EXHIBIT 10.1
EXECUTIVE SERVICE AGREEMENT
THIS EXECUTIVE SERVICE AGREEMENT (the "Agreement") is deemed made, entered into
and effective this 22nd day of September, 2009 (the "Effective Date").
Between: Mainland Resources, Inc., a Nevada Corporation, with its principle
business address at 00000 Xxxxx Xxxxxxx 000, Xxxxx 000, Xxxxxxx, Xxxxx 00000
(the "Company").
And: Xxxx X. Xxxx, an individual, with his principal business address at 00000
Xxxxx. Xxxxxxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxx 00000
(the "Executive").
WHEREAS:
A. The Company is a reporting company incorporated under the laws of the State
of Nevada, U.S.A., and has its common shares listed for trading on the NASDAQ
Over-The-Counter Bulletin Board;
B. The Company is involved in the principal business of acquiring, exploring and
developing various resource properties of merit and particularly those resource
properties which constitute oil and gas exploration and development prospects
(collectively, the "BUSINESS");
C. The Executive is a professional within the oil and gas industry and has
extensive experience in and specialized knowledge in providing consulting advise
on exploration strategies, management and operational service considerations to
oil and gas exploration companies involved in the areas of Business carried out
by the Company and desires to provide professional consulting services to the
Company and act in the capacity as its Treasurer/Chief Financial Officer and a
Director;
D. The Company desires to retain the Executive to continue to act in the
capacity as the Treasurer/Chief Financial Officer and a Director, and the
Executive desires to accept such positions, in order to provide such related
services to the Company (collectively, the "GENERAL SERVICES");
E. It is the intention of the Company and the Executive (at times referred to
herein as "Parties") hereby to memoralize all such agreements and understandings
between them relating to the terms and conditions of the General Services and,
correspondingly, it is their further intention that the terms and conditions of
this agreement (the "AGREEMENT") will replace, in their entirety, all such prior
discussions, negotiations, understandings and agreements with respect to the
General Services;
F. The Parties hereto have agreed to enter into this Agreement which replaces,
in its entirety, all such prior discussions, negotiations, understandings and
agreements, and, furthermore, which necessarily clarifies their respective
duties and obligations with respect to the General Services to be provided
hereunder, all in accordance with the terms and conditions of this Agreement;
G. The Parties do not wish this Agreement to be an employment agreement and
intend to maintain an independent contractor relationship whereby the Executive
will continue to provide the General Services hereunder. The Executive shall
allocate, in his discretion, the amount of time appropriate to providing General
Services to the Company and the manner of the provision of any part of the
General Services. The Executive may choose the location from which the
Executive's General Services are rendered, select the times during which such
General Services are rendered, and the optimal form of communication through
which to deliver or provide such General Services. Provided however, all
decisions of the Executive in rendering the General Services must be made in
good faith, in the best mutual interests of the Executive and the Company, and
carried out in a manner that is generally consistent with accepted industry
standards for the provision of such General Services.
H. This Agreement when duly signed and accepted by the Executive; will define
the duties, responsibilities and obligations of the Executive; set forth and
provide the consideration, expense allowances and any other consideration
offered or provided to the Executive hereunder; and as offered by the Company to
other independent contractors providing professional services and consulting
services to the Company.
NOW THEREFORE, in consideration of the recited ongoing relationship of the
Parties and the promises, covenants, assurances, agreements and financial
compensation provided by and between the Parties all of which is mutually
acknowledged as good and sufficient consideration, by and between the Parties
hereto, and the Company and the Executive hereby promise, covenant and agree as
follows:
1. REMUNERATION
1.1 The Company shall pay to the Executive a monthly fee of $10,000.00 (the
"Executive Fee") and an expense allowance in such amounts as may from
time to time be agreed to by and between the Executive and the Company.
1.2 The Company shall grant an aggregate of 3,000,000 stock options (the
"Stock Options") to the Executive under its 2008 Stock Option Plan, as
amended (the "Stock Option Plan") on the Effective Date. The Stock
Options shall expire ten (10) years from the Effective Date and shall
vest in incremental periods as reflected below (each, hereinafter the
"Vesting Date"). The exercise price at each Vesting Date shall be the
lesser of: (a) the thirty-day weighted average price of the Company's
shares of common stock prior to each of the respective Vesting Date; or
(ii) the issue price as established by the Board of Directors of the
Company's shares of common stock at each of the equity fundings
referenced below in (i). The Vesting Date of the Stock Options is as
follows: (i) 1,500,000 Stock Options shall vest on the date the Company
closes equity funding(s) aggregating $10,000,000; (ii) 500,000 Stock
Options shall vest when the Company has successfully completed its
listing and commences trading of its shares of common stock with a
designated trading symbol (the "Trading Date") with the NYSE Amex
Equities, formerly known as the American Stock Exchange ("NYSE Amex
Equities") or comparable major exchange; (iii) 500,000 Stock Options
shall vest at the one year anniversary date of the Trading Date (the
"First Trading Anniversary Date"); and (iv) 500,000 Stock Options shall
vest at the one year anniversary date of the First Trading Anniversary
Date (the "Second Trading Anniversary Date").
