State of Delaware | 51-0064146 | |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
Title of each class | Name of each exchange on which registered | |
Common Stock par value per share $.4867 | New York Stock Exchange, Inc. |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller Reporting Company o |
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Exhibit 3.2 | ||||||||
Exhibit 10.5 | ||||||||
Exhibit 10.7 | ||||||||
Exhibit 10.9 | ||||||||
Exhibit 10.11 | ||||||||
Exhibit 10.13 | ||||||||
Exhibit 10.15 | ||||||||
Exhibit 10.26 | ||||||||
Exhibit 10.27 | ||||||||
Exhibit 10.28 | ||||||||
Exhibit 12 | ||||||||
Exhibit 14.2 | ||||||||
Exhibit 21 | ||||||||
Exhibit 23.1 | ||||||||
Exhibit 23.2 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32.1 | ||||||||
Exhibit 32.2 |
BravePoint
|
BravePoint, Inc., a wholly-owned subsidiary of Chesapeake Services Company, which is a wholly-owned subsidiary of Chesapeake Utilities Corporation | |
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Chesapeake
|
The Registrant, the Registrant and its subsidiaries, or the Registrants
subsidiaries, as appropriate in the context of the disclosure
|
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Company
|
The Registrant, the Registrant and its subsidiaries or the Registrants
subsidiaries, as appropriate in the context of the disclosure
|
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ESNG
|
Eastern Shore Natural Gas Company, a wholly-owned subsidiary of Chesapeake
|
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OnSight
|
Chesapeake OnSight Services, LLC, a wholly-owned subsidiary of Chesapeake
|
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PESCO
|
Peninsula Energy Services Company, Inc., a wholly-owned subsidiary of
Chesapeake
|
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PIPECO
|
Peninsula Pipeline Company, Inc., a wholly-owned subsidiary of Chesapeake
|
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Sharp Energy
|
Sharp Energy, Inc., a wholly-owned subsidiary of Chesapeake Utilities
Corporation
|
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Sharpgas
|
Sharpgas, Inc., a wholly-owned subsidiary of Sharp Energy, Inc.
|
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Skipjack
|
Skipjack, Inc., a wholly-owned subsidiary of Chesapeake Service Company,
which is a wholly-owned subsidiary of Chesapeake Utilities Corporation
|
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Tri-County
|
Tri-County Gas Co., Inc. a wholly-owned subsidiary of Sharp Energy
|
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Xeron
|
Xeron, Inc., a wholly-owned subsidiary of Chesapeake
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APB
|
Accounting Principles Board | |
|
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Delaware PSC
|
Delaware Public Service Commission | |
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DOT
|
United States Department of Transportation | |
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EPA
|
United States Environmental Protection Agency | |
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FASB
|
Financial Accounting Standards Board | |
|
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FERC
|
Federal Energy Regulatory Commission | |
|
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FDEP
|
Florida Department of Environmental Protection | |
|
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Florida PSC
|
Florida Public Service Commission | |
|
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IRS
|
Internal Revenue Service | |
|
||
Maryland PSC
|
Maryland Public Service Commission | |
|
||
MDE
|
Maryland Department of Environment | |
|
||
SEC
|
Securities and Exchange Commission |
AOCI
|
Accumulated Other Comprehensive Income | |
|
||
AS/SVE
|
Air Sparging and Soil/Vapor Extraction | |
|
||
CGS
|
Community Gas Systems | |
|
||
Columbia
|
Columbia Gas Transmission Corporation | |
|
||
DSCP
|
Directors Stock Compensation Plan | |
|
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Dts
|
Dekatherms | |
|
||
E3 Project
|
ESNG Energylink Expansion Project | |
|
||
ER
|
Environmental rider | |
|
||
EITF
|
Financial Accounting Standards Board Emerging Issues Task Force | |
|
||
FIN
|
Financial Accounting Standards Board Interpretation Number | |
|
||
FSP
|
Financial Accounting Standards Board Staff Position | |
|
||
GAAP
|
Generally Accepted Accounting Principles | |
|
||
GSR
|
Gas sales service rates |
Gulf
|
Columbia Gulf Transmission Company | |
|
||
Gulfstream
|
Gulfstream Natural Gas System, LLC | |
|
||
HDD
|
Heating degree-days | |
|
||
MMBtus
|
One million (1,000,000) British Thermal Units | |
|
||
NYSE
|
New York Stock Exchange | |
|
||
PIP
|
Performance Incentive Plan | |
|
||
S&P 500 Index
|
Standard & Poors 500 | |
|
||
SFAS
|
Statement of Financial Accounting Standards |
EITF 03-6-1
|
EITF 03-6-1, Determining Whether instruments Granted in Share-based
Payment Transactions are Participating Securities
|
|
|
||
EITF 07-05
|
EITF 07-05, Determining Whether an Instrument (of an Embedded Feature)
is Indexed to an Entitys Own Stock
|
|
|
||
EITF 08-03
|
EITF 08-03, Accounting for Maintenance Deposits Under Lease Arrangements
|
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|
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EITF 08-05
|
EITF 08-05, Issuers Accounting for Liabilities Measured at Fair Value
with a Third-Party Credit Enhancement
|
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|
||
FIN 39-1
|
FIN 39-1, a modification to FIN 39, Offsetting of Amounts Related to
Certain Contracts
|
|
|
||
FIN 47
|
FIN 47, Accounting for Conditional Asset Retirement Obligations, an
interpretation of FASB Statement No. 143
|
|
|
||
FIN 48
|
FIN 48, Accounting for Uncertainty in Income Taxes, an interpretation of
SFAS Statement No. 109
|
|
|
||
FSP APB 14-1
|
FSP APB 14-1,
Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlements)
|
|
|
||
FSP 142-3
|
FSP 142-3, Determining the Useful Life of Intangible Assets
|
|
|
||
FSP 157-3
|
FSP 157-3, Determining the Fair Value of a Financial Asset When the
Market for that Asset is Not Active
|
|
|
||
SFAS No. 71
|
Statement of Financial Accounting Standards No. 71, Accounting for the
Effects of Certain Types of Regulation
|
|
|
||
SFAS No. 87
|
Statement of Financial Accounting Standards No. 87, Employers
Accounting for Pensions
|
|
|
||
SFAS No. 88
|
Statement of Financial Accounting Standards No. 88, Employers
Accounting for Settlements and Curtailments of Defined Benefit Pension
Plans and for Termination Benefits
|
|
|
||
SFAS No. 106
|
Statement of Financial Accounting Standards No. 106, Employers
Accounting for Postretirement Benefits Other Than Pensions
|
|
|
||
SFAS No. 109
|
Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes
|
|
|
||
SFAS No. 112
|
Statement of Financial Accounting Standards No. 112, Employers
Accounting for Postemployment Benefits
|
|
|
||
SFAS No. 115
|
Statement of Financial Accounting Standards No. 115, Accounting for
Certain Investments in Debt and Equity Securities
|
|
|
||
SFAS No. 123
|
Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation
|
|
|
||
SFAS No. 123R
|
Statement of Financial Accounting Standards No. 123R, Share-Based Payment
|
|
|
||
SFAS No. 128
|
Statement of Financial Accounting Standards No. 128, Earnings Per Share
|
|
|
||
SFAS No. 132R
|
Statement of Financial Accounting Standards No. 132R, Employers
Disclosures about Pensions and Other Postretirement Benefits
|
|
|
||
SFAS No. 133
|
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities
|
SFAS No. 141R
|
Statement of Financial Accounting Standards No. 141R, Business
Combinations
|
|
|
||
SFAS No. 142
|
Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets
|
|
|
||
SFAS No. 143
|
Statement of Financial Accounting Standards No. 143, Accounting for
Asset Retirement Obligations
|
|
|
||
SFAS No. 157
|
Statement of Financial Accounting Standards No. 157, Fair Value
Measurements
|
|
|
||
SFAS No. 158
|
Statement of Financial Accounting Standards No. 158, Employers
Accounting for Defined Benefit Pension and Other Postretirement Plans,
an Amendment of SFAS Nos. 87, 88, 106, and 132R
|
|
|
||
SFAS No. 159
|
Statement of Financial Accounting Standards No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities Including an
Amendment of SFAS No. 115
|
|
|
||
SFAS No. 160
|
Statement of Financial Accounting Standards No. 160, Noncontrolling
Interests in Consolidated Financial Statements, an Amendment of
Accounting Research Bulletin 51
|
|
|
||
SFAS No. 161
|
Statement of Financial Accounting Standards No. 161, Disclosures about
Derivative Instruments and Hedging Activities, an Amendment of SFAS No.
133
|
|
|
||
SFAS No. 162
|
Statement of Financial Accounting Standards No. 162, The Hierarchy of
Generally Accepted Accounting Principles
|
Net Property, Plant
(Thousands)
Operating Income
& Equipment
$
25,846
91
%
$
242,882
87
%
1,586
6
%
30,180
11
%
695
2
%
915
<1
%
352
1
%
6,694
2
%
$
28,479
100
%
$
280,671
100
%
Table of Contents
Operating Revenues
Deliveries
(Thousands)
(MMcfs)
$
47,994
53
%
2,590,425
39
%
29,480
33
%
2,312,644
34
%
2,130
2
%
812,224
12
%
79,604
88
%
5,715,293
85
%
9,041
10
%
1,035,540
15
%
1,934
2
%
$
90,579
100
%
6,750,833
100
%
(1)
Operating Revenues
Deliveries
(Thousands)
(MMcfs)
$
3,725
28
%
321,077
2
%
3,108
24
%
1,180,507
7
%
4,684
36
%
14,527,786
91
%
1,637
12
%
0
%
$
13,154
100
%
16,029,370
100
%
(1)
Table of Contents
Operating Revenues
Deliveries
(Thousands)
(MMcfs)
$
19,280
81
%
9,720,864
44
%
3,523
15
%
11,191,555
50
%
968
4
%
1,299,878
6
%
5
<1
%
23,776
100
%
22,212,297
100
%
11,521
48
%
5,978,996
27
%
$
12,255
52
%
16,233,301
73
%
(1)
Operating Revenues
Deliveries
State
Customers
(Thousands)
(Dts)
1,922
99
%
$
76,862
81
%
6,275,717
79
%
12
1
%
18,552
19
%
1,683,695
21
%
1,934
100
%
$
95,414
100
%
7,959,412
100
%
Table of Contents
Firm transportation
capacity maximum
Firm storage capacity
peak-day daily
maximum peak-day
Pipeline
deliverability (Dts)
daily withdrawal (Dts)
Expiration
21,356
6,407
Various dates between 2012 and 2028
3,460
8,224
Various dates between 2009 and 2020
880
Expires in 2009
61,637
4,146
Various dates between 2009 and 2023
Firm transportation
capacity maximum
Firm storage capacity
peak-day daily
maximum peak-day
Pipeline
deliverability (Dts)
daily withdrawal (Dts)
Expiration
5,866
2,456
Various dates between 2012 and 2013
1,700
3,663
Various dates between 2014 and 2018
590
Expires in 2009
20,528
2,306
Various dates between 2009 and 2023
Table of Contents
Table of Contents
Table of Contents
Operating Revenues
Total Gallons Sold
Average No. of
(Thousands)
(Thousands)
Customers
$
59,173
95
%
26,765
96
%
32,889
94
%
3,412
5
%
1,182
4
%
2,280
6
%
$
62,585
100
%
27,947
100
%
35,169
100
%
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Name
Age
Position
61
President and Chief Executive Officer
50
Executive Vice President and Chief Operating Officer
42
Senior Vice President and Chief Financial Officer
48
Senior Vice President and President, ESNG
56
President, Sharp Energy
Table of Contents
Table of Contents
Item 5.
Market for the Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.
