Document:

Exhibit
10.3

 

FLUX
POWER HOLDINGS, INC.

 

PERFORMANCE
RESTRICTED STOCK UNIT AWARD AGREEMENT UNDER THE 

FLUX
POWER HOLDINGS, INC. 2014 EQUITY INCENTIVE PLAN

 

TO:

 

To
encourage your continued service as __________ of Flux Power Holdings, Inc. (the “Company”) or its subsidiary, you
have been granted this Performance Restricted Stock Unit Award (the “Award”) pursuant to the Company’s 2014
Equity Incentive Plan (the “Plan”). The Award represents the right to receive shares of common stock (the “Shares”),
par value $0.001 per share, of the Company subject to the fulfillment of the vesting conditions set forth in this agreement (this
“Agreement”).

 

The
terms of the Award are as set forth in this Agreement and in the Plan. The Plan is incorporated into this Agreement by reference,
which means that this Agreement is limited by and subject to the express terms and provisions of the Plan. In the event of a conflict
between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. Capitalized terms that are
not defined in this Agreement have the meanings given to them in the Plan. The most important terms of the Award are summarized
as follows:

 

1.
Award Date:

 

2.
RSUs Performance Period: The Company’s three (3) fiscal years starting from July 1, 20XX through June 30, 20XX.

 

3.
Number of Performance-Based Restricted Stock Units (“RSUs’) Subject to this Award:

 

Maximum:
______ (“Maximum RSUs”)

 

Target:
______ (“Target RSUs”)

 

Floor:
______ (“Floor RSUs”)

 

4.
Target Performance Goal. The Target Performance Goal shall be based on the [____] of the Company for each Fiscal Performance
Period (as defined below) of the RSUs Performance Period. At or around the beginning of each Fiscal Performance Period, the Company
will provide notice to you of the Target Performance Goal that applies to the current Fiscal Performance Period.

 

5.
Vesting. Up to one third (1/3rd) of the Maximum RSUs will vest at the end of each fiscal year starting the fiscal
year ending on June 30, 20XX and at the end of each fiscal year thereafter during the Performance Period (each a “Fiscal
Performance Period”) based on the Company’s performance relative to the Target Performance Goal for the applicable
Fiscal Performance Period (see Exhibit A).

 

6.
Termination due to Death, Disability or Retirement. If Termination of your employment occurs prior to the end of any Fiscal
Performance Period of the RSUs Performance Period by reason of your death, Disability, or your Retirement, then the Maximum RSUs
for that Fiscal Performance Period shall be eligible for vesting at the end of such Fiscal Performance Period based on the Company’s
performance relative to the Target Performance Goal. For the purpose of this Agreement, “Retirement” shall mean the
voluntary Termination by a Participant when such Participant’s age plus years of service with the Company equals or exceeds
seventy five (75).

 

    	1

     

    

 

7.
Conversion of Restricted Stock Units and Issuance of Shares. Upon the Company’s determination of the number of restricted
stock units vesting following the end of each Fiscal Performance Period (each, a “Vesting Date”), each restricted
stock unit that vests on such Vesting Date, shall be converted into one Share and thereafter, the Company will transfer such Shares
to you upon satisfaction of any required tax withholding obligations. No fractional shares shall be issued under this Agreement.

 

8.
Termination of Service. All restricted stock units that have not vested pursuant to the terms of this Award will terminate
automatically and be forfeited to the Company immediately and without further notice upon termination of your service to the Company
for any reason (except as a result of death, Disability, or Retirement). No Shares shall be issued or issuable with respect to
any portion of the Award that terminates unvested and is forfeited.

 

9.
Right to Shares. You shall not have any right in, to or with respect to any of the Shares (including any voting rights
or rights with respect to dividends paid on the Shares) issuable under the Award until the Award is settled by the issuance of
such Shares to you.