1.3 The terms and conditions for payment of monthly service fees, expense
allowances, reimbursement for the cost of providing the General
Services, grant of Stock Options, and other similar matters relating to
financial consideration payable to the Executive hereunder are only
binding on the Parties and form part of this Agreement when reduced to
writing, signed by the Parties or their respective authorized
signatories, and provided in the body of this Agreement.
1.3 The compensation provided for herein will be inclusive of any
remuneration otherwise payable to the Executive for serving as a
director of the Company or any subsidiary of the Company at the request
of the Company during the currency of this Agreement.
2. EXPENSES
2.1 The Company shall reimburse the Executive the full amount for all
expenses reasonably incurred by the Executive in the proper performance
of the General Services, where such expenses are pre-approved under
this Agreement, pre-approved by the Company's Board of Directors (the
"Board") or the controller of the Company at any specified rate or
amount, or upon the Executive providing such receipts or other evidence
as the Company may reasonably require.
3. NOTICE OF TERMINATION AND TERMINATION OF THE AGREEMENT
3.1 Any Party can terminate this Agreement upon thirty (30) days written
notice (herein called "Notice of Termination") to the other Parties. If
the Company terminates the Agreement prior to the Termination Date for
any reason other than the Executive's gross negligence, all unvested
Stock Options shall vest and become immediately exercisable for a
period of ninety (90) days and the Company shall pay the Executive an
amount equal to six (6) months of Executive Fees within thirty (30)
days of written Notice of Termination.
3.2 In the event that the Company terminates this Agreement for any reason
without providing the required Notice of Termination, then the Company
shall pay the Executive the amount of the Executive Fee as required
monthly up and to the Termination Date (as defined below).
3.3 The Executive is required to provide Notice of Termination herein to
the Company and his failure to do so will entitle the Company to only
pay the Executive Fee on a prorated basis up to the date of the Notice
of Termination by the Executive without notice.
3.4 All expenses and other reimbursable cost payable to the Executive
hereunder are payable to the date of effective Notice of Termination as
provided hereunder.
4. TERM OF AGREEMENT
4.1 Unless otherwise agreed to in writing by the Parties, this Agreement
will commence on the Effective Date and continue on for a two-year
period at which date it shall terminate (herein called the "Termination
Date"). The Agreement may be renewed on an annual basis thereafter upon
the mutual consent of the Parties.
5. GENERAL SERVICES
5.1 During the continuance of this Agreement the Company hereby agrees to
appoint and to retain the Executive as a Director and as the Treasurer
and Chief Financial Officer of the Company, respectively. The Executive
hereby agrees to be subject to the direction and supervision of, and to
have such authority as is delegated to the Executive by, the Board of
Directors of the Company (the "Board"), consistent with such positions.
The Executive also agrees to accept such positions in order to carry
out the duties of a Director and to provide such related services,
associated with the positions of Treasurer and Chief Financial Officer,
as the Board may, from time to time, reasonably assign to the Executive
and as may be necessary for the ongoing maintenance and development of
the Company's various Business interests during the continuance of this
Agreement (herein collectively described as the "GENERAL SERVICES").
5.2 It being expressly acknowledged and agreed by the Parties that the
Executive will commit to and provide to the Company the General
Services on the basis set forth herein. In this regard it is hereby
acknowledged and agreed that the Executive, as Treasurer and Chief
Financial Officer, shall be entitled to communicate with and shall rely
upon the immediate advice, direction and instructions of the Chief
Executive Officer, and shall have direct responsibility to the Audit
Committee and the Board of Directors as a whole.
5.3 Without in any manner limiting the generality of the General Services
to be provided as set forth in Section 5.1 and 5.2 herein and subject
to the provisions of letter "G" of the Recitals hereof, it is hereby
also acknowledged and agreed that Executive will, during the
continuance of this Agreement, devote a substantial amount of
professional and business effort, energy and enterprise, both as to the
time and commitment, to the General Services.
