Exhibit 10.1

EXECUTIVE SEVERANCE AGREEMENT

 

This Executive Severance Agreement (“Agreement”) is hereby entered into as of
April 27, 2018 by and between ENSERVCO CORPORATION (the “Company”) and AUSTIN
PEITZ (the “Executive”), who are collectively referred to herein as the
“Parties” and each as a “Party.”

 

WHEREAS, Executive is employed as Senior Vice President of Field Operations of
the Company pursuant to an Employment Agreement between the Parities entered
into effective June 22, 2016 (“Employment Agreement”). The Employment Agreement
provides for certain benefits and compensation to be paid to the Executive upon
termination of his employment. The Company and the Executive have discussed
termination of the Executive. The Executive and the Company desire to resolve
all potential claims of the Executive under the Employment Agreement and the
Executive is willing to resign his positions with the Company and its
subsidiaries effective on April 27, 2018.

 

WHEREAS, Company desires to provide Executive with severance payments and
benefits in recognition of Executive’s service and contributions to the Company
and to settle, fully and finally, all matters between them.

 

THEREFORE, in consideration of the terms and promises made in this Agreement,
and other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Parties agree as follows:

 

1.     Termination of Executive. Executive’s employment with the Company, and
its subsidiaries, shall terminate pursuant to the terms of this Agreement,
including, but not limited to, his positions as Senior Vice President of Field
Operations as well as from any officer or director position with any subsidiary
of the Company, effective April 27, 2018 (the “Separation Date”). The parties
intend and agree that such termination is involuntary and constitutes an
“Involuntary Separation from Service” as defined in Treasury Regulation §
1.409A-1(n).

 

2.     Executive’s Compensation. In lieu of and in settlement of the amounts due
to Executive under the Employment Agreement, the Company agrees to pay and
provide to Executive the following amounts and benefits:

 

(a)     Accrued Salary and Benefits. The Company shall pay Executive his base
salary through the Separation Date and Executive hereby resigns as an officer of
the Company and any other positions with its subsidiaries. In addition, on the
Separation Date, the Executive shall be paid any remaining balance of the
accrued and unpaid benefits, including unused vacation days and expense
reimbursements which are then due and payable under the Employment Agreement.
This payment shall be paid regardless of the Executive’s right to revoke this
Agreement under Section 14, below.

 

(b)     Severance Benefits. If Executive does not exercise his right to revoke
this Agreement under Section 14 below, Executive shall receive the following
severance payments (“Severance Benefits”), subject to appropriate employer and
employee withholding by the Company as contemplated in Section 3 below, all of
such payments to be treated as “wages” as defined in C.R.S. § 8-4-101(14)(a)
notwithstanding § 8-4-101(14)(b):

 

 

(i)

Payment to Executive of 12 months’ of Base Salary as existing as of April 27,
2018 to be paid within five business days from the date hereof plus a bonus
equal to the greater of (a) the Executive’s most recent annual bonus or (b) six
months of Base Salary commencing on the first payday following the Separation
Date and certain Company property as described in Section 7(d) hereof (primarily
a pickup truck); and

 

 

(ii)

Company will provide Executive with medical, dental and vision benefits of like
amount and tenor as of the date hereof until the earlier of 12 months after
April 27, 2018 or substantially similar coverage can be obtained by Executive
through another employer. Executive shall use good faith, commercially
reasonable best efforts to obtain such coverage in the event he obtains
employment before the earlier of such time periods.

 

(c)     Stock Options. All stock options relating to the common stock of the
Company held by Executive will immediately vest on the Separation Date (in
accordance with the agreements establishing such options) and Executive will
have until 5:00 p.m. Mountain Time on July 26, 2018 to exercise his incentive
stock options to the extent of 33,333 shares and until 5:00 p.m. Mountain Time
on April 27, 2019 to exercise all of his other stock options, in each such case,
in accordance with the applicable Option Agreements between the Parties.

 

(d)     Change of Control. In the event of a Change of Control (as defined in
the Employment Agreement), all unpaid obligations to be paid under paragraphs
2(a) or 2(b) will be payable to Executive immediately before the completion of
such transaction, and such payment will be subject to the provisions of Section
3, below.

 

3.     Tax Liability. The parties agree that the severance payments as described
in Sections 2(a) and 2(b) are employee compensation for the purposes of the
Internal Revenue Code, and the Company will make all appropriate employee and
employer withholdings relating thereto and report the severance payment on IRS
Form W-2. Company will have the right to deduct from any compensation payable to
Executive under this Agreement all federal, state and local income taxes, social
security taxes and such other mandatory deductions normally deducted from the
Executive’s compensation (that is, the Company will not deduct from Executive’s
compensation the employer’s share of FICA, FUTA, Medicaid, etc.) as may now be
in effect or may be enacted or required after the Effective Date of this
Agreement.