 

10.
Withholding of Taxes.

 

(a)
Notwithstanding any contrary provision of this Agreement, no Shares will be issued to you, unless and until satisfactory arrangements
(as determined by the Administrator) will have been made by you with respect to the payment of income (including federal, state,
foreign and local taxes), employment, social insurance, payroll tax, payment on account and other taxes which the Company determines
must be withheld with respect to such Shares so issuable (the “Withholding Taxes”). You acknowledge that the ultimate
liability for all Withholding Taxes legally due by you is and remains your responsibility and that the Company (i) makes no representations
or undertakings regarding the treatment of any Withholding Taxes in connection with any aspect of the Award, including the grant
of the Award, the vesting of Award, the settlement of the Award in Shares or the receipt of an equivalent cash payment, the subsequent
sale of any Shares acquired at vesting and the receipt of any dividends; and (ii) does not commit to structure the terms of the
grant or any aspect of the Award to reduce or eliminate your liability for Withholding Taxes.

 

(b)
To satisfy the Withholding Taxes, the Company may withhold otherwise deliverable Shares upon vesting of the Award, according to
the vesting schedule, having a Fair Market Value (as defined in the Plan) equal to the minimum amount required to be withheld
for the payment of the Withholding Taxes pursuant to such procedures as the Administrator may specify from time to time. The Company
will not retain fractional Shares to satisfy any portion of the Withholding Taxes. If the Administrator determines that the withholding
of whole Shares results in an over-withholding to meet the minimum tax withholding requirements, a reimbursement will be made
to you as soon as administratively possible.

 

(c)
If the Company does not withhold the Shares as described above, prior to the issuance of Shares upon vesting of the Award or the
receipt of an equivalent cash payment, you shall pay, or make adequate arrangements satisfactory to the Company (in its sole discretion)
to satisfy all withholding and payment on account obligations of the Company. In this regard, you authorize the Company to withhold
all applicable Withholding Taxes legally payable by you from your wages or other cash compensation payable to you by the Company
or from any equivalent cash payment received upon vesting of the Award. Alternatively, or in addition, if permissible under local
and applicable law, you may instruct and authorize the Administrator to pay Withholding Taxes, in whole or in part, by one of
the additional following alternatives:

 

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(i)
You providing irrevocable instructions to a Company-designated broker to deliver cash to the Company from your previously established
account with such broker equal to the Withholding Taxes; or

 

(ii)
You providing irrevocable instructions to a Company-designated broker to sell a sufficient number of Shares otherwise deliverable
to you having a Fair Market Value equal to the Withholding Taxes provided that such sale does not violate Company policy or Applicable
Laws.

 

(d)
The Company may refuse to issue any Shares to you until you satisfy your Withholding Taxes. To the maximum extent permitted by
law, the Company has the right to retain without notice from Shares issuable under the Award or from salary payable to you, Shares
or cash having a value sufficient to satisfy the Withholding Taxes.

 

11.
Restricted Shares. The Company will not be obligated to issue any Shares with respect to this Award unless such Shares
are at that time effectively registered or exempt from registration under federal securities laws and the offer and sale of the
Shares are otherwise in compliance with all applicable state securities laws.

 

12.
Limitation on Rights; No Right to Future Grants; Extraordinary Item. By entering into this Agreement and accepting the
Award, you acknowledge that: (a) the Plan is discretionary and may be modified, suspended or terminated by the Company at any
time as provided in the Plan; (b) the grant of the Award is a one-time benefit and does not create any contractual or other right
to receive future grants of awards or benefits in lieu of awards; (c) all determinations with respect to any such future grants,
including, but not limited to, the times when awards will be granted, the number of shares subject to each award, the award price,
if any, and the time or times when each award will be settled, will be at the sole discretion of the Company; (d) your participation
in the Plan is voluntary; (e) the value of the Award is an extraordinary item which is outside the scope of your service contract,
if any; (f) the Award is not part of normal or expected compensation for any purpose, including without limitation for calculating
any benefits, severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension
or retirement benefits or similar payments; (g) the future value of the Shares subject to the Award is unknown and cannot be predicted
with certainty, (h) neither the Plan, the Award nor the issuance of the Shares confers upon you any right to continue in the service
of (or any other relationship with) the Company, and (i) the grant of the Award will not be interpreted to form an employment
relationship with the Company.

