Document:

Unassociated Document

    EXHIBIT 10.5

     

    CHANGE
OF CONTROL AGREEMENT

     

    This
Change of Control Agreement (the “Agreement”) is entered into
between Franklin Wireless Corp., a Nevada corporation (the “Company,” which term shall
include any successor by merger, consolidation, sale of substantially all of the
Company’s assets or otherwise), and David Lee (“Executive”) effective as of
the 21st day of September, 2009 (“Effective
Date”).

     

    RECITALS

     

    A.  It
is expected that the Company from time to time will consider the possibility of
an acquisition by another company or other change of control, whether voluntary
or involuntary.  The Board of Directors of the Company (the “Board”) recognizes that such
consideration or concern can be a distraction to Executive and can cause
Executive to consider alternative employment opportunities. The Board has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication and objectivity of
Executive, notwithstanding the possibility, threat or occurrence of a Change of
Control of the Company .

     

    B. The
Board believes that it is in the best interests of the Company and its
stockholders to provide Executive with an incentive to continue Executive’s
employment and to motivate Executive to maximize the value of the Company for
the benefit of its stockholders.

     

    C. The
Board believes that it is imperative to provide Executive with certain benefits
upon a change in control of the Company.  These benefits will provide
Executive with enhanced financial security and incentive and encouragement to
remain with the Company.

     

    NOW,
THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:

     

    1. Definition.

     

    “Change of Control” for
purposes of this Agreement will mean the occurrence of any one or more of the
following events:

     

    (i) Any
person or company becomes the owner of more than fifty percent (50%) of the
Company’s Common Stock; or

     

    (ii) If
during any 12–month period, individuals who, as of the Effective Date,
constitute the Board of Directors of the Company (the “Continuing Directors”) cease
for any reason to constitute at least a majority of such Board; provided,
however, that any individual becoming a director after the Effective Date whose
election or nomination for election by the Company’s stockholders, was approved
by a vote of at least a majority of the Continuing Directors will be considered
as though such individual were a Continuing Director; or

     

    (iii) A
reorganization, merger, consolidation or similar transaction that will result in
the transfer of ownership of more than fifty percent (50%) of the Company’s
outstanding Common Stock or that will result in the issuance of new shares of
Company Common Stock in an amount equal to more than fifty percent (50%) of
the amount of Common Stock outstanding immediately prior to such issuance;
or

     

    (iv)
Liquidation or dissolution of the Company or sale of substantially all of the
Company’s assets.  

     

    2. At–Will Employment.
The Company and Executive acknowledge that Executive’s employment is and will
continue to be at–will, as defined under applicable law.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3. Severance
Payment.  Upon a Change of Control, the Company will provide
the following benefits to Executive as set forth below in this
Section 3.

     

    (i) The
Company will pay to Executive, within ten (10) days after the Change of
Control, a lump sum cash amount of Two Million Dollars ($2,000,000);
and

     

    (ii)
Immediately prior to the Change of Control, one hundred percent
(100%) of Executive’s then outstanding and unvested stock options will
vest, become immediately exercisable and remain exercisable for the period
prescribed in the applicable stock option agreement.

    

    4. Withholding. All
payments required to be made by the Company to Executive under this Agreement
will be subject to the withholding of such amounts, if any, relating to tax and
other payroll deductions as may be required by law.

     

    5. Arbitration. Any
dispute or controversy between the parties involving the construction or
application of any terms, covenants or conditions of this Agreement, or any
claim arising out of or relating to this Agreement, or any claim arising out of
or relating to Executive’s employment by the Company that is not resolved within
ten (10) days by the parties will be settled by arbitration in the City of
San Diego, California, in accordance with the rules of the American Arbitration
Association then in effect, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. Any
decision of the arbitrator(s) will be final and binding upon the
parties.

     

    6. No Duty to Mitigate.
Benefits payable under Section 3 of this Agreement will neither be governed
by any duty to mitigate damages.