5.4 The Executive will perform the said General Services faithfully,
diligently, to the best of the Executive's capabilities with the
resources at its disposal and in the best interests of the Company.
5.5 Included in the general definition and meaning of General Services,
hereunder, are those duties, responsibilities and obligations that the
Executive has agreed to be bound by as a Director.
5.6 In any event the Executive will not engage in any activity which is in
a conflict of interests with its engagement under this Agreement or
contrary to the best interests of the Company. In that regard, the
Executive and the Company shall regularly consult and make necessary
and appropriate records available to one another to assure them, and
each of them, that no potential or actual conflict of interest arises
in the performance of the responsibilities hereunder by the Executive.
6. CONFIDENTIALITY, NON-DISCLOSURE, NON-COMPETITION AND NON-CIRCUMVENTION
6.1 Subject to the provisions of Section 5.6 hereof to prevent conflicts of
interest, the Executive hereby covenants, promises and agrees that he
will be provided with confidential, proprietary and valuable
information by the Company about its clients, properties, prospects and
financial circumstances from time to time during the currency of this
Agreement, in order to permit the Executive to properly, effectively
and efficiently carry out its tasks, duties and activities hereunder.
However, by providing such disclosure of Confidential Information to
the Executive, the Company relies on the Executive to hold such
information as confidential and only disclose the same to those
parties, whether directors, officers, employees, agents,
representatives or clients and contacts of the Executive "who need to
know", in order that the Executive can carry out the objects of this
Agreement as provided for herein and as communicated as between the
Company and the Executive during the currency of this Agreement. Due to
the nature of the relationship of the Executive to the Company no more
precise limitations can be placed on the Executive's use and disclosure
of Confidential Information received from the Company pursuant hereto
than as described herein.
6.2 The general nature of the Agreement between the Parties is that the
Executive (also called the "Independent Contractor") acting as an
independent contractor and consultant to the Company, whereby the
Independent Contractor will act on the Company's behalf in the
promotion of the Company's interests and by way of introductions,
consulting to and advising of the Company on matters related to the
Business. With the broad mandate and scope of this relationship the
Company must rely on the fiduciary duty of good faith that the
Executive owes the Company as provided under this Agreement and as a
Director and Officer of the Company, when the Company is making
disclosure to the Independent Contractor of Confidential Information
about Business opportunities and competitive advantages which the
Company has cultivated and developed. All Confidential Information
disclosed to the Executive is disclosed on the strict condition that
the Independent Contractor, will not now or at any future time, use
such Confidential Information received from the Company hereunder in
any manner inconsistent with the best interests of the Company, except
with the express written permission of the Company. The result of these
terms and conditions of disclosure of Confidential Information to the
Independent Contractor by the Company is that the Independent
Contractor will:
(a) Only disclose such Confidential Information on a "need to
know" basis, but it will be up to the Independent Contractor's
reasonable discretion in acting on behalf of and in the best
interests of the Company to determine what group or groups
"need to know" about such information pursuant to the nature
and scope of this Agreement;
(b) The disclosure of Confidential Information from the Company to
the Independent Contractor further to the intents and purposes
of this Agreement will prohibit the Independent Contractor
from directly or indirectly using the Confidential Information
in a manner that is in conflict with or contrary to the best
interests of the Company, except with the Company's written
consent;
(c) The Independent Contractor will not use Confidential
Information in a manner that in the view of the Company would
constitute a direct or indirect use for a purpose which is in
competition with the best interests of the Company or would be
a circumvention of the Company's right or interest in a
particular Business opportunity.
(d) The meaning of Confidential Information (herein called
"Confidential Information") will include any information
disclosed by the Company that is declared by the Company
either verbally or in writing, depending on the means of
communication of such Confidential Information by the Company
to the Independent Contractor.
(e) The restrictions on disclosure of Confidential Information do
not apply to any of the following circumstances:
(i) Information forming part of the public domain, which became
such through no disclosure or breach of this Agreement on the
Independent Contractor's behalf;
(ii) Information which the Independent Contractor can independently
prove was received from a Third Party, which was legally
entitled to disclose such information;
(iii) Information which the Independent Contractor is legally
obligated to disclose in compliance with any applicable law,
statute, regulation, order, ruling or directive of an
official, tribunal or agency which is binding on the
Executive, provided that the Independent Contractor must also
provide the Company with notice of such disclosure at or
before releasing or disclosing the Confidential Information to
such official, tribunal or agency so that the Company is
afforded an opportunity to file a written objection to such
disclosure with such official, tribunal or agency.