 

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13.
Compliance With Section 409A Of The Code. This Award is intended to be exempt from the application of Section 409A of the
Internal Revenue Code (the “Code”), including but not limited to by reason of complying with the “short-term
deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4) and any ambiguities herein shall be interpreted accordingly.
Notwithstanding the foregoing, if it is determined that the Award fails to satisfy the requirements of the short-term deferral
rule and is otherwise not exempt from, and determined to be deferred compensation subject to Section 409A of the Code, this Award
shall comply with Section 409A to the extent necessary to avoid adverse personal tax consequences and any ambiguities herein shall
be interpreted accordingly. If it is determined that the Award is deferred compensation subject to Section 409A and you are a
“Specified Employee” (within the meaning set forth in Section 409A(a)(2)(B)(i) of the Code) as of the date of your
“Separation from Service” (as defined in Section 409A), then the issuance of any shares that would otherwise be made
upon the date of your Separation from Service or within the first six (6) months thereafter will not be made on the originally
scheduled date(s) and will instead be issued in a lump sum on the date that is six (6) months and one day after the date of the
Separation from Service, with the balance of the shares issued thereafter in accordance with the original vesting and issuance
schedule set forth above, but if and only if such delay in the issuance of the shares is necessary to avoid the imposition of
adverse taxation on you in respect of the shares under Section 409A of the Code. Each installment of shares that vests is intended
to constitute a “separate payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2).

 

14.
Execution of Award Agreement. Please acknowledge your acceptance of the terms and conditions of the Award by signing the
original of this Agreement and returning it to the Company.

 

	 	Very
    truly yours,
	 	 
	 	Flux
    Power Holdings, Inc.
	 	 
	 	 
	 	Ronald
    Dutt, Chief Executive Officer

 

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ACCEPTANCE
AND ACKNOWLEDGMENT

 

I,
____________, accept the Restricted Stock Unit Award described in this Agreement and in the Plan, and acknowledge receipt of a
copy of this Agreement and the Plan, and acknowledge that I have read them carefully and that I fully understand their contents.

 

	Dated:	 	 
	 	 	 
	 	 	Name:
    	 
	 	 	 	 
	 	 	Address:
    	 
	 	 	 	 
	 	 	 

 

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EXHIBIT
A

PERFORMANCE
CRITERIA

 

    	6Exhibit
10.4

 

FLUX
POWER HOLDINGS, INC.

 

ANNUAL
CASH BONUS PLAN

 

(Adopted
November 5, 2020)

 

1.
Background. Your Board of Directors (“Board”) believes that the long-term success of Flux Power Holdings,
Inc. (the “Company”) depends, in part, on its ability to recruit and retain outstanding individuals as employees and
to furnish these employees maximum incentive to improve operations and increase profits. Your Board also believes it is important
to align compensation of officers and eligible employees with the interests of the Company’s shareholders. In accordance
with this belief, your Board, upon recommendation of the Compensation Committee (“Committee”) of the Board (comprised
of independent outside directors), has unanimously adopted the Flux Power Holdings, Inc. Annual Cash Bonus Plan (the “Plan”).
This Plan is effective for fiscal year 2021 and each fiscal year thereafter (“Plan Year”).

 

2.
Goal. The goal of the Plan is to link an employee’s compensation to the financial success of the Company.
The intent is to encourage participants to think, act and be rewarded like owners, and to seek out and undertake initiatives that
continuously improve the performance of the Company.

 

3.
Eligibility. Executive officers and all employees (other than part-time employees and temporary employees) are eligible
to participate in the Plan (“Participants”).

 

In
order to be eligible to participate in the Plan for a Plan Year, an employee (including executive officers) must be an active
regular employee of the Company for its subsidiary whose Employment Start Date (as defined below) is June 30 of the Plan Year
or earlier. Employees who are not expressly classified by the Company or its subsidiary as “regular” employees, such
as temporary or contract employees and interns, are not eligible to be Participants. For the purpose of this Plan, “Employment
Start Date” means the first business day on which a Participant is an active regular employee of the Company or its subsidiary.

