Performance Share Agreement - Beth W. Cooper


    Exhibit
      10.14

    
 

    PERFORMANCE
      SHARE AGREEMENT

    


    pursuant
      to the

    


    CHESAPEAKE
      UTILITIES CORPORATION

    PERFORMANCE
      INCENTIVE PLAN

    


    


    AGREEMENT
      dated as of December ___, 2006, and entered into, in duplicate, by and between
      Chesapeake Utilities Corporation, a Delaware corporation (the "Company"), and
      Beth W. Cooper (the "Grantee") who resides at
      [address
      of executive].

    


    WITNESSETH
      that:

    


    WHEREAS,
      the Chesapeake Utilities Corporation Performance Incentive Plan (the "Plan"),
      to
      be effective January 1, 2006, has been duly adopted by action of the Company's
      Board of Directors (the "Board") on February 24, 2005 and by its shareholders
      on
      May 5, 2005; and

    


    WHEREAS,
      the Committee of the Board of Directors of the Company referred to in the Plan
      (the "Committee") has determined that it is in the best interests of the Company
      to grant the Performance Share Award described herein pursuant to the Plan;
      and

    


    WHEREAS,
      the shares of the Common Stock of the Company (“Shares”) that are subject to
      this Agreement, when added to the other shares of Common Stock that are subject
      to awards granted under the Plan, do not exceed the total number of shares
      of
      Common Stock with respect to which awards are authorized to be granted under
      the
      Plan;

    


    NOW,
      THEREFORE, it is hereby covenanted and agreed by and between the Company and
      the
      Grantee as follows:

    


    Section
      1. Performance
      Share Award

    


    The
      Company hereby grants to the Grantee a Performance Share Award for the year
      ending December 31, 2007 (the "Award Year"). As more fully described herein,
      the
      Grantee may earn a maximum total of 3,600 Shares (the "Contingent Performance
      Shares") upon the Company's achievement of the Performance Goals set forth
      in
      Section 2. Alternatively, the Grantee may elect to receive 800 Shares (the
      "Forfeitable Performance Shares"), as detailed in Section 3, in lieu of
      receiving any Contingent Performance Shares. The Forfeitable Performance Shares
      shall be subject to forfeiture conditions, as set forth in Section
      3(c).

    


    Section
      2. Contingent
      Performance Shares

    


    (a)  As
      soon
      as practicable after the Company’s independent auditors have certified the
      Company’s financial statements for the Award Year, the Committee shall determine
      for purposes of this Agreement the Company’s (1) earnings growth (“EG”), (2)
      achievement of established milestones and objectives under the Company’s
      long-term strategic plan (“SP”), and (3) Shareholder Value as of the end of the
      Award Year. The EG, SP and Shareholder Value shall be determined by the
      Committee in accordance with the terms of the Plan and this Agreement based
      on
      financial results reported to shareholders in the Company’s annual reports and
      shall be subject to adjustment by the Committee for extraordinary events
      during
      the
      Award Year. The Committee shall promptly notify the Grantee of its
      determination.

    


    (b)  The
      Grantee may earn up to 3,600 Contingent Performance Shares (the “Maximum Award”)
      as follows:

    


    (1) The
      performance measured for Shareholder Value will be the value of $10,000 invested
      in the Company stock compared to a Utility Index. If the Company’s performance
      exceeds the Utility Index, the Grantee will be eligible to earn up to 800
      Contingent Performance Shares of the Maximum Award for the Award Year. If the
      value of $10,000 invested for the Award Year does not exceed the Utility Index
      for the Award Year, the Grantee shall not earn any Contingent Performance Shares
      under this Paragraph (b)(1).

    


    (2) The
      performance measured for EG will be based upon achieving a growth in earnings
      per share of 3.5% to 7% for the award year. If the Company earnings per share
      for 2007 is equal to or exceeds $1.79, the Grantee is eligible to earn 1,200
      Contingent Performance Shares of the Maximum Award. If the earnings per share
      is
      equal to or greater than $1.82, the Grantee is eligible to earn an additional
      400 Contingent Performance Shares of the Maximum Award. If the earnings per
      share is equal to or greater than $1.85, the Grantee is eligible to earn an
      additional 400 Contingent Performance Shares of the Maximum Award but in no
      event shall the Grantee earn more than 2,000 Contingent Performance Shares
      of
      the Maximum Award under this paragraph (b) (2). 

    


    (3)The
      performance measured for SG will be based upon execution of the Company’s
      long-term strategic plan, assuming attainment of pre-authorized milestones
      and
      objectives as established by the Compensation Committee. If the long-term
      strategy is executed, the Grantee will be eligible to earn 800 Contingent
      Performance Shares of the Maximum Award. After approval from the Company’s Board
      of Directors, if the long-term strategic plan is not executed, the Grantee
      shall
      not earn any Contingent Performance Shares under this paragraph
      (b)(3).

