected by general release. A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Potashner waives and releases any right or benefit which Potashner has or may have under California Civil Code Section 1542 to the full extent he may lawfully waive all such rights and benefits and acknowledges and agrees that Potashner shall be considered to be a creditor of the Parametric and VTBH Released Parties for the purposes of California Civil Code Section 1542. In connection with such waiver and relinquishment, Potashner acknowledges and is aware that he may hereafter discover claims or facts in addition to or different from those which he now knows or believes to be true with respect to any and all claims, of whatever nature, character or description, known or unknown, including but not limited to claims based upon, related to, or arising directly or indirectly from the modification of the Potashner HHI Stock Option Agreement as set forth in the Potashner Restated Option Agreement, which do now exist, may exist, or heretofore have existed between Potashner, on the one hand, and the Parametric and VTBH Released Parties, on the other hand. In furtherance of such intention, the releases given here shall be and remain in effect as full and complete releases of such released items, notwithstanding the discovery or existence of any such additional or different claims or facts relating thereto.

In exchange for the consideration recited above, Potashner also agrees to execute, at or before the closing of the Merger Agreement and promptly upon request by Parametric (including a request by the Board of Directors of Parametric), a Final Release of Claims, a copy of which is attached hereto as “Attachment A” (the “Final Release of Claims”). If Potashner fails to sign the Final Release of Claims as specified above, or signs the Final Release of Claims and then revokes or attempts to revoke it prior to or at the closing of the Merger Agreement, then Potashner will be fully liable to Parametric for any consequential, indirect, or direct damages suffered by Parametric relating in any way to Potashner’s failure to sign the Final Release of Claims or his revocation of same, including, but not limited to attorney fees and expenses.

In exchange for the consideration recited above, Potashner also agrees that, if Parametric consummates a transaction with another party having entered into an “Alternative Acquisition Agreement” with such party as that term is defined in Section 5.5(c) of the Merger Agreement (“Alternative Transaction”), Potashner will execute, at or before the closing of the Alternative Transaction and promptly upon request by Parametric (including a request by the Board of Directors of Parametric), a similar form of release of claims with regard to the party to the Alternative Transaction (the “Alternative Transaction Final Release”) and if Potashner fails to do so, or signs the Alternative Transaction Final Release and then revokes or attempts to revoke it prior to or at the closing of the Alternative Transaction, then Potashner will be fully liable to Parametric for any consequential, indirect, or direct damages suffered by Parametric relating in any way to Potashner’s failure to sign the Alternative Transaction Final Release or his revocation of same, including, but not limited to attorney fees and expenses.

Potashner acknowledges and agrees that he has been provided the opportunity to review this Release of Claims and consult with counsel of his choice prior to executing it. Potashner acknowledges and agrees that this Release of Claims remains in effect regardless of whether the Merger Agreement or an Alternative Transaction is signed or closes. Potashner acknowledges and agrees that he will not seek to revoke, modify, or restrict this Release of Claims.