Dividends
Declared
Quarter Ended
High
Low
Close
Per Share
March 31
$
33.60
$
27.21
$
29.64
$
0.295
June 30
31.88
25.02
25.72
0.305
September 30
34.84
24.65
33.21
0.305
December 31
34.66
21.93
31.48
0.305
March 31
$
31.10
$
28.85
$
30.94
$
0.290
June 30
35.58
29.92
34.24
0.295
September 30
37.25
28.00
33.94
0.295
December 31
36.38
29.59
31.85
0.295
Table of Contents
Total
Total Number of Shares
Maximum Number of
Number of
Average
Purchased as Part of
Shares That May Yet Be
Shares
Price Paid
Publicly Announced Plans
Purchased Under the
Period
Purchased
Per Share
or Programs
(2)
Plans or Programs
(2)
594
$
31.62
0
0
0
$
0.00
0
0
0
$
0.00
0
0
594
$
31.62
0
0
(1)
(2)
Table of Contents
2003
2004
2005
2006
2007
2008
$
100
$
107
$
128
$
133
$
143
$
147
$
100
$
117
$
123
$
147
$
152
$
163
$
100
$
111
$
116
$
135
$
142
$
90
Table of Contents
For the Years Ended December 31,
2008
2007
2006
(3)
$
211,402
$
181,202
$
170,374
65,877
62,838
48,576
14,720
15,099
12,568
(556
)
(853
)
(318
)
$
291,443
$
258,286
$
231,200
$
25,846
$
22,485
$
19,733
1,586
4,498
2,534
695
836
767
352
295
298
$
28,479
$
28,114
$
23,332
$
13,607
$
13,218
$
10,748
$
381,688
$
352,838
$
325,836
$
280,671
$
260,423
$
240,825
$
385,795
$
381,557
$
325,585
$
30,844
$
30,142
$
49,154
$
123,073
$
119,576
$
111,152
86,422
63,256
71,050
$
209,495
$
182,832
$
182,202
6,657
7,656
7,656
33,000
45,664
27,554
$
249,152
$
236,152
$
217,412
(1)
(2)
(3)
Table of Contents
2005
2004
2003
2002
2001
2000
1999
$
166,582
$
124,246
$
110,247
$
93,588
$
107,418
$
101,138
$
75,637
48,976
41,500
41,029
29,238
35,742
31,780
25,199
14,140
12,427
12,578
12,764
14,104
12,390
13,531
(213
)
(218
)
(286
)
(334
)
(113
)
(131
)
(14
)
$
229,485
$
177,955
$
163,568
$
135,256
$
157,151
$
145,177
$
114,353
$
17,236
$
17,091
$
16,653
$
14,973
$
14,405
$
12,798
$
10,388
3,209
2,364
3,875
1,052
913
2,135
2,622
1,197
387
692
343
517
336
1,470
279
335
359
237
386
816
495
$
21,921
$
20,177
$
21,579
$
16,605
$
16,221
$
16,085
$
14,975
$
10,699
$
9,686
$
10,079
$
7,535
$
7,341
$
7,665
$
8,372
$
280,345
$
250,267
$
234,919
$
229,128
$
216,903
$
192,925
$
172,068
$
201,504
$
177,053
$
167,872
$
166,846
$
161,014
$
131,466
$
117,663
$
295,980
$
241,938
$
222,058
$
223,721
$
222,229
$
211,764
$
166,958
$
33,423
$
17,830
$
11,822
$
13,836
$
26,293
$
22,057
$
21,365
$
84,757
$
77,962
$
72,939
$
67,350
$
67,517
$
64,669
$
60,714
58,991
66,190
69,416
73,408
48,409
50,921
33,777
$
143,748
$
144,152
$
142,355
$
140,758
$
115,926
$
115,590
$
94,491
4,929
2,909
3,665
3,938
2,686
2,665
2,665
35,482
5,002
3,515
10,900
42,100
25,400
23,000
$
184,159
$
152,063
$
149,535
$
155,596
$
160,712
$
143,655
$
120,156
Table of Contents
For the Years Ended December 31,
2008
2007
2006
(3)
$
2.00
$
1.96
$
1.78
$
1.98
$
1.94
$
1.76
11.2
%
11.5
%
11.0
%
58.7
%
65.4
%
61.0
%
49.4
%
50.6
%
51.1
%
$
18.03
$
17.64
$
16.62
$
34.840
$
37.250
$
35.650
$
21.930
$
28.000
$
27.900
$
31.480
$
31.850
$
30.650
6,811,848
6,743,041
6,032,462
6,827,121
6,777,410
6,688,084
1,914
1,920
1,978
$
1.21
$
1.18
$
1.16
3.9
%
3.7
%
3.8
%
60.5
%
60.2
%
65.2
%
65,201
62,884
59,132
34,981
34,143
33,282
39,778
34,820
34,321
27,956
29,785
24,243
4,431
4,504
3,931
4,401
4,376
4,372
2,471
2,441
2,315
448
445
437
(1)
(2)
(3)
(4)
Table of Contents
2005
2004
2003
2002
2001
2000
1999
$
1.83
$
1.68
$
1.80
$
1.37
$
1.37
$
1.46
$
1.63
$
1.81
$
1.64
$
1.76
$
1.37
$
1.35
$
1.43
$
1.59
13.2
%
12.8
%
14.4
%
11.2
%
11.1
%
12.2
%
14.3
%
59.0
%
54.1
%
51.2
%
47.8
%
58.2
%
55.9
%
64.3
%
46.0
%
51.3
%
48.8
%
43.3
%
42.0
%
45.0
%
50.5
%
$
14.41
$
13.49
$
12.89
$
12.16
$
12.45
$
12.21
$
11.71
$
35.780
$
27.550
$
26.700
$
21.990
$
19.900
$
18.875
$
19.813
$
23.600
$
20.420
$
18.400
$
16.500
$
17.375
$
16.250
$
14.875
$
30.800
$
26.700
$
26.050
$
18.300
$
19.800
$
18.625
$
18.375
5,836,463
5,735,405
5,610,592
5,489,424
5,367,433
5,249,439
5,144,449
5,883,099
5,778,976
5,660,594
5,537,710
5,424,962
5,297,443
5,186,546
2,026
2,026
2,069
2,130
2,171
2,166
2,212
$
1.14
$
1.12
$
1.10
$
1.10
$
1.10
$
1.07
$
1.03
3.7
%
4.2
%
4.2
%
6.0
%
5.6
%
5.8
%
5.7
%
62.3
%
66.7
%
61.1
%
80.3
%
80.3
%
73.3
%
63.2
%
54,786
50,878
47,649
45,133
42,741
40,854
39,029
32,117
34,888
34,894
34,566
35,530
35,563
35,267
34,981
31,430
29,375
27,935
27,264
30,830
27,383
26,178
24,979
25,147
21,185
23,080
28,469
27,788
4,792
4,553
4,715
4,161
4,368
4,730
4,082
4,436
4,389
4,409
4,393
4,446
4,356
4,409
2,315
2,045
2,195
2,151
1,958
1,928
1,926
423
426
439
455
458
471
466
Table of Contents
Table of Contents
Table of Contents
Percentage
(In thousands)
2008
2007
Change
Change
$
25,846
$
22,485
$
3,361
15
%
1,586
4,498
(2,912
)
-65
%
695
836
(141
)
-17
%
352
295
57
19
%
$
28,479
$
28,114
$
365
1
%
Table of Contents
Table of Contents
Table of Contents
Increase
Increase
For the Years Ended December 31,
2008
2007
(decrease)
2007
2006
(decrease)
$
13,607
$
13,218
$
389
$
13,218
$
10,748
$
2,470
(20
)
20
(20
)
(241
)
221
$
13,607
$
13,198
$
410
$
13,198
$
10,507
$
2,691
$
1.98
$
1.94
$
0.04
$
1.94
$
1.76
$
0.18
(0.04
)
0.04
$
1.98
$
1.94
$
0.04
$
1.94
$
1.72
$
0.22
*
Table of Contents
Increase
Increase
For the Years Ended December 31,
2008
2007
(decrease)
2007
2006
(decrease)
$
25,846
$
22,485
$
3,361
$
22,485
$
19,733
$
2,752
1,586
4,498
(2,912
)
4,498
2,534
1,964
695
836
(141
)
836
767
69
352
295
57
295
298
(3
)
$
28,479
$
28,114
$
365
$
28,114
$
23,332
$
4,782
103
291
(188
)
291
189
102
6,158
6,590
(432
)
6,590
5,774
816
8,817
8,597
220
8,597
6,999
1,598
$
13,607
$
13,218
$
389
$
13,218
$
10,748
$
2,470
Table of Contents
Table of Contents
Increase
Increase
For the Years Ended December 31,
2008
2007
(decrease)
2007
2006
(decrease)
(in thousands)
$
211,402
$
181,202
$
30,200
$
181,202
$
170,374
$
10,828
146,546
121,550
24,996
121,550
117,948
3,602
64,856
59,652
5,204
59,652
52,426
7,226
26,579
26,024
555
26,024
22,673
3,351
828
828
6,694
6,918
(224
)
6,918
6,312
606
4,909
4,225
684
4,225
3,708
517
39,010
37,167
1,843
37,167
32,693
4,474
$
25,846
$
22,485
$
3,361
$
22,485
$
19,733
$
2,752
Increase
Increase
For the Years Ended December 31,
2008
2007
(decrease)
2007
2006
(decrease)
4,431
4,504
(73
)
4,504
3,931
573
4,401
4,376
25
4,376
4,372
4
$
1,937
$
1,937
$
0
$
1,937
$
2,013
$
(76
)
$
375
$
372
$
3
$
372
$
372
$
0
$
103
$
106
$
(3
)
$
106
$
111
$
(5
)
45,570
43,485
2,085
43,485
40,535
2,950
13,373
13,250
123
13,250
12,663
587
58,943
56,735
2,208
56,735
53,198
3,537
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Increase
Increase
For the Years Ended December 31,
2008
2007
(decrease)
2007
2006
(decrease)
(in thousands)
$
65,877
$
62,838
$
3,039
$
62,838
$
48,576
$
14,262
46,066
41,038
5,028
41,038
30,780
10,258
19,811
21,800
(1,989
)
21,800
17,796
4,004
15,111
14,594
517
14,594
12,823
1,771
254
254
2,024
1,842
182
1,842
1,659
183
836
866
(30
)
866
780
86
18,225
17,302
923
17,302
15,262
2,040
$
1,586
$
4,498
$
(2,912
)
$
4,498
$
2,534
$
1,964
Increase
Increase
For the Years Ended December 31,
2008
2007
(decrease)
2007
2006
(decrease)
4,431
4,504
(73
)
4,504
3,931
573
4,401
4,376
25
4,376
4,372
4
$
2,465
$
1,974
$
491
$
1,974
$
1,743
$
231
Table of Contents
Table of Contents
Table of Contents
Increase
Increase
For the Years Ended December 31,
2008
2007
(decrease)
2007
2006
(decrease)
(in thousands)
$
14,720
$
15,099
$
(379
)
$
15,099
$
12,568
$
2,531
8,033
8,260
(227
)
8,260
7,082
1,178
6,687
6,839
(152
)
6,839
5,486
1,353
5,091
5,225
(134
)
5,225
4,119
1,106
60
60
175
144
31
144
113
31
666
634
32
634
487
147
5,992
6,003
(11
)
6,003
4,719
1,284
$
695
$
836
$
(141
)
$
836
$
767
$
69
Table of Contents
Increase
Increase
For the Years Ended December 31,
2008
2007
(decrease)
2007
2006
(decrease)
(in thousands)
$
652
$
622
$
30
$
622
$
618
$
4
652
622
30
622
618
4
116
109
7
109
96
13
12
12
114
160
(46
)
160
163
(3
)
62
62
62
65
(3
)
304
331
(27
)
331
324
7
348
291
57
291
294
(3
)
4
4
4
4
$
352
295
$
57
$
295
298
$
(3
)
Table of Contents
Table of Contents
December 31,
2008
2007
(In thousands, except percentages)
$
86,422
41
%
$
63,256
35
%
$
123,073
59
%
$
119,576
65
%
$
209,495
100
%
$
182,832
100
%
December 31,
2008
2007
(In thousands, except percentages)
$
33,000
13
%
$
45,664
19
%
$
93,079
38
%
$
70,912
30
%
$
123,073
49
%
$
119,576
51
%
$
249,152
100
%
$
236,152
100
%
Table of Contents
For the Years Ended December 31,
2008
2007
2006
$
13,607,259
$
13,197,710
$
10,506,525
23,024,317
15,723,829
11,386,670
(8,089,187
)
(3,239,655
)
8,255,699
$
28,542,389
$
25,681,884
$
30,148,894
Table of Contents
Table of Contents
Payments Due by Period
Less than 1
More than 5
Contractual Obligations
year
1
3 years
3
5 years
years
Total
$
6,656,364
$
14,403,636
$
13,454,545
$
58,564,091
$
93,078,636
770,329
1,217,087
929,756
2,446,248
5,363,420
8,881,750
22,168,145
10,162,156
48,665,180
89,877,231
1,507,998
4,145,743
2,719,878
1,707,063
10,080,682
31,597,588
57,545
31,655,133
10,181,630
10,181,630
336,637
1,392,409
659,454
1,810,947
4,199,447
519,319
120,615
60,308
1,396,143
2,096,385
$
60,451,615
$
43,505,180
$
27,986,097
$
114,589,672
$
246,532,564
(1)
(2)
(3)
(4)
(5)
(6)
Table of Contents
Table of Contents
Quantity in
Estimated Market
Weighted Average
At December 31, 2008
gallons
Prices
Contract Prices
10,626,000
$0.5450 $1.9100
$
0.9984
9,949,800
$0.7000 $1.9600
$
1.0233
Quantity in
Estimated Market
Weighted Average
At December 31, 2007
gallons
Prices
Contract Prices
30,941,400
$0.8925 $1.6025
$
1.3555
30,954,000
$0.8700 $1.6000
$
1.3498
December
31,
2008
2007
$
4,482
$
7,812
$
3,052
$
7,739
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Stockholders of Chesapeake Utilities Corporation
Beard Miller Company LLP
Reading, Pennsylvania
March 9, 2009
Table of Contents
of Chesapeake Utilities Corporation
Table of Contents
For the Twelve Months Ended December 31,
2008
2007
2006
$
291,443,477
$
258,286,495
$
231,199,565
200,643,518
170,848,211
155,809,747
43,475,794
42,242,218
36,612,683
1,152,844
2,215,123
2,235,605
2,161,177
9,004,911
9,060,185
8,243,715
6,472,353
5,786,694
5,040,306
262,964,543
230,172,913
207,867,628
28,478,934
28,113,582
23,331,937
103,039
291,305
189,093
6,157,552
6,589,639
5,773,993
22,424,421
21,815,248
17,747,037
8,817,162
8,597,461
6,999,072
13,607,259
13,217,787
10,747,965
(20,077
)
(241,440
)
$
13,607,259
$
13,197,710
$
10,506,525
6,811,848
6,743,041
6,032,462
6,927,483
6,854,716
6,155,131
$
2.00
$
1.96
$
1.78
(0.04
)
$
2.00
$
1.96
$
1.74
$
1.98
$
1.94
$
1.76
(0.04
)
$
1.98
$
1.94
$
1.72
$
1.21
$
1.18
$
1.16
Table of Contents
For the Years Ended December 31,
2008
2007
2006
$
13,607,259
$
13,197,710
$
10,506,525
9,004,911
9,060,185
8,243,715
2,239,018
3,336,506
3,102,066
11,441,660
1,831,030
(408,533
)
(204,882
)
(1,146,486
)
(170,465
)
37,110
509,084
(122,819
)
(151,952
)
151,910
1,004,273
(158,825
)
820,175
989,945
709,789
4,045
56
13,300
(200,603
)
229,125
(177,990
)
19,410,552
(28,189,132
)
9,705,860
(1,729,641
)
1,193,336
354,764
410,989
(344,680
)
2,498,954
(1,182,142
)
(1,185,829
)
(261,017
)
(153,005
)
(2,477,879
)
(231,822
)
207,324
83,653
137,101
(15,139,134
)
22,130,049
(11,434,370
)
(6,155,239
)
(158,556
)
1,800,913
158,154
33,112
273,672
(502,479
)
2,534,655
2,361,265
(174,946
)
946,099
(721,289
)
(3,107,401
)
2,124,091
2,824,068
68,384
(157,699
)
1,125,590
28,542,389
25,681,884
30,148,894
(30,755,845
)
(31,277,390
)
(48,845,828
)
204,882
(479,799
)
(227,979
)
(15,549
)
(31,235,644
)
(31,300,487
)
(48,861,377
)
(7,956,843
)
(7,029,821
)
(5,982,531
)
28,541
299,436
321,865
19,698,509
(434,782
)
(683,836
)
(541,052
)
49,047
(11,980,108
)
18,651,055
(7,977,347
)
29,960,518
19,968,104
(7,656,623
)
(7,656,580
)
(4,929,674
)
1,711,649
3,723,038
20,713,191
(981,606
)
(1,895,565
)
2,000,708
2,592,801
4,488,366
2,487,658
$
1,611,195
$
2,592,801
$
4,488,366
Table of Contents
December 31,
December 31,
Assets
2008
2007
$
316,124,761
$
289,706,066
51,827,293
48,506,231
1,439,390
1,157,808
10,815,345
8,567,833
380,206,789
347,937,938
(101,017,551
)
(92,414,289
)
1,481,448
4,899,608
280,670,686
260,423,257
1,600,790
1,909,271
1,611,195
2,592,801
52,905,447
72,218,191
5,167,666
5,265,474
5,710,673
7,629,295
1,479,249
1,280,506
826,009
1,575,072
9,491,690
6,042,169
7,442,921
1,237,438
1,577,805
2,155,393
4,679,368
3,496,517
4,482,473
7,812,456
146,820
146,253
95,521,316
111,451,565
674,451
674,451
164,268
178,073
533,356
740,680
2,806,195
2,539,235
3,823,448
3,640,480
8,001,718
7,772,919
$
385,794,510
$
381,557,012
Table of Contents
December 31,
December 31,
Capitalization and Liabilities
2008
2007
$
3,322,668
$
3,298,473
66,680,696
65,591,552
56,817,921
51,538,194
(3,748,093
)
(851,674
)
1,548,507
1,403,922
(1,548,507
)
(1,403,922
)
123,073,192
119,576,545
86,422,273
63,255,636
209,495,465
182,832,181
6,656,364
7,656,364
33,000,000
45,663,944
40,202,280
54,893,071
9,534,441
10,036,920
1,023,658
865,504
2,082,267
1,999,343
3,304,736
3,400,112
3,227,337