    


    (c) Contingent
      Performance Shares that are earned by the Grantee pursuant to this Section
      2
      shall be issued promptly, without payment of consideration by the Grantee,
      within 2 1⁄2 months of the end of the Award Year. The Grantee shall have the right
      to vote the Contingent Performance Shares and to receive the dividends
      distributable with respect to such Shares on and after, but not before, the
      date
      on which the Grantee is recorded on the Company's ledger as holder of record
      of
      the Contingent Performance Shares (the "Issue Date"). If, however, the Grantee
      receives Shares as part of any dividend or other distribution with respect
      to
      the Contingent Performance Shares, such Shares shall be treated as if they
      are
      Contingent Performance Shares, and such Shares shall be subject to all of the
      terms and conditions imposed by this Section 2. 

    


    (d) Sale,
      transfer, pledge, or hypothecation of the Contingent Performance Shares shall
      be
      prohibited for a period of three (3) years after the Issue Date (the "Limitation
      Period"), and the Performance Shares shall bear a restrictive legend to that
      effect. Any attempt to dispose of Contingent Performance Shares in contravention
      of this Agreement shall be ineffective. Upon expiration of the Limitation
      Period, the transfer restrictions imposed by this Section shall expire, and
      new
      certificates representing the Contingent Performance Shares, without the
      restrictive legend described in this paragraph (d), shall be issued, subject
      to
      the provisions of paragraph (e) of this Section 2.

    


    (e) The
      Performance Shares will be not registered for resale under the Securities Act
      of
      1933 or the laws of any state except when and to the extent determined by the
      Board pursuant to a resolution. Until a registration statement is filed and
      becomes effective, however, transfer of the Contingent Performance Shares after
      expiration of the Limitation Period shall require the availability of an
      exemption from such registration, and prior to the issuance of new certificates,
      the Company shall be entitled to take such measures as it deems appropriate
      (including but not limited to obtaining from the Grantee an investment
      representation letter and/or further legending the new certificates) to ensure
      that the Contingent Performance Shares are not transferred in the absence of
      such exemption.

    


    (f) 
      In the
      event of a Change in Control, as defined in the Plan, during the Award Year,
      the
      Grantee shall earn at least the Maximum Award of Contingent Performance Shares
      set forth in this Section 2, as if all employment and performance criteria
      were
      satisfied, without any pro ration based on the proportion of the Award Year
      that
      has expired as of the date of such Change in Control.

    


    (g) If,
      during the Award Year, the Grantee is separated from employment, Contingent
      Performance Shares shall be deemed earned or forfeited as follows:

    


    (1) Upon
      voluntary termination by the Grantee (other than for retirement at age 65 or
      as
      accepted by the Committee) or termination by the Company for failure of job
      performance or other just cause as determined by the Committee, all unearned
      Contingent Performance Shares shall be forfeited immediately;

    


    (2) If
      the
      Grantee separates from employment by reason of death or total and permanent
      disability (as determined by the Committee), the number of Contingent
      Performance Shares that would otherwise have been earned at the end of the
      Award
      Year shall be reduced by pro rating such Contingent Performance Shares based
      on
      the proportion of the Award Year during which the Grantee was employed by the
      Company, unless the Committee determines that the Contingent Performance Shares
      shall not be so reduced;

    


    (3) Retirement
      of the Grantee at age 65 or as accepted by the Committee shall not affect the
      Contingent Performance Shares, which shall continue to be earned through the
      remainder of the Award Year, as set forth above.

    


    (h) The
      Grantee shall be solely responsible for any federal, state and local taxes
      of
      any kind imposed in connection with the delivery of Contingent Performance
      Shares. Prior to the transfer of any Contingent Performance Shares to the
      Grantee, the Grantee shall remit to the Company an amount sufficient to satisfy
      any federal, state, local and other withholding tax requirements. The Grantee
      may elect to have all or part of any withholding tax obligation satisfied by
      having the Company withhold Shares otherwise deliverable to the Grantee as
      Contingent Performance Shares, unless the Committee determines otherwise by
      resolution. If the Grantee fails to make such payments or election, the Company
      and its subsidiaries shall, to the extent permitted by law, have the right
      to
      deduct from any payments of any kind otherwise due to the Grantee any taxes
      required by law to be withheld with respect to the Contingent Performance
      Shares.

    


     

    


    


    Section
      3. Forfeitable
      Performance Shares

    


    (a) In
      lieu
      of earning Contingent Performance Shares, the Grantee may elect to receive
      800
      Forfeitable Performance Shares, irrespective of whether the Company meets any
      Performance Goals. The Grantee must make any such election on or before
      September 30, 2007, and the election must be made in writing, in a manner
      prescribed by the Committee. Once made, the election is irrevocable. If a
      Grantee makes such an election, he shall not receive any Contingent Performance
      Shares under this Agreement. 