 

4.     Section 409A. The parties believe that this Agreement, and the manner and
timing of payments, benefits and amounts to be deferred hereunder are exempt
from the requirements and provisions of Section 409A of the Code pursuant to the
exemptions thereunder, including, but not limited to the short term deferral and
payment exemption under Treasury Regulation §1.409A-1(b)(4)(i) and/or the
payment limitations applicable under Treasury Regulation §1.409A-1(b)(9)(iii)
applicable to involuntary terminations, or other applicable exemptions. Each
installment payment of salary, compensation, bonuses or other amounts to
Executive hereunder, vesting of stock options, or other benefit shall be treated
as a separate payment for purposes of Section 409A of the Code and the
exemptions thereunder and the parties intend that such exemptions apply to
exempt all or as much of the payments to be made to Executive hereunder from
Section 409A. Notwithstanding any other provision of this Agreement to the
contrary, the provision, time and manner of payment or distribution of all
compensation and benefits provided by this Agreement that constitute
nonqualified deferred compensation subject to and not exempted from the
requirements of Section 409A of the Code (“Section 409A Deferred Compensation”)
shall be subject to, limited by and construed in accordance with the
requirements of Section 409A of the Code and all regulations and other guidance
promulgated by the Secretary of the Treasury pursuant to such Section (such
Section, regulations and other guidance being referred to herein as “Section
409A”), including the following:

 

(a)     Separation from Service. Payments and benefits constituting Section 409A
Deferred Compensation otherwise payable or provided pursuant to Section 2(b)
upon the Executive’s termination of employment shall be paid or provided only at
the time of a termination of the Executive’s employment that constitutes a
Separation from Service. For the purposes of this Agreement, a “Separation from
Service” is a separation from service within the meaning of Treasury Regulation
Section 1.409A-1(h).

 

 

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(b)     Six-Month Delay. If, at the time of a Separation from Service of the
Executive, the Executive is a “Specified Employee” within the meaning of Section
409A(a)(2)(B)(i) (a “Specified Employee”), then any payments and benefits
constituting Section 409A Deferred Compensation to be paid or provided pursuant
to Section 2(b) upon the Separation from Service of the Executive shall be paid
or provided commencing on the later of (i) the date that is six months after the
date of such Separation from Service or, if earlier, the date of death of the
Executive (in either case, the “Delayed Payment Date”), or (ii) the date or
dates on which such Section 409A Deferred Compensation would otherwise be paid
or provided in accordance with Section 2(a). All such amounts that would, but
for this Section 4(b), become payable prior to the Delayed Payment Date shall be
accumulated and paid on the Delayed Payment Date.

 

(c)     Stock-Based Awards. The vesting of any stock-based compensation awards
which constitute Section 409A Deferred Compensation and are held by the
Executive, if the Executive is a Specified Employee, shall be accelerated in
accordance with this Agreement to the extent applicable; provided, however, that
the payment in settlement of any such awards shall occur on the Delayed Payment
Date.

 

(d)     Installments. Executive’s right to receive any installment payments
payable hereunder shall be treated as a right to receive a series of separate
payments and, accordingly, each such installment payment shall at all times be
considered a separate and distinct payment for purposes of Section 409A.

 

(e)     Reimbursements. To the extent that any reimbursements payable to
Executive pursuant to this Agreement are subject to the provisions of Section
409A, such reimbursements shall be paid to Executive no later than December 31
of the year following the year in which the cost was incurred; the amount of
expenses reimbursed in one year shall not affect the amount eligible for
reimbursement in any subsequent year; and Executive’s right to reimbursement
under this Agreement will not be subject to liquidation or exchange for another
benefit.

 

5.     Section 280G Safe Harbor Cap. If it shall be determined that any payment
or distribution or any part thereof of any type to or for the benefit of
Executive whether pursuant to this Agreement or any other agreement between
Executive and the Company, or any person or entity that acquires ownership or
effective control of the Company, or ownership of a substantial portion of the
Company's assets (within the meaning of Section 280G of the Code) whether paid
or payable or distributed or distributable pursuant to the terms of the
Agreement or any other agreement, (the “Total Payments''), is or will be subject
to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then
the Total Payments shall be reduced to the maximum amount that could be paid to
Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”), if the
net after-tax payment to Executive after reducing Executive's Total Payments to
the Safe Harbor Cap is greater than the net after-tax (including the Excise Tax)
payment to Executive without such reduction.

