TERMS OF EMPLOYMENT

 

 

This Employment Agreement (the "Agreement") is made effective on this 7th day of
December, 2012 (the "Effective Date") by and among Flux Power Holding, Inc., a
Nevada Corporation which includes Flux Power, Inc a California based Corporation
(the “Company”) located at 2240 Auto Park Way, Escondido, CA 92029 and Ronald
Dutt (“Employee and/or I”), with a home address of 12 Greenview Dr. Carlsbad, CA
92009.

 

As a condition of employment with Company, Employee and Company agree to the
following Terms of Employment:

 

1.Employment, Duties and Acceptance

A.Appointment. Company hereby employs Employee as the Chief Financial Officer
(“CFO”) whom shall report to the CEO and Board of Directors and render exclusive
and full-time services in an executive capacity to Company and to any subsidiary
of Company and to devote Employee’s best efforts to the affairs of the Company
and to perform such duties as respectively defined below.

 

CFO— Responsible for the financial management of the Company including but not
limited to overseeing the capital structure of the company, presenting and
reporting accurate and timely financial information, providing economic strategy
and forecasting, working with the CEO of the Board of Directors on the strategic
vision of the Company, overseeing the management and coordination of all fiscal
reporting activities, establishing controls and structure that support the
growth of the Company.

 

B.Acceptance. Employee hereby accepts such employment and agrees to render such
services. Employee agrees to render such services at Company's offices, but
Employee will travel on temporary trips to such other place or places as may be
required from time to time to perform the duties hereunder.

 

2.Compensation

A.As compensation for all services to be rendered pursuant to this Agreement to
or at the request of Company, Company agrees to compensate Employee a salary at
the rate of one hundred seventy thousand dollars ($170,000) per annum
(“Salary”).

 

B.Additional compensation may include, but is not limited to, equity
compensation, vacation time, medical coverage, and bonus structure, as attached
hereto as Exhibit A.

 

3.EMPLOYMENT AT WILL

Employee agrees that unless specifically stated in writing and signed by an
authorized officer of the Company, subject to controlling law, any employment
granted to Employee is at will and for an indefinite term, and that such
employment may be terminated at any time (subject to such requirements as to
notice as may be applicable) either by Employee or by the Company for any or no
reason whatsoever, and Employee hereby waive and disclaim any express or implied
covenants to the contrary. In accepting employment by Company, Employee agrees
not to rely on any statements or representations, whether orally or in writing,
by any officers, employees or agents of Company concerning the duration or term
of employment, grounds and procedures for discharge or termination of
employment, or any other terms and conditions of employment except those
specifically stated in writing and signed by an authorized officer of Company.
Employee further agrees and understands that the provisions of any employee
handbooks, personnel manuals and any and all other written statements of or
regarding personnel policies, practices or procedures that are or may be issued
by Company or any official or department thereof from time to time do not and
shall not constitute a contract of employment and create no vested rights; that
any such provisions may be changed, revised, modified, suspended, cancelled, or
eliminated by Company at an time without notice; and that they constitute
guidelines only and may be disregarded either in individual or Company wide
situations when in the sole opinion and judgment of Company circumstances so
require.

 

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4.PROBATION PERIOD

An Employee's first ninety (90) days of employment are on a trial basis and are
considered a continuation of the employment selection process. The ninety (90)
day probationary period (“Probation Period”) provides the Company an opportunity
to observe and evaluate the capacity of the Employee, which includes the
Employee’s ability to satisfactorily perform the essential functions of his or
her job; and to observe and evaluate the employee’s work habits and conduct,
including attendance and the Employee’s relationship with coworkers and
superiors. During this probationary period, the Company may terminate employment
immediately, with or without cause and with or without notice. This 90 day
probationary period is not a term of employment and is not intended, nor does
it, impact the at will nature of the relationship between the Company and the
Employee.

 

5.CONFIDENTIAL INFORMATION

A.Company Information. Employee agrees at all times during the term of
employment and thereafter, to hold in strictest confidence, and not to use,
except for the benefit of Company, or to disclose to any person, firm or
corporation without written authorization of Company, the Confidential
Information of Company. Employee understands that “Confidential Information”
means any Company proprietary information, technical data, trade secrets or
know-how, including, but not limited to research, product plans, products,
services, customer lists and customers (including, but not limited to customers
of the Company on whom Employee call or with whom Employee became acquainted
during the term of my employment), software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering, hardware
configuration information, marketing, financial or other business information
disclosed to me by Company either directly or indirectly in writing, orally or
by drawings or observation of parts or equipment. Company acknowledges that
Confidential Information does not include any of the foregoing items that have
become publicly known and made generally available through no wrongful act of
Employee or of others who were under confidentiality obligations as to the item
or items involved.