    


    (b) Any
      Forfeitable Performance Shares received by the Grantee pursuant to this Section
      3 shall be issued as promptly as possible after December 31, 2007, without
      payment of consideration by the Grantee. The Grantee shall have the right to
      vote the Forfeitable Performance Shares and to receive the dividends
      distributable with respect to such Shares on and after, but not before, the
      date
      on which the Grantee is recorded on the Company's ledger as holder of record
      of
      the Forfeitable Performance Shares (the "Issue Date"). If, however, the Grantee
      receives Shares as part of any dividend or distribution with respect to the
      Forfeitable Performance Shares, such Shares shall be treated as if they are
      Forfeitable Performance Shares, and such Shares shall be subject to all of
      the
      terms and conditions imposed by this Section 3.

    


    (c) The
      Forfeitable Performance Shares shall be subject to the following
      restrictions:

    


    (1) Sale,
      transfer, pledge or hypothecation of the Forfeitable Performance Shares shall
      be
      prohibited for a period of three (3) years after the Issue Date (the
      "Restriction Period"), and the certificates evidencing the Forfeitable
      Performance Shares shall bear an appropriate restrictive legend that refers
      to
      the terms, conditions, and restrictions set forth in this Agreement. Any attempt
      to dispose of Forfeitable Performance Shares in contravention of this Agreement
      shall be ineffective. Upon expiration of the Restriction Period, the transfer
      restrictions imposed by this Section shall expire, and new certificates
      representing the Forfeitable Performance Shares, without the restrictive legend
      described in this paragraph (c)(1), shall be issued, subject to the provisions
      of paragraph (f) of this Section 3.

    


    (2) If,
      during the Restriction Period, the Grantee separates from employment for any
      reason other than death, normal retirement, total and permanent disability
      (as
      determined by the Committee), or involuntary termination without cause (as
      determined by the Committee), all Forfeitable Performance Shares shall be
      forfeited immediately.

    


    (d) All
      restrictions under paragraph (c) of this Section 3 shall immediately expire
      on
      the earliest of: (A) the Grantee's separation from employment because of death,
      total and permanent disability (as determined by the Committee), or involuntary
      termination without cause (as determined by the Committee), (B) a Change in
      Control, as defined in the Plan, or (C) the end of the Restriction Period.
      

    


    (e) 
      If,
      after the Grantee has made an election to receive Forfeitable Performance Shares
      pursuant to Section 3(a), a Change in Control, as defined in the Plan, occurs
      during the Award Year, the Grantee shall receive at least the total number
      of
      Forfeitable Performance Shares due under this Agreement, without any pro ration
      based on the proportion of the Award Year that has expired as of the date of
      such Change in Control. Pursuant to Section 3(d), such Shares shall not be
      subject to any of the restrictions imposed by this Section.

    


    (f) The
      Forfeitable Performance Shares shall be not registered for resale under the
      Securities Act of 1933 or the laws of any state except when and to the extent
      determined by the Board pursuant to a resolution. Until a registration statement
      is filed and becomes effective, however, transfer of the Forfeitable Performance
      Shares after expiration of the Restriction Period shall require the availability
      of an exemption from such registration, and prior to the issuance of new
      certificates, the Company shall be entitled to take such measures as it deems
      appropriate (including but not limited to obtaining from the Grantee an
      investment representation letter and/or further legending the new certificates)
      to ensure that the Forfeitable Performance Shares are not transferred in the
      absence of such exemption.

    


    (g) The
      Grantee shall be solely responsible for any federal, state and local taxes
      of
      any kind imposed in connection with receipt of the Forfeitable Performance
      Shares:

    


    (1) The
      Grantee agrees that, no later than the date that the restrictions set forth
      in
      Section 3(c) lapse, he shall remit to the Company an amount sufficient to
      satisfy any federal, state, local and other withholding tax requirements.


    


    (2) The
      Grantee may elect to have all or part of any withholding tax obligation
      satisfied by having the Company withhold Shares otherwise deliverable to the
      Grantee in connection with the Award of Restricted Stock, unless the Committee
      determines otherwise by resolution.

    


    (3) If
      the
      Grantee properly elects, within 30 days of the Issue Date, to include in gross
      income for federal income tax purposes an amount equal to the fair market value
      of the Forfeitable Performance Shares, he shall make arrangements satisfactory
      to the Committee to remit in the year of issue an amount sufficient to satisfy
      any federal, state, local and other withholding tax requirements with respect
      to
      such Forfeitable Performance Shares. 