6.3 The Independent Contractor understands, acknowledges and agrees that
the covenants to keep the Confidential Information confidential and not
disclose it to Third Parties, except in conformity with this Agreement,
is necessary to protect the proprietary interests of Company in such
Confidential Information and a breach of these covenants would cause
significant loss to the Company in regard to its competitive advantage,
market opportunities and financial investment associated with
protection of its Confidential Information.
6.4 The Independent Contractor further understands, acknowledges and agrees
that a breach of these covenants of confidentiality, non-disclosure,
non-competition and non-circumvention under this Section 6 (in
combination the "Covenants of Confidentiality, Non-Circumvention and
Non Disclosure"), will likely cause such irreparable harm to the
Company that damages alone would be an inadequate remedy and the
Independent Contractor consent and agree such equitable remedies
including injunctive relief against any further breach which are
reasonably justified in addition to any claim for damages based on a
breach of these Covenants of Confidentiality, Non-Circumvention and Non
Disclosure.
6.5 The Parties mutually acknowledge, confirm and agree that the Covenants
of Confidentiality, Non-Circumvention and Non-Disclosure will survive
Termination of this Agreement and will continue to bind the Independent
Contractor to protect the Company's interest in such Confidential
Information disclosed pursuant hereto.
7. CHANGE OF CONTROL.
7.1 Where a Change of Control occurs prior to the Termination of this
Agreement, then the Independent Contractor will be entitled at any time
within one (1) month of the occurrence of the Change of Control, to
terminate this Agreement by giving the other Party thirty (30) days
notice in writing of the Independent Contractor's intention to
terminate the Agreement. In the event that the Independent Contractor
Terminates the Agreement, then the Company or the legal successor to
the Company (where a Change of Control involves a merger, take-over,
acquisition or similar arrangement accompanying the Change of Control,
which actually or effectively results in the elimination of the Company
as a separate or subsisting legal entity whereby it is replaced by the
legal successor which will hereinafter be called the "Successor
Company"), will be obligated to pay a termination bonus (the
"Termination Bonus") to the Independent Contractor equal to the greater
of the remaining Executive Fees for the Term of Agreement or six (6)
months of Executive Fees in addition to all unpaid amounts due and
owing to the Independent Contractor by the Company at the time of such
Termination.
7.2 Payment of the Termination Bonus to the Executive pursuant to
sub-section 7.1 will be made by the Company or the Successor Company
within thirty (30) days of the date that the notice of termination was
delivered by the terminating Party, and such Termination Bonus will
only be payable where:
(a) the Independent Contractor is not in breach of any of the terms and
conditions of this Agreement such that the Company or the Successor
Company, as the case may be, is legally entitled to terminate this
Agreement pursuant hereto, and
(b) the Independent Contractor delivers a duly executed copy of such
signed release and waiver of claim as prepared by the Company or the
Successor Company pursuant to the settlement that: such Termination
Bonus together with all other outstanding monies duly owing to the
Executive will, upon payment pursuant to this sub-sections 7.2 and 7.3,
constitute a full and final payment and consideration, in settlement of
any and all outstanding claims or potential claims, that the
Independent Contractor has or may have against the Company or the
Successor Company, or their respective Board of Directors, Officers,
successors or other assigns, arising out of or in relation to the
Independent Contractor relationship to the Company or the Successor
Company under this Agreement.
7.3 Where the Change of Control triggers the obligation of the Company or
the Successor Company to pay the Termination Bonus pursuant to 7.1 and
7.2 herein, the Independent Contractor will have the right to exercise
any Stock Options as granted under this Agreement or as may have been
previously granted to the Executive in his capacity as either an
officer or director of the Company, for a period of ninety (90) days
from the date of Termination (the "Post Termination Exercise Period").
Unless prohibited by law or the constitution of the Company or the
Successor Company, where any of the Independent Contractor's Stock
Options would not have otherwise vested and thereby be exercisable by
the Independent Contractor before the expiry of the Post Termination
Exercise Period, the Company will elect to do either one of the
following, (on the advise of its corporate and securities attorney):
(a) extend the Post Termination Exercise Period; or,
(b) collapse the length of the Stock Option vesting period,so that
the Independent Contractor's total issued stock options in the Company
securities (if any) can be legally exercised by the Independent
Contractor within the Post Termination Exercise Period,
where the Independent Contractor so choses to exercise such of the
Company's stock options as are in their possession at the time of
Termination.
8. Indemnification
8.1 The Company agrees to indemnify, defend and hold harmless the Executive
for any and all acts and omissions that are not due to the Executive's
gross negligence or gross misconduct. Further the Company will use its
best efforts to obtain as soon as practical and maintain at all times
the appropriate directors and officers insurance policy while the
Executive provides such services for the Company.
