Exhibit 10.1

 
EXECUTIVE EMPLOYMENT AGREEMENT
 
This Executive Employment Agreement (this “Agreement”) is made and entered into
as of the Effective Date shown at the top of the signature block below (the
"Effective Date"), by and among MobileSmith, Inc., a Delaware corporation (the
“Company”) and the undersigned individual (the “Executive”). The Company and the
Executive are each a “Party” and collectively the “Parties” to this Agreement.
 
RECITAL
 
WHEREAS the Company desires to employ Executive to serve as its Chief Executive
Officer, and the Executive desires to continue to be employed in the capacity
hereinafter stated, each pursuant to the terms and conditions set forth herein.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, the Company and the Executive, intending to be
legally bound, hereby agree as follows:
 
1. Employment. The Company hereby agrees to employ the Executive as Chief
Executive Officer (“CEO”) of the Company, effective on the Effective Date and
for the duration of the Term unless terminated earlier pursuant to the terms of
Section 2 below. The Executive accepts such employment and agrees to devote
sufficient time, efforts and skills to diligently perform the duties of such
role as shall reasonably be assigned to him by the Board of Directors of the
Company (“Board”), subject to Section 3 below.
 
2. Term.
 
2.1 Term. The initial term of this Agreement shall be the period beginning on
the Effective Date and ending on December 31, 2020 unless terminated earlier
pursuant to the terms of this Section 2 (the “Initial Term”). This Agreement may
be renewed for additional terms in such duration as the parties may mutually
agree (each a “Renewal Term”). Absent mutually agreed renewal, this Agreement
shall automatically terminate upon the expiration of the Initial Term and any
Renewal Terms. The Initial Term and any Renewal Terms are referred to
collectively herein as the “Term.” Upon expiration or termination of the Term
under circumstances not involving Cause, death or Disability, Executive shall
remain as an independent member of the Board.
 
2.2 Discharge by the Company For Cause. During the Term, the Executive’s
employment may be terminated by the Company (which shall also constitute a
termination of this Agreement) immediately upon written notice to the Executive
by the Board, detailing the circumstances constituting Cause. As used herein,
“Cause” shall mean any one or more of the following that continues uncured for
thirty (30) days following receipt of written notice to Executive from the Board
setting forth in detail the circumstances constituting Cause: (i) failure or
refusal to follow the reasonable written direction of the Board (other than by
reason of Disability); (ii) the Executive’s commission of any crime, the
underlying conduct of which is job related such that it is consistent with
business necessity to terminate Executive’s employment; (iii) the Executive’s
willful material false statement regarding the Company’s business to the Board,
shareholders of the Company, any lender or insurer, or a regulatory authority;
(iv) the Executive’s breach of this Agreement in any material respect (other
than by reason of Disability); or (v) other intentional conduct that is or could
reasonably be expected to be materially harmful to the business interests or
reputation of the Company. Immediately upon termination for Cause, the Company
shall pay Executive all compensation, benefits and reimbursable expenses,
accrued through the effective date of termination or as required by law, and
shall comply with the terms of any applicable benefits plans and agreements
between the Company and the Executive.
 
2.3 Discharge by the Company Without Cause. During the Term, the Executive’s
employment may be terminated by the Company (which shall also constitute a
termination of this Agreement) upon thirty (30) days’ written notice; provided
that the Company in its sole discretion may elect to add any portion of such
notice to the Severance Period (defined below) rather than have Executive work
the full notice. In the event of termination of Executive’s employment by the
Company without Cause, the Company shall pay Executive all compensation,
benefits and reimbursable expenses accrued through the effective date of
termination or as required by law, and shall comply with the terms of any
applicable benefits plans and agreements between the Company and the Executive;
and, in the event that the Company terminates Executive’s employment without
Cause prior to July 1, 2020, and provided that Executive (i) signs and returns
to the Company a timely and effective separation agreement containing a general
release of claims and other customary terms in the form provided by the Company
at the time employment is terminated (the “Separation Agreement”) and (ii)
continues to comply with his post-employment covenants in this Agreement and any
other agreement between the Executive and the Company, the Company will continue
to pay Executive’s Base Salary, less taxes and other legally required deductions
(“Severance Pay”) for a period of 3 months following the date of termination
(“Severance Period”), and upon Executive’s timely election of statutory
continuation coverage the Company will pay on Executive’s behalf or reimburse
Executive for the cost of statutory continuation coverage for eligible group
insurance benefits (minus Executive’s share of the premiums for such insurance
at the same rate as during employment) for the shorter of the amount of time
that Executive continues such benefits and the remainder of the Initial Term.
 
