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 20333 State Highway 249, Suite 200, Houston,
Texas 77070
(the "Company").
And: Michael J. Newport, an individual, with his
principal business address at
13311 April Mist Court, Cypress, Texas 77429
(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 has to date provided professional
consulting services to the
Company and acted in the capacity as its President/Chief Executive
Officer and a
Director;
D. The Company desires to retain the
Executive to continue to act in the
capacity as the President/Chief Executive
Officer and a Director, and the
Executive desires to accept to continue in such
positions, in order to provide
such related services to the Company (collectively, the "GENERAL
SERVICES");
E. Since the verbal month-to-month agreement of the
Company and the Executive
relating to the engagement of the Executive in
such capacity effective as of
February 28, 2008 (in combination called the "Parties"), it
is the intention of
the Parties hereby to memoralize all such previous 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;
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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 $15,000.00 (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 Notwithstanding any
prior issuances of common stock of the Company or
grant of
stock options to the Executive, the Company
shall grant an
aggregate
of 1,500,000 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 (b)_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) 500,000 Stock
Options 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
other Senior
exchange as the case may be; (ii) 500,000 Stock Options at
the one year
anniversary date of the Trading Date (the "First Trading
Anniversary
Date"); and (iii) 500,000 Stock Options at the second year
anniversary
date of the Trading 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.
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1.3 The
compensation provided for herein
will be inclusive of any
remuneration
otherwise payable to the Executive may be 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.
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). The
Executive
shall retain all shares of common stock and Stock
Options
previously issued
or granted as of the Termination Date. In addition to
the Stock
Options reflected in paragraph 1.2 above, as of the
date of
this
Agreement, the Executive holds of record: (i)
689,992 shares of
common stock; (ii)
1,800,000 stock options to purchase 1,800,000 shares
of the
Company's common stock at an exercise price of $0.585 per
share
expiring on April
7, 2018; and (iii) 300,000 stock options to purchase
300,000
shares of the Company's common stock at an exercise
price of
$1.50 per share
expiring on February 4, 2019.
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 is shall terminate (herein called the "Termination
Date"). The
Agreement may be renewed on an annual basis thereafter upon
the mutual consent
of the Parties.
<PAGE>
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 President
and Chief
Executive 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 President and Chief Executive 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 President
and Chief
Executive Officer,
shall be entitled to communicate with and shall rely
upon the
immediate advice, direction and instructions of the
Chairman
of the Board, or
upon the advice or instructions of such other Director
or
officer of the Company as the Chairman
may, from time to time,
designate as
necessary, in order to initiate, coordinate and implement
the General
Services as contemplated herein subject, at all times,
to
the final
direction and supervision of the Board 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
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