6,300,766
3,052,440
7,739,261
2,967,905
2,500,542
105,051,428
141,055,827
37,719,859
28,795,885
235,422
277,698
875,106
1,136,071
511,223
835,143
7,335,116
2,513,030
20,641,279
20,249,948
3,929,612
3,861,229
71,247,617
57,669,004
$
385,794,510
$
381,557,012
Table of Contents
Common Stock
Additional
Accumulated
Other
Number of
Paid-In
Retained
Comprehensive
Deferred
Treasury
Shares
Par Value
Capital
Earnings
Income
Compensation
Stock
Total
5,883,099
$
2,863,212
$
39,619,849
$
42,854,894
$
(578,151
)
$
794,535
$
(797,156
)
$
84,757,183
10,506,525
10,506,525
74,036
74,036
10,580,561
169,565
169,565
38,392
18,685
1,148,100
1,166,785
29,705
14,457
900,354
914,811
16,677
8,117
275,300
283,417
29,866
14,536
887,426
901,962
(233,327
)
(233,327
)
323,974
(323,974
)
(97
)
(51,572
)
(51,572
)
97
54,193
54,193
690,345
335,991
19,362,518
19,698,509
(7,090,535
)
(7,090,535
)
6,688,084
3,254,998
61,960,220
46,270,884
(334,550
)
1,118,509
(1,118,509
)
111,151,552
13,197,710
13,197,710
(2,828
)
(2,828
)
(514,296
)
(514,296
)
12,680,586
35,333
17,197
1,121,190
1,138,387
29,563
14,388
934,295
948,683
8,106
3,945
133,839
137,784
16,324
7,945
1,442,008
1,449,953
285,413
(285,413
)
(971
)
(29,771
)
(29,771
)
971
29,771
29,771
(7,930,400
)
(7,930,400
)
6,777,410
3,298,473
65,591,552
51,538,194
(851,674
)
1,403,922
(1,403,922
)
119,576,545
13,607,259
13,607,259
(71,438
)
(71,438
)
(2,824,981
)
(2,824,981
)
10,710,840
9,060
4,410
269,127
273,537
5,260
2,560
156,195
158,755
10,397
5,060
171,680
176,740
24,994
12,165
441,898
454,063
50,244
50,244
144,585
(144,585
)
(2,425
)
(71,573
)
(71,573
)
2,425
71,573
71,573
(79,570
)
(79,570
)
(8,247,962
)
(8,247,962
)
6,827,121
$
3,322,668
$
66,680,696
$
56,817,921
$
(3,748,093
)
$
1,548,507
$
(1,548,507
)
$
123,073,192
(1)
(2)
(3)
(4)
(5)
(6)
Table of Contents
For the Years Ended December 31,
2008
2007
2006
$
(2,551,138
)
$
5,512,071
$
5,994,296
1,223,145
1,424,485
(42,276
)
(50,579
)
(54,816
)
(2,593,414
)
6,684,637
7,363,965
10,347,035
2,958,758
1,697,024
781,635
(629,228
)
(2,085,066
)
(174,365
)
(9,154
)
(97,436
)
144,848
45,872
(5,580
)
311,423
(464,322
)
(36,345
)
11,410,576
1,901,926
(527,403
)
$
8,817,162
$
8,586,563
$
6,836,562
$
7,862,760
$
7,635,336
$
6,212,237
1,162,081
1,086,680
829,630
(207,679
)
(124,555
)
(42,795
)
8,817,162
8,597,461
6,999,072
(10,898
)
(162,510
)
$
8,817,162
$
8,586,563
$
6,836,562
39.3
%
39.4
%
39.4
%
At December 31,
2008
2007
$
41,248,245
$
31,058,050
394,869
250,021
2,414,121
860,993
44,057,235
32,169,064
4,679,075
2,581,853
370,398
384,009
364,498
1,146,133
2,501,210
1,416,577
7,915,181
5,528,572
$
36,142,054
$
26,640,492
(1)
(2)
Table of Contents
Table of Contents
At December 31,
2008
2007
Useful Life
(1)
$
184,124,950
$
166,202,413
27-65 years
37,946,690
35,127,633
14-55 years
24,980,668
24,959,330
44 years
26,303,832
25,575,213
5-33 years
19,479,360
18,111,466
Propane 10-33 years, Natural gas 25-49 years
15,092,354
14,067,262
24-54 years
12,536,281
9,947,881
Non-regulated 3-10 years, Regulated 14-25 years
11,266,723
11,194,916
3-11 years
10,601,819
10,024,105
10-79 years
(2)
7,901,058
7,404,679
Not depreciable, except certain regulated assets
6,296,155
5,313,061
15-40 years
23,676,899
20,009,979
Various
380,206,789
347,937,938
1,481,448
4,899,608
(101,017,551
)
(92,414,289
)
$
280,670,686
$
260,423,257
(1)
(2)
Table of Contents
At December 31,
2008
2007
$
650,820
$
1,389,454
2,059
18,575
22,290
107,943
107,394
46,612
55,934
826,009
1,575,072
1,284,552
1,115,638
646,126
446,642
12,667
15,201
83,370
111,159
779,480
850,594
2,806,195
2,539,234
$
3,632,204
$
4,114,306
$
162,616
$
191,004
1,542,174
4,225,845
231,919
11,202
743,874
395,379
546,754
1,477,336
3,227,337
6,300,766
749,827
757,557
125,279
151,521
226,993
875,106
1,136,071
20,641,279
20,249,948
$
24,743,722
$
27,686,785
Table of Contents
Table of Contents
Table of Contents
For the Periods Ended December 31,
2008
2007
2006
$
13,607,259
$
13,197,710
$
10,506,525
6,811,848
6,743,041
6,032,462
$
2.00
$
1.96
$
1.74
$
13,607,259
$
13,197,710
$
10,506,525
88,657
95,611
105,024
$
13,695,916
$
13,293,321
$
10,611,549
6,811,848
6,743,041
6,032,462
12,083
103,552
111,675
122,669
6,927,483
6,854,716
6,155,131
$
1.98
$
1.94
$
1.72
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
For the Years Ended December 31,
2008
2007
2006
$
210,957,687
$
180,842,699
$
170,114,512
65,873,930
62,837,696
48,575,976
14,611,860
14,606,100
12,509,077
$
291,443,477
$
258,286,495
$
231,199,565
$
444,083
$
359,235
$
259,970
2,861
406
108,596
492,840
58,532
652,296
622,272
618,492
$
1,207,836
$
1,474,753
$
936,994
$
25,846,346
$
22,485,266
$
19,733,487
1,586,414
4,497,843
2,534,035
694,636
835,981
767,160
351,538
294,492
297,255
28,478,934
28,113,582
23,331,937
103,039
291,305
189,093
6,157,552
6,589,639
5,773,993
8,817,162
8,597,461
6,999,072
$
13,607,259
$
13,217,787
$
10,747,965
$
6,694,037
$
6,917,609
$
6,312,277
2,024,172
1,842,047
1,658,554
175,295
143,706
112,729
111,407
156,823
160,155
$
9,004,911
$
9,060,185
$
8,243,715
$
25,386,046
$
23,086,713
$
43,894,614
3,416,514
5,290,215
4,778,891
678,705
174,184
159,402
1,362,246
1,591,272
321,204
$
30,843,511
$
30,142,384
$
49,154,111
(1)
At December 31,
2008
2007
2006
$
297,407,548
$
273,500,890
$
252,292,600
72,954,861
94,966,212
60,170,200
3,544,847
2,507,910
2,573,810
11,849,010
10,533,511
10,503,804
$
385,756,266
$
381,508,523
$
325,540,414
Table of Contents
For the Years Ended December 31,
2008
2007
2006
$
5,835,321
$
5,592,279
$
5,334,477
$
3,884,921
$
7,009,206
$
6,285,272
For the Years Ended December 31,
2008
2007
2006
$
696,268
$
365,890
$
1,490,890
$
158,756
$
948,683
$
914,811
$
208,194
$
840,718
$
844,920
$
176,740
$
137,784
$
283,417
$
568,361
$
435,309
$
715,494
$
181,312
$
183,573
$
175,617
$
50,244
$
201,455
Table of Contents
Fair Value Measurements Using:
Significant
Other
Significant
Quoted Prices in
Observable
Unobservable
Active Markets
Inputs
Inputs
(in thousands)
Fair Value
(Level 1)
(Level 2)
(Level 3)
$
1,601
$
1,601
$
4,482
$
4,482
$
3,052
$
3,052
$
105
$
105
Table of Contents
December 31, 2008
December 31, 2007
Gross
Gross
Carrying
Accumulated
Carrying
Accumulated
Amount
Amortization
Amount
Amortization
$
115,333
$
89,481
$
115,333
$
82,269
263,659
125,243
263,659
118,650
$
378,992
$
214,724
$
378,992
$
200,919
Table of Contents
For the Years Ended December 31,
2008
2007
2006
6,777,410
6,688,084
5,883,099
9,060
35,333
38,392
5,260
29,563
29,705
10,397
8,106
16,677
250
350
350
24,744
15,974
29,516
690,345
6,827,121
6,777,410
6,688,084
(97
)
(2,425
)
(971
)
2,425
971
97
6,827,121
6,777,410
6,688,084
(1)
(2)
(3)
(4)
Table of Contents
At December 31,
2008
2007
$
$
1,000,000
1,818,182
2,727,273
3,000,000
4,000,000
12,000,000
14,000,000
24,545,455
27,272,727
20,000,000
20,000,000
30,000,000
1,655,000
1,832,000
60,000
80,000
93,078,637
70,912,000
(6,656,364
)
(7,656,364
)
$
86,422,273
$
63,255,636
Table of Contents
Table of Contents
Table of Contents
Defined
Other
Benefit
Pension
Postretirement
Pension
SERP
Benefit
$
(4,699
)
$
13,176
$
268,276
$
59,089
$
158,378
Defined
Other
Benefit
Pension
Postretirement
Pension
SERP
Benefit
$
(20,162
)
$
118,580
4,319,514
(175,725
)
1,049,291
4,299,352
(57,145
)
1,049,291
(1,721,460
)
20,041
(420,136
)
$
2,577,892
$
(37,104
)
$
629,155
Table of Contents
At December 31,
2008
2007
2006
48.70
%
49.03
%
77.34
%
51.24
%
50.26
%
18.59
%
0.06
%
0.71
%
4.07
%
100.00
%
100.00
%
100.00
%
At December 31,
2008
2007
$
11,073,520
$
11,449,725
593,723
622,057
267,953
83,704
282,684
(426,652
)
(1,280,946
)
11,592,248
11,073,520
10,798,781
12,040,287
(3,683,183
)
39,440
(426,652
)
(1,280,946
)
6,688,946
10,798,781
(4,903,302
)
(274,739
)
$
(4,903,302
)
$
(274,739
)
5.25
%
5.50
%
6.00
%
6.00
%
Table of Contents
For the Years Ended December 31,
2008
2007
2006
$
593,723
$
622,057
$
635,877
(629,432
)
(696,398
)
(690,533
)
(4,699
)
(4,699
)
(4,699
)
$
(40,408
)
$
(79,040
)
$
(59,355
)
5.50
%
5.50
%
5.25
%
6.00
%
6.00
%
6.00
%
At December 31,
2008
2007
$
2,326,250
$
2,286,970
124,771
123,361
39,227
5,123
118,580
(89,204
)
(89,204
)
2,519,624
2,326,250
89,204
89,204
(89,204
)
(89,204
)
(2,519,624
)
(2,326,250
)
$
(2,519,624
)
$
(2,326,250
)
5.25
%
5.50
%
Table of Contents
For the Years Ended December 31,
2008
2007
2006
$
124,771
$
123,361
$
119,588
45,416
51,734
57,039
$
170,187
$
175,095
$
176,627
5.50
%
5.50
%
5.25
%
At December 31,
2008
2007
$
1,755,564
$
1,763,108
551,684
56,123
(19,329
)
21,012
(109,852
)
(84,679
)
$
2,178,067
$
1,755,564
39,598
243,660
103,572
100,863
(143,170
)
(344,523
)
$
(2,178,067
)
$
(1,755,564
)
$
(2,178,067
)
$
(1,755,564
)
5.25
%
5.50
%
For the Years Ended December 31,
2008
2007
2006
$
2,826
$
6,203
$
9,194
114,282
101,776
93,924
22,282
289,838
166,423
144,694
$
406,946
$
274,402
$
270,094
Table of Contents
Defined
Pension
Other Post-
Benefit
Supplemental
Retirement
Pension Plan
(1)
Executive Retirement
(2)
Benefits
(2)
$
1,116,199
$
87,810
$
224,683
936,064
805,978
237,850
441,760
84,623
215,670
1,351,260
82,833
226,548
491,266
80,911
220,874
3,643,521
585,796
1,201,769
(1)
(2)
Table of Contents
For the year ended December 31,
2008
2007
2006
$
180,037
$
180,920
$
165,340
640,138
809,030
544,450
820,175
989,950
709,790
326,585
386,080
276,820
$
493,590
$
603,870
$
432,970
Table of Contents
Weighted
Number of
Average Grant
Shares
Date Fair Value
5,850
$
31.38
5,850
$
31.38
6,161
$
29.43
6,161
$
29.43
(a)
For the year ended December 31,
2008
2007
2006
$
180,037
$
180,920
$
165,340
Table of Contents
Weighted
Number of
Average Fair
Shares
Value
31,140
$
31.00
33,760
$
29.90
12,544
$
31.00
6,820
$
31.00
11,776
$
31.00
33,760
$
29.90
94,200
$
27.71
31,094
$
29.90
2,666
$
29.90
94,200
$
27.71
For the year ended December 31,
2008
2007
2006
$
640,138
$
809,030
$
544,450
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
For the Quarters Ended
March 31
June 30
September 30
December 31
$
100,273,502
$
69,056,959
$
49,698,013
$
72,415,004
$
14,040,715
$
4,329,439
$
1,170,393
$
8,938,386
$
7,574,343
$
1,818,924
$
(198,298
)
$
4,412,291
$
1.11
$
0.27
$
(0.03
)
$
0.65
$
1.10
$
0.27
$
(0.03
)
$
0.64
$
93,526,891
$
52,501,920
$
41,418,718
$
70,838,968
$
14,613,572
$
3,698,066
$
985,634
$
8,816,310
$
7,991,088
$
1,481,791
$
(355,898
)
$
4,080,730
$
1.19
$
0.22
$
(0.05
)
$
0.60
$
1.18
$
0.22
$
(0.05
)
$
0.60
Table of Contents
Table of Contents
Stockholders of Chesapeake Utilities Corporation
Beard Miller Company LLP
Reading, Pennsylvania
March 9, 2009
Table of Contents
Table of Contents
(c)
Number of securities
(a)
(b)
remaining available for future
Number of securities to
Weighted-average
issuance under equity
be issued upon exercise
exercise price
compensation plans
of outstanding options,
of outstanding options,
(excluding securities
warrants and rights
warrants and rights
reflected in column (a))
446,632
(1)
(2)
446,632
(1)
(2)
Table of Contents
(a)
1.
2.
3.
Exhibit 1.1
Exhibit 3.1
Exhibit 3.2
Exhibit 4.1
Exhibit 4.2
Exhibit 4.3
Table of Contents
Exhibit 4.4
Exhibit 4.5
Exhibit 4.6
Exhibit 4.7
Exhibit 4.8
Exhibit 4.9
Exhibit 4.10
Exhibit 10.1*
Exhibit 10.2*
Exhibit 10.3*
Exhibit 10.4*
Exhibit 10.5*
Table of Contents
Exhibit 10.6*
Exhibit 10.7*
Exhibit 10.8*
Exhibit 10.9*
Exhibit 10.10*
Exhibit 10.11*
Exhibit 10.12*
Exhibit 10.13*
Exhibit 10.14*
Exhibit 10.15*
Exhibit 10.16*
Exhibit 10.17*
Exhibit 10.18*
Exhibit 10.19*
Table of Contents
Exhibit 10.20*
Exhibit 10.21*
Exhibit 10.22*
Exhibit 10.23*
Exhibit 10.24*
Exhibit 10.25*
Exhibit 10.26*
Exhibit 10.27*
Exhibit 10.28*
Exhibit 12
Table of Contents
Exhibit 14.1
Exhibit 14.2
Exhibit 21
Exhibit 23.1
Exhibit 23.2
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
*
Table of Contents
Chesapeake Utilities Corporation
By:
/s/ John R. Schimkaitis
President and Chief Executive Officer
Date:
March 9, 2009
/s/ John R. Schimkaitis
Chief Executive Officer and Director
Date: March 9, 2009
/s/ Eugene H. Bayard
Eugene H. Bayard, Director
Date: February 24, 2009
/s/ Thomas J. Bresnan
Thomas J. Bresnan, Director
Date: March 9, 2009
/s/ J. Peter Martin
J. Peter Martin, Director
Date: February 24, 2009
/s/ Calvert A. Morgan, Jr.
Calvert A. Morgan, Jr., Director
Date: February 24, 2009
Table of Contents
Stockholders of Chesapeake Utilities Corporation
Beard Miller Company LLP
Reading, Pennsylvania
March 9, 2009
Table of Contents
Schedule II
Valuation and Qualifying Accounts
Balance at
Additions
Beginning of
Charged to
Other
Balance at End
For the Year Ended December 31,
Year
Income
Accounts
(1)
Deductions
(2)
of Year
$
952,075
$
1,185,906
$
241,153
$
(1,220,120
)
$
1,159,014
$
661,597
$
818,561
$
26,190
$
(554,273
)
$
952,075
$
861,378
$
381,424
$
65,519
$
(646,724
)
$
661,597
(1)
(2)
Table of Contents
Chesapeake will provide, free of
charge, a copy of any exhibit to
the 2008 Annual Report on
Form 10-K not included
in this document.