     

    7. Successors. This
Agreement will inure to and be binding upon the Company’s successors. The
Company will require any successor to all or substantially all of the business
and assets of the Company by sale, merger or consolidation (where the Company is
not the surviving corporation), lease or otherwise, by agreement in form and
substance satisfactory to Executive, to assume this Agreement expressly. This
Agreement is not otherwise assignable by the Company or by
Executive.

     

    8. Code
Section 409A. Notwithstanding anything to the contrary in this
Agreement, if the Company reasonably determines, after consultation and
agreement with Executive that Section 409A of the Code will result in the
imposition of interest and additional tax, Executive shall not be paid any
compensation or benefits hereunder upon a separation from service (within the
meaning of Section 409A(a)(2)(A)(i) of the Code and the regulations
promulgated thereunder) until the date which is six (6) months after the
date of such separation from service (or, if earlier, the date of death of
Executive). Such severance or other benefits otherwise due to Executive on or
within the six (6) month period following Executive’s termination of
employment will accrue during such six (6) month period and will become
payable in a lump sum payment on the date six (6) months and one
(1) day following the date of Executive’s termination. All subsequent
payments, if any, will be payable as provided in this Agreement. It is the
intent of this Agreement to comply with the requirements of Section 409A of
the Code so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A
of the Code, and any ambiguities herein will be interpreted to so
comply.

     

    9. Term of Agreement.
This Agreement shall remain in effect for two years from the date hereof, at
which time it will expire.

     

    10. Amendment or Modification;
Waiver. This Agreement may not be amended unless agreed to in writing by
Executive and the Company. No waiver by either party of any breach of this
Agreement will be deemed a waiver of a subsequent breach.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    11. Severability. In the
event that any provision of this Agreement is determined to be invalid or
unenforceable, the remaining provisions shall remain in full force and effect to
the fullest extent permitted by law.

     

    12. Controlling Law. This
Agreement will be controlled and interpreted pursuant to California
law.  

     

    13. Conflict. In the
event of a conflict between this Agreement and the provisions of any other
compensation or benefit arrangement between the Company and Executive, this
Agreement shall prevail.

     

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first set forth above.

     

    
      	 	
              
                /s/
      David Lee

              

            
	 	      
              David
      Lee

            
	 	 
      
	 	
              Franklin
      Wireless Corp.

            
	 	 
      	 
      
	 	
              By:

            	
              
                /s/
      OC Kim

              

            
	 	
              Name:

            	
              OC
      Kim

            
	 	
              Title:

            	
              President

            

    

     

     

    
      
         

      

      
        3Exhibit 10.18

 

NATIONAL
BEEF PACKING COMPANY, LLC

MANAGEMENT
INCENTIVE PROGRAM

 

1.             Purpose.  The National Beef Packing Company, LLC Management
Incentive Program (the “Plan”) has been established to provide additional
incentive compensation opportunities for certain personnel employed by National
Beef Packing Company, LLC (the “Company”). 
The main purpose of the Plan is to provide an incentive to eligible
employees to influence and increase the profitability of the Company.  The Plan is hereby restated as of August 26,
2007, to reflect a change in the calculation of the Bonus Pool.

 

2.             Administration.  The Plan is administered by the Board of Managers of
the Company (the “Board”), which has complete discretion and authority with
respect to the Plan and its application, except to the extent that discretion
is expressly limited by the Plan.

 

3.             Definitions. 
For purposes of this Plan, the following terms shall have the meanings
set forth below:

 

a.     Affiliate shall mean HyPlains Beef, L.C., HyPlains Dressed Beef,
Farmland Industries, Inc. (but not with respect to any employee hired from
Farmland Industries, Inc. on or after August 6, 2003), National
Carriers, Inc. or any subsequently acquired affiliate of the Company.  For this purpose, an “acquired affiliate” shall
be any entity in which the Company owns 50% or more of the stock or assets.

 

b.     Applicable Vesting Percentage shall mean the percentage used for
purposes of calculating Eligible Earnings, based on the following schedule:

 

	
   

  	
  Employment Period

  	
   

  	
  Applicable
  Vesting Percentage

  	
   

  
	
   

  	
  First
  12 months

  	
   

  	
  50

  	
  %

  
	
   

  	
  Second
  12 months

  	
   

  	
  75

  	
  %

  
	
   

  	
  Thereafter

  	
   

  	
  100

  	
  %

  

 

d.     Board shall mean the Board of Managers of the Company.

