ENERGY SERVICES OF AMERICA CORPORATION
 
EMPLOYMENT AGREEMENT
FOR
EDSEL R. BURNS
 
This employment agreement (“Agreement”) by and between Energy Services of
America Corporation, a Delaware corporation (the “Company”) and Edsel R. Burns
(“Employee”), is made to be effective as of February 15, 2012 (the “Effective
Date”).
 
WHEREAS, Employee is the President and Chief Executive Officer of the Company;
and
 
WHEREAS, the Company wishes to assure itself of the continued services of
Employee for the period provided in this Agreement; and
 
WHEREAS, in order to induce Employee to remain in the employ of the Company and
to provide further incentive for Employee to achieve the financial and
performance objectives of the Company, the parties desire to enter into this
Agreement; and
 
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
 
1.
POSITION AND RESPONSIBILITIES.

During the Term (as herein defined), Employee agrees to serve as the President
and Chief Executive Officer of the Company.
 
2.
TERM AND DUTIES.

(a) The period of Employee’s employment under this Agreement shall begin as of
the Effective Date and shall continue thereafter for twenty-four (24) full
calendar months (the “Term”). Commencing on the day following execution of this
Agreement, the Term shall extend for one day each day until such time as the
board of directors of the Company (the “Board”) or Employee elects not to extend
the term of this Agreement by giving written notice to the other party of
non-renewal (“Non-Renewal Notice”), in which case the term of this Agreement
shall become fixed and shall end twenty-four (24) full calendar months following
such Non-Renewal Notice.
 
(b) During the Term, except for periods of absence occasioned by illness, or
vacation periods, Employee shall devote substantially all his business time,
attention, skill, and efforts to the faithful performance of his duties.
 
(c) Employee’s principal place of employment shall be Huntington, West Virginia,
though that might change as needed and by mutual agreement of the parties.
 
 
 

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3.
COMPENSATION AND BENEFITS.

(a) The compensation specified under this Agreement shall constitute the salary
and benefits paid for the duties described in Section 2(b).  The Company shall
pay Employee as compensation a salary of not less than One hundred fifty one
thousand Dollars ($151,000) per year (“Base Salary”) beginning on the Effective
Date.  Such Base Salary shall be payable semi-weekly, or with such other
frequency as employees are generally paid in accordance with the Company’s
normal payroll practices.  In addition to the Base Salary provided in this
Section 3 (a), the Company shall provide Employee with all such other benefits
as are provided or made available to Company employees generally, including, but
not limited to, participation in Company health and medical plans or paid
vacation periods at the Company’s discretion.
 
(b) In consideration of Employee’s efforts in performing the requirements of the
position set forth in Section 1, and in addition to Base Salary and other
benefits to which Employee may be entitled as set forth in Section 3(a) hereof,
Employee will receive an annual incentive payment (“Incentive Bonus”) during the
Term, or until such later period as Employee leaves the employ of the Company or
an affiliate or subsidiary of the Company.  Such payment is discretionary based
upon the performance of the Company. The annual Incentive Bonus shall be payable
by the Company within ninety days after the end of the Company’s year end.
.  Notwithstanding the foregoing, no Incentive Bonus will be payable to Employee
at any time after he leaves the employ of the Company, or any affiliate or
subsidiary of the Company.  For the purpose of this Agreement, pre-tax earnings
shall be computed in accordance with the Company’s normal accounting practices
in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”)
consistently applied.
 
4.
TERMINATION FOR CAUSE

The term “Termination for Cause” shall mean termination because of Employee’s
(i) conviction of, or the entering into a plea of guilty to, a crime involving a
felonious act or acts, including dishonesty, fraud or moral turpitude, and which
is detrimental to the business, reputation, character of the Company or any of
its subsidiaries; (ii) willful misconduct by Employee in the performance of his
duties, any material breach of fiduciary duty involving personal profit, or the
intentional failure to perform his stated duties; or (iii) a repeated and
material breach of any provision of this Agreement.  For purposes of this
paragraph, no act or failure to act on the part of Employee shall be considered
“willful” unless done, or omitted to be done, by Employee not in good faith and
without reasonable belief that Employee’s action or omission was in the best
interest of the Company.  Notwithstanding the foregoing, Employee shall not be
deemed to have been Terminated for Cause unless and until there shall have been
delivered to him a letter after not less than ten (10) business days notice to
Employee and a reasonable opportunity for him, together with counsel, to be
heard before a representative of the Company, finding that in the good faith
opinion of management, Employee was guilty of conduct justifying Termination for
Cause and specifying the particulars thereof in detail.  Employee shall not have
the right to receive compensation or other benefits for any period after
Termination for Cause.
 

