Exhibit 10.31





EMPLOYMENT
AGREEMENT





This
EMPLOYMENT AGREEMENT
(the “Agreement”) is made this 1st day of August
2009, by and between INTEGRAL TECHNOLOGIES, INC., a
Nevada corporation, with principal executive offices located at 805 West Orchard
Drive, #7, Bellingham, Washington 98225 (the "Company"), and WILLIAM A. INCE, an individual
residing at 2317 North Shore Road, Bellingham, Washington 98226 (the
"Executive").





RECITALS





NOW, THEREFORE,for and in
consideration of the mutual covenants and representations and warranties of each
other contained herein and other good and valuable consideration, the receipt of
which is hereby acknowledged, the Executive and the Company agree as
follows:








ARTICLE
I


EMPLOYMENT





The
Company hereby employs the Executive; and the Executive hereby accepts such
employment and agrees to serve as an employee and Director of the Company,
subject to and upon the terms and conditions set forth in this
Agreement.








ARTICLE
II


TITLE
AND DUTIES





(A)           During
the term of employment with the Company, and subject to the direction of the
Board of Directors, the Executive shall perform duties and functions consistent
with his employment hereunder as an officer and director of the Company in the
capacity of President, Secretary and Chief Financial Officer, as further defined
in the Company’s bylaws. The Executive shall also perform duties and functions
consistent with his employment hereunder as an officer and director of each
subsidiary of the Company.





(B)           The
Executive agrees to devote his best efforts to the performance of his duties for
the Company; to render his services to any joint venture, subsidiary or
affiliated business of the Company; to participate in establishing the direction
of the Company's business; and to promote the Company's relationships with its
employees, customers and others in the business and financial
communities.








William
A. Ince Employment Agreement





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ARTICLE
III


COMPENSATION





(A)           The
Company shall pay to the Executive $220,000 per year for
all services to be rendered pursuant to the terms of this
Agreement.  Such salary is payable in accordance with the Company’s
normal payroll procedures.  The Board of Directors may increase the
Executive's salary from time to time in its discretion.





(B)           The Company shall grant the
Executive options to acquire 500,000 shares of the Company's common stock at an
exercise price of $0.25 per share. These options shall be granted pursuant to
the Integral Technologies, Inc. 2009 Stock Plan. These options shall be fully
vested on August 1, 2009 and may be exercised in whole or in part at any time
after January 1, 2010.  All options shall expire the earlier of
December 31, 2014, or one year following the termination of employment with the
Company.  The following terms and conditions apply to the options: (i)
both the number of options and the exercise price are subject to appropriate
adjustments in the event of any stock split, stock dividend or other change in
capital structure affecting the Company's common stock, (ii) the options and the
shares of common stock issuable upon exercise of the options are subject to
restrictions on transfer, as required by applicable federal and state securities
laws; (iii) options which have not vested on or before the date of
termination of the Executive’s employment shall terminate on such date, and
(iv) notwithstanding the expiration date, all vested options must be
exercised within the earlier of the expiration date of the options or one year
after termination of the Executive’s employment.  The Executive
acknowledges that as long as he remains an executive officer of the Company, he
shall be deemed an "affiliate" and/or a "control person" for purposes of
reporting and compliance under the rules and regulations of the Securities and
Exchange Commission.





(C)           The
Executive shall be eligible to receive bonuses, based on the extent the
Executive achieves certain goals and objectives, to be determined by mutual
agreement between the Executive and the Board of Directors.





(D)           The
Board of Directors may at its discretion from time to time grant to the
Executive additional options to purchase shares of common stock of the
Company.








ARTICLE
IV


WORKING
CONDITIONS AND BENEFITS





(A)           The
Executive shall be entitled to paid vacations during each year of his employment
with the Company in accordance with Company practice in that
year.  The Executive shall also be entitled to leave for illness or
temporary disability, subject to the terms of Article VII(B), which may be paid
or unpaid, in accordance with the policies of the Company in effect at that
time.