 

B.Former Employer Information. Employee agrees not to improperly use or disclose
any patent, copyright, proprietary information or trade secrets of any former or
concurrent employer or other person or entity and will not bring onto the
premises of the Company any unpublished document or proprietary information
belonging to any such employer, person or entity unless consented to in writing
by such employer, person, or entity.

 

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C.Third Party Information. Employee agrees and recognizes that Company has
received and in the future will receive from third parties their confidential or
proprietary information (such as, but not limited to, software programs provided
by license) subject to a duty on Company’s part to maintain the confidentiality
of such information and to use it only for certain limited purposes. Employee
agrees to hold all such confidential or proprietary information in the strictest
confidence and not to disclose it to any person, firm or corporation or to use
it except as necessary in carrying out my work for Company consistent with
Company’s agreement with such third party. I agree to comply with Company’s
policies and procedures, as applicable from time to time, with respect to such
information.

 

6.INVENTIONS

A.Inventions Retained. I agree not to use, incorporate or disclose any
proprietary information or inventions which belong to me and relate to the
Company’s proposed business, products or research and development and which are
not assigned to the Company hereunder and belong to me prior to executing this
agreement.

 

B.Assignment of Inventions. I hereby assign and transfer to the Company all my
rights, title and interest in and to all improvements, discoveries, designs,
inventions, trade secrets, improvement works, documents and other data (whether
or not copyrightable or patentable), made, conceived or first reduced to
practice by me, (the “Innovations”) whether solely or jointly with others,
during my period of employment with the Company which relate to the actual work
I have performed or may perform for the Company. This Assignment Agreement does
not require me to assign to the Company any Invention for which no equipment,
supplies, facility, or trade secret information of Company was used and that was
developed entirely on my own time, and does not relate to the business of
Company or to Company’s actual or demonstrably anticipated research or
development, or does not result from any work performed by my for Company.

 

C.Maintenance of Records. I agree to assist Company, or its designee, at
Company’s expense, in every proper way to secure the Company’s rights in the
Inventions and any copyrights, patents, or other intellectual property rights
relating thereto in any all countries, including the disclosure to Company of
all pertinent information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments and all other instruments which
Company shall deem necessary in order to apply for and obtain such rights and in
order to assign and convey to Company, its successors, assigns, and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto. I agree that the obligation to execute or cause to be
executed, when it is in my power to do so, and such instrument or papers shall
continue after the termination of my employment. If Company is unable to secure
my signature due to mental or physical incapacity or if I am otherwise
unavailable or unable to sign or to apply for or pursue any application for any
United States or foreign patents or for copyright registrations covering
Inventions or original works of authorship assigned to the Company as above,
then I hereby irrevocably designate and appoint Company and its duly authorized
officers and agents as my agent and attorney in fact, to act for and in my
behalf and stead to execute and file any such applications and to do all other
lawfully permitted acts to further the prosecution and issuance of letters
patent or copyright registrations thereon with the same legal force and effect
as if executed by me.

 

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7.CONFLICTING EMPLOYMENT

I agree that, during the term of my employment with Company, I will not engage
in any other employment, occupation, consulting or other business activity
directly related to the business in which the Company is now involved or becomes
involved during the term of my employment, nor will I engage in any other
activities that conflict with my obligations to Company. At no time shall I
develop an/or cause others to develop technologies that directly relate to
and/or compete with Flux’s products

 

8.RETURNING COMPANY DOCUMENT

I agree that, at the time I leave the employ of Company, I will deliver to
Company (and will not keep in possession, recreate or deliver to anyone else)
any and all devices, records, data, notes, reports, proposals, lists,
correspondence, specifications drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned
items developed by me pursuant to employment with Company or otherwise belonging
to Company, its successors or assigns.

 

9.NOTIFICATION OF NEW EMPLOYER

Upon termination of my employment for any reason, I hereby grant consent to
notification by the Company to any subsequent employer about rights and
obligations under the Agreement.

 

10.SOLICITATION OF EMPLOYEES

I agree that for a period of twelve (12) months immediately following the
termination of my employment with Company for any reason, whether with or
without cause, I shall not either directly or indirectly solicit, induce,
recruit or encourage any of Company’s employees to leave their employment, or
take away such employees, or attempt to solicit, induce, recruit, encourage or
take away employees of Company, either for me or for any other person or entity.

 

11.OTHER POLICIES

I agree to comply with all Company policies, rules and procedures that are
generally applicable to Company employees.