 
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5.
RESIGNATION.

Employee shall provide not less than sixty (60) days’ advance written notice of
resignation.  In the event of Employee’s voluntary resignation from the Company,
Employee shall not be entitled to receive his Base Salary or any other benefits
to which he may be entitled under this Agreement for any period thereafter,
provided, however, that if the Company and Employee mutually agree that the
Employee’s voluntary resignation is due to his “retirement” or “early
retirement,” then the Company shall provide the Employee and the Employee’s
spouse with continued non-taxable medical and dental insurance coverage
substantially comparable (and on substantially the same terms and conditions) to
the coverage maintained by the Company for the Employee and the Employee’s
spouse immediately prior to the Employee’s date of termination until the
Employee and the Employee’s Spouse attains Medicare eligibility age,
respectively.
 
6.
CHANGE IN CONTROL

(a)  “Change in Control” shall mean a change in control of the Company  as
defined in Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations promulgated thereunder, including the following:

 
(1)
Change in ownership: A change in ownership of the Company occurs on the date any
one person or group of persons accumulates ownership of more than 50% of the
total fair market value or total voting power of the Company;  or

 
(2)
Change in effective control: A change in effective control occurs when either
(i) any one person or more than one person acting as a group acquires within a
twelve (12)-month period ownership of stock of the Company possessing 30% or
more of the total voting power of the Company; or (ii) a majority of the Board
is replaced during any 12-month period by directors whose appointment or
election is not endorsed in advance by a majority of the Board (as applicable),
or

 
(3)
Change in ownership of a substantial portion of assets: A change in the
ownership of a substantial portion of the Company's assets occurs if, in a
twelve (12)-month period, any one person or more than one person acting as a
group acquires assets from the Company having a total gross fair market value
equal to or exceeding 40% of the total gross fair market value of the Company’s
entire assets immediately before the acquisition or acquisitions. For this
purpose, “gross fair market value” means the value of the Company’s assets, or
the value of the assets being disposed of, determined without regard to any
liabilities associated with the assets.

(b)  Upon the occurrence of a Change in Control during the term of this
Agreement, the Company shall pay Employee a lump sum cash payment equal to one
and one-half (1.5) times Employee’s Base Salary (determined on an annualized
basis) that is in effect immediately prior to the Change in Control, subject to
applicable withholding taxes, within thirty (30) days following the date of the
Change in Control.  Such payment hereunder shall be made in lieu of any payments
pursuant to Section 13(a)(2) hereof.
 
 
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7.
NOTICE.

(a) Any purported termination by the Company for Cause shall be communicated by
Notice of Termination to Employee.  For purposes of this Agreement, a “Notice of
Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee’s employment under the provision so indicated.
 
(b) Any other purported termination by the Company or by Employee shall be
communicated by a Notice of Termination to the other party. For purposes of this
Agreement, a “Notice of Termination” shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in detail the facts and circumstances claimed to provide a basis
for termination of employment under the provision so indicated.
 
8.
SOURCE OF PAYMENTS.

All payments provided in this Agreement shall be timely paid in cash, check or
direct deposit from the general funds of the Company.
 
9.
NON-COMPETE/CONFIDENTIALITY.

 
(a)  For a period of two (2) years from the date the Employee’s employment under
this Agreement terminates,, Employee will not, directly or indirectly, compete
in any manner with the Company or its subsidiaries, including, but not limited
to: (i) soliciting any client of the Company or its subsidiaries to transact
business; (ii) transacting business with a competitor of the Company or its
subsidiaries; (iii) interfering or damaging a relationship between the Company
or its subsidiaries and any of their customers; (iv) soliciting an employee of
the Company or its subsidiaries; or (v) selling products similar to the products
sold by the Company or its subsidiaries in their market area.  The parties
acknowledge that this Agreement shall not preclude the Employee from entering
into an agreement with another company that does not compete, directly or
indirectly with the Company or its subsidiaries.  Moreover, Employee shall treat
as confidential information, all information pertaining to the Company or its
subsidiaries.  Notwithstanding the foregoing, in the event the Employee’s
employment under this Agreement is terminated Without Cause or With Good Reason
in accordance with Section 13(a) hereof, or in the event the Employee’s
employment under this Agreement terminates for Cause in accordance with Section
4 hereof, terminates Without Cause or With Good Reason in accordance with
Section 13(a) hereof, or terminates due to Disability in accordance with Section
13(c) hereof at anytime on or after the effective date of a Change in Control,
the provisions of this Section 9(a), except for the preceding sentence herein
related to confidential information, shall become null and void

