Exhibit 10.6
First Amendment to the
CHESAPEAKE UTILITIES CORPORATION
DEFERRED COMPENSATION PLAN
As Amended and Restated as of January 1, 2009

 

 

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First Amendment to the Chesapeake Utilities Corporation Deferred Compensation
Plan
Background Information

A.   The Plan was amended and restated effective as of January 1, 2009, to
comply with the requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”). From and after January 1, 2005 through
December 31, 2008, the Plan was subject to and operated in accordance with a
good faith interpretation of Code Section 409A, including the use of any
applicable transition rules in effect during such period.

B.   The Internal Revenue Service, in Notice 2010-6, provided guidance regarding
document drafting failures and ambiguities that may be corrected or clarified
without adverse tax implications.

C.   Chesapeake Utilities Corporation, as the Plan’s sponsor, desires to make
certain clarifying amendments to the Plan to ensure its interpretation and
operation continue in accordance with the requirements of Code Section 409A, as
permitted by Section IV of Notice 2010-6.

Amendment
Chesapeake Utilities Corporation hereby amends the Plan as set forth below,
effective as of January 1, 2009:

1.   Subsection (a) of Section 3.03 of the Plan, “Form and Time of Payment,” is
hereby revised to read as follows in order to reflect within the Plan document
the administrative practice set forth in Plan election forms of offering
Participants the option of electing that payment be made in a single lump sum or
in annual installments over a period of either five or ten years:

“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, or commence to be paid, in a lump
sum or in annual installments over a period of five or ten years as of the
Valuation Date coincident with or next following Separation from Service or 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
Participant’s 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. In the
event a Participant fails to make a payment election, the default form of
payment shall be a lump sum and the default time of payment shall be six months
after the Valuation Date coincident with or next following the Participant’s
Separation from Service. Elections regarding the time and form of payment must
be made by or before the election filing deadlines under Section 3.02.”

 

 

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2.   Subsection (c) of Section 5.02 of the Plan, “Installment Payments,” is
hereby revised to read as follows in order to reflect the fact that Participants
make separate payment elections for each year’s deferrals, if any, and that only
a portion of any Plan subaccount may be payable in accordance with an
installment payment election:

“Installment Payments. If the Participant receives installment payments, the
amount of the first installment shall be equal to the value of the portion of
the Participant’s Deferred Cash Subaccount payable in installments, plus the
value of the portion of the Participant’s DSU Subaccount (determined in
accordance with Section 4.05(b)) payable in installments, determined as of the
Valuation Date as of which the installment payments 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 portion of the
Participant’s Deferred Cash Subaccount payable in installments and the value of
the portion of the Participant’s DSU Subaccount (determined in accordance with
Section 4.05(b)) payable in installments on the next succeeding anniversary of
the applicable Valuation Date, divided by the remaining number of installments
to be paid. The payment medium of each installment payment shall be determined
in accordance with Section 5.02(b).”

3.   Subsection (b) of Section 5.03 of the Plan, “Time of Payment,” is hereby
revised to read as follows in order to reflect the fact that payment must be
made no more than 90 days after the date of death:

“Time of Payment. A distribution pursuant to this Section 5.03 shall be paid to
the Participant’s Beneficiary within 30 days after the Valuation Date that is
coincident with or next follows the date of the Participant’s death, together
with any additional information or documentation that the Committee determines
to be necessary or appropriate before it makes the distribution. Notwithstanding
the foregoing, in no event will payment be made more than 90 days after the date
of the Participant’s death.”

4.   Section 5.05 of the Plan, “Disability,” is hereby revised to read as
follows in order to reflect the fact that payment must be made no more than
90 days after the date a Disability occurs:

“Disability. Notwithstanding any election made pursuant to Sections 3.02 and
3.03, upon the Participant’s becoming Disabled, 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 has determined
the Participant is Disabled. Benefits payable in accordance with this provision
shall be payable in a lump sum to the Participant equal to the remaining balance
of the Participant’s Account.”

 

 

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5.   Section 8.01 of the Plan, “By the Compensation Committee,” is hereby
amended by the addition of the following sentence at the end thereof: “The
suspension or termination of the Plan shall not accelerate the obligation to
make payments to any person not otherwise currently entitled to payments under
the Plan, unless specifically determined by the Compensation Committee and
permitted by applicable law, including but not limited to Code Section 409A.”

6.   Section 9.04 of the Plan, “Required Information,” is hereby amended by the
addition of the following sentence at the end thereof: “Notwithstanding the
foregoing, the failure to provide any requested information or proof shall not
delay any payment under the Plan, unless specifically permitted by applicable
law, including but not limited to Code Section 409A.”

            CHESAPEAKE UTILITIES CORPORATION
      By:             Its:            Date: