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’