2.4 Death or Disability. Executive’s employment (and this Agreement) shall
terminate automatically upon the death of Executive, and may be terminated by
the Company upon written notice to Executive of termination of his employment
due to Disability (which shall also constitute a termination of this Agreement).
As used herein, “Disability” shall mean the inability of Executive to perform
his material duties hereunder due to a physical or mental incapacity for 180
days (including weekends and holidays) in any 365-day period, with reasonable
accommodations if required by applicable state and federal disability laws. To
the extent necessary, the existence of a Disability shall be determined by an
independent physician selected by the Executive and reasonably acceptable to
Company. In the event of termination of Executive’s employment due to death or
Disability, the Company shall pay to Executive (or to his qualified personal
representative in the event of his death during the Term) all compensation,
benefits and reimbursable expenses accrued through the effective date of
termination or as required by law, and shall comply with the terms of any
applicable benefits plans and agreements between the Company and the Executive.
 
2.5 Voluntary Resignation by Executive. The Executive may terminate his
employment (which shall also constitute a termination of this Agreement) upon at
least thirty (30) days’ written notice by Executive to the Company. In the event
Company chooses to effect Executive’s termination prior to the end of the notice
period provided by Executive, Company will remain obligated to pay Executive for
the full notice period. Upon termination by Executive pursuant to this Section
2.4, the Company shall pay Executive all compensation, benefits and reimbursable
expenses accrued through the effective date of termination or as required by
law, and shall comply with the terms of any applicable benefits plans and
agreements between the Company and the Executive.
 
2.6 Resignation by Executive for Good Reason. The Executive may terminate his
employment (which shall constitute a termination of this Agreement) upon thirty
(30) days’ written notice to the Company of his resignation for Good Reason (as
defined below), detailing the circumstances constituting Good Reason; provided
that the Company in its sole discretion may elect to add any portion of such
notice to the Severance Period (defined below) rather than have Executive work
the full notice. As used herein, “Good Reason” shall mean any of the following
without the Executive’s consent: (i) breach by the Company of this Agreement or
any other Agreement between the Company and Executive; (ii) a requirement that
Executive do anything that the Executive believes in good faith to be illegal
after consulting with an attorney duly licensed to practice and in good standing
with the Bar of the applicable state; or (iii) a material reduction in
Executive’s compensation or benefits, provided that the foregoing factors (i) –
(iii) shall only constitute “Good Reason” in the event that Executive provides
the Company written notice of the circumstances that would constitute “Good
Reason” if not cured as provided herein and the Company does not cure such
circumstances within thirty (30) days of receipt of such written notice. In the
event of termination of Executive’s employment for Good Reason, the Company
shall pay Executive all compensation, benefits and reimbursable expenses accrued
through the effective date of termination or as required by law, and shall
comply with the terms of any applicable benefits plans and agreements between
the Company and the Executive; and, in the event that the Executive resigns his
employment hereunder with Good Reason prior to July 1, 2020, and provided that
Executive (i) signs and returns to the Company a timely and effective separation
agreement containing a general release of claims and other customary terms in
the form provided by the Company at the time employment is terminated (the
“Separation Agreement”) and (ii) continues to comply with his post-employment
covenants in this Agreement and any other agreement between the Executive and
the Company, the Company will continue to pay Executive’s Base Salary, less
taxes and other legally required deductions (“Severance Pay”) for a period of 3
months following the date of termination (“Severance Period”), and upon
Executive’s timely election of statutory continuation coverage the Company will
pay on Executive’s behalf or reimburse Executive for the cost of statutory
continuation coverage for eligible group insurance benefits (minus Executive’s
share of the premiums for such insurance at the same rate as during employment)
for the shorter of the amount of time that Executive continues such benefits and
the remainder of the Initial Term..
 
3. Position and Duties.
 
3.1 Service with the Company. For the duration of his employment during the
Term, the Executive agrees to perform such duties and on such basis as shall be
consistent with those customarily associated with the Executive’s position and
assigned to him from time to time by the Board. In addition, for the duration of
the Term, Executive shall maintain a seat on the Board. Upon expiration or
termination of the Term under circumstances not involving Cause, death or
Disability, Executive shall remain as an independent member of the Board.
 