 

In
order to be eligible to receive a cash incentive (“Bonus”) for a Plan Year, a Participant must (i) continue to be
an active regular employee of the Company or its subsidiary in good standing from the date his/her participation in the Plan commences
for the Plan Year until the date the Bonus is paid for the Plan Year (except as provided in Paragraph 8), and (ii) act in accordance
with the Company’s Code of Conduct, compliance policies and procedures, and those of the Participant’s employer, and
applicable laws and regulations during the Plan Year.

 

4.
Bonus Pool. For each Plan Year, the Committee, in its sole discretion, will establish an aggregate amount of allocable
Bonus under the Plan (“Bonus Pool”) which may be established before, during or after the applicable Plan Year. Bonuses
will be allocated from the Bonus Pool.

 

5.
Performance Criteria. The Committee will, in its sole discretion, determine the performance goals applicable to
a bonus during a Plan Year (“Performance Criteria”). The Performance Criteria may be on the basis of any such factors
the Committee determines relevant, and may be on an individual, divisional, business unit or Company-wide basis. Performance Criteria
may be measured over the period of time determined by the Committee in its sole discretion. The Performance Criteria may differ
from Participant to Participant and from Bonus to Bonus. Failure to meet the Performance Criteria will result in a failure to
earn the Bonus, except as otherwise determined by the Committee. As determined by the Committee, the Performance Criteria may
be based on GAAP or non-GAAP results and any actual results may be adjusted by the Committee for one-time items, unbudgeted or
unexpected items, acquisition-related activities or changes in applicable accounting rules when determining whether the Performance
Criteria have been met, and any such adjustments shall not be deemed adverse to any Participant. It is within the sole discretion
of the Committee to make or not make any such equitable adjustments.

 

    	1

     

    

 

6.
Administration. For a particular Plan Year, the Committee must approve the Targets, performance measure computation
adjustments, and any other conditions within the Relevant Time Period. At the end of each Plan Year, but before Plan incentives
may be paid, the Committee must certify in writing that Targets and other conditions have been satisfied. The Committee does not
have the discretion to increase the amount of any Bonus under this Plan for the Executive Officers. The Board may amend or terminate
the Plan effective for future fiscal years.

 

7.
Bonus Payments. Each Bonus will be paid in cash in a single lump sum, unless otherwise determined by the Committee.
The Bonus target is the percentage of Base Salary (as defined below) to be paid out at 100% achievement of the applicable Performance
Criteria. Bonuses may be weighted based on individual performance and Company performance. Bonuses can provide for payout above
target for performance in excess of the applicable Performance Criteria or below target for performance below the applicable Performance
Criteria. “Base Salary” means with respect to each Participant eligible for a Bonus, the amount of base salary or
base fees actually earned and paid to the Participant during the applicable Eligibility Period, excluding (i) bonuses, commissions,
overtime premium, or the value of any equity securities, or any employee benefits or other compensation paid to the Participant
(e.g., 401(k) plan employer match), and (ii) any compensation paid to the Participant in respect of any inactive employment by
the Company (e.g., a leave of absence from the Company).

 

8.
Time of Payment. Any Bonus payment shall be made in the first quarter of the fiscal year following the fiscal year
in which the applicable bonus is earned (but no later than September 15 of the year following the year in which the applicable
Bonus is earned). If a Participant’s employment is terminated before a scheduled Bonus payment date, the former employee
will not be entitled to receive that Bonus payment or any subsequent bonus payment, unless the Participant’s termination
was caused by death, or permanent disability, in which case, that Participant (or estate, in the event of the Participant’s
death) will be entitled to receive all bonus payments for the previous Plan Year on the scheduled payment date.

 

9.
Restriction on Payments. Notwithstanding anything to the contrary set forth herein, no Bonus payment shall be made
to any Participant if such payments would result in the Company’s breach of or default under any terms of loan agreement,
credit agreement, promissory note, bond or debenture to which the Company or its subsidiary thereof is a party.

