Exhibit 10.2

 

ENSERVCO CORPORATION

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”), effective July 24, 2019, is by and
between the following parties:

 

Company:

 

Enservco Corporation, a Delaware corporation (hereafter “Company”); and

 

Executive:

 

Marjorie Hargrave, an individual resident of the state of Colorado (hereafter
“Executive”).

 

Recitals

 

A. In order to induce Executive to serve as the Company’s Chief Financial
Officer, the Company desires to provide Executive with compensation and other
benefits on the terms and conditions contained in this Agreement.

 

B. Executive is willing to accept such employment and perform such services for
the Company on the terms and conditions contained in this Agreement.

 

Agreement

In consideration of the mutual promises and consideration described below, the
parties agree as follows:

 

1. Employment. Subject to the terms and conditions of this Agreement, the
Company and Executive Agree to enter into an employment relationship whereby
Executive will serve as the Company’s Chief Financial Officer. Executive will
report to the Company’s Chief Executive Officer and Board of Directors.
Executive will have such responsibilities and authority as are consistent with
the offices of Chief Financial Officer and as may be determined from time to
time by the Company’s Board of Directors. Executive is required to devote all of
Executive’s working time and efforts to the performance of services for the
Company. All Company performance will be to the best of Executive’s ability.

 

2. Term of Employment. Executive’s term of employment under this Agreement will
commence on the date hereof and continue until July 24, 2020, and on a
year-to-year basis thereafter ending each July 24 thereafter (the “Term”),
unless: (i) the Company provides the Executive with a notice of non-renewal not
less than 60 days before the last day of the then-current Term (as then
effective); or (ii) the Agreement is otherwise terminated as described in
Section 5 hereof.

 

3. Compensation.

 

a. Base Salary. The Company will pay Executive during the Term an annual Base
Salary of two hundred and thirty thousand dollars per year ($230,000.00 per
year), which may be adjusted from time to time by the independent members of the
Board of Directors or Compensation Committee of the Board of Directors, if any.

 

b. Bonus. Executive shall be eligible to earn bonus payments from the Company as
follows.

 

(i) Discretionary Bonus. Executive will be eligible each year to receive a
discretionary bonus (the “Discretionary Bonus”) in addition to Executive’s Base
Salary, which will be awarded in such amounts as the Company’s Board of
Directors will determine.

 

Such bonus for any year, if any, will be paid following Audit Committee approval
of year end financials, but in any event by March 15 of the year immediately
after the year for which the Discretionary Bonus was earned.

 

c. Equity Awards. Subject to and in accordance with the Company’s 2016 Stock
Incentive Plan or any similar plan as the Company may adopt from time to time,
the Company may grant to Executive incentive awards from time to time. Such
incentive awards shall be subject to vesting requirements pursuant to the
Company’s Long Term Incentive Program, or any successor program.

 

d.  Withholding. All payments to Executive under this Agreement will be subject
to withholding as required by law.

 

4. Employee Benefits.

 

a. Benefit Plans. During the Term, the Company will provide Executive with
coverage under all employee benefit plans available to the Company’s senior
executives to the extent permitted under any such employee benefit plan and in
accordance with the terms thereof. In addition, should the employee elect to be
covered by Medicare and related plans, the Company shall pay the applicable
premium for coverage at no more than the same rate it pays for the Company’s
employee benefit plans.

 

b. Vacation. During the term of Executive’s employment under this Agreement,
Executive will be entitled to accrue four (4) weeks of paid vacation per
calendar year (prorated for partial years), consistent with the Company’s
policies in effect from time to time. Executive will also be entitled to sick
leave consistent with the Company’s practices and policies in effect from time
to time. Executive will not take vacations at times or in amounts that would
materially affect Executive’s ability to perform her work duties. Up to ten (10)
days of Executive’s accrued vacation time may be rolled over each year.
Executive will be entitled to payment for any unused accrued vacation days upon
termination of Executive’s employment with Company.

 

c. Expenses. Executive is authorized to incur reasonable expenses in carrying
out her duties and responsibilities under this Agreement. The Company will
reimburse the executive for such expenses upon presentation by Executive from
time to time of appropriately itemized and approved accounts of such
expenditures consistent with the Company’s policies and practices.

 

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5. Termination of Employment.