9. General Clauses
9. GOVERNING LAW, JURISDICTION AND CURRENCY
9.1 This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Nevada, without giving effect to the
principles of conflicts of law thereof.
9.2 Unless otherwise mutually agreed to in writing by the Parties, any
action, proceeding or arbitration in regard to a dispute or direction
relating to the subject matter of this Agreement will be solely within
the jurisdiction of the appropriate court, tribunal or arbitrator of
competent jurisdiction within the State of Nevada.
9.3 Unless otherwise expressly provided for herein or agreed upon in
writing by the Parties, all references to money or money consideration
are deemed to be in United States Currency ("US$")
10. NOTICE
10.1 All notices to be given with respect to this Agreement, unless
otherwise provided for, shall be given to Executive, the Company and
the Executive at the respective addresses, fax numbers and email
addresses shown below or otherwise communicated by the Parties to each
other for such notice and service matters during the currency of this
Agreement.
10.2 All notices, requests, demands or other communications made by a Party
will be deemed to have been duly delivered: (i) on the date of personal
delivery utilizing a process server, courier or other means of physical
delivery to the intended recipient ("Personal Service"); or (ii) on the
date of facsimile transmission (the "Fax") on proof of receipt of the
Fax; or (iii) on the date of electronic mail (the "email") with
verifiable proof of receipt of such email; or (iv) on the seventh (7th)
day after mailing by registered mail with postage prepaid ("Registered
Mail"), to the Party's address, Fax number, email address set out in
this Agreement or such other addresses Fax numbers or email address as
the Parties or their Representatives may have from time to time during
the currency of this Agreement or thereafter and communicated to the
other Parties for the purposes of this Agreement.
To: Mainland Resources Inc.
00000 Xxxxx Xxxxxxx 000, Xxxxx 000, Xxxxxxx, Xxxxx 00000
Or
X/x Xxxxx X. Xxxxx, Xxxxxxxx Xx Law
0000 X. Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Emaile:xxxxxx@xxxxxxxxx.xxx
To: Xxxx X. Xxxx
00000 Xxxxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
11. ENTIRE AGREEMENT
11.1 This Agreement constitutes the entire agreement between the Parties
with respect to the subject matter hereof and replaces, restates in
full and supersedes all other prior agreements and understandings, both
written and oral.
12 ASSIGNMENTS
12.1 The Parties agree that neither will assign this Agreement without prior
written consent of the other Party.
13. INUREMENT
13.1 This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and authorized assigns. Any
attempt by either party to assign any rights, duties or obligations
that may arise under this Agreement without the prior written consent
of the other party shall be void.
14. ENTIRE AGREEMENT AND SEVERANCE
14.1 This document contains the entire agreement between the Parties with
respect to the subject matter hereof, and neither Party is relying on
any agreement, representation, warranty, or other understanding not
expressly stated herein. In the event that any provision of this
Agreement will be held to be invalid, illegal or unenforceable in any
circumstances, the remaining provisions will nevertheless remain in
full force and effect and will be construed as if the unenforceable
portion or portions were deleted.
15. TIME IF OF THE ESSENCE
15.1 Time is of the essence in this Contract. A waiver of the strict
performance requirements hereunder in on instance will not constitute a
waiver for any other instance where time for performance is specified
herein..
16 COUNTERPARTS AND EXECUTION ELECTRONICALLY
16.1 Where the Parties hereto or their authorized signatories have signed,
sealed and duly executed this Agreement effective the date above shown
whether as a whole document in original form or in several
counterparts; each such counterpart shall be considered as an original
and in combination comprises the formal execution hereof. The Parties
acknowledge and consent to the execution of this Agreement and all
related documents and notices pursuant hereto by electronically scanned
signatures or facsimile transmission, either of which will constitute
good and sufficient execution, service and notice for all intents and
purposes hereunder and will be deemed to be as effective as if an
originally "signed-in-hand" physical document was used instead.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
IN WITNESS WHEREOF this Agreement is hereby signed, sealed and duly executed by
the Parties or their duly authorized signatories on the Effective Date first
above written.
The COMMON SEAL of Mainland Resources Inc. )
was affixed in the presence of )
)
) (C/S)
)
Authorized Signatory )
SIGNED, SEALED and DELIVERED by )
Xxxxxxx X. Newport in the presence of: )
)
)
)
Signature of Witness ) _____________
) Xxxx X. Xxxx
)
Address of Witness )
)
)
Name and Occupation of Witness )