(b)  The parties hereto acknowledge that the potential restrictions on
Employee’s future activities as set forth at Section 9(a) is reasonable in both
duration and geographic scope and in all other respects.  In the event that the
provisions of Section 9(a) should ever be deemed to exceed the duration or
geographic limitations or scope permitted by applicable law, then such
provisions shall be reformed to the maximum time or geographic limitations or
scope, as the case may be, permitted by applicable law, and the parties agree
that the restrictions and prohibitions contained herein shall be effective to
the fullest extent allowed under applicable law in such jurisdiction.
 
 
 
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(c)  The parties acknowledge that it would be impossible to determine the amount
of damages that would result from any breach of any of the provisions of Section
9(a) and that the remedy at law for any breach, or threatened breach, of any of
such provisions would likely be inadequate and accordingly, each party agrees
that in addition to any other rights or remedies which it may have at law or in
equity, the non-breaching party would be entitled to seek such equitable and
injunctive relief as may be available from any court of competent jurisdiction
to restrain a party from violating any of the provisions of this Agreement.  In
connection with any action or proceeding for such equitable or injunctive
relief, each party hereby waives any claim or defense that a remedy at law alone
is adequate and agrees, to the maximum extent permitted by law, to have each
such provision of Section 9(a) specifically enforced against a violating party,
without the necessity of posting bond or other security against the violating
party, and consents to the entry of equitable or injunctive relief against the
violating party enjoining or restraining any breach or threatened breach of
Section 9(a).
 
10.
EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

 
This Agreement contains the entire understanding between the parties hereto with
respect to the subject matter hereof and supersedes any prior employment
agreement between the Company or any predecessor of the Company and Employee,
except that this Agreement shall not affect or operate to reduce any benefit or
compensation inuring to Employee of a kind elsewhere provided.  No provision of
this Agreement shall be interpreted to mean that Employee is subject to
receiving fewer benefits than those available to him without reference to this
Agreement.
 
11.
NO ATTACHMENT; BINDING ON SUCCESSORS.

 
(a) Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation, or to execution, attachment,
levy, or similar process or assignment by operation of law, and any attempt,
voluntary or involuntary, to affect any such action shall be null, void, and of
no effect.
 
(b) This Agreement shall be binding upon, and inure to the benefit of, Employee
and the Company and their respective successors and assigns.
 
12.
MODIFICATION AND WAIVER.

(a) This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
 
(b) No term or condition of this Agreement shall be deemed to have been waived,
nor shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel.  No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future as to any act other than that specifically waived.
 
 
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13.
MISCELLANEOUS PROVISIONS

(a) Termination Without Cause or With Good Reason.
 
 
(1)
The Company may, by written notice to Employee, immediately terminate his
employment at any time for a reason other than a Termination for Cause (a
termination “Without Cause”), and Employee may, by written notice to the
Company, terminate this Agreement at any time within ninety (90) days following
an event constituting “Good Reason,” as defined below (a termination “With Good
Reason”); provided, however, that the Company shall have thirty (30) days to
cure the “Good Reason” condition, but the Company may waive its right to cure.

 
(2)
In the event of termination under this Section 13(a), the Company shall pay
Employee, or in the event of Employee’s subsequent death, Employee’s beneficiary
or estate, as the case may be, as severance pay, a single cash lump sum payment
equal to one and one-half (1.5) times Employee’s Base Salary (determined on an
annualized basis) that is in effect immediately prior to the Employee’s date of
termination, subject to applicable withholding taxes.  Such payment shall be
payable within thirty (30) calendar days following his date of termination.

 
(3)
In addition the Company shall continue to provide to Employee non-taxable
medical and dental insurance coverage substantially comparable (and on
substantially the same terms and conditions) to the coverage maintained by the
Company for Employee immediately prior to his date of termination for the
remaining Term of the Agreement.  However, if any termination of employment
(other than termination of employment for cause) occurs following a Change in
Control, then the Company shall provide the Employee and the Employee’s spouse
with continued non-taxable medical and dental insurance coverage substantially
comparable (and on substantially the same terms and conditions) to the coverage
maintained by the Company for the Employee and the Employee’s spouse immediately
prior to the Employee’s date of termination until the Employee and the
Employee’s Spouse attains Medicare eligibility age, respectively.