3.2 Work Location. For the duration of his employment during the Initial Term,
the Executive shall perform his duties under this Agreement remotely, without
provision or reimbursement for any expenses associated with maintaining an
office or other remote workspace. In the event that the Term is extended beyond
the Initial Term, the Executive may elect at any time in his sole discretion to
make the Company’s headquarters in Raleigh, North Carolina his primary work
location, in which case the Company will reimburse Executive for a pre-approved,
reasonable amount of expenses associated with moving to a residence in or near
Raleigh, North Carolina. For the duration of the Term, Executive may be required
to travel for Company business, at the reasonable cost and expense of the
Company, including but not limited to traveling to the offices of the Company,
offices of clients, prospective clients, and vendors.
 
3.3 Personnel Policies. Except as may be inconsistent with this Agreement, for
the duration of his employment during the Term, the Executive shall be subject
to the personnel policies of the Company applicable to executive level employees
in effect from time to time, and any amendments or revisions thereto. In the
event of a conflict between this Agreement and the Company’s personnel policies,
the terms of this Agreement shall control.
 
3.4 No Conflicting Duties. For the duration of his employment during the Term,
the Executive shall devote sufficiently necessary business time and attention to
the performance of his duties hereunder and shall not serve as an officer,
director, employee, consultant, or advisor to any competing business; provided
that Executive may and it shall not be considered a breach of this Agreement for
Executive to serve on boards of community and industry organizations or
otherwise participate in charitable, community and industry activities so long
as such activities do not compete with the Company’s business or otherwise
interfere with Executive’s duties hereunder.
 
4. Compensation and Benefits. During the Term of this Agreement, the Company
will provide to the Executive the following compensation and benefits:  
 
4.1 Base Salary. During the Term, Executive shall be entitled to a base salary
of $25,000.00 per month (which annualizes to $300,000.00 per year), pro-rated
for any partial month, less applicable tax and other withholdings (“Base
Salary”), which shall be paid in accordance with the Company’s normal payroll
practices and applicable state and federal law. The Base Salary may be increased
but not decreased in the sole discretion of the Board.
 
4.2 Board Member Compensation & Benefits. The compensation provided by this
Agreement shall be in lieu of any compensation that would otherwise be due to
Executive as a result of his position as a member of the Board during the Term,
provided that any other benefits extended to Board members that are not provided
hereunder shall be extended to Executive during the Term. At all times after the
Term, for so long as Executive serves as a Board member, Executive shall be
entitled to Director compensation and benefits on the same terms and conditions
as other Board members.
 
4.3 Annual Bonus. Executive shall not be entitled to an annual bonus for the
Initial Term. Any bonuses for the initial term will be the sole discretion of
the Board. In the event that the Term is extended beyond the Initial Term,
Executive shall be entitled to such bonuses, on such terms and conditions for
such bonuses, as the Parties may agree.
 
4.4 Commissions. Executive shall not be eligible for commissions on any sales or
for any sales involvement.
 
4.5 Options. Executive shall be granted awards of options to purchase shares of
the Company’s Common Stock, subject to vesting and exercise requirements and
other terms and conditions of the Company’s Equity Compensation Plan and
associated award documents, and contingent upon Executive signing the applicable
Incentive Stock Option Agreement in form and substance acceptable to the
Company, as follows:
 
4.4.1           375,000 options awarded within thirty (30) days after the
Effective Date; and
 
4.4.2           375,000 options awarded upon proof of Peri application viability
(2 unique Peri customer sales).
 
4.6 Employee Benefits. During the Term, Executive will be eligible to
participate in any and all employee benefit plans made available to similarly
situated employees of the Company from time to time and on the same terms as
similarly situated employees, except to the extent duplicative of or in conflict
with a benefit provided hereunder, subject to plan terms and applicable Company
policies. As of the Effective Date, such benefits include group health and
dental, life and disability insurance and a 401(k) plan.
 
4.7 Paid Time Off. During the Term, in addition to holidays observed by the
Company, Executive shall be entitled to take such paid time off (“PTO”) in his
discretion, so long as it does not interfere with his effective performance of
his duties and responsibilities hereunder.
 
4.8 Expenses. The Company will pay or reimburse the Executive for all reasonable
out-of-pocket expenses incurred by Executive in the performance of his duties
hereunder, subject to applicable Company policies as in effect from time to
time.
 
5. Assignment. This Agreement shall not be assignable, in whole or in part, by
either Party without the written consent of the other Party, except that the
Company may assign its rights and obligations under this Agreement to any
successor or affiliate of the Company, or to any corporation, firm or other
business entity (i) with or into which the Company may merge or consolidate,
(ii) to which all or substantially all of the ownership interests in the Company
may be transferred or (iii) to which the Company may otherwise sell or transfer
all or substantially all of its assets. After any such assignment such assignee
shall thereafter be deemed to be the Company for the purposes of all provisions
of this Agreement including this Section 5.
 