 

The reduction of the amounts payable hereunder, if applicable, shall be made by
reducing payments that trigger the excise tax, and such reductions will be first
applied to the payment made pursuant to the Agreement and then to payments
pursuant to any other agreements that are not subject to Section 409A of the
Code, and finally to payments pursuant to any other agreements that are subject
to Section 409A of the Code, provided that Executive shall have no ability to
designate the order of such reductions. All mathematical determinations, and all
determinations as to whether any of the Total Payments are “parachute payments”
(within the meaning of Section 280G of the Code), that are required to be made
under this Section 5, including determinations as to whether the Total Payments
to Executive shall be reduced to the Safe Harbor Cap and the assumptions to be
utilized in arriving at such determinations, shall be made by an accounting firm
selected by the Company (the “Accounting Firm'').

 

If the Accounting Firm determines that the Total Payments to Executive shall be
reduced to the Safe Harbor Cap (the “Cutback Payment”) and it is established
pursuant to a final determination of a court or an Internal Revenue Service (the
“IRS”) proceeding which has been finally and conclusively resolved, that the
Cutback Payment is in excess of the limitations provided in this Section 5 (such
excess amount hereinafter referred to as an “Excess Payment”), such Excess
Payment shall be deemed for all purposes to be an overpayment to Executive made
on the date such Executive received the Excess Payment. The Company or
Executive, as applicable, shall notify the other within 30 days of its receipt
of such final determination of the amount of the Excess Payment, along with a
copy of the final determination, and Executive shall repay the Excess Payment
amount to the Company within 30 days of such notification; provided, however, if
Executive shall be required to pay an Excise Tax by reason of receiving such
Excess Payment (regardless of the obligation to repay the Company), Executive
shall provide the Company with written evidence of such requirement to pay an
Excise Tax amount, and shall then be required to repay the Excess Payment
reduced by such Excise Tax amount (or if already paid by Executive, the Company
shall reimburse Executive within 10 days of proof of payment).

 

6.     Disclosure. Executive will be given a reasonable opportunity to review
and approve any public disclosure concerning his termination of employment with
the Company in a Form 8-K, press release, or other manner.

 

7.     Restrictive Covenants.

 

(a)     Confidential Information. During Executive’s employment and for a period
of two years following the Separation Date, Executive will not, without the
prior written consent of the Board of Directors of the Company, use, divulge,
disclose or make accessible to any other person, firm, partnership, corporation
or other entity any Confidential Information pertaining to the business of the
Company or any of its affiliates, except (a) while employed by, or providing
consulting services to, the Company, in the business of and for the benefit of
the Company, or (b) as required by law. “Confidential Information” includes
without limitation non-public information concerning the financial data,
business plans, product development (or other proprietary product data),
customer lists, marketing, acquisition and divestiture plans and other
non-public, proprietary and confidential information of the Company. Executive
or his legal representatives, heirs or designated beneficiaries must return all
Confidential Information within 15 days of the termination of Executive's
employment for any reason. Executive acknowledges that this subsection (a)
survives the termination of Executive's employment and is enforceable by the
Company at any time as long as it remains in effect.

 

(b)     Non-competition. For a period of nine (9) months following the
Separation Date and in lieu of any similar provision in his Employment
Agreement, Executive agrees that, without the prior written consent of the Board
of Directors of the Company, he will not (i) engage in or have any direct
interest in, as an employee, officer, director, agent, subcontractor,
consultant, security holder, partner, creditor or otherwise, any business in
direct competition with the Company other than as a 10% or less equity
stakeholder; (ii) cause or attempt to cause any person who is, or was at any
time during the nine months immediately preceding the termination of Executive,
an employee of the Company to leave the employment of the Company; or (iii)
solicit, divert or take away, or attempt to take away, the business or patronage
of any client, customer or account, or prospective client, customer or account,
of the Company. For purposes of this subsection, a business will be deemed to be
in competition with the Company if it is in the business of providing services
to oil and/or gas production companies similar to those provided by the Company
at the time of Executive's resignation. Executive acknowledges that this
subsection survives the termination of Executive's employment and is enforceable
by the Company at any time as long as it remains in effect.