 

a.  Termination Without Cause. Provided that not less than six (6) months have
elapsed since the effective date of this Agreement, if Executive’s employment is
thereafter terminated by the Company (other than for Cause), Executive will be
entitled to all accrued and unpaid Base Salary, accrued prior year bonuses and
other accrued benefits and expense reimbursements through the date of
termination, plus she will be entitled to receive the following severance
benefits:

 

(i)  Executive will be entitled to receive a severance amount equal to her then
current Base Salary for a period of six (6) months from the date of termination,
plus a bonus equal to the greater of (a) Executive’s most recent Discretionary
Bonus or (b) three (3) months of Base Salary, both to be paid within five (5)
business days from the date of termination; and

 

(ii) Company will provide Executive with the same or similar health care
benefits (including life, dental, and vision, if any) as provided to Executive
at the time of termination, such health care benefits to be provided for a
period of six (6) months from the date of termination; and

 

(iii) All non-vested equity awards granted to Executive will immediately vest
and any stock options which are the subject of such awards will be exercisable
for a period of three months following such termination in accordance with the
Company’s 2016 Stock Incentive Plan or any similar plan as the Company may adopt
from time to time which such equity award was granted under.

 

For purposes of this Agreement: (i) any material reduction in the Executive’s
responsibilities, duties, title or compensation of the Executive without the
Executive’s written consent or (ii) if the Company gives notice to the Executive
that it will not renew this Agreement pursuant to Section 2 hereof, shall be
deemed an Effective Termination Without Cause.

 

Upon termination of Executive’s employment without cause or upon the Executive’s
resignation as a result of an Effective Termination Without Cause, except for
the obligations set forth in this subsection 5a., the obligations of the Company
to make any further payments or to provide any further benefits to Executive
under this Agreement will cease and terminate.

 

If the independent members of the Board of Directors unanimously determine, at
their sole election, that the Executive has materially not met her obligations
as set forth in Section 1 above, but not to the full extent required to trigger
termination for Cause as defined in subsection 5d., then termination of the
Executive will be deemed to be a resignation and governed under the terms of
subsection 5b.

 

b. Termination by Resignation. If Executive resigns other than due to an
Effective Termination Without Cause, Executive will be entitled to receive only
accrued but unpaid Base Salary, accrued unpaid prior year bonuses and accrued
benefits (including vested equity awards) through the effective date of
Executive’s resignation.

 

Upon termination of Executive’s employment by resignation, the obligations of
the Company under this Agreement to make any further payments or to provide any
further benefits to Executive will cease and terminate.

 

c. Termination Following a Change of Control Event.

 

(i)  For purposes of this Agreement, a “Change of Control Event” shall mean any
of the following:

 

(1) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing more than 40% of the
total voting power represented by the Company’s then outstanding voting
securities; or

 

(2) A merger or consolidation of the Company whether or not approved by the
Board of Directors of the Company, other than a merger or consolidation that
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least 60% of
the total voting power represented by the voting securities of the Company or
such surviving entity (or the parent of any such surviving entity) outstanding
immediately after such merger or consolidation, or a change in the ownership of
all or substantially all of Company’s assets to a person not related (within the
meaning of income tax Regulations Section 1.409A-3(i)(5)(vii)(b)) to the
Company; or

 

(3) The replacement during any 12-month period of a majority of the members of
the Board of Directors of the Company with directors whose appointment or
election was not endorsed by a majority of the members before the date of the
appointment or election.

 

(ii) Immediately upon the occurrence of a Change of Control Event, all
non-vested equity awards granted to Executive will immediately vest and any
stock options which are the subject of such awards will be exercisable for the
longer of three months following the date of such Change of Control Event or (if
longer) the period set forth for the exercise of any such stock options held by
any employee in the agreement accomplishing the Change of Control Event.

 

(iii) If Executive’s employment is terminated by the Company or Executive
resigns due to an Effective Termination Without Cause (in either case, within
twelve (12) months following a Change of Control Event), Executive will be
entitled to all accrued and unpaid Base Salary, accrued prior year bonuses and
other accrued benefits through the date of termination, plus she will be
entitled to receive the following severance benefits:

 

(1) Executive will be entitled to receive: (i) six (6) months of her then
current Base Salary; plus (ii) 100% of the target amount of any Discretionary
Bonus which Executive is eligible to earn in the present year. All such amounts
shall be paid within five (5) days from the date of termination.

 

(2) Executive will be entitled to receive the benefits described in subsection
5(a)(ii) above; and

 

Upon termination of Executive’s employment resulting from a Change of Control
Event, except for the obligations set forth in this subsection c., the
obligations of the Company under this Agreement to make any further payments or
to provide any further benefits to Executive will cease and terminate.

 

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d. Termination for Cause. The Company will have the right to terminate the
employment of Executive for Cause. In the event that Executive’s employment is
terminated by the Company for Cause, Executive will be entitled to receive only
accrued but unpaid Base Salary and accrued benefits (including vested stock
options) through the date of termination. Executive will not be entitled to any
bonus payments or severance payments unless agreed to in writing by the Company.
As used in this Agreement, the term “Cause” means as a result of (i) any
material breach of any material written policy of the Company; (ii) conduct
involving moral turpitude, including, but not limited to, misappropriation or
conversion of assets of the Company (other than minor and immaterial assets) to
or for the Executive’s personal gain; (iii) Executive’s conviction of, or entry
of a plea of nolo contendere to, a felony; and (iv) a material breach of this
Agreement.

 

Upon termination of the Executive’s employment for Cause, except as set forth in
this subsection d., the obligations of the Company under this Agreement to make
any further payments or to provide any further benefits to Executive will cease
and terminate.

 

e. Permanent Disability. If Executive is unable to engage in the activities
required by Executive’s job by reason of any medically determined physical or
mental impairment which has lasted for a continuous period of not less than six
consecutive months (“Permanent Disability”), the Company or Executive may
terminate Executive’s employment on written notice thereof, and Executive will
receive the payments and benefits that would be payable to Executive upon a
termination of Executive’s employment other than for Cause pursuant to
subsection 5.a. above.

 

Upon termination of Executive’s employment by Permanent Disability, except as
set forth in this subsection e., the obligations of the Company to make any
further payments or to provide any further benefits to Executive will cease and
terminate.

 

f. Death. In the event of Executive’s death during the Term, Executive’s estate
or designated beneficiaries will receive or commence receiving, as soon as
practicable, the payments and benefits that would be payable to Executive upon a
termination of Executive’s employment other than for Cause pursuant to
subsection 5.a. above.

 

Upon termination of Executive’s employment by death, except as set forth in this
subsection f., the obligations of the Company under this Agreement to make any
further payments or to provide any further benefits to Executive will cease and
terminate.

 

6.  Nondisclosure of Confidential Information. During Executive’s employment,
and for a period of two years thereafter, Executive will not, without the prior
written consent of the Board of Directors, 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 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 her 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 Section
6 survives the termination of Executive’s employment and is enforceable by the
Company at any time, regardless of whether the Executive continues to be
employed by the Company.

 

7. Non-Competition and Non-Solicitation

 

a. From the date hereof through the Term or, in the event Executive’s employment
is terminated, from the date hereof through the first anniversary of Executive’s
termination of employment with the Company, Executive agrees that, without the
prior written consent of the Board of Directors, she 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 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 six 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.

 

b. For purposes of this Section 7, 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 in
the states in which the Company operates at the time of Executive’s termination.

 

c. Executive acknowledges that this Section 7 survives the termination of
Executive’s employment and is enforceable by the Company at any time, regardless
of whether the Executive continues to be employed by the Company.

 

d. 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.

 

e. Executive agrees that any breach of the covenants contained in this Section 7
would irreparably injure the Company. Accordingly, Executive agrees that the
Company may, in addition to pursuing any other remedies it may have in equity,
obtain an injunction 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.

 

8. Ownership of 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
her 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.

 

9. Property of the Company. Upon any termination of Executive’s employment,
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, including but not limited to any laptop computer, no later than the
date of Executive’s termination from employment for any reason. Executive
acknowledges and agrees that retaining any copies of Confidential Information
will be deemed to be the misappropriation of the property of the Company.

 

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10. 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
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 10, 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 a nationally
recognized 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 10
(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).