Page 2 of 15
Page 3 of 15
Page 4 of 15
Page 5 of 15
Page 6 of 15
Page 7 of 15
Page 8 of 15
Page 9 of 15
Page 10 of 15
Page 11 of 15
Page 12 of 15
Page 13 of 15
Page 14 of 15
Page 15 of 15
Page No. | ||||
Section 1. Establishment and Purpose
|
1 | |||
|
||||
1.01. Establishment
|
1 | |||
1.02. Purpose
|
1 | |||
1.03. Effective Date
|
1 | |||
Section 2. Definitions and Construction
|
2 | |||
|
||||
2.01. Definitions
|
2 | |||
2.02. Construction
|
8 | |||
Section 3. Participation
|
9 | |||
|
||||
3.01. Election of Benefits
|
9 | |||
3.02. Election Requirements
|
9 | |||
3.03. Form and Time of Payment
|
10 | |||
3.04. Termination of Participation
|
11 | |||
Section 4. Accounts
|
12 | |||
|
||||
4.01. Accounts
|
12 | |||
4.02. Deferred Cash Subaccount
|
12 | |||
4.03. DSU Subaccount
|
12 | |||
4.04. Investment Return for Deferred Cash Subaccount
|
12 | |||
4.05. Treatment of DSUs
|
14 | |||
4.06. Vesting of Accounts
|
15 | |||
Section 5. Distributions
|
16 | |||
|
||||
5.01. Exclusive Entitlement to Payment
|
16 | |||
5.02. Payment
|
16 | |||
5.03. Death Benefits
|
17 | |||
5.04. Distributions Due to Unforeseeable Emergency
|
17 | |||
5.05. Disability
|
18 | |||
5.06. Change in Control
|
18 | |||
5.07. Acceleration of Payment
|
18 | |||
5.08. Delay of Payment
|
19 | |||
5.09. Assignment and Assumption of Liabilities
|
20 |
Page No. | ||||
Section 6. Nature of Participants Interest in Plan
|
21 | |||
|
||||
6.01. No Right to Assets
|
21 | |||
6.02. No Right to Transfer Interest
|
21 | |||
6.03. No Right to Employment or Service
|
21 | |||
6.04. Withholding and Tax Liabilities
|
22 | |||
Section 7. Administration
|
23 | |||
|
||||
7.01. Committee
|
23 | |||
7.02. Meetings
|
23 | |||
7.03. Quorum
|
23 | |||
7.04. Expenses
|
23 | |||
7.05. Responsibilities of the Committee
|
23 | |||
7.06. Finality of Committee Determinations
|
24 | |||
7.07. Benefit Claims Procedure
|
25 | |||
7.08. Arbitration of Denied Claims
|
25 | |||
Section 8. Amendment, Suspension, and Termination
|
26 | |||
|
||||
8.01. By the Compensation Committee
|
26 | |||
8.02. By the Committee
|
27 | |||
Section 9. Miscellaneous
|
28 | |||
|
||||
9.01. Participation by Affiliate
|
28 | |||
9.02. Designation of Beneficiary
|
28 | |||
9.03. Incapacity
|
29 | |||
9.04. Required Information
|
29 | |||
9.05. Inability to Locate Participants and Beneficiaries
|
29 | |||
9.06. Headings
|
29 | |||
9.07. Severability
|
29 | |||
9.08. Governing Law
|
30 | |||
9.09. Complete Statement of Plan
|
30 | |||
EXHIBIT A
|
31 |
Chesapeake
Utilities Corporation
Deferred Compensation Plan |
Page 1 |
Chesapeake
Utilities Corporation
Deferred Compensation Plan |
Page 2 |
(a) | Account means the bookkeeping account established for each Participant under Section 4. Each Account shall include a Deferred Cash Subaccount and a Deferred Stock Unit Subaccount. Additional subaccounts shall be maintained as necessary for the administration of the Plan. |
(b) | Affiliate means any corporation included with Chesapeake Utilities Corporation in a controlled group of corporations, as defined in Code Section 414(b), or an unincorporated business included with Chesapeake Utilities Corporation in a group of trades or business under common control, as defined by regulations prescribed by the Secretary of the Treasury under Code Section 414(c). |
(c) | Beneficiary means the person or persons (including a contingent beneficiary except where the context indicates otherwise) designated by a Participant pursuant to Section 9.02 to receive death benefits under the Plan. |
(d) | Board means the Board of Directors of the Company. |
(e) | Bonus Compensation means compensation received under the Bonus Plan or other compensation designated by the Committee as Bonus Compensation eligible for deferral under the Plan as Performance Based Compensation. |
(f) | Bonus Plan means the Chesapeake Utilities Corporation Cash Bonus Incentive Plan, as in effect and amended from time to time. |
(g) | Change in Control means the first of the following events to occur: |
(1) | Any one person, or group of owners of another corporation who acting together through a merger, consolidation, purchase, acquisition of stock or the like (a group), acquires ownership of stock of the Company (or a majority-controlled subsidiary of the Company) that, together with the stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Company. However, if such person or group is considered to own more than 50 percent of the total fair market value or total voting power of the stock of the corporation before this transfer of the Companys stock, the acquisition of additional stock by the same person or persons shall not be considered to cause a Change in Control of the Company; or |
Chesapeake
Utilities Corporation
Deferred Compensation Plan |
Page 3 |
(2) | Any one person or group (as described in Section 2.01(g)(1), above) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company (or a majority-owned subsidiary of the Company) possessing 35 percent or more of the total voting power of the stock of the Company where such person or group is not merely acquiring additional control of the Company; or |
(3) | A majority of members of the Companys Board (other than the Board of a majority-controlled subsidiary of the Company) is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Companys Board prior to the date of the appointment or election; or |
(4) | Any one person or group (as described in 2.01(g)(1), above) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) assets from the Company (or a majority-controlled subsidiary of the Company) that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. A transfer of assets by the Company will not result in a Change in Control under this Section 2.01(g)(4), if the assets are transferred to: |
(A) | a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock; |
(B) | an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Company immediately after the transfer of assets; |
(C) | a person, or more than one person acting as a group (as described in 2.01(g)(1), above), that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding stock of the Company; or |
(D) | an entity, at least 50 percent of the total value or voting power of which is owned directly or indirectly, by a person described in Section 2.01(g)(4)(C), above. |
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Utilities Corporation
Deferred Compensation Plan |
Page 4 |
(h) | Code means the Internal Revenue Code of 1986, as amended from time to time. |
(i) | Committee means the Employee Benefits Committee of the Company or such other committee as may be appointed by the Board to administer the Plan. |
(j) | Common Stock means the common stock, $.4867 par value, of the Company, including both treasury shares and authorized but unissued shares, or any security of the Company issued in substitution, exchange, or in lieu thereof. |
(k) | Company means Chesapeake Utilities Corporation, a Delaware corporation, and any Affiliate that may be authorized by the Compensation Committee and by its own board of directors to participate in the Plan with respect to its employees. |
(l) | Compensation Committee means the Compensation Committee of the Board. |
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Utilities Corporation
Deferred Compensation Plan |
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(m) | Deferred Cash Subaccount means the bookkeeping account to which Deferred Cash Payments of a Participant and interest are credited pursuant to Section 4. |
(n) | Deferred Cash Payment means any Director Compensation, otherwise payable in cash, or Bonus Compensation that a Participant elects to defer under the Plan. |
(o) | Deferred Stock Units or DSUs means hypothetical shares of Common Stock (including hypothetical fractional shares). |
(p) | Director means a member of the Board of Directors of the Company. |
(q) | Director Compensation means amounts paid or payable by the Company to a Director for a Plan Year which are includable in income for federal tax purposes, including Directors fees of all types, whether paid in cash or Common Stock. Notwithstanding the foregoing, non-cash compensation and expense reimbursements are excluded from Director Compensation. |
(r) | Disabled means a medically determinable physical or mental impairment that can be expected to result in death or last for at least 12 months; and the impairment either (1) prevents the Participant from engaging in any substantial gainful activity, or (2) entitles the Participant to receive income replacement benefits for at least 3 months under an accident or health plan sponsored by the Company. The Company shall determine whether a Participant is Disabled in its sole discretion (but in compliance with Code Section 409A) and may require the Participant to submit to periodic medical examinations at the Participants expense to confirm the existence and continuation of the Participants disability. |
(s) | DSU Subaccount means the bookkeeping account to which DSUs of a Participant and dividend equivalents are credited pursuant to Section 4. |
(t) | Eligible Employee means an employee of the Company who is designated by the Compensation Committee, in its sole discretion, to be eligible to participate in the Plan. |
(u) | ERISA means the Employee Retirement Income Security Act of 1974, as amended. |
(v) | Excessive Benefits means an amount credited to a Participants Account or paid on a Participants behalf in excess of the amount that properly should have been credited to the Participants Account or paid on the Participants behalf. |
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Utilities Corporation
Deferred Compensation Plan |
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(w) | Fair Market Value means the average of the high and low sales price of the Common Stock, as reported on the New York Stock Exchange (or any other reporting system as shall be selected by the Committee) on the relevant date, or if no sale of Common Stock is reported for a date, on the date or dates that the Committee determines, in its sole discretion, to be appropriate for purposes of valuation. |
(x) | Participant means an Eligible Employee or Director who becomes a participant in the Plan in accordance with Section 3.01 and whose Account has a positive balance. |
(y) | Performance Based Compensation means a bonus or other payment of compensation for which the amount of the payment or the entitlement thereto is contingent on the satisfaction of organizational or individual performance criteria relating to a performance period of at least 12 consecutive months. The organizational or individual performance criteria shall be established in writing no later than 90 days after the beginning of the period of service to which the criteria relate, and the outcome must be substantially uncertain at the time the criteria are established. Notwithstanding the above, a performance-based bonus may be based on subjective performance criteria, provided that: |
(1) | the subjective performance criteria are bona fide and relate to the performance of the Participant, a group of service providers that includes the Participant, or a business unit for which the Participant provides services (which may include the entire organization); and |
(2) | the determination that any subjective performance criteria have been met is not to be made by the Participant or a family member of the Participant (as defined in Code Section 267(c)(4) applied as if the family of an individual includes the spouse of any member of the family), or a person under the effective control of the Participant or such a family member, and no amount of the compensation of the person making such determination is effectively controlled in whole or in part by the Participant or such a family member. |
(z) | Performance Share Award means a performance share award granted under the PIP which qualifies as Performance Based Compensation. |
(aa) | Performance Shares means shares of Common Stock awardable under a Performance Share Award in accordance with the terms of the PIP. |
(bb) | PIP means the Chesapeake Utilities Corporation Performance Incentive Plan, as in effect and as amended from time to time. |
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Utilities Corporation
Deferred Compensation Plan |
Page 7 |
(cc) | Plan means the Chesapeake Utilities Corporation Deferred Compensation Program, as set forth herein and as amended from time to time. |
(dd) | Plan Year means the calendar year. |
(ee) | Separation from Service occurs when an Eligible Employee separates from service with the Company if the Eligible Employee dies, retires or otherwise has a termination of employment with the Company. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Company and the Eligible Employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Eligible Employee would perform after such date (as an employee or independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed over the immediately preceding 36-month period (or the full period in which the Eligible Employee provided services to the Company if the Eligible Employee has been providing services for less than 36 months). An Eligible Employee will not be deemed to have experienced a Separation from Service if such Eligible Employee is on military leave, sick leave, or other bona fide leave of absence, to the extent such leave does not exceed a period of six months or, if longer, such longer period of time during which a right to re-employment is protected by either statute or contract. If the period of leave exceeds six months and the individual does not retain a right to re-employment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period. In the case of a Director, a separation from service occurs upon the termination of the Directors service on the Board, provided, however, that a Director who is also providing services to the Company as an independent contractor, does not have a Separation from Service until he has separated from service both as a Director and as an independent contractor. If an Eligible Employee provides services both as an employee and as a member of the Board, the services provided as a Director are generally not taken into account in determining whether the Eligible Employee has a Separation from Service as an employee for purposes of the Plan, in accordance with final regulations under Code Section 409A. |
(ff) | Valuation Date means the last business day of each calendar month. |
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Utilities Corporation
Deferred Compensation Plan |
Page 8 |
(a) | the use of the masculine gender shall also include within its meaning the feminine and vice versa, |
(b) | the use of the singular shall also include within its meaning the plural and vice versa, and |
(c) | the word include shall mean to include without limitation. |
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Utilities Corporation
Deferred Compensation Plan |
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(a) | Election Filing Deadline . Except as provided in subsection (b), below, an election to defer an amount equal to all or part of an Eligible Employees Bonus Compensation earned with respect to, or Performance Shares awarded during, a Plan Year shall be filed by the Eligible Employee with the Committee at least six months before the Plan Year ends ( i.e. , by June 30th), unless the Bonus Compensation or Performance Shares do not qualify as Performance-Based Compensation, in which case an election with respect to such compensation shall be filed by the Eligible Employee with the Committee before the beginning of the Plan Year for which the compensation will be earned, or at such other time that complies with the deferral election requirements of Code Section 409A. Except as provided in subsection (b) below, a Director shall file an election with the Committee to defer an amount equal to all or part of his Director Compensation before the beginning of the Plan Year for which the Director Compensation will be earned. In all cases, a Participants election to defer Bonus Compensation, Director Compensation or Performance Shares, as applicable, shall be made in accordance with the deferral election timing requirements of Code Section 409A and procedures established by the Committee from time to time. |
(b) | Initial Election . A newly hired or otherwise newly Eligible Employee may file the requisite election to defer Bonus Compensation or Performance Shares earned thereafter before the expiration of 30 days either from, as applicable, (1) his initial date of employment (if the Eligible Employee is a new hire) or (2) his initial date of eligibility (if the Eligible Employee is newly eligible to participate in the Plan). A newly eligible Director may file the requisite election to defer Director Compensation earned thereafter before the expiration of 30 days from the Directors initial date of eligibility to participate in the Plan. Initial elections shall apply only to compensation (of whatever kind) to be earned after the date of the timely initial election. |
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Utilities Corporation
Deferred Compensation Plan |
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(c) | Irrevocable Election . Except as provided in Sections 5.03, 5.04, 5.05 and 5.06, a deferral election described in this Section 3.02, once filed, shall be irrevocable and shall remain in effect until the end of the Plan Year to which it pertains. Six months before the end of each subsequent Plan Year (or prior to the beginning of each subsequent Plan Year if the Bonus Compensation or Performance Shares do not qualify as Performance-Based Compensation), the Participant shall file a new election with the Committee in accordance with the preceding provisions of this Section 3.02. The new election shall apply only to deferrals for that Plan Year. An Eligible Employee or Director who does not make a deferral election in one Plan Year may make a deferral election for any subsequent Plan Year, provided he remains an Eligible Employee or Director, by making a deferral election in accordance with this Section 3.02. |
(d) | Form and Content of Election . An election to make a deferral hereunder shall be in writing, in a form acceptable to the Committee, and shall specify such information as required by the Committee. A deferral election may designate any whole percentage (from 1% to 100%) of the Bonus Compensation or Performance Shares awarded to an Eligible Employee, or Director Compensation awarded to a Director, to be deferred for a calendar year. |
(e) | Treatment of Performance Shares and Common Stock . A Participant who elects to defer Performance Shares or other compensation payable in the form of Common Stock shall be credited with DSUs rather than with shares of Common Stock. Such DSUs shall equal the number of shares of Common Stock that the Participant otherwise would be entitled to receive as compensation or under the Performance Share Award (irrespective of any taxes that would have otherwise been withheld on such compensation or Performance Share Award). |
(a) | General . Except as provided in Sections 5.03, 5.04, 5.05, and 5.06, an amount deferred under this Section 3 shall be paid in a lump sum as of the Valuation Date coincident with or next following the date elected by the Participant. A Participant may elect a different form or time of payment for his deferrals for each Plan Year, but may not divide his deferrals for a single Plan Year among different forms or times of payment. If, however, a Participant who is an Eligible Employee elects to receive payment upon Separation from Service, no amount shall be distributed earlier than six months after the Valuation Date coincident with or next following the Participants Separation from Service. Such six month delay shall not apply to a distribution made to a Participant who is a Director. A Participant may elect to receive his distribution as of the earlier or later of two dates (including Separation from Service), to the extent permitted by Code Section 409A. |
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Utilities Corporation
Deferred Compensation Plan |
Page 11 |
(b) | Modification of Time and Form . After making his first election, a Participant may file an election with the Committee, in a form satisfactory to the Committee, to modify the payment date with respect to a deferral election or to irrevocably specify that the amount credited to his Account is to be paid in the form of five or ten annual installments; provided, however, that, to the extent required by Code Section 409A, such election: |
(1) | is filed with the Committee at least twelve months prior to the date of the first scheduled payment; |
(2) | is not effective until at least twelve months after the date on which the election is made; |
(3) | defers the lump sum payment or the first installment payment with respect to which such election is made for a period of not less than five years from the date such payment would otherwise have been made; |
(4) | does not accelerate payment of the deferred amount; and | ||
(5) | does not request other than five or ten annual installments. |
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Utilities Corporation
Deferred Compensation Plan |
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(a) | Rate of Return Indices . The Compensation Committee shall select and maintain one or more rate of return indices as specified on Exhibit A attached hereto as amended from time to time. A Deferred Cash Payment shall be allocated among one or more of the rate of return indices and shall be credited with the applicable investment return (or loss) that such Deferred Cash Payment would have achieved if it were invested in the specified index or indices. Allocations to one or more of the rate of return indices may be modified during the Plan Year to the extent permitted by the Committee, in its sole discretion. Amounts in the Deferred Cash Subaccount that were deferred and vested as of January 1, 2005, may be allocated among one or more of the rate of return indices on Exhibit A attached hereto to the extent the Committee so provides and to the extent such provision is not a material modification (within the meaning of Code Section 409A and Treasury Regulations issued thereunder) to the terms of the September 1, 1998 Plan restatement, which are set forth in Appendix A. |