 

10.
Repayment, Forfeiture. After the Committee certifies that Targets and other conditions have been satisfied as described
above, no adjustments will be made to reflect any subsequent change in accounting, the effect of federal, state or municipal taxes
later assessed or determined, or otherwise. Notwithstanding the foregoing, the Company reserves the right to, and in appropriate
cases, will seek recovery of all or any portion of Bonus payments made if (i) the amount of the Bonus payment was calculated based
upon the achievement of certain financial results that were subsequently the subject of a restatement of all or a portion of the
Company’s financial statements; (ii) the Participant engaged in intentional misconduct that caused or partially caused the
need for such a restatement; and (iii) the amount of the Bonus payment that would have been awarded to a Participant would have
been lower than the amount actually awarded had the financial results been properly reported. Further, the Company is not limited
in its power to take other actions as it deems necessary to remedy the misconduct, prevent its recurrence and, if appropriate,
based on all relevant facts and circumstances, punish the wrongdoer in a manner it deems appropriate.

 

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11.
Participant’s Liability. The Company’s liability for the payment of benefits shall be defined only by
the Plan. The Company shall have no obligation to a Participant under the Plan except as expressly provided in the Plan.

 

12.
Nonassignability. A Participant shall have no right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder,
or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part
of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment (except to the extent the
Company may be required to garnish amounts from payments due under the Plan pursuant to applicable law) or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by
operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable
to a spouse as a result of a property settlement or otherwise.

 

13.
Not a Contract of Employment. The terms and conditions of the Plan shall not be deemed to constitute a contract
of employment or continued engagement between the Company or its subsidiary and the Participant. Nothing in the Plan shall be
deemed to give a Participant the right to be retained in the service of the Company or its subsidiary or to interfere with the
right of the Company or its subsidiary to discipline or discharge the Participant at any time for any or no reason, with or without
notice (subject to applicable law). The Participant’s employment (if applicable) with the Company or its subsidiary remains
at will (subject to applicable law).

 

14.
Withholding of Taxes. Bonus payments will be subject to income and employment tax withholdings as required by applicable
law.

 

15.
Section 409A. To the extent any payment under the Plan may be classified as a “short-term deferral”
within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for another
exemption from Section 409A. To the extent that any provision of the Plan is ambiguous as to its exemption from or compliance
with Section 409A, the provision will be read in such a manner that the applicable payments hereunder are exempt from Section
409A to the maximum permissible extent, and for any payments where such construction is not tenable, that those payments comply
with Section 409A to the maximum permissible extent. Each Participant acknowledges and agrees that the Company and its subsidiary
make no representations with respect to the application of Code Section 409A to any Cash incentive and other tax consequences
to any payments under the Plan and, by the acceptance of any Cash incentive , the Participant agrees to accept the potential application
of Code Section 409A and the other tax consequences of any payments made pursuant to the Plan.

 

16.
Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine
in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be
construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.

 

17.
Captions. The captions of the articles, sections and paragraphs of the Plan are for convenience only and shall not
control or affect the meaning or construction of any of its provisions.

 

18.
Governing Law. The provisions of the Plan shall be construed and interpreted according to the laws of the State
of California without regard to its conflicts of laws principles.

 

19.
Successors. The provisions of the Plan shall bind and inure to the benefit of the Company, all Participants, and
their successors in interest.

 

20.
Validity. In case any provision of the Plan shall be illegal or invalid for any reason, said illegality or invalidity
shall not affect the remaining parts hereof, but the Plan shall be construed and enforced as if such illegal or invalid provision
had never been inserted herein.

 

21.
Beneficiary Designations. If permitted by the Committee, a Participant under the Plan may name a beneficiary or
beneficiaries to whom any earned but unpaid award will be paid in the event of the Participant’s death. Each such designation
will revoke all prior designations by the Participant and will be effective only if given in a form and manner acceptable to the
Committee. In the absence of any such designation, any vested benefits remaining unpaid at the Participant’s death will
be paid to the Participant’s estate.

 

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