(B)           The
Executive is authorized to incur reasonable and necessary expenses for promoting
the business of the Company, including authorized expenses for entertainment,
travel and similar items.  The Company shall reimburse the Executive
in accordance with the policies of the Company in effect from time to time for
all such expenses, upon presentation by the Executive of an itemized account of
such authorized expenditures.








William A. Ince Employment
Agreement





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2





(C)           The
Executive shall be employed by the Company at its executive offices in
Bellingham, Washington.  The Executive shall travel on the Company's
behalf to the extent reasonable and necessary and be reimbursed for such
travel.




(D)           
The Company shall provide to the Executive, to the full extent provided for
under the laws of the Company's state of incorporation and the Company's bylaws,
indemnification for any claim or lawsuit which may be threatened, asserted or
commenced against the Executive by reason of the fact that he is or was a
director, officer, employee or other agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or other agent of
another corporation, partnership, joint venture, trust, or other enterprise or
employee benefit plan, provided that indemnification shall not be provided in
violation of applicable law.  The Company shall also provide the
Executive with mandatory advancement of expenses upon receipt by the Company of
Executive's written undertaking to repay any such amount advanced if he is
ultimately found not to be entitled to indemnification under applicable
law.








ARTICLE
V


OTHER
BENEFITS





(A)           During
the term hereof, the Executive shall be entitled to receive such of the
following other benefits of employment available to other members of the
Company's senior executive management: major medical health benefits, life
insurance benefits, pension, profit sharing and income protection or disability
plans, in each instance, consistent with the Executive's position.





(B)           The
Executive shall be entitled to receive an automobile allowance up to $1,500 per
month.








ARTICLE
VI


TERM





The term
of this Agreement shall commence as of August 1, 2009 and
continue until July
31, 2014, unless this Agreement is terminated pursuant to the terms
hereof.








ARTICLE
VII


TERMINATION





(A)           The
Executive may voluntarily terminate this Agreement at any time upon written
notice to the Company.  The Executive shall provide at least one month
advance notice to the Company of his election to voluntarily terminate this
Agreement.





(B)           The
Company may terminate this Agreement upon written notice to the Executive if the
Executive becomes disabled or suffers an illness and as a result of such
disability or illness is substantially unable to perform the Executive's duties
hereunder for a period of three (3) consecutive months or an aggregate of ninety
(90) working days over a consecutive twelve (12) month period; such notice shall
be forwarded to the Executive by the Company upon and after a resolution of the
Company's Board of Directors authorizing such notification.  In the
event of the Executive’s death, this Agreement shall terminate upon the date of
death.








William
A. Ince Employment Agreement





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(C)           The
Company may terminate this Agreement for cause upon written notice from the
Company to the Executive if the Executive has materially violated the terms of
this Agreement or committed acts of misconduct or willfully fails to carry out
the policies of the Company's Board of Directors or commits acts which have a
material adverse affect on the business of the Company.  Such notice
shall be forwarded to the Executive by the Company upon and after a resolution
of the Company's Board of Directors authorizing such notification.





(D)           In
the event that the Company terminates the employment of the Executive without
cause, then the Executive shall be entitled to severance pay equal to twelve
(12) month's base salary based on the base salary then in effect at the
termination date.  Such severance pay shall be made in one lump sum or
in monthly installments on the first day of each month at the option of the
Company.  In addition, the Executive shall be entitled to any prior
unpaid salary and unreimbursed expenses.  In addition, any and all
options to purchase Company's stock held by the Executive, but not yet vested,
shall immediately vest.  The payments contemplated in this paragraph
shall completely relieve the Company of any liability to the Executive for any
compensation that would have otherwise been payable to the Executive under the
terms of this Agreement.