 

e.     Bonus shall mean the benefits paid to Eligible Employees
under this Plan.

 

f.      Bonus Pool shall mean an amount calculated based on the
following:  Pre-bonus Net Income
multiplied by 14%.

 

g.     Company shall mean National Beef Packing Company, LLC.

 

h.     Eligible Earnings shall mean:

 

(1)           In the case of an Eligible Employee who is classified
as management personnel, the Eligible Employee’s gross earnings for the
applicable fiscal year in a management position, multiplied by the Applicable
Vesting Percentage.

 

 

(2)           In the case of an Eligible Employee who is classified
as professional personnel, the Eligible Employee’s gross earnings for the
applicable fiscal year in a professional position, multiplied by the Applicable
Vesting Percentage, and further multiplied by 25%.

 

Notwithstanding the
above, Eligible Earnings shall in no event include any Bonuses or other compensation
outside the scope of ordinary salary paid during the applicable fiscal year.

 

i.      Eligible Employee shall have the meaning set forth in Section 4.

 

j.      Excluded Companies shall mean Kansas City Steak Company and National
Carriers, Inc.

 

k.     Plan shall mean this National Beef Packing Company, LLC
Management Incentive Program.

 

l.      Pre-bonus Net Income shall mean the Net Income of the Company less the Net
Income of the Excluded Companies plus the total bonus accrued for the Company
(not including bonus accrued for the Excluded Companies) plus 20% of the net
income of the Excluded Companies.

 

m.    Target shall mean that the Company has attained, for the
applicable fiscal year, after provision for bonus expense under this plan and
all other incentive plans of the Company, an after tax profit of at least $20
million.  If the Company does not attain,
for the applicable fiscal year, an after tax profit of at least $20 million,
the Target will be deemed to have not been reached and no Bonuses will be paid
out under this Plan for such year.

 

4.             Eligibility for
Participation.  For purposes of this Plan, the term “Eligible
Employee” shall include all management and professional (salaried) personnel
and all management support (hourly wage employees who are not exempt from
overtime pay) personnel employed by the Company who:

 

a.     Are not covered by any other incentive, bonus or
variable compensation plan;

 

b.     Are deemed eligible to participate in this Plan by the
Company’s CEO or Board of Managers;

 

c.     Are not represented under a collective bargaining
agreement; and

 

d.     Maintain an active employment status with the Company
through the date on which the Bonus checks provided pursuant to this Plan are
distributed.

 

2

 

5.             Bonus Amounts.  If the Company attains the Target, Bonuses shall be
paid to Eligible Employees as follows:

 

a.     Eligible Employees who are classified as management
support personnel will each receive a Bonus in an amount based on their length
of service with the Company.  For this
purpose, the length of a particular Eligible Employee’s service with the
Company shall be calculated based on the Eligible Employee’s current continuous
service period with the Company, or the combination of the current continuous service
period with the Company and its Affiliates. 
The amount of the Bonus to be distributed to each Eligible Employee who
is classified as management support personnel will be as follows:

 

	
   

  	
  Service Time

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Calculated Through

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Last Day of

  	
   

  	
  Bonus

  	
   

  	
   

  
	
   

  	
  Applicable Fiscal Year

  	
   

  	
  Amount

  	
   

  	
   

  
	
   

  	
  Less
  than 6 Months

  	
   

  	
  $

  	
  0

  	
   

  	
   

  
	
   

  	
  6
  Months – 1 Year

  	
   

  	
  $

  	
  100

  	
   

  	
   

  
	
   

  	
  1
  Year

  	
   

  	
  $

  	
  150

  	
   

  	
   

  
	
   

  	
  2
  Years

  	
   

  	
  $

  	
  200

  	
   

  	
   

  
	
   

  	
  3
  Years

  	
   

  	
  $

  	
  250

  	
   

  	
   

  
	
   

  	
  4-5
  Years

  	
   

  	
  $

  	
  300

  	
   