(1) | Each Participant shall specify in writing, at the time he completes his election to participate under Section 3, and in a form acceptable to the Committee, how any Deferred Cash Payment shall be allocated among the indices specified on Exhibit A attached hereto. |
(2) | The Committee may, in its discretion and from time to time, permit a Participant to change any election previously made with respect to the allocation of any Deferred Cash Payment, subject to such conditions and such limitations as the Committee may prescribe. Any such change in election shall be in writing and in a form acceptable to the Committee. |
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Utilities Corporation
Deferred Compensation Plan |
Page 13 |
(3) | The Committee may, in its discretion and from time to time, permit a Participant to elect to reallocate the amounts in such Participants Deferred Cash Subaccount from one rate of return index to another, subject to such conditions and such limitations as the Committee may prescribe; provided that a Participant shall be permitted, at least once per calendar month, to reallocate amounts previously allocated. Any such reallocation election shall be in writing and in a form acceptable to the Committee. |
(4) | The Committee may require that any election under this Section 4.04 apply to the entire amount to which it pertains ( e.g. , 100% of the Participants future contributions) or to such percentage or percentages of that amount as the Committee may specify ( e.g. , increments of 5%). |
(5) | If a Participant fails to specify a rate of return index with respect to his Deferred Cash Payments, the Participant shall be presumed to have specified that his entire Deferred Cash Subaccount be allocated to the index determined by the Committee to represent the lowest risk of principal loss. |
(c) | Crediting of Investment Return . The balance credited to the Participants Deferred Cash Subaccount as of the last day of the prior month shall be credited with the applicable investment return (or loss) as of the last day of the month of crediting. All references herein to Deferred Cash Payments shall be deemed to include such Deferred Cash Payments plus any investment return (or loss) credited pursuant to this Section 4.04. |
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Utilities Corporation
Deferred Compensation Plan |
Page 14 |
(a) | Deemed Reinvestment of Dividends on DSUs . The DSUs credited to a Participants DSU Subaccount pursuant to Section 3.02 shall be increased on each date that a dividend is paid on Common Stock. The number of additional DSUs credited to a Participants DSU Subaccount as a result of such increase shall be determined first by multiplying the number of DSUs credited to the Participants DSU Subaccount on the dividend record date by the amount of the dividend declared per share of Common Stock on the dividend declaration date, and then by dividing the product so determined by the Fair Market Value of the Common Stock on the dividend payment date. |
(b) | Conversion Out of DSUs . Amounts credited to the DSU Subaccount generally will be paid in the corresponding number of shares of Common Stock. In the event, however, that it becomes necessary to determine the dollar value of DSUs credited to a Participants DSU Subaccount as of any date, the dollar value shall be determined by multiplying the number of DSUs on that date by the Fair Market Value of the Common Stock on that date. |
(c) | Effect of Recapitalization . In the event of a transaction or event described in this Section 4.05(c), the number of DSUs credited to a Participants DSU Subaccount shall be adjusted in such manner as the Committee, in its sole discretion, deems equitable. A transaction or event is described in this Section 4.05(c), if and only if: |
(1) | it is a dividend or other distribution (whether in the form of cash, shares, other securities, or other property), extraordinary cash distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of shares or other securities, the issuance of warrants or other rights to purchase shares or other securities, or other similar corporate transaction or event; and |
(2) | the Committee determines that such transaction or event affects the Common Stock such that an adjustment pursuant to this Section 4.05(c) is appropriate to prevent dilution or enlargement of the benefits made available under the Plan. |
Chesapeake
Utilities Corporation
Deferred Compensation Plan |
Page 15 |
(a) | Deferred Cash Subaccount . A Participant shall at all times have a 100% vested and nonforfeitable interest in the balance in his Deferred Cash Subaccount. |
(b) | DSU Subaccount . Any Performance Share in a Participants DSU Subaccount shall vest and become nonforfeitable only to the extent such Performance Share would have vested and become nonforfeitable under the terms of the PIP had it not been deferred. Any Common Stock in a Directors DSU Subaccount shall be 100% vested at all times. |
(c) | Dividend DSUs . A Participant shall have a vested and nonforfeitable interest in any dividend DSUs only to the extent the Participant has a vested and nonforfeitable interest in the underlying Performance Share or Common Stock to which the dividend DSU relates. |
Chesapeake
Utilities Corporation
Deferred Compensation Plan |
Page 16 |
(a) | Time of Payment . Subject to Sections 5.03, 5.04, 5.05, and 5.06, the Participant shall receive an amount equal to the sum of the balances in his Account at the time(s) and in the manner specified or elected by him in accordance with Section 3.03. If the deferred amounts are subject to more than one distribution election made in accordance with Section 3.03, then the portion of the Participants Account that is subject to each election shall be distributed in accordance with the applicable election. The Participants Account shall be debited to reflect each distribution pursuant to this Section 5. |
(b) | Payment Medium . All amounts credited to the Deferred Cash Subaccount shall be paid in cash. All amounts credited to the DSU Subaccount shall be paid solely in shares of Common Stock, except that cash shall be paid in lieu of fractional shares. Any reference in the Plan to a payment of DSUs shall refer to a distribution of shares of Common Stock equal to the number of DSUs, except that it shall refer to a payment of cash in lieu of a fractional share. For this purpose, the cash value of a fractional share shall be determined in accordance with Section 4.05(b). |
(c) | Installment Payments . If the Participant receives installments, the amount of the first installment shall be equal to the value of the Participants Deferred Cash Subaccount plus the value of the Participants DSU Subaccount (determined in accordance with Section 4.05(b)) determined as of the Valuation Date as of which the installments commence (the applicable Valuation Date) pursuant to Section 5.02(a), divided by five (if five installments are elected) or ten (if ten installments are elected). The amount of each succeeding installment shall be equal to the value of the Participants Deferred Cash Subaccount and the value of the Participants DSU Subaccount (determined in accordance with Section 4.05(b)) on the next succeeding anniversary of the applicable Valuation Date, divided by the remaining number of installments to be paid. The form of each installment payment shall be determined in accordance with Section 5.02(b). |
Chesapeake
Utilities Corporation
Deferred Compensation Plan |
Page 17 |
(d) | Effect of Deferral on Restriction or Vesting Period . If a share of Common Stock would have been subject to any restriction or vesting period upon transfer to a Participant under a Performance Share Award in the absence of a deferral election, such share shall be subject to such restriction or vesting period upon payment from the Plan; provided however, that any period of deferral under the Plan shall be credited toward the satisfaction of any such restriction or vesting period. |
(a) | Amount and Form of Death Benefit . Any amount credited to a Participants Account that is unpaid at the time of the Participants death shall be paid in a single lump sum to the Beneficiary (or the contingent Beneficiary if the Beneficiary predeceases the Participant) designated by the Participant pursuant to Section 9.02. |
(b) | Time of Payment . A distribution pursuant to this Section 5.03 shall be paid to the Participants Beneficiary within 30 days after the Valuation Date that is coincident with or next follows the date of the Participants death, together with any additional information or documentation that the Committee determines to be necessary or appropriate before it makes the distribution. |
Chesapeake
Utilities Corporation
Deferred Compensation Plan |
Page 18 |
(a) | Domestic Relations Order . A payment of all or part of the Participants Account may be made to a spouse, former spouse or other dependent under the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)). The Administrative Committee shall determine whether a payment should be made pursuant to the terms of a domestic relations order and the time and form of such payment. |
(b) | Employment Taxes . A payment of all or part of the Participants Account may be made to the extent necessary to pay the Federal Insurance Contributions Act (FICA) tax imposed under Code Sections 3101, 3121(a), and 3121(v)(2) on amounts deferred under the Plan (the FICA Amount), income tax at source on wages imposed under Code Section 3401 or the corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of the FICA Amount, and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes. The total payment under this Section shall not exceed the aggregate of the FICA Amount and the income tax withholding related to such FICA Amount. |
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Utilities Corporation
Deferred Compensation Plan |
Page 19 |
(c) | Payment of State, Local or Foreign Taxes . Payment may be made to reflect payment of state, local or foreign tax obligations arising from participation in the Plan that apply to an amount deferred under the Plan before the amount is paid or made available to the Participant, plus the income tax at source on wages imposed under Code Section 3401 as a result of such payment; provided, however, that the amount of the payment may not exceed the amount of the taxes due, and the income tax withholding related to such state, local and foreign tax amount. |
(d) | Income Inclusion under Code Section 409A . Payment may be made at any time the Plan fails to meet the requirements of Code Section 409A and the Treasury Regulations issued thereunder; provided, however, that payment cannot exceed the amount required to be included in income as a result of the failure to comply. |
(e) | Certain Offsets . Payment may be made as satisfaction of a debt of the Participant to the Company where: (1) the debt is incurred in the ordinary course of the employment relationship; (2) the entire amount of the offset in any of the Participants taxable years does not exceed $5,000; and (3) the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant. |
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Utilities Corporation
Deferred Compensation Plan |
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Utilities Corporation
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Utilities Corporation
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Utilities Corporation
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(a) | to make and enforce such rules and regulations as it shall deem necessary or proper for the efficient administration of the Plan; |
(b) | to interpret the Plan and to decide any and all matters arising hereunder, including the right to remedy possible ambiguities, inconsistencies, or omissions; provided that all such interpretations and decisions shall be applied in a uniform and non-discriminatory manner to all persons similarly situated; |
(c) | to compute the amount of benefits that shall be payable to any Participant or Beneficiary in accordance with the provisions of the Plan, and in the event that the Committee determines that Excessive Benefits have been paid to any person, the Committee may suspend payment of future benefits to such person or his Beneficiary or reduce the amount of such future benefits until the Excessive Benefits and any interest thereon determined by the Committee have been recovered; |
Chesapeake
Utilities Corporation
Deferred Compensation Plan |
Page 24 |
(d) | to appoint other persons to carry out any ministerial responsibilities under the Plan as it may determine consistent with applicable law; |
(e) | to employ one or more persons to render advice with respect to any of its responsibilities under the Plan; and |
(f) | to amend the Plan from time to time by written resolution for the limited purpose of meeting the requirements of Code Section 409A. |
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Utilities Corporation
Deferred Compensation Plan |
Page 25 |
(a) | state the specific reason or reasons for the denial, |
(b) | provide specific reference to pertinent Plan provisions on which the denial or modification is based, |
(c) | provide a description of any additional material or information necessary for the Participant or his representative to perfect the claim and an explanation of why such material or information is necessary, and |
(d) | explain the Plans claim review procedure as contained in this Plan. |
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Utilities Corporation
Deferred Compensation Plan |
Page 26 |
(a) | Authority to Amend . The Compensation Committee of the Board may modify, amend, suspend, or terminate the Plan at any time; provided that no such modification, amendment, suspension, or termination shall reduce a Participants accrued benefits under the Plan as of the date of such modification, amendment, suspension, or termination, except to the extent that the affected Participants consent in writing to the modification, amendment, suspension, or termination; and provided further that the Plan may be amended at any time and without the consent of the Participants to provide that DSUs shall be paid in cash rather than in shares of Common Stock; and provided further that no such modification, amendment, suspension, or termination shall eliminate, restrict, or modify any of the following provisions of the Plan, except to the extent that the affected Participants consent in writing to the modification, amendment, suspension, or termination: |
(1) | the provision in Section 2.01(g) that defines Change in Control; |
(2) | the provision in Section 5.06 that provides for a lump sum payment following a Change in Control; |
(3) | the provision in Section 7.08 that permits submission of denied claims for benefits to arbitration; and |
(4) | the provisions of this Section 8 that protect accrued benefits and limit modification, amendment, suspension, or termination of the Plan. |
(b) | Authority to Delegate . The Board may, in its sole discretion, delegate to any person or persons all or part of its authority and responsibility under the Plan, including, without limitation, the authority to amend the Plan. |
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Utilities Corporation
Deferred Compensation Plan |
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Utilities Corporation
Deferred Compensation Plan |
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(a) | Each Participant may designate a Beneficiary. Such designation shall be in writing, shall be made in the form and manner prescribed by the Committee, and shall be effective only if filed with the Committee prior to the Participants death. A Participant may, at any time prior to his death, and without the consent of his Beneficiary, change his designation of Beneficiary by filing a written notice of such change with the Committee in the form and manner prescribed by the Committee. In the absence of a designated Beneficiary, or if the designated Beneficiary and any designated contingent Beneficiary predecease the Participant, the Beneficiary shall be the Participants surviving spouse, or if the Participant has no surviving spouse, the Participants estate. |
(b) | If a Participant designates his spouse as his Beneficiary, that designation shall not be revoked or otherwise altered or affected by any: |
(1) | change in the marital status of the Participant and such spouse, |
(2) | agreement between the Participant and such spouse, or |
(3) | judicial decree (such as a divorce decree) affecting any rights that the Participant and such spouse might have as a result of their marriage separation, or divorce, |
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Utilities Corporation
Deferred Compensation Plan |
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Utilities Corporation
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Utilities Corporation
Deferred Compensation Plan |
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1. | The Fidelity Spartan U.S. Equity Index Fund | |
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Stephen C. Thompson
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ARTICLE I ESTABLISHMENT AND PURPOSE
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ARTICLE
II DEFINITIONS
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2.1 Beneficiary
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2.2 Change in Control
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2.3 Committee
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2.4 Employer
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2.5 Excess Benefit
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2.6 Executive
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2.7 Maximum Benefit
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2.8 Pension Plan
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2.9 Plan
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2.10 Plan Year
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2.11 Related Company
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2.12 Unrestricted Benefit
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ARTICLE
III PAYMENT OF EXCESS BENEFITS
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3.1 Group A Participants
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3.2 Group B Participants
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ARTICLE
IV TERMINATION OF EMPLOYMENT
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4.1 Termination for Cause
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4.2 Conduct After Termination
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ARTICLE V NATURE OF INTEREST OF EXECUTIVE
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5.1 In General
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5.2 Funding of Plan Under Certain Circumstances
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ARTICLE
VI ADMINISTRATION
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6.1 Committee
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6.2 Expenses
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6.3 Powers of the Committee
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6.4 Finality
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6.5 Benefit Claims Procedure
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ARTICLE
VII AMENDMENTS
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ARTICLE
VIII MISCELLANEOUS
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8.1 Participation by Affiliated Company
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8.2 Incapacity
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8.3 Required Information
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8.4 Inability to Locate Executives
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8.5 No Right to Employment
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8.6 Withholding Taxes
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8.7 Gender and Number
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8.8 Headings
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8.9 Severability
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8.10 Governing Law
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8.11 Effective Date
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SCHEDULE A Group A and B Participants
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Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Table of Contents |
Section 1. Establishment and Purpose
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1.01. Establishment
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1.02. Purpose
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1.03. Effective Date
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Section 2. Definitions and Construction
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2.01. Definitions
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2.02. Construction
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Section 3. Participation
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3.01. Election of Benefits
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3.02. Election Requirements
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3.03. Form and Time of Payment
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Section 4. Accounts
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4.01. Accounts