 

11. Repayment Provisions. If the Company is required to prepare an accounting
restatement due to noncompliance with any financial reporting requirement under
United States securities laws for any filings made during the Term, commencing
with the first full quarter following the date of this Agreement, then Company
will have the right to require Executive to reimburse the Company for (a) any
bonus or other incentive-based or equity-based compensation received by
Executive from the Company during the 12-month period following the first public
issuance or filing with the Securities and Exchange Commission (whichever first
occurs) of the financial documents embodying such financial reporting
requirement, (b) any profits realized by the Executive from the sale of
securities of the Company during such 12-month period and (c) such other
incentive-based compensation as may be specified by applicable law, regulation
or listing standard.

 

12. Miscellaneous.

 

a. All notices and other communications required or to be given under this
Agreement will be in writing and given either (i) by personal delivery against a
receipted copy, (ii) by certified or registered United States mail, return
receipt requested, postage prepaid, (iii) by facsimile, or (iv) by attachment to
electronic mail in PDF or similar file format. Notice to the Company shall be
sent to the address of the Company’s principal offices, and notice to Executive
shall be sent to the address on file for Executive in the Company’s records, or
such other addresses and numbers as a party hereto may provide in accordance
with this subsection a. Notice will be deemed delivered when received if by
personal delivery; three days after placement with the United States Postal
Service if mailed; upon receipt of a confirmation that the transmission has been
successfully sent if by facsimile; and when sent if sent by electronic mail.

 

b. This Agreement, along with any amendments from time to time made hereto,
constitutes the full, entire and integrated agreement between the parties hereto
with respect to the subject matter hereof.

 

c. Executive represents and warrants to the Company that Executive is free to
enter into this Agreement and has no contract, commitment, arrangement or
understanding to or with any party that restrains or is in conflict with
Executive’s performance of the covenants, services and duties provided for in
this Agreement. Executive agrees to indemnify the Company and to hold it
harmless against any and all liabilities or claims arising out of any
unauthorized act or acts by Executive that, the foregoing representation and
warranty to the contrary notwithstanding, are in violation, or constitute a
breach, of any such contract, commitment, arrangement or understanding.
Executive further represents and warrants to the Company that Executive has
consulted with her legal, tax, accounting, and investment advisors with respect
to the advisability of entering into this Agreement to the extent that Executive
has determined such consultation to be necessary or appropriate.

 

d. This Agreement will be binding upon and inure to the benefit of the heirs and
representatives of Executive and the assigns and successors of the Company, but
neither this Agreement nor any rights or obligations hereunder will be
assignable by Executive (except by will or by operation of the laws of intestate
succession) or by the Company, except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or businesses of the Company, if such
successor expressly agrees to assume the obligations of the Company hereunder.

 

e. Whenever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law, but if any clause
or provision of this Agreement is held illegal, invalid or unenforceable then it
is the intention of the parties hereto that the remainder of this Agreement will
not be affected thereby. It is also the intention of the parties to this
Agreement that in lieu of each clause or provision of this Agreement that is
illegal, invalid or unenforceable, there be added, as a part of this Agreement,
a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be legal, valid and enforceable.

 

f. The respective rights and obligations of the parties hereunder will survive
any termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations. The provisions of this subsection
f. are in addition to the survivorship provisions of any other section of this
Agreement.

 

g. No provision of this Agreement may be amended, waived or otherwise modified
without the prior written consent of all the parties hereto.

 

h. The waiver by any party hereto of a breach of any provision or condition
contained in this Agreement will not operate or be construed as a waiver of any
subsequent breach or of any other conditions hereof.

 

i.  This Agreement may be executed in any number of counterparts, each of which
will be deemed to be an original and all of which together will be deemed to be
one and the same instrument.

 

j. This Agreement was made in the state of Colorado, and will be governed by,
construed, interpreted and enforced in accordance with the laws of the state of
Colorado.

 

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Signature Page

to Employment Agreement

The parties hereto have executed or caused to be executed this Employment
Agreement effective as of the date first above written.

 

                                                                                                               
Company:

 

                                                                                                               
Enservco Corporation, a Delaware corporation

 

                                                                                                               
By:   /s/ Ian A. Dickinson                                                     
 

Ian A. Dickinson, Chief Executive Officer

 

                                                                                                               
Executive:

 

                                                                                                               
       /s/ Marjorie Hargrave                                                   
   

 

                                                                                                                               
Name: Marjorie Hargrave