 

(i)     Executive and the Company agree that this covenant not to compete is a
reasonable covenant under the circumstances with respect to both scope and
duration, and further agree that if in the opinion of any court of competent
jurisdiction such restraint is not reasonable in any respect, such court will
have the right, power and authority to excise or modify such provision or
provisions of this covenant as to the court will appear not reasonable and to
enforce the remainder of the covenant as so amended.

 

(ii)     Executive agrees that any breach of the covenants contained in this
subsection (b) would irreparably injure the Company. Accordingly, Executive
agrees that the Company may, in addition to pursuing any other remedies it may
have in law and equity, obtain an injunction, without the posting of a bond or
other security, against Executive from any court having jurisdiction over the
matter restraining any further violation of this Agreement by Executive and
cease making any payments otherwise required by this Agreement.

 

(c)     Intellectual Property. Executive acknowledges and agrees that all
intellectual property created, acquired, adapted, modified or improved, in whole
or in part, by or through the efforts of Executive during the course of his
employment by the Company, including without limitation all copyrights, patents,
trademarks, service marks, trade secrets, know-how or other work product in any
way related to the Company's operations and activities, are works for hire and
are owned exclusively by the Company, and Executive hereby disclaims any right
or interest in or to any such intellectual property.

 

(d)     Company Property. Within seven days after the Separation Date, Executive
agrees to return to the Company any and all records, files, notes, memoranda,
reports, work product and similar items, and any manuals, drawings, sketches,
plans, tape recordings, computer programs, disks, cassettes and other physical
representations of any information, relating to the Company, or any of its
affiliates, whether or not constituting Confidential Information. Executive also
agrees to return to the Company any other property belonging to the Company no
later than seven days after the Separation Date. Notwithstanding the preceding
sentences, Executive may retain and will be assigned title to the pickup truck
that he currently uses (2016 Dodge Ram 2500 4x4 Laramie 4dr Mega Cab 6.3 ft. SB
Pickup, VIN 3C6UR5NL6GG125816). Executive acknowledges and agrees that retaining
any copies of Confidential Information or other property belonging to the
Company will be deemed to be the misappropriation of the property of the
Company.

 

8.     Non-Disparagement.     The Executive and the Company (including persons
speaking with the authority of the Company whether or not speaking on behalf of
the Company) agree to represent the other Party in a positive light and not to
disparage or in any way communicate to any person or entity any negative
information or opinion concerning the Executive or the Company, its subsidiaries
and affiliates, or any of their partners, members, family members, shareholders,
officers, directors, executives or agents, or any of them. This provision shall
not prohibit either Party from making any statements or taking any actions
required by law, or reporting any actions or inactions either Party believes to
be unlawful. This provision shall not be interpreted to require or encourage
either Party to make any misrepresentations.

 

9.     General Release. Executive agrees that, in consideration of the Severance
Benefits described in Section 2 above, he will, and hereby does, forever and
irrevocably release and discharge Company, its officers, directors, executives,
independent contractors, agents, affiliates, parents, subsidiaries, divisions,
predecessors, executive benefit plans, purchasers, assigns, representatives,
successors and successors in interest from any and all claims, actions,
agreements causes of action, damages of any kind, demands, debts, defenses,
grievances, obligations, contracts, complaints, promises, judgments, expenses,
costs, attorneys’ fees, compensation, and liabilities, known or unknown,
whatsoever which he now has, has had, or may have, whether the same be at law,
in equity, or mixed, in any way arising from or relating to any act, occurrence,
or transaction on or before the date of this Agreement, including without
limitation his employment and separation of employment from Company. Executive
expressly acknowledges that this General Release includes, but is not limited
to, claims under any state, local or federal wage and hour law or wage payment
or collection law, and claims of discrimination, retaliation or harassment based
on age, race, color, sex, religion, handicap, disability, national origin,
ancestry, citizenship, marital status, sexual orientation, genetic information
or any other protected basis, or any other claim of employment discrimination,
retaliation or harassment under the Family and Medical Leave Act (29 U.S.C.
§§ 2601 et seq.), the Americans With Disabilities Act (42 U.S.C. §§ 12101 et
seq.), the Rehabilitation Act of 1973 (29 U.S.C. §§ 701 et seq.), the Age
Discrimination In Employment Act (including the Older Workers Benefit Protection
Act) (29 U.S.C. §§ 626 et seq.), Title VII of the Civil Rights Acts of 1964 and
1991 as amended (42 U.S.C. §§ 2000e et seq.), the Executive Retirement Income
Security Act (29 U.S.C. §§ 1001 et seq.), the Consolidated Omnibus Budget
Reconciliation Act of 1985 (29 U.S.C. §§ 1161 et seq.), the Genetic Information
Nondiscrimination Act of 2008 (42 U.S.C. §§ 2000ff et seq.), the Fair Labor
Standards Act (29 U.S.C. §§ 201 et seq.), the Colorado Anti-Discrimination Act
(C.R.S. § 24-34-402 et seq.), or any other federal, state, or local law,
regulation or ordinance prohibiting employment discrimination or governing
employment. The Parties agree that this General Release does not release (i) any
claims arising out of any alleged breach of this Agreement, (ii) any claims that
may result from, or arise as a result of, that certain Indemnification Agreement
by and between Company and Executive dated February 21, 2014, which agreement
Executive and Company agree remains in full force and effect, (iii) any rights
or claims the Executive may have for indemnification under the Certificate of
Incorporation of the Company, the bylaws of the Company or Delaware law, or (iv)
any claims arising out of any alleged breach of the agreements establishing the
options held by the Executive as described in Section 2(c), which such
agreements the Executive and Company agree remain in full force and effect.