6. Successors. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
 
7. Miscellaneous.
 
7.1 Governing Law; Arbitration of Disputes. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of North
Carolina applicable to contracts executed and fully performed within such State.
All claims and disputes arising out of the interpretation, application or
enforcement of this letter agreement shall be settled by final and binding
arbitration in Wake County, North Carolina, in accordance with the then current
employment arbitration rules of the American Arbitration Association (AAA), by a
single arbitrator appointed in accordance with such rules, and judgment on the
arbitration award shall be final, binding and enforceable by any court of
competent jurisdiction. The arbitrator shall be authorized to make any decision
or award allowed by law, including but not limited to any remedy provided by law
or equity. The Parties shall each bear their own attorneys’ fees and costs
associated with such arbitration and shall share equally the arbitrator's fees
and administrative fees charged by any entity that may administer the
arbitration, subject to reapportionment of costs by the arbitrator in accordance
with applicable law. The foregoing notwithstanding, a Party may seek and be
awarded injunctive or other equitable relief in accordance with applicable law
by any court of competent jurisdiction, in addition to any other remedies
available at law or in equity.
 
7.2 Entire Agreement. This Agreement contains the entire agreement of the
Parties relating to the subject matter hereof and supersedes all prior
agreements and understandings with respect to such subject matter, and the
Parties hereto have made no agreements, representations or warranties relating
to the subject matter of this Agreement which are not set forth herein.
 
7.3 Withholding Taxes. The Company may withhold from any amounts payable under
this Agreement all federal, state, city or other taxes or amounts as may be
required or allowed to be withheld pursuant to any law or governmental
regulation, ruling or court order.
 
7.4 409A Compliance. The provisions of this Agreement are intended and shall be
interpreted and administered so as to not result in the imposition of additional
tax or interest under Section 409A of the Code (as defined below) where
applicable. References herein to the termination of Executive’s employment
shall, only to the extent required by Code Section 409A, be construed to mean
“Separation from Service” within the meaning of Section 409A(a)(2)(A)(i) of the
Code. To the extent any such cash payment or continuing benefit payable upon
Executive’s separation from service is nonqualified deferred compensation
subject to Code Section 409A, then, only to the extent required by Code Section
409A, such payment or continuing benefit shall not commence until the date which
is six (6) months and one day after the date of separation from service. To the
extent any reimbursements or in-kind benefit payments under this Agreement are
subject to Code Section 409A, such reimbursements and in-kind benefit payments
shall be made in accordance with Section 1.409A-3(i)(l)(iv) of the Treasury
Regulations (as defined below) (or any similar or successor provisions), and
payments with respect to such reimbursements or in-kind benefits shall be made
on or before the last day of the calendar year following the calendar year in
which the relevant expense is incurred. If under this Agreement, an amount is
paid in two or more installments, for purposes of Code Section 409A, each
installment shall be treated as a separate payment. For purposes of this
Agreement, (i) the “Code” shall mean the United States Internal Revenue Code of
1986, as amended, and (ii) “Treasury Regulations” shall mean all final
regulations promulgated under the Code as from time to time in effect.
 
7.5 Amendment and Waiver. This Agreement may not be amended except by an
instrument in writing signed by the Parties hereto. To be effective, a waiver by
a Party of any of its rights hereunder or of any obligation of another Party
hereto, or of any breach thereof, must be set forth in a written instrument or
document that has been signed by the Party to be charged by that waiver and no
waiver of any term or condition hereof shall be construed as a future or
continuing waiver of the same or any other term or condition hereof or, in the
case of any breach by a Party of any obligation hereunder, of any other breach,
whether or not similar.
 
7.6 Severability. To the extent any provision of this Agreement shall be found
by any court of competent jurisdiction to be invalid or unenforceable, it shall
not affect the enforceability of the remainder of such provision, or the
validity or enforceability of such provision in any other jurisdiction, and the
remainder of this Agreement shall be unaffected thereby and shall continue in
full force and effect.
 
7.7 Counterparts. This Agreement may be executed in one or more counterparts and
by the different Parties hereto in separate counterparts, each of which when
executed, together with any facsimile copies or photocopies thereof, shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
 
[Signature Page Follows]
 

 
IN WITNESS WHEREOF, the Parties have executed this Executive Employment
Agreement to be effective as of March 18, 2020 (the “Effective Date” of this
Agreement).
 
 
“COMPANY”
MOBILESMITH, INC.
By: 
Name: 
Title: 
Date: 
 
EXECUTIVE:
 
Signature: /s/ Jerry
Lepore                                                                   
Jerry Lepore
 
Date:
3/19/2020