    


    (4) If
      the
      Grantee fails to make satisfactory arrangements to meet all withholding tax
      obligations, the Company and its subsidiaries shall, to the extent permitted
      by
      law, have the right to deduct from any payments of any kind otherwise due to
      the
      Grantee any taxes required by law to be withheld with respect to the Forfeitable
      Performance Shares.

    


    Section
      4. Additional
      Conditions to Issuance of Shares

    


    Each
      transfer of Contingent Performance Shares or Forfeitable Performance Shares
      (together, the "Award Shares") shall be subject to the condition that if at
      any
      time the Committee shall determine, in its sole discretion, that it is necessary
      or desirable as a condition of, or in connection with, transfer of Award Shares
      (i) to satisfy withholding tax or other withholding liabilities, (ii) to effect
      the listing, registration or qualification on any securities exchange or under
      any state or federal law of any Shares deliverable in connection with such
      exercise, or (iii) to obtain the consent or approval of any regulatory body,
      then in any such event such transfer shall not be effective unless such
      withholding, listing, registration, qualification, consent or approval shall
      have been effected or obtained free of any conditions not acceptable to the
      Company.

    


    


    


    


    Section
      5. Adjustment
      of Shares

    


    (a) If
      the
      Company shall become involved in a merger, consolidation or other
      reorganization, whether or not the Company is the surviving corporation, any
      right to earn Contingent Performance Shares or to elect to receive Forfeitable
      Performance Shares shall be deemed a right to earn or to elect to receive the
      consideration into which the Shares represented by the Contingent Performance
      Shares or by the Forfeitable Performance Shares would have been converted under
      the terms of the merger, consolidation or other reorganization. If the Company
      is not the surviving corporation, the surviving corporation (the "Successor")
      shall succeed to the rights and obligations of the Company under this
      Agreement.

    


    (b) If
      any
      subdivision or combination of Shares or any stock dividend, capital
      reorganization or recapitalization occurs after the adoption of the Plan, the
      Committee shall make such proportionate adjustments as are appropriate to the
      number of Contingent Performance Shares to be earned and/or to the number of
      Forfeitable Performance Shares to be received in order to prevent the dilution
      or enlargement of the rights of the Grantee.

    


    Section
      6. No
      Right to Employment

    


    Nothing
      contained in this Agreement shall be deemed by implication or otherwise to
      confer upon the Grantee any right to continued employment by the Company or
      any
      affiliate of the Company.

    


    Section
      7. Notice

    


    Any
      notice to be given hereunder by the Grantee shall be sent by mail addressed
      to
      Chesapeake Utilities Corporation, 909 Silver Lake Boulevard, Dover, Delaware
      19904, for the attention of the Committee, c/o the Secretary, and any notice
      by
      the Company to the Grantee shall be sent by mail addressed to the Grantee at
      the
      address of the Grantee shown on the first page hereof. Either party may, by
      notice given to the other in accordance with the provisions of this Section,
      change the address to which subsequent notices shall be sent.

    


    Section
      8. Assumption
      of Risk

    


    It
      is
      expressly understood and agreed that the Grantee assumes all risks incident
      to
      any change hereafter in the applicable laws or regulations or incident to any
      change in the market value of the Award Shares.

    


    Section
      9. Terms
      of Plan

    


    This
      Agreement is entered into pursuant to the Plan (a copy of which has been
      delivered to the Grantee). This Agreement is subject to all of the terms and
      provisions of the Plan, which are incorporated into this Agreement by reference,
      and the actions taken by the Committee pursuant to the Plan. In the event of
      a
      conflict between this Agreement and the Plan, the provisions of the Plan shall
      govern. All determinations by the Committee shall be in its sole discretion
      and
      shall be binding on the Company and the Grantee.

    


    Section
      10. Governing
      Law; Amendment

    


    This
      Agreement shall be governed by, and shall be construed and administered in
      accordance with, the laws of the State of Delaware (without regard to its choice
      of law rules) and the requirements of any applicable federal law. This Agreement
      may be modified or amended only by a writing signed by the parties
      hereto.

    


    Section
      11. Terms
      of Agreement

    


    This
      Agreement shall remain in full force and effect and shall be binding on the
      parties hereto for so long as any Award Shares issued to the Grantee under
      this
      Agreement continue to be held by the Grantee.

    


    IN
      WITNESS WHEREOF, the Company has caused this Agreement to be executed in its
      corporate name, and the Grantee has executed the same in evidence of the
      Grantee's acceptance
      hereof, upon the terms and conditions herein set forth, as of the day and year
      first above written.

    


    CHESAPEAKE
      UTILITIES CORPORATION

    


    


    By: ___________________________________

    


    


    ___________________________________

    Beth
      W.
      Cooper, Grantee