 

12.EQUITABLE RELIEF

I agree that it would be impossible or inadequate to measure and calculate
Company’s damages from any breach of the covenants set forth in Sections 5, and
6 herein. Accordingly, I agree that upon breech of any of such Sections, Company
will have available, in addition to any other right or remedy available, the
right to obtain an injunction from a court of competent jurisdiction restraining
such breach or threatened breach and to specific performance of any such
provision of this Agreement. I further agree that no bond or other surety shall
be required in order to obtain such relief and I hereby consent to the issuance
of such injunction and to any order of specific performance.

 

13.ARBITRATION

Except for equitable relief pursuant to Section 12 above, any dispute between
the parties arising out of the Agreement shall be resolved through arbitration
by a single arbitrator acting under the auspices and rules and regulations of
the American Arbitration Association, located in San Diego, California, and in
such event the decision of the arbitrator shall be binding upon the parties and
enforceable in a court of competent jurisdiction. The parties agree to negotiate
any dispute arising out of the Agreement in good faith.

 

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14.Severance

In the event the Employee is terminated after the Probation Period for any
reason other than for cause, Company agrees to provide employee with a severance
payout equal to three (3) months of employment.

 

15.GENERAL PROVISIONS

A.Governing Law; Consent to Personal Jurisdiction. This Agreement will be
governed by the laws of the State of California, and I hereby expressly consent
to the personal jurisdiction of the state and federal courts located therein for
any lawsuit filed there by the Company arising from or relating to my
employment.

 

B.Entire Agreement. This Terms of Employment sets forth the entire agreement and
understanding between the Company and me relating to the subject matter herein
and merges, all prior discussions between us. No modification of or amendment to
this Terms of Employment, nor any waiver of any rights, will be effective unless
in writing signed by the party to be charged. Any subsequent change or changes
in my duties, salary or compensation will not affect the validity or scope of
the Terms of Employment.

 

C.Severability. If one or more of the clauses in this Agreement are deemed
unenforceable, then the remaining clauses will continue in full force and
effect. In the event a provision contained in any Restrictive Covenant shall be
declared by a court of competent jurisdiction to be illegal or unenforceable in
whole or in part, then the offending provision automatically shall be deemed
modified to conform to the minimum requirements of law. The provision as
modified, together with all other provisions hereof, shall be given full force
and effect.

 

D.Successors and Assigns. This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors, and its assigns.

 

E.Company. The term “Company” shall include any subsidiaries, affiliates,
predecessors, or successors of the Company.

 

16.Independent Representation

Each party warrants and represents that (i) this Agreement has been prepared by
the Company’s legal counsel, (ii) he/she has been advised to obtain the advise
of personal or independent counsel in the analysis of this Agreement, and (iii)
that he/she has read this Agreement with care and believes that he/she is fully
aware of and understands the contents hereof and their legal effect.

 

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17.Survival of Covenants and Provisions

The terms and obligations of Sections 5, 7, 9 and 13 of this Agreement shall
survive the termination of Employee's employment with the Company or any
subsidiary of the Company, and shall survive the termination of this Agreement.

 

IN WITNESS WHEREOF, the parties as of the day and year first above written have
executed this Agreement.

 

Flux Power, Inc Employee                     By: /s/ Chris Anthony   By: /s/
Ronald Dutt   Chris Anthony, CEO     Ronald Dutt Date: December 11, 2012   Date:
December 11, 2012

  

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EXHIBIT A

 

ADDITIONAL COMPENSATION

 

 

Equity Compensation: It will be recommended to the Company’s board of directors
that you participate in the Company Incentive Stock Option program (“ISO”) at
the first meeting of the Company’s board of directors following your start date
and that the Company grant you an option to purchase 200,000 shares of the
Company’s Common Stock at a price per share equal to the fair market value per
share of the Common Stock on the date of grant and pursuant to Company’s
standard vesting schedule.

 

These option grants shall be subject to the terms and conditions of the
Company’s Stock Option Plan and Stock Option Agreement, including vesting
requirements. No right to any stock is earned or accrued until such time that
vesting occurs, nor does the grant confer any right to continue vesting or
employment.

 

Medical Insurance: Health and dental insurance (100% company paid) for employee
and spouse only (effective the first of the month after a 30 day waiting
period). Family coverage can be purchased by employee.

 

Vacation Time: Employee is granted personal paid time off of 20 days, of which
the first 10 days shall be accessible and vested upon Employees start date of
December 7, 2012 and the remaining 10 days shall be accrued over the next 12
months of employment.

 

Bonus Structure: To be determined as departmental goals are instituted and job
descriptions are further defined, mutually agreed upon and in writing.

 

 

Flux Power, Inc Employee                     By: /s/ Chris Anthony   By: /s/
Ronald Dutt   Chris Anthony, CEO     Ronald Dutt Date: December 11, 2012   Date:
December 11, 2012

 

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