 
 (4)
“Good Reason” exists if, without Employee’s express written consent, any of the
following occurs:

(A)  
a material change in Employee’s position to become one of lesser responsibility,
importance, or scope from the position described in Section 1 above;

 
 
 
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(B)  
a liquidation or dissolution of the Company other than liquidations or
dissolutions that are caused by reorganizations that do not negatively affect
the status of Employee;

 
(C)  
a material reduction in Employee’s Base Salary or benefits provided in this
Agreement (other than a reduction or elimination of Employee’s benefits under
one or more benefit plans maintained by the Company as part of a good faith,
overall reduction or elimination of such plans or benefits applicable to all
participants in a manner that does not discriminate against Employee (except as
such discrimination may be necessary to comply with applicable law));

 
(D)  
a relocation of Employee’s principal place of employment by more than fifty (50)
miles from its location as of the date of this Agreement; or

 
(E)  
a material breach of this Agreement by the Company.

 
(b)  Death.  Employee’s employment under this Agreement will terminate upon his
death during the term of this Agreement, in which event Employee’s estate or
beneficiary will receive the compensation due to Employee through the last day
of the calendar month in which his death occurred.
 
(c)  Disability.  In the event the Company determines that Employee has suffered
a Disability (as defined herein), Employee will no longer be obligated to
perform services under this Agreement.  Upon Employee’s termination due to
Disability, the Company will cause to continue to provide to Employee
non-taxable medical and dental coverage substantially comparable (and on
substantially the same terms and conditions) to the coverage maintained by the
Company for Employee immediately prior to his termination for Disability for the
remaining Term of the Agreement.  “Disability” shall mean termination because of
any permanent and totally physical or mental impairment that restricts Employee
from performing all the essential functions of normal employment.  A
determination as to whether Employee has suffered a Disability shall be made by
the Board with objective medical input.  In the event of termination due to
Disability, Employee will be entitled to disability benefits, if any, provided
under a disability plan sponsored by the Company, if any.
 
(d) Separation from Service.  Notwithstanding anything else in this Agreement,
Employee’s employment shall not be deemed to have been terminated unless and
until Employee has a Separation from Service within the meaning of Code Section
409A. For purposes of this Agreement, a “Separation from Service” shall have
occurred if the Company and Employee reasonably anticipate that either no
further services will be performed by Employee after the date of the termination
(whether as an employee or as an independent contractor) or the level of further
services performed is less than 50% of the average level of bona fide services
in the thirty-six (36) months immediately preceding the termination.  For all
purposes hereunder, the definition of Separation from Service shall be
interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii).
 
 
 
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(e)  Specified Employee.  Notwithstanding the foregoing, in the event Employee
is a Specified Employee (as defined herein), then, solely, to the extent
required to avoid penalties under Code Section 409A, Employee’s payments shall
be delayed until the first day of the seventh month following Employee’s
Separation from Service.  A “Specified Employee” shall be interpreted to comply
with Code Section 409A and shall mean a key employee within the meaning of Code
Section 416(i) (without regard to paragraph 5 thereof), but an individual shall
be a “Specified Employee” only if the Company is or becomes a publicly traded
company.

14.
SEVERABILITY

If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
 
15.
HEADINGS FOR REFERENCE ONLY.

 
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
 
16.
GOVERNING LAW.

 
This Agreement shall be governed by the laws of the State of West Virginia but
only to the extent not superseded by federal law.
 
17.
NOTICE.  

 
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below:
 
To the Company:
Marshall T. Reynolds
Chairman of the Board
Energy Services of America Corporation
100 Industrial Lane
Huntington, West Virginia  25702
   
With a copy to:
Luse Gorman Pomerenk & Schick, P.C.
5335 Wisconsin Avenue NW, Suite 400
Washington, D.C. 20015
Attention: Alan Schick
   
To Employee:
    Edsel R. Burns

                                           

 
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SIGNATURES
 
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and its
seal to be affixed hereunto by its duly authorized officers, and Employee has
signed this Agreement, on the day and date first above written.
 
ATTEST:
ENERGY SERVICES OF AMERICA CORPORATION
           
Secretary
By:
Marshall Reynolds
Chairman of the Board 
               
WITNESS:
EMPLOYEE:
           
 
Secretary
By:
Edsel R. Burns