Item 1.01 Entry into a Material Definitive Agreement.
On March 18, 2020 (the "Effective Date"), MobileSmith, Inc. (the "Company")
entered into an Executive Employment Agreement with Jerry Lepore to serve as the
Company's Chief Executive Officer (the "Lepore Agreement"). Mr. Lepore has
served as the Company's Chief Executive Officer since January 17, 2020 without a
formal employment agreement and is a current member of the Company's Board of
Directors (the "Board"). The Lepore Agreement will continue until December 31,
2020 (the "Initial Term") unless terminated pursuant to its terms as described
below.
Under the Lepore Agreement, Mr. Lepore is entitled to an annual base salary of
$300,000. The base salary may be increased but not decreased in the sole
discretion of the Board. Mr. Lepore is not entitled to an annual bonus during
the Initial Term unless granted at the sole discretion of the Board. Subsequent
to the Initial Term, Mr. Lepore shall be entitled to an annual bonus subject to
the terms and conditions upon which the Company and Mr. Lepore may agree. Mr.
Lepore shall not be eligible for commissions on any sales or for any sales
involvement.
Also and pursuant to the Company's 2016 Equity Compensation Plan, Mr. Lepore
will be granted (i) within thirty days after the Effective Date an option to
purchase up to 375,000 shares of the Company's common stock subject to vesting
terms and an exercise price yet to be determined and (ii) an option to purchase
up to an additional 375,000 shares of the Company's common stock which will be
granted upon the Company achieving certain business objectives and once granted
be subject to vesting terms and an exercise price yet to be determined The
specific terms of each of the option grants will be announced once they are
determined.
Pursuant to the Lepore Agreement, if Mr. Lepore's employment is terminated by
Mr. Lepore for good reason (as such term is defined in Lepore Agreement), or by
the Company without cause (as such term is defined in Lepore Agreement) prior to
July 1, 2020, Mr. Lepore will be entitled to receive, in addition to other
unpaid amounts owed to him (e.g., for base salary, accrued personal time and
business expenses): (i) to the then base salary for a period of three months (in
accordance with the Company's general payroll policy) and (ii) substantially
similar coverage under the Company's then-current group insurance coverage for a
period of three months.
If the Company terminates Mr. Lepore's employment for cause or employment
terminates as a result of Mr. Lepore's resignation, death or disability or if
Mr. Lepore resigns without good reason, Mr. Lepore will only be entitled to
unpaid amounts owed to him.
The foregoing summary of certain terms of the Lepore Agreement does not purport
to be complete and is subject to, and qualified in their entirety by, the full
text of Lepore Agreement, a copy of which are attached hereto as Exhibits 10.1
and is hereby incorporated into this Current Report on Form 8-K by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Compensatory Arrangements for Existing Officers and Director
All information set forth in Item 1.01 of this Current Report on Form 8-K is
hereby incorporated herein by referenced.
Additionally, on March 18, 2020, Robert Smith, a current member of the Board,
was appointed as the Chairman of the Board and will receive a $5,000 per month
cash retainer as compensation for such position.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibit
10.1
Executive Employment Agreement dated March 18, 2020 between MobileSmith, Inc.
and Jerry Lepore.
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MOBILESMITH, INC. 