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4.02. Participant Subaccount
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4.03. Employer Match Subaccount
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4.04. Investment Returns
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4.05. Vesting of Accounts
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Section 5. Distributions
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5.01. Exclusive Entitlement to Payment
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5.02. Payment
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5.03. Death Benefits
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5.04. Hardship Distributions
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5.05. Disability
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5.06. Change in Control
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5.07. Acceleration of Payment
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5.08. Delay of Payment
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5.09. Assignment and Assumption of Liabilities
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Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan
Table of Contents
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Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 1 |
1.01. | Establishment. | |
Effective March 1, 1999, the Company established for the benefit of certain Eligible Employees an unfunded plan of deferred compensation known as the Chesapeake Utilities Corporation Supplemental Executive Retirement Savings Plan. | ||
1.02. | Purpose. | |
The Plan is an unfunded plan maintained primarily for the purpose of providing deferred compensation to a select group of management and highly compensated employees. The Plan permits Eligible Employees to defer receipt of a portion of their Compensation earned above an amount or after a date selected by the Eligible Employee before the start of each Plan Year until their Separation from Service with the Company and its Affiliates or until such other date specified in accordance with the terms of the Plan. | ||
1.03. | Effective Date. | |
The Plan, as hereby amended and restated, is intended to meet the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the Code) and is effective with respect to amounts that were not deferred and vested (within the meaning of Section 409A of the Code) before January 1, 2005, and any earnings on such amounts. Except as otherwise specifically provided herein, amounts deferred and vested (within the meaning of Section 409A of the Code) before January 1, 2005 (and earnings on such amounts) are not affected by this amendment and restatement of the Plan, and remain subject to the terms of the March 1, 1999 Plan restatement, which are set forth in Appendix A to this January 1, 2009, amendment and restatement. For recordkeeping purposes, the Company will establish separate accounts for each Participant for amounts deferred and vested before January 1, 2005 (Grandfathered Amounts), and amounts deferred and vested on or after that date (409A Amounts). All amounts that are subject to Code Section 409A for the period from January 1, 2005 through December 31, 2008, shall be subject to the January 1, 2005 amendment and restatement of the Plan and to a good faith interpretation of Code Section 409A, including the use of any applicable transition rules in effect during such period. From and after January 1, 2009, the terms of this amended and restated Plan document shall govern all amounts that are subject to Code Section 409A. |
Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 2 |
2.01. | Definitions. | |
The following words and phrases as used in the Plan have the following meanings: |
(a) | Account means the bookkeeping account established for each Participant under Section 4. Each Account shall include an Employer Match Subaccount and a Participant Subaccount. Additional subaccounts shall be maintained as necessary for the administration of the Plan. |
(b) | Affiliate means any corporation included with Chesapeake Utilities Corporation in a controlled group of corporations, as defined in Code Section 414(b), or an unincorporated business included with Chesapeake Utilities Corporation in a group of trades or business under common control, as defined by regulations prescribed by the Secretary of the Treasury under Code Section 414(c). Participating Affiliates that cease to be a member of the same controlled group as Chesapeake Utilities Corporation within the meaning of Code Sections 414(b) and (c) are no longer eligible to participate in the Plan effective as of the date that they cease to qualify as a controlled group member. Participants of such an employer shall no longer be eligible to participate effective as of the date that their employer becomes ineligible. |
(c) | Beneficiary means the person or persons (including a contingent beneficiary except where the context indicates otherwise) designated by a Participant pursuant to Section 9.02 to receive death benefits under the Plan. |
(d) | Board means the Board of Directors of the Company. | ||
(e) | Change in Control means the first of the following events to occur: |
(1) | Any one person, or group of owners of another corporation who acting together through a merger, consolidation, purchase, acquisition of stock or the like (a group), acquires ownership of stock of the Company (or a majority-controlled subsidiary of the Company) that, together with the stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Company. However, if such person or group is considered to own more than 50 percent of the total fair market value or total voting power of the stock of the corporation before this transfer of the Companys stock, the acquisition of additional stock by the same person or persons shall not be considered to cause a Change in Control of the Company; or |
Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 3 |
(2) | Any one person or group (as described in Section 2.01(e)(1), above) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company (or a majority-owned subsidiary of the Company) possessing 35 percent or more of the total voting power of the stock of the Company where such person or group is not merely acquiring additional control of the Company; or |
(3) | A majority of members of the Companys Board (other than the Board of a majority-controlled subsidiary of the Company) is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Companys Board prior to the date of the appointment or election; or |
(4) | Any one person or group (as described in 2.01(e)(1), above) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) assets from the Company (or a majority-controlled subsidiary of the Company) that have a total gross fair market value equal to or more than 40 percent of the total fair market value of all assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. A transfer of assets by the Company will not result in a Change in Control under this Section 2.01(e)(4), if the assets are transferred to: |
(A) | A shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock; |
(B) | An entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Company immediately after the transfer of assets; |
(C) | A person, or more than one person acting as a group (as described in 2.01(e)(1), above), that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding stock of the Company; or |
(D) | An entity, at least 50 percent of the total value or voting power of which is owned directly or indirectly, by a person described in Section 2.01(e)(4)(C), above. |
Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 4 |
(f) | Code means the Internal Revenue Code of 1986, as amended from time to time. | ||
(g) | Committee means the Employee Benefits Committee of the Company or such other committee as may be appointed by the Board to administer the Plan. | ||
(h) | Company means Chesapeake Utilities Corporation, a Delaware corporation, and any Affiliate that may be authorized by the Compensation Committee and by its own board of directors to participate in the Plan with respect to its employees. | ||
(i) | Compensation means an employees compensation as determined for purposes of the Savings Plan, plus amounts deferred hereunder, except that any dollar limit imposed on compensation under the Savings Plan shall be disregarded under the Plan. | ||
(j) | Compensation Committee means the Compensation Committee of the Board. | ||
(k) | Disabled means a medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of at least 12 months; and the impairment either (1) prevents the Participant from engaging in any substantial gainful activity, or (2) entitles the Participant to receive income replacement benefits for at least 3 months under an accident or health plan sponsored by the Company. |
Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 5 |
(l) | Eligible Employee means an employee of the Company who is designated by the Compensation Committee, in its sole discretion, to be eligible to participate in the Plan and who is among a select group of management or highly compensated employees (within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA). |
(m) | Employer Match means the amount accrued in accordance with Section 4.03 with respect to a Participants Salary Reduction Contributions and Excess Contributions, based on the rate or rates of Matching Contributions under the Savings Plan. |
(n) | Employer Match Subaccount means the bookkeeping account to which the Employer Match on behalf of a Participant and interest are credited pursuant to Section 4. | ||
(o) | ERISA means the Employee Retirement Income Security Act of 1974, as amended. | ||
(p) | Excess Contribution means that portion, if any, of the Compensation earned above a selected dollar amount or after a fixed date during the year selected by the Participant pursuant to Section 3, which the Participant elects to have deferred to the Plan. | ||
(q) | Excessive Benefits means an amount credited to a Participants Account or paid on a Participants behalf in excess of the amount that properly should have been credited to the Participants Account or paid on the Participants behalf. | ||
(r) | Limitations mean |
(1) | the limitation on contributions to defined contribution plans under Sections 401(k), 401(m), 402(g), 414(v) and 415(c) of the Code; and |
(2) | the limitations imposed by Sections 401(a)(4), 401(a)(17), and 415(e) of the Code and by any other provision of the Code to the extent that such provision limits the amount of Salary Reduction Contributions and Matching Contributions that otherwise would be made to the Savings Plan. |
Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 6 |
(s) | Matching Contributions mean the contributions to the Savings Plan made by the Company as matching contributions for salary deferrals under the Savings Plan, as it may be amended from time to time. | ||
(t) | Participant means an Eligible Employee who becomes a participant in the Plan in accordance with Section 3.01 and whose Account has a positive balance. | ||
(u) | Participant Subaccount means the bookkeeping account to which the Excess Contributions of a Participant and interest are credited pursuant to Section 4. | ||
(v) | Performance-Based means a bonus or other payment of Compensation for which the amount of the payment or the entitlement thereto is contingent on the satisfaction of organizational or individual performance criteria relating to a performance period of at least 12 consecutive months. The organizational or individual performance criteria shall be established in writing no later than 90 days after the beginning of the period of service to which the criteria relate, and the outcome must be substantially uncertain at the time the criteria are established. Notwithstanding the above, a Performance-Based Bonus may be based on subjective performance criteria, provided that: |
(1) | The subjective performance criteria are bona fide and relate to the performance of the Participant, a group of service providers that includes the Participant, or a business unit for which the Participant provides services (which may include the entire organization); and |
(2) | the determination that any subjective performance criteria have been met is not to be made by the Participant or a family member of the Participant (as defined in Code Section 267(c)(4) applied as if the family of an individual includes the spouse of any member of the family), or a person under the effective control of the Participant or such a family member, and no amount of the Compensation of the person making such determination is effectively controlled in whole or in part by the Participant or such a family member. |
(w) | Plan means the Chesapeake Utilities Corporation Supplemental Executive Retirement Savings Plan as set forth herein and as amended from time to time. |
(x) | Plan Year means the calendar year. |
(y) | Salary Reduction Contribution means that portion of his or her Compensation that a Participant elects to have deferred and contributed by the Company to the Savings Plan without violating the Limitations. |
Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 7 |
(z) | Savings Plan means the Chesapeake Utilities Corporation Retirement Savings Plan. |
(aa) | Separation from Service means separation from service from the Company and its Affiliates within the meaning of Section 409A of the Code. Whether a termination of employment that is a separation from service has occurred is determined based on whether the facts and circumstances indicate that the Company and the Eligible Employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Eligible Employee would perform after such date (as an employee or independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed over the immediately preceding 36-month period (or the full period in which the Eligible Employee provided services to the Company if the Eligible Employee has been providing services for less than 36 months). An Eligible Employee will not be deemed to have experienced a Separation from Service if such Eligible Employee is on military leave, sick leave, or other bona fide leave of absence, to the extent such leave does not exceed a period of six months or, if longer, such longer period of time during which a right to re-employment is protected by either statute or contract. If the period of leave exceeds six months and the individual does not retain a right to re-employment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period. If an Eligible Employee provides services both as an employee and as a member of the Board, the services provided as a Director are generally not taken into account in determining whether the Eligible Employee has a Separation from Service as an employee for purposes of the Plan, in accordance with final regulations under Code Section 409A. | ||
(bb) | Valuation Date means the last business day of each calendar month. |
2.02. | Construction. | |
For purposes of the Plan, unless the contrary is clearly indicated by the context, |
(a) | the use of the masculine gender shall also include within its meaning the feminine and vice versa, | ||
(b) | the use of the singular shall also include within its meaning the plural and vice versa, and | ||
(c) | the word include shall mean to include without limitation. |
Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 8 |
3.01. | Election of Benefits. | |
An Eligible Employee shall become a Participant in the Plan by electing to participate in the Plan in accordance with Section 3.02. | ||
3.02. | Election Requirements. |
(a) |
Election Filing Deadline
. Except as provided in subsections (b) and
(c), below, an election to defer an amount by an Eligible Employee as an Excess
Contribution earned with respect to a Plan Year shall be filed by the Eligible Employee
with the Committee prior to the beginning of that Plan Year. If an Eligible Employee
has ceased being eligible to participate in the Plan (other than the accrual of
earnings on his Account, if any), regardless of whether all amounts deferred under the
Plan have yet been paid, and subsequently becomes eligible to participate in the Plan
again, the Eligible Employee may be treated as being initially eligible to participate
in the Plan if he has not been eligible to participate in the Plan (other than the
accrual of earnings on his Account, if any) at any time during the
24-month period ending on the date the employee again becomes an Eligible Employee under the Plan. |
(b) | Initial Election . A newly hired or otherwise newly Eligible Employee may file the requisite election to defer Compensation earned thereafter before the expiration of 30 days either from, as applicable, (1) his initial date of employment (if the Eligible Employee is a new hire who is immediately eligible for the Plan) or (2) his initial date of eligibility (if the Eligible Employee is newly eligible to participate in the Plan). If an initial election is not made within such 30 day period, the Eligible Employee shall have to wait until the annual open enrollment for the next Plan Year before participating. |
(c) | Performance-Based Compensation . In the case of the deferral of any Performance-Based Compensation, such election shall be made no later than six months before the end of the performance period, provided that in no event may an election to defer Performance-Based Compensation be made after such Compensation has become readily ascertainable within the meaning of Code Section 409A. |
Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 9 |
(d) | Irrevocable Election . Except as provided in Sections 5.03, 5.04, 5.05, and 5.06, a deferral election described in this Section 3.02, once filed, shall be irrevocable and independent of the rate of Salary Reduction Contributions to the Savings Plan; it shall remain in effect until the end of the Plan Year to which it pertains. Before the beginning of a Plan Year, the Participant shall file a new election with the Committee in accordance with the preceding provisions of this Section 3.02. The new election shall apply only to deferrals for that Plan Year. An Eligible Employee who does not make a deferral election in one Plan Year may make a deferral election for any subsequent Plan Year, provided he remains an Eligible Employee, by making a deferral election in accordance with this Section 3.02. In all cases, a Participants election to defer Compensation shall be made prior to the time any of the Compensation covered by such election is to be earned by such Participant. |
(e) | Form and Content of Election . An election to make a deferral hereunder shall be in writing, in a form acceptable to the Committee, and shall specify such information as required by the Committee. A deferral election may designate any whole percentage (from 1% to 100%) of Compensation that is earned above any specified amount or after any specified date to be deferred hereunder. The Company may, in its discretion, establish and change from time to time the minimum and maximum amount that may be so deferred. Elections shall be made in accordance with procedures established by the Committee. In addition, special limitations may be established by the Committee to apply to the deferral of any special bonus or other non-periodic Compensation that a Participant is expected to receive. The Company will credit the deferred compensation amount agreed to for each Plan Year to the Participants Account from time to time as soon as administratively practicable after the deferred amounts otherwise would have been earned and paid to the Participant. |
3.03. | Form and Time of Payment. |
(a) | General . Except as provided in Sections 5.03, 5.04, 5.05 and 5.06, an amount deferred under this Section 3 shall be paid in a lump sum as of the Valuation Date coincident with or next following the date elected by the Participant. A Participant may elect a different form or time of payment for his 409A Amounts from the time or form of payment for his Grandfathered Amounts, if any. If, however, the Participant elects to receive payment upon Separation from Service, no amount shall be distributed earlier than six months after the Valuation Date coincident with or next following the Participants Separation from Service. A Participant may receive payment of the amounts credited to his Account upon his Separation from Service, or due to death, Disability, a Change in Control or upon a fixed date elected by the Participant. A Participant may also elect to receive payment of the amounts credited to his Account as of the earlier or later of a fixed date or Separation from Service or of two fixed dates. The Committee may also permit a Participant to make a different election as to the time and form of distribution of the amounts deferred and credited to his Account in a particular Plan Year from the amounts deferred and credited to his Account in any other Plan Year, or may require that only one time and form of payment applies to a Participants entire Account. A Participant may also elect a different time and form of payment to apply to different permitted payment events, to the extent permitted by the Committee. |
Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 10 |
(b) | Modification of Time and Form . After making his first election, a Participant may file an election with the Committee, in a form satisfactory to the Committee, to modify the payment date with respect to a deferral election or to irrevocably specify that the amount credited to his Account is to be paid in the form of five or ten annual installments; provided, however, that such election: |
(1) | is filed with the Committee at least twelve months prior to the date of the first scheduled payment; |
(2) | is not effective until at least twelve months after the date on which the election is made; |