ARTICLE
VIII


CONFIDENTIALITY
AND NON-COMPETITION





(A)           All
Company trade secrets, proprietary information, software, software codes,
advertising, sales, marketing and other materials or articles of information,
including without limitation customer and supplier lists, data processing
reports, customer sales analyses, invoices, price lists or information, samples,
or any other materials or data of any kind furnished to the Executive by the
Company or developed by the Executive on behalf of the Company or at the
Company's direction or for the Company's use or otherwise in connection with the
Executive's employment hereunder, are and shall remain the sole and confidential
property of the Company; if the Company requests the return of such materials at
any time during or after the termination of the Executive's employment, the
Executive shall immediately deliver the same to the Company.





(B)           During
the term of this Agreement and for a period in which any severance payments are
made, the Executive shall not, directly or indirectly, either individually or as
owner, partner, agent, employee, consultant or otherwise, except for the account
of and on behalf of the Company or its affiliates, engage in any activity
competitive with the business of the Company or its affiliates, nor shall he, in
competition with the Company or its affiliates, solicit or otherwise attempt to
establish for himself or any other person, firm or entity, any business
relationships with any person, firm or corporation, which was, at any time
during the term of this Agreement, a customer or employee of the Company or one
of its affiliates.





(C)           During
the term of this Agreement and at all times thereafter, the Executive shall not
use for personal benefit, or disclose, communicate or divulge to, or use for the
direct or indirect benefit of any person, firm, association or entity other than
the Company, any material referred to in paragraph (A) above or any information
regarding the business methods, business policies, procedures, techniques,
research or development projects or results, trade secrets, or other knowledge
or processes used or developed by the Company or any names and addresses of
customers or clients or any other confidential information relating to or
dealing with the business operations or activities of the Company, made known to
the Executive or learned or acquired by the Executive while in the employ of the
Company.








William
A. Ince Employment Agreement





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ARTICLE
IX


SEVERABILITY





If any
provision of this Agreement shall be held invalid or unenforceable, the
remainder of this Agreement shall remain in full force and effect.  If
any provision is held invalid or unenforceable with respect to particular
circumstances, it shall remain in full force and effect in all other
circumstances.








ARTICLE
X


ARBITRATION





Any
controversy, claim or dispute arising out of the terms of this Agreement, or the
breach thereof, shall be settled by arbitration in the State of Washington and
the award rendered thereon shall be final, binding and conclusive as to all
parties and may be entered in any court of competent jurisdiction.








ARTICLE
XI


NOTICE





Any
notice, request, demand or other communication provided for by this Agreement
shall be sufficient if in writing and if delivered in person or sent by
registered or certified mail to the Executive at the last resident address he
has filed in writing with the Company or, in the case of the Company, at its
principal executive offices.








ARTICLE
XII


BENEFIT





This
Agreement shall inure to, and shall be binding upon, the parties hereto, the
successors and assigns of the Company and the heirs and personal representatives
of the Executive.








ARTICLE
XIII


WAIVER





The
waiver of either party of any breach or violation of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach.








William
A. Ince Employment Agreement





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ARTICLE
XIV


GOVERNING
LAW





This
Agreement has been negotiated and executed in the State of Washington and the
laws of the State of Washington (except its provisions governing the choice of
law) shall govern its construction and validity.








ARTICLE
XV


ENTIRE
AGREEMENT





This
Agreement contains the entire Agreement between the parties hereto; no change,
addition or amendment shall be made hereto except by written agreement signed by
the parties hereto.  This Agreement supersedes all prior Agreements
and understandings between the Executive and the Company.








ARTICLE
XVI


COUNTERPARTS
AND FACSIMILE SIGNATURES





This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.  Execution and delivery of
this Agreement by exchange of facsimile copies bearing the facsimile signature
of a party shall constitute a valid and binding execution and delivery of this
Agreement by such party.  Such facsimile copies shall constitute
enforceable original documents.








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








EXECUTIVE:/s/ William A. InceWilliam
      A. InceCOMPANY:INTEGRAL TECHNOLOGIES,
      INC.By:/s/ William S. RobinsonWilliam
      S. Robinson








William
A. Ince Employment Agreement






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