  	
   

  
	
   

  	
  6-7
  Years

  	
   

  	
  $

  	
  400

  	
   

  	
   

  
	
   

  	
  8-9
  Years

  	
   

  	
  $

  	
  500

  	
   

  	
   

  
	
   

  	
  10-11
  Years

  	
   

  	
  $

  	
  600

  	
   

  	
   

  
	
   

  	
  12
  Years or More

  	
   

  	
  $

  	
  700

  	
   

  	
   

  

 

b.     Eligible Employees who are classified as management
and professional personnel will each receive a Bonus in an amount equal to a
portion of the remaining Bonus Pool after the amounts described in subparagraph
(a) above are distributed to management support personnel.  The amount received by each such Eligible
Employee shall be an amount equal to a percent of their Eligible Earnings, the
numerator of which is the Bonus Pool and the denominator of which is the sum of
all Eligible Earnings in the plan.

 

6.             Distribution of Bonus
Amounts.  Although no specific date has been
established by the Company for the distribution of the Bonuses, the Company
anticipates that all Bonus amounts payable under this Plan will be distributed
on or before the respective November 30 immediately following the end of
the applicable fiscal year.

 

3

 

7.             Withholding on Bonus
Amounts.  Any amounts received as Bonuses under
this Plan shall be subject to tax withholding in such amounts as are consistent
with each Eligible Employee’s payroll profile.

 

8.             Continuity of the Plan;
Amendments.  Although the Company intends to continue
the Plan indefinitely, the Company expressly reserves the right to amend or
terminate the Plan at any time, provided that no amendment or termination of
the Plan shall adversely affect any Bonuses previously earned under the Plan.

 

9.             Notices.  Any notice required or permitted to be given by the
Company or the Board pursuant to the Plan shall be deemed given when personally
delivered or deposited in the United States mail, registered or certified,
postage prepaid, addressed to the Eligible Employee, his or her heirs,
executors, administrators, successors, assigns or transferees, at the last
address shown for the Eligible Employee on the records of the Company (or
subsequently provided in writing to the Company).

 

10.          Miscellaneous Provisions.

 

A.            The Board shall have the sole discretion with respect
to the application of the provisions of this Plan and such exercise of
discretion shall be conclusive and binding upon all Eligible Employees and all
other persons.

 

B.            No Bonus payable under the Plan shall be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or change prior to actual receipt thereof by the payee; and any
attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber or
change prior to such receipt shall be void; and the Company shall not be liable
in any manner for or subject to the debts, contracts, liabilities, engagements
or torts of any person entitled to any Bonus under the Plan.

 

C.            Nothing contained herein will confer upon any Eligible
Employee the right to be retained in the service of the Company or any
subsidiary thereof nor limit the right of the Company or any subsidiary thereof
to discharge or otherwise deal with any Eligible Employee without regard to the
existence of the Plan.

 

D.            The Plan shall at all times be entirely unfunded and
no provision shall at any time be made with respect to segregating assets of
the Company or any subsidiary thereof for payment of any Bonuses
hereunder.  No Eligible Employee or any
other person shall have any interest in any particular assets of the Company or
any subsidiary thereof by reason of the right to receive a Bonus under the Plan
and any such Eligible Employee or any other person shall have only the rights
of a general unsecured creditor of the Company or any subsidiary thereof with
respect to any rights under the Plan.

 

E.             This Plan shall be governed by the laws of the State
of Kansas.

 

4

 

F.             This document sets forth the entire Plan with respect
to the subject matter hereof and supersedes any prior understanding or
agreements relating thereto, oral or written.

 

G.            The headings contained in this Plan are for
convenience only and shall not be used in the interpretation, construction or
enforcement of any of the provisions of this Plan.

 

H.            In the event any provision of this Plan shall be declared
unenforceable by a court of competent jurisdiction, the provision shall be
stricken herefrom and the remainder of this Plan shall remain binding on the
parties hereto.  In the event any
provision of this Plan shall be so declared unenforceable due to its scope or
breadth, then the provision shall be narrowed to the scope or breadth permitted
by law.

 

5

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