(3) | defers the lump sum payment or the first installment payment with respect to which such election is made for a period of not less than five years from the date such payment would otherwise have been made; |
(5) | does not request other than five or ten annual installments. If payment is to be made in annual installments, it shall commence on the specified payment date with subsequent annual installments to occur on the same date each year thereafter (or the next business day if the date falls on a weekend or holiday) until the amount payable in installments is distributed in full. |
(c) | A Participant may not change a distribution option or a distribution date in a manner that does not comply with Code Section 409A. If a distribution option election is made or changed and distribution is triggered before 12 months have elapsed, the distribution will be made in accordance with the distribution option election in effect prior to the change or, if none, as a single lump sum. If an annual installment payment method is the selected distribution option, the amount of the annual benefit shall equal the amount necessary to fully distribute the Participants Account as an annual benefit payable over the installment period. |
Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 11 |
4.01. | Accounts. | |
The Company shall maintain for bookkeeping purposes an Account in the name of each Participant. Each Account shall have a Participant Subaccount and an Employer Match Subaccount, as applicable, to which shall be credited amounts deferred under Section 3. | ||
4.02. | Participant Subaccount. | |
The Company shall maintain a Participant Subaccount in the name of each Participant. During each Plan Year, each Participant Subaccount shall be credited with the Participants Excess Contributions deferred under Section 3. | ||
4.03. | Employer Match Subaccount. | |
The Company shall maintain a separate Employer Match Subaccount in the name of each Participant for purposes of accrual of the Employer Match. For each Plan Year, the Employer Match shall begin to accrue monthly only after the Participant is no longer eligible to receive a Matching Contribution under the Savings Plan for the Plan Year. The rate of Employer Match in this Plan shall be the same rate in effect under the Savings Plan for the applicable Plan Year. | ||
4.04. | Investment Returns. |
(a) | Rate of Return Indices . The Compensation Committee shall select and maintain one or more rate of return indices as specified on Exhibit A attached hereto. The Compensation Committee may amend the list of rate of return indices from time to time in its sole discretion. Any Excess Contributions or any Employer Matching Contribution shall be allocated among one or more of the rate of return indices and shall be credited with the applicable investment return (or loss) that such Excess Contribution or Employer Matching Contribution would have achieved if it were invested in the specified index or indices. Allocations to one or more of the rate of return indices may be modified from time to time during the Plan Year to the extent permitted by the Committee, in its sole discretion. Any Excess Contributions or any Employer Matching Contributions that were deferred and vested as of January 1, 2005, may also be allocated among one or more of the rate of return indices on Exhibit A attached hereto to the extent the Committee so provides. |
Chesapeake Utilities Corporation
Supplemental Executive Retirement Savings Plan |
Page 12 |
(b) | Election of Rate of Return Indices . |
(1) | Each Participant shall specify in writing, at the time he completes his election to participate under Section 3, and in a form acceptable to the Committee, how any Excess Contribution or Employer Match shall be allocated among the indices specified on Exhibit A attached hereto. |
(2) | The Committee may, in its discretion and from time to time, permit a Participant to change any election previously made with respect to the allocation of any Excess Contribution or Employer Match, subject to such conditions and such limitations as the Committee may prescribe. Any such change in election shall be in writing and in a form acceptable to the Committee. |
(3) | The Committee may, in its discretion and from time to time, permit a Participant to elect to reallocate the amounts in such Participants Participant Subaccount or Employer Match Subaccount from one rate of return index to another, subject to such conditions and such limitations as the Committee may prescribe; provided that a Participant shall be permitted, at least once per calendar month, to reallocate amounts previously allocated. Any such reallocation election shall be in writing and in a form acceptable to the Committee. |
(4) | The Committee may require that any election under this Section 4.04 apply to the entire amount to which it pertains ( e.g. , 100% of the Participants future contributions) or to such percentage or percentages of that amount as the Committee may specify ( e.g. , increments of 5%). |
(5) | If a Participant fails to specify a rate of return index with respect to his Excess Contribution or Employer Match, the Participant shall be presumed to have specified that his entire Participant Subaccount or Employer Match Subaccount be allocated to the index determined by the Committee to represent the lowest risk of principal loss. |
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Supplemental Executive Retirement Savings Plan |
Page 13 |
(c) | Crediting of Investment Return . The balance credited to the Participants Participant Subaccount or Employer Match Subaccount as of the last day of the prior month shall be credited with the applicable investment return (or loss) as of the last day of the month of crediting. All references herein to Excess Contributions or Employer Match shall be deemed to include such Excess Contributions or Employer Match plus any investment return (or loss) credited pursuant to this Section 4.04. |
4.05. | Vesting of Accounts. | |
A Participant shall at all times be 100% vested in the balance in his Account; provided, however, that all Accounts shall be subject to the claims of the Companys creditors as provided in Section 6. |
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Supplemental Executive Retirement Savings Plan |
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5.01. | Exclusive Entitlement to Payment. | |
A Participants deferral election pursuant to Section 3 shall constitute a waiver of his right to receive the amount deferred and an agreement to receive in lieu thereof the amounts payable to him at the times and in the methods specified in this Section 5. No other amounts shall be due under the Plan or otherwise as a result of a Participants deferral election under Section 3. | ||
5.02. | Payment. |
(a) | Time of Payment . Subject to Sections 5.03, 5.04, 5.05, and 5.06, the Participant shall receive an amount equal to the sum of the balances in his Account at the time(s) and in the manner specified or elected by him in accordance with Section 3.03. If the deferred amounts are subject to more than one distribution election made in accordance with Section 3.03, then the portion of the Participants Account that is subject to each election shall be distributed in accordance with the applicable election. The Participants Account shall be debited to reflect each distribution pursuant to this Section 5. |
(b) | Payment Medium . All amounts credited to a Participants Account shall be paid in cash. |
(c) | Installment Payments . If the Participant receives installments, the amount of the first installment shall be equal to the value of the Participants Account determined as of the Valuation Date as of which the installments commence (the applicable Valuation Date), divided by five (if five installments are elected) or ten (if ten installments are elected). The amount of each succeeding installment shall be equal to the value of the Participants Account on the next succeeding anniversary of the applicable Valuation Date, divided by the remaining number of installments to be paid. |
5.03. | Death Benefits. |
(a) | Amount and Form of Death Benefit . Any amount credited to a Participants Account that is unpaid at the time of the Participants death shall be paid in a single lump sum to the Beneficiary (or the contingent Beneficiary if the Beneficiary predeceases the Participant) designated by the Participant pursuant to Section 9.02. |
(b) | Time of Payment . A distribution pursuant to this Section 5.03 shall be paid to the Participants Beneficiary within 30 days after the Valuation Date that is coincident with or next follows the date of the Participants death. |
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5.04. | Hardship Distributions. | |
Notwithstanding Sections 3.02 and 3.03, upon the occurrence of an unforeseeable emergency, a Participant shall be eligible to receive payment of the amount necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participants assets (to the extent such liquidation would not itself cause severe financial hardship), or by cessation of deferrals under the Plan. The amount determined to be properly distributable under this Section and applicable regulations under Code Section 409A shall be payable in a single lump sum only. For the purposes of this Section, the term unforeseeable emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participants spouse, or a dependent of the Participant (as defined in Code Section 152, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)); loss of the Participants property due to casualty, including the need to rebuild a home following damage not otherwise covered by insurance, for example, not as a result of a natural disaster; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, including imminent foreclosure of or eviction from the Participants primary residence, the need to pay for medical expenses, including non-refundable deductibles, the cost of prescription drugs, and the need to pay for funeral expenses of a spouse, beneficiary, or dependent. It shall be the responsibility of the Participant seeking to make a withdrawal under this Section to demonstrate to the Committee that an unforeseeable emergency has occurred and to document the amount properly distributable hereunder. After a distribution on account of an unforeseeable emergency, a Participants deferral elections shall cease and such Participant will not be permitted to participate in the Plan or elect additional deferrals until the next enrollment following one full year from the date of the distribution on account of an unforeseeable emergency. Such future deferral elections following a distribution on account of an unforeseeable emergency will be treated as an initial deferral election and subject to the rules applicable thereto under the Plan and Code Section 409A. | ||
5.05. | Disability. | |
Upon the Participants Disability, the Participant shall be eligible to receive payment of the amounts credited to his Account commencing as soon as practicable but no more than 90 days after the Committee is satisfied of the determination of the existence of a Disability with respect to such Participant. Benefits payable upon Disability shall be paid in a single lump sum unless another distribution option (annual installments over a period of 5 or 10 years) was timely elected by the Participant upon initial enrollment in the Plan or at least 12 months prior to his Disability. The Committee may, in its discretion, permit each Participant to elect a distribution option to apply to distributions made upon Disability that is different from the distribution option applicable to other payment events. |
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Supplemental Executive Retirement Savings Plan |
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5.06. | Change in Control. | |
Notwithstanding any election made pursuant to Sections 3.02 and 3.03 and subject to obtaining written consent from affected Participants pursuant to Section 8, upon a Change in Control, the Participant shall receive amounts credited to his Account in the form of a single lump sum payment within 90 days of the event constituting the Change in Control. | ||
5.07. | Acceleration of Payment. | |
The acceleration of the time and/or form of any payment determined in accordance with the provisions of this Section 5, above, shall not be made except due to unforeseeable emergency, as described above, or as set forth below and otherwise permitted by Code Section 409A and the Treasury Regulations and other guidance issued thereunder: |
(a) | Employment Taxes . A payment of all or part of the Participants Account may be made to the extent necessary to pay the Federal Insurance Contributions Act (FICA) tax imposed under Code Sections 3101, 3121(a), and 3121(v)(2) on amounts deferred under the Plan (the FICA Amount), income tax at source on wages imposed under Code Section 3401 or the corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of the FICA Amount, and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes. The total payment under this Section shall not exceed the aggregate of the FICA Amount and the income tax withholding related to such FICA Amount. |
(b) | Payment of State, Local or Foreign Taxes . Payment may be made to reflect payment of state, local or foreign tax obligations arising from participation in the Plan that apply to an amount deferred under the Plan before the amount is paid or made available to the Participant, plus the income tax at source on wages imposed under Code Section 3401 as a result of such payment; provided, however, that the amount of the payment may not exceed the amount of the taxes due, and the income tax withholding related to such state, local and foreign tax amount. |
(c) | Income Inclusion under Code Section 409A . Payment may be made at any time the Plan fails to meet the requirements of Code Section 409A and the Treasury Regulations issued thereunder; provided, however, that payment cannot exceed the amount required to be included in income as a result of the failure to comply. |
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(d) | Certain Offsets . Payment may be made as satisfaction of a debt of the Participant to the Company where: (1) the debt is incurred in the ordinary course of the employment relationship; (2) the entire amount of the offset in any of the Participants taxable years does not exceed $5,000; and (3) the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant. |
5.08. | Delay of Payment. | |
A Participant who is a specified employee (as defined in Code Section 409A and the regulations thereunder) and is entitled to a distribution due to a Separation from Service may not receive a distribution under the Plan until a date that is at least six months after the date of the Separation from Service. In addition, the Company may in its discretion delay any payment due under the Plan to the extent permitted by Code Section 409A and the regulations thereunder. | ||
5.09. | Assignment and Assumption of Liabilities. | |
In the discretion of the Company, upon the cessation of participation in the Plan by any Participant solely due to the employer of that Participant no longer qualifying as a member of the controlled group of Chesapeake Utilities Corporation within the meaning of Code Sections 414(b) and (c), all liabilities associated with the Account of such Participant may be transferred to and assumed by the Participants employer under a deferred compensation plan established by such employer that is substantially identical to this Plan and that preserves the deferral and payment elections in effect for the Participant under this Plan to the extent required by Code Section 409A. Any such Participant shall not be deemed to have incurred a Separation from Service for purposes of the Plan by virtue of his employers ceasing to be a member of the controlled group of Chesapeake Utilities Corporation The foregoing provision shall be interpreted and administered in compliance with the requirements of Code Section 409A. |
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6.01. | No Right to Assets. | |
Participation in this Plan shall not create, in favor of any Participant or Beneficiary, any interest in or lien against any of the assets of the Company. All payments hereunder shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established and no other segregation of assets shall be made to assure the payments of benefits hereunder. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company and a Participant or any other person, and the promise of the Company to pay benefits hereunder shall, at all times, remain unfunded as to the Participant or Beneficiary, whose rights hereunder shall be limited to those of a general and unsecured creditor of the Company. | ||
6.02. | No Right to Transfer Interest. | |
A Participants or Beneficiarys rights to benefits payable under the Plan are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, or encumbrance. However, the Committee may permit a Participant or Beneficiary to enter into a revocable arrangement to pay all or part of his benefits under the Plan to a revocable grantor trust (a so-called living trust). In addition, the Committee may recognize the right of an alternate payee named in a domestic relations order to receive all or part of a Participants benefits under the Plan, but only if (a) the domestic relations order would be a qualified domestic relations order (within the meaning of Section 414(p) of the Code (if Section 414(p) applied to the Plan)), (b) the domestic relations order does not attempt to give the alternate payee any right to any asset of the Company, (c) the domestic relations order does not attempt to give the alternate payee any right to receive payments under the Plan at a time or in an amount that the Participant could not receive under the Plan, and (d) the amount of the Participants benefits under the Plan are reduced to reflect any payments made or due the alternate payee. |
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Supplemental Executive Retirement Savings Plan |
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6.03. | No Right to Employment. | |
No provisions of the Plan and no action taken by the Company, the Board, the Compensation Committee, or the Committee will give any person any right to be retained in the employ of the Company, and the Company specifically reserves the right and power to dismiss or discharge any Participant. | ||
6.04. | Withholding and Tax Liabilities. | |
The amount of any withholdings required to be made by any government or government agency will be deducted from benefits paid under the Plan to the extent deemed necessary by the Committee. In addition, the Participant or Beneficiary (as the case may be) will bear the cost of any taxes not withheld on benefits provided under the Plan, regardless of whether withholding is required. |
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Supplemental Executive Retirement Savings Plan |
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7.01. | Committee. | |
The Plan shall be administered by the Committee, the members of which shall serve at the pleasure of the Board. The Committee may allocate its responsibilities for the administration of the Plan among its members or among any subcommittee(s) it may appoint and may designate persons other than its members to carry out its responsibilities under the Plan. | ||
7.02. | Meetings. | |
The Committee shall hold meetings upon such notice, at such place or places, and at such intervals as are required to carry out its functions. | ||
7.03. | Quorum. | |
A majority of the members of the Committee at any time in office shall constitute a quorum for the transaction of business. All resolutions or other actions taken by the Committee shall be by vote of a majority of members present at a meeting of the Committee; or without a meeting by an instrument in writing signed by all the members of the Committee at such time in office. | ||
7.04. | Expenses. | |
The expenses incident to the operation of the Plan, including the compensation of attorneys, advisors, actuaries, and such other persons providing technical and clerical assistance as may be required, shall be paid directly by the Company. | ||
7.05. | Responsibilities of the Committee. | |
In addition to any implied authority and duties that may be needed to carry out the provisions of the Plan, the Committee shall have the following specific discretionary powers and duties: |
(a) | to make and enforce such rules and regulations as it shall deem necessary or proper for the efficient administration of the Plan; |
(b) | to interpret the Plan and to decide any and all matters arising hereunder, including the right to remedy possible ambiguities, inconsistencies, or omissions; provided that all such interpretations and decisions shall be applied in a uniform and non-discriminatory manner to all persons similarly situated; |
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Supplemental Executive Retirement Savings Plan |
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(c) | to compute the amount of benefits that shall be payable to any Participant or Beneficiary in accordance with the provisions of the Plan, and in the event that the Committee determines that Excessive Benefits have been paid to any person, the Committee may suspend payment of future benefits to such person or his Beneficiary or reduce the amount of such future benefits until the Excessive Benefits and any interest thereon determined by the Committee have been recovered; |
(d) | to appoint other persons to carry out any ministerial responsibilities under the Plan as it may determine consistent with applicable law; |
(e) | to employ one or more persons to render advice with respect to any of its responsibilities under the Plan; and |
(f) | to amend the Plan from time to time by written resolution for the limited purpose of meeting the requirements of Section 409A of the Code. |