 

10.     Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective personal representatives, heirs,
executors, administrators, successors, and assigns.

 

11.     Governing Law. The Parties agree that this Agreement and the rights and
obligations hereunder shall be governed by, and construed in accordance with,
the laws of the
State of Colorado regardless of any principles of conflicts of laws or choice of
laws of any jurisdiction, except as to any matter which is governed by federal
law.

 

12.     Venue. The Parties agree that any claimed violation of this Agreement
must be submitted for determination in the state courts in the City and County
of Denver, Colorado. In any litigation or arbitration of any dispute between the
Parties, the prevailing Party shall be entitled to recover reasonable attorney
fees and the other costs of the proceeding.

 

13.     Severability; Interpretation of Agreement. If any terms of the above
provisions of this Agreement are found null, void or inoperative, for any
reason, the remaining provisions will remain in full force and effect provided
such interpretation maintains the agreement of the parties represented by this
Agreement substantially in effect. The language of all parts of this Agreement
shall in all cases be construed as a whole, according to its fair meaning, and
not strictly for or against either of the Parties.

 

14.     Time to Consider Agreement; Revocation. Executive understands that he
has twenty-one (21) days from the date of his receipt of this Agreement to
consider his decision to sign it with the release of claims under the Age
Discrimination in Employment Act, as amended, contained in Section 9, and that
he may unilaterally waive this period at his election. Executive’s signature on
this Agreement constitutes an express waiver of the twenty-one (21) day period.
The Parties agree that any revisions or modifications to this Agreement, whether
material or immaterial, will not and did not restart this time period. Executive
acknowledges that he may revoke this Agreement for up to and including seven (7)
days after his execution of this Agreement; provided, however, that if Executive
elects to revoke this Agreement, Executive will not be paid Severance Benefits
he would otherwise be entitled to receive under Section 2(b) if the Agreement is
not revoked .

 

15.     Full and Complete Agreement. The Parties agree and understand that no
promises, covenants, representations, understandings or warranties have been
made other than those expressly contained herein, and that this Agreement
constitutes the entire agreement between the Parties. The Parties agree that
this Agreement shall not be modified except in writing signed by each of the
Parties hereto.

 

16.     Agreement Freely Entered. Each Party represents to the other Party that
it carefully read this Agreement, that it understands all of the terms hereof,
that it had a reasonable amount of time to consider its decision to sign this
Agreement, that it has been advised in writing and has had the opportunity to
discuss all the terms of this Agreement with an attorney of its choice, that in
executing this Agreement it does not rely and has not relied upon any
representation or statement made by any other Party nor the agents,
representatives or attorneys of such Party with regard to the subject matter,
basis, or effect of the Agreement, and that it enters into this Agreement
voluntarily, of its own free will, without any duress and with knowledge of its
meaning and effect. In entering into this Agreement on behalf of the Company,
the signatory on behalf of the Company represents to Executive that he does so
with all authority necessary to do so.

 

17.     Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original instrument, but all such counterparts together
shall constitute but one agreement. Any Party’s delivery of an executed
counterpart signature page by facsimile or email is as effective as executing
and delivering this agreement in the presence of the other Party. No Party shall
be bound until such time as both Parties have executed counterparts of this
Agreement.

 

 

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of April
27, 2018.

 

AUSTIN PEITZ                                                        ENSERVCO
CORPORATION

 

 

 /s/ Austin Peitz                                                          By: 
 /s/ Ian Dickinson                                   

                                                                                    Title:
President and Chief Executive Officer