7.06. | Finality of Committee Determinations. | |
Subject to the provisions of Section 7.08, determinations by the Committee and any interpretation, rule, or decision adopted by the Committee under the Plan or in carrying out or administering the Plan shall be final and binding for all purposes and upon all interested persons, their heirs, and their personal representatives. | ||
7.07. | Benefit Claims Procedure. | |
A claim for a benefit under the Plan by any person shall be filed in the manner and governed by the procedures set forth below: | ||
Upon Separation from Service, death, or any and all types of claims regarding benefits under the Plan, the Participant or his representative may make application to the Company requesting payment of benefits due. If no application for benefits is made, the Company shall automatically pay any benefit due pursuant to Section 5. If an application for benefits is made, the Company shall accept, deny, or modify such request and shall notify the Participant in writing setting forth the response of the Company and in the case of a denial or modification the Company shall: |
(a) | state the specific reason or reasons for the denial, | ||
(b) | provide specific reference to pertinent Plan provisions on which the denial or modification is based, |
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(c) | provide a description of any additional material or information necessary for the Participant or his representative to perfect the claim and an explanation of why such material or information is necessary, and | ||
(d) | explain the Plans claim review procedure as contained in this Plan. |
7.08. | Arbitration of Denied Claims. | |
Any controversy or claim arising out of or relating to a final decision, upon review pursuant to the procedures set forth in Section 7.07, that denies a claim for benefits under the Plan may be settled by arbitration under three arbitrators in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Any such arbitration shall be subject to the statute of limitations that would apply if the claim on which the arbitration is based were brought as a suit in a United States district court under ERISA. The site of any such arbitration shall be Delaware. |
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Supplemental Executive Retirement Savings Plan |
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8.01. | By The Compensation Committee. |
(a) | Authority to Amend . The Compensation Committee of the Board may modify, amend, suspend, or terminate the Plan at any time; provided that no such modification, amendment, suspension, or termination shall reduce a Participants accrued benefits under the Plan as of the date of such modification, amendment, suspension, or termination, except to the extent that the affected Participants consent in writing to the modification, amendment, suspension, or termination; and provided further that no such modification, amendment, suspension, or termination shall eliminate, restrict, or modify any of the following provisions of the Plan, except to the extent that the affected Participants consent in writing to the modification, amendment, suspension, or termination: |
(1) | the provision in Section 2.01(e) that defines Change in Control; |
(2) | the provision in Section 5.06 that provides for a lump sum payment following a Change in Control; |
(3) | the provision in Section 7.08 that permits submission of denied claims for benefits to arbitration; and |
(4) | the provisions of this Section 8 that protect accrued benefits and limit modification, amendment, suspension, or termination of the Plan. |
(b) | Authority to Delegate . The Board may, in its sole discretion, delegate to any person or persons all or part of its authority and responsibility under the Plan, including, without limitation, the authority to amend the Plan. |
8.02. | By the Committee. | |
The Committee shall have the right by written resolution to amend the Plan from time to time, for the limited purpose of meeting the requirements of Section 409A of the Code. |
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Supplemental Executive Retirement Savings Plan |
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9.01. | Participation by Affiliate. | |
Subject to the consent of the Compensation Committee, an Affiliate may participate in the Plan by delivering to the Compensation Committee a resolution of its board of directors approving such action. Such Affiliate shall begin participating in the Plan as of an effective date approved by the Compensation Committee and shall be subject to the provisions of the Plan. | ||
9.02. | Designation of Beneficiary. |
(a) | Each Participant may designate a Beneficiary. Such designation shall be in writing, shall be made in the form and manner prescribed by the Committee, and shall be effective only if filed with the Committee prior the Participants death. A Participant may, at any time prior to his death, and without the consent of his Beneficiary, change his designation of Beneficiary by filing a written notice of such change with the Committee in the form and manner prescribed by the Committee. In the absence of a designated Beneficiary, or if the designated Beneficiary and any designated contingent Beneficiary predecease the Participant, the Beneficiary shall be the Participants surviving spouse, or if the Participant has no surviving spouse, the Participants estate. |
(b) | If a Participant designates his spouse as his Beneficiary, that designation shall not be revoked or otherwise altered or affected by any |
(1) | change in the marital status of the Participant and such spouse, |
(2) | agreement between the Participant and such spouse, or |
(3) | judicial decree (such as a divorce decree) affecting any rights that the Participant and such spouse might have as a result of their marriage separation, or divorce, |
9.03. | Incapacity. | |
If the Committee determines that any person entitled to benefits under the Plan is unable to care for his affairs because of illness or accident, any payment due (unless a duly qualified guardian or other legal representative has been appointed) may be paid for the benefit of such person to his spouse, parent, brother, sister, or other party deemed by the Committee to have incurred expenses for such person. |
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Supplemental Executive Retirement Savings Plan |
Page 25 |
9.04. | Required Information. | |
Any person eligible to receive benefits under the Plan shall furnish to the Committee any information or proof requested by the Committee and reasonably required for the proper administration of the Plan. Failure on the part of any person to comply with any such request within a reasonable period of time shall be sufficient grounds for delay in the payment of any benefits that may be due under the Plan until such information or proof is received by the Committee. If any person claiming benefits under the Plan makes a false statement that is material to such persons claim for benefits, the Committee may offset against future payments any amount paid to such person to which such person was not entitled under the provisions of the Plan. | ||
9.05. | Inability to Locate Participants and Beneficiaries. | |
Each Participant and each Beneficiary entitled to receive a benefit under the Plan shall keep the Committee advised of his current address. If the Committee is unable to locate a Participant or Beneficiary to whom a benefit is payable under the Plan for a period of 36 months, commencing with the first day of the month as of which such benefit becomes payable, the total amount payable to such Participant or Beneficiary shall be forfeited, subject to being restored (without any intervening investment gains) only if the Participant and Beneficiary provide evidence sufficient to satisfy the Committee that the Participant or Beneficiary is entitled to such forfeited amount. | ||
9.06. | Headings. | |
Any headings used in this document are for convenience of reference only and may not be given any weight in interpreting any provision of the Plan. | ||
9.07. | Severability. | |
If any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if such illegal or invalid provision had never been included in the Plan. In addition, if any provision of the Plan shall be found to violate Section 409A of the Code or otherwise result in any portion of a Participants or Beneficiarys benefits under the Plan being subject to income tax prior to distribution, such provision shall be void and unenforceable, and the Plan shall be administered without regard to such provision. |
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Supplemental Executive Retirement Savings Plan |
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9.08. | Governing Law. | |
The Plan shall be construed, administered, and regulated in accordance with the laws of the State of Delaware (not including its conflict of law rules), except to the extent that such laws are pre-empted by Federal law. | ||
9.09. | Complete Statement of Plan. | |
This Plan contains a complete statement of its terms. The Plan may be amended, suspended, or terminated only in writing and then only as provided in Section 8. A Participants right to any benefit of a type provided under the Plan will be determined solely in accordance with the terms of the Plan. No other evidence, whether written or oral, will be taken into account in interpreting the provisions of the Plan. |
|
CHESAPEAKE UTILITIES CORPORATION | |
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ADOPTED:
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ATTESTED: | |
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Executive Vice President and
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Senior Vice President and CFO | |
Chief Operating Officer
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DATE:
December
, 2008
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(a) | the limitation on contributions to defined contribution plans under Sections 401(k), 401(m), 402(g), and 415(c) of the Code; |
(b) | the limitations imposed by Sections 401(a)(4), 401(a)(17), and 415(e) of the Code and by any other provision of the Code to the extent that such provision limits the amount of Salary Reduction Contributions and Matching Contributions that otherwise would be made to the Chesapeake Utilities Corporation Retirement Savings Plan; and |
(c) | the limitations contained in Section 4(a)(ii) of the Adoption Agreement to the Chesapeake Utilities Corporation Retirement Savings Plan, as it may be amended from time to time, that prevent an Eligible Employee from participating in the Chesapeake Utilities Corporation Retirement Savings Plan until he has satisfied a minimum service requirement. |
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(a) | To make and enforce such rules and regulations as it shall deem necessary or proper for the efficient administration of the Plan; |
(b) | To interpret the Plan and to decide any and all matters arising hereunder, including the right to remedy possible ambiguities, inconsistencies, or omissions; provided that all such interpretations and decisions shall be applied in a uniform and non-discriminatory manner to all persons similarly situated; |
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(c) | To compute the amount of benefits that shall be payable to any Participation or Beneficiary in accordance with the provisions of the Plan, and in the event that the Committee determines that excessive benefits have been paid to any person, the Committee may suspend payment of future benefits to such person or his Beneficiary or reduce the amount of such future benefits until the excessive benefits and any interest thereon determined by the Committee have been recovered; |
(d) | To appoint other persons to carry out such ministerial responsibilities under the Plan as it may determine; and |
(e) | To employ one or more persons to render advice with respect to any of its responsibilities under the Plan. |
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Supplemental Executive Retirement Savings Plan |
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(a) | the provision in Section 2.5 hereof that defines Change in Control; |
(a) | the provision in Section 2.9 hereof that preserves the eligibility under the Plan of certain Eligible Employees after a Change in Control; |
(c) | the provision in Section 7.8 hereof that permits submission of denied claims for benefits to arbitration; and |
(d) | the provisions of this Section 8 that protect accrued benefits and limit modification, amendment, suspension, or termination of the Plan. |
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Supplemental Executive Retirement Savings Plan |
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(a) | Each Participant may designate a Beneficiary hereunder. Such designation shall be in writing, shall be made in the form and manner prescribed by the Committee, and shall be effective only if filed with the Committee prior the Participants death. A Participant may, at any time prior to his death, and without the consent of his Beneficiary, change his designation of Beneficiary by filing a written notice of such change with the Committee in the form and manner prescribed by the Committee. In the absence of a designated Beneficiary, or if the designated Beneficiary and any designated contingent Beneficiary predecease the Participant, the Beneficiary shall be the Participants surviving spouse, or if the Participant has no surviving spouse, the Participants estate. If the surviving spouse becomes the Beneficiary pursuant to this Section 9.2, but dies before receiving the entire amount due under Section 5.2, the remaining amount shall be paid to the surviving spouses estate. |
(b) | If a Participant designates his spouse as his Beneficiary, that designation shall not be revoked or otherwise altered or affected by any |
(i) | change in the marital status of the Participant and such spouse, |
(ii) | agreement between the Participant and such spouse, or |
(iii) | judicial decree (such as a divorce decree) affecting any rights that the Participant and such spouse might have as a result of their marriage separation, or divorce, until and unless the Participant revokes and designates a Beneficiary in accordance with this Section 9.2, it being the intent of the Plan that any change in the designation of a Beneficiary hereunder may be made by the Participant only in accordance with the provision of this Section 9.2. |
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For the Years Ended December 31, | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||
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||||||||||||||||||||
Income from continuing operations
|
$ | 13,607,259 | $ | 13,217,787 | $ | 10,747,965 | $ | 10,698,811 | $ | 9,686,449 | ||||||||||
Add:
|
||||||||||||||||||||
Income taxes
|
8,817,162 | 8,597,461 | 6,999,072 | 6,472,220 | 5,771,333 | |||||||||||||||
Portion of rents representative of interest factor
|
293,207 | 245,399 | 226,583 | 278,846 | 309,446 | |||||||||||||||
Interest on indebtedness
|
6,110,331 | 6,539,004 | 5,721,912 | 5,076,666 | 5,145,243 | |||||||||||||||
Amortization of debt discount and expense
|
47,221 | 50,635 | 52,081 | 55,792 | 61,421 | |||||||||||||||
|
||||||||||||||||||||
Earnings as adjusted
|
$ | 28,875,180 | $ | 28,650,286 | $ | 23,747,613 | $ | 22,582,335 | $ | 20,973,892 | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Fixed Charges
|
||||||||||||||||||||
Portion of rents representative of interest factor
|
$ | 293,207 | $ | 245,399 | $ | 226,583 | $ | 278,846 | $ | 309,446 | ||||||||||
Interest on indebtedness
|
6,110,331 | 6,539,004 | 5,721,912 | 5,076,666 | 5,145,243 | |||||||||||||||
Amortization of debt discount and expense
|
47,221 | 50,635 | 52,081 | 55,792 | 61,421 | |||||||||||||||
|
||||||||||||||||||||
Fixed Charges
|
$ | 6,450,759 | $ | 6,835,038 | $ | 6,000,576 | $ | 5,411,304 | $ | 5,516,110 | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Ratio of Earnings to Fixed Charges
|
4.48 | 4.19 | 3.96 | 4.17 | 3.80 |
|
Ownership of a financial interest (other than, in the case of a public company,
the ownership of less than a one percent equity interest) in any business or other
enterprise that does business (whether as a supplier, customer or otherwise), or is
seeking to do business, with the Company.
|
|
Serving as a director, officer or partner of, or in any other managerial role with
respect to, or as a consultant to, any business or other enterprise that does business
(whether as a supplier, customer or otherwise), or is seeking to do business, with the
Company.
|
||
|
Ownership of a financial interest in (other than, in the case of a public company,
the ownership of less than a one percent equity interest), or serving as a director,
officer or partner of, or in any other managerial role with respect to, or as a
consultant to, any competitor of the Company.
|
||
|
Acting as a broker, finder or other intermediary for the benefit of a third party
in any transaction involving the Company.
|
||
|
Any situation where the employee, officer or director will receive any payment of
money, services, loan, guarantee or any other personal benefits from a third party in
anticipation of or as a result of any transaction or business relationship between the
Company and the third party.
|
||
|
Taking a public position or making public statements contrary to the best interests
of the Company or that could result in embarrassment to the Company.
|
2 of 8
|
Taking for themselves personally opportunities that they discovered through the use
of Company property or information or through their position with the Company;
|
|
Using property or information of the Company or their position with the Company for
personal gain; or
|
|
Engaging in any business in competition with the Company.
|
|
Trade secrets and other proprietary technical information or data.
|
|
Undisclosed financial and accounting information.
|
|
Strategic information concerning current and future business plans.
|
|
Pricing information.
|
|
Customer records.
|
|
Employee personnel records (e.g., job applications, resumes, performance
evaluations and records, compensation information, notices regarding performance,
termination notices, etc.).
|
|
Research information and records.
|
3 of 8
|
No undisclosed or unrecorded fund or asset of the Company shall be established or
maintained for any purpose.
|
|
No employee or officer of the Company shall intentionally conceal or fail to record
or report any matter that is required to be recorded or reported.
|
|
No employee or officer of the Company shall improperly record or report any matter,
or improperly alter any record or report of any matter.
|
|
Current or prospective customer, supplier or competitor of the Company or to
government officials; or
|
|
Any director, officer, employee, general partner, stockholder or owner of a current
or prospective customer, supplier or competitor,
|
4 of 8
|
It is consistent with customary business practices;
|
|
It is not for an improper purpose;
|
|
It is not in contravention of any applicable laws, rules, regulations or ethical
standards; and
|
|
Public disclosure of the full details of the gift would not cause embarrassment to
the Company.
|
|
It does not go beyond common courtesies usually associated with accepted business
practices;
|
|
It does not interfere with the recipients independence or judgment in carrying out
his or her responsibilities on behalf of the Company; and
|
|
Public disclosure of the full details of the gift or gratuity would not cause
embarrassment to the Company.
|
5 of 8
|
Providing all customers with exceptional service;
|
|
Dealing fairly and ethically with all customers and treating customers with respect;
|
|
Providing customers with accurate and clear information regarding the services
offered by the Company; and
|
|
Investigating promptly and resolving on fair terms all customer complaints and
inquiries.
|
6 of 8
7 of 8
8 of 8
Subsidiaries
|
State Incorporated | |
Eastern Shore Natural Gas Company
|
Delaware | |
Sharp Energy, Inc.
|
Delaware | |
Chesapeake Service Company
|
Delaware | |
Xeron, Inc.
|
Mississippi | |
Chesapeake OnSight Services LLC
|
Delaware | |
Peninsula Energy Services Company, Inc.
|
Delaware | |
Peninsula Pipeline Company, Inc.
|
Delaware | |
|
||
Subsidiaries of Sharp Energy, Inc.
|
State Incorporated | |
Sharpgas, Inc.
|
Delaware | |
|
||
Subsidiaries of Chesapeake Service Company
|
State Incorporated | |
Skipjack, Inc.
|
Delaware | |
BravePoint, Inc.
|
Georgia | |
Chesapeake Investment Company
|
Delaware | |
Eastern Shore Real Estate, Inc.
|
Delaware |
a) |
designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in
which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluations; and
|
d) |
disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter
(the registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant s
internal control over financial reporting; and
|
a) |
all significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and
|
b) |
any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting.
|
/s/ John R. Schimkaitis
|
||
President and Chief Executive Officer
|
a) |
designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in
which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluations; and
|
d) |
disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter
(the registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant s
internal control over financial reporting; and
|
a) |
all significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and
|
b) |
any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting.
|
/s/ Beth W. Cooper
|
||
Senior
Vice President and Chief Financial Officer
|
/s/ John R. Schimkaitis | ||||
John R. Schimkaitis | ||||
March 9, 2009 |
/s/ Beth W. Cooper | ||||
Beth W. Cooper | ||||
March 9, 2009 |