2. Consulting Services.(a) For the period commencing upon the Executive’s retirement from employment and continuingfor up to 12 months (the “Consulting Term”), the Company shall engage the Executive as aconsultant, and the Executive shall provide consulting services in accordance with the terms setforth herein. The Executive shall be available to work for the Company as a consultant for up to400 hours per year at mutually agreeable times and shall perform such consulting services as shallbe reasonably requested from time to time by the Board of Directors of the Company or its lawfullydesignated representative (the “Board”). TheCompany, in its sole discretion shall determine the number of days per month that theExecutive shall provide consulting services. However, the parties agree that the time commitmentfrom the Executive shall not exceed 20% of the average time devoted to the Executive’s position asPresident and CEO of the Company during the 36 month period prior to the Executive’s retirement inorder to ensure that the Executive’s retirement does constitute a separation from service as anemployee under Section 409A. The Company shall provide the Executive with office space at theCompany’s principal executive offices for purposes of performing the consulting services, asnecessary. The parties acknowledge and agree that the Executive may perform services for otherentities and that this engagement of Executive is on a non-exclusive basis, subject, however, tothe Executive’s continuing obligation to comply with the covenants of Section 3, below.(b) During the Consulting Term, the Company shall (a) pay the Executive a consulting fee of$10,000.00 per month for each month during the Consulting Term, or portion thereof, that theExecutive provides consulting services, payable at the end of each calendar month, and (b)reimburse the Executive for all reasonable out of pocket expenses he incurs in connection withproviding the consulting services, provided that such reimbursement payments are made by the end ofthe Executive’s taxable year following the year in which such expenses are incurred and that theCompany shall not be obligated to pay any such reimbursement amount for which Executive fails tosubmit an invoice or other documented reimbursement request at least 10 business days before theend of such calendar year. Such expenses shall be reimbursable only to the extent they wereincurred during the term of this Agreement. In addition, the amount of such reimbursements thatthe Company is obligated to pay in any given calendar year shall not affect the amount the Companyis obligated to pay in any other calendar year. In addition, Executive may not liquidate orexchange the right to reimbursement of such expenses for any other benefits. The Executive shallnot be entitled to the payment of any consulting fee for any month during the Consulting Term forwhich no services are provided, nor to any payments or benefits other than those provided underthis Agreement for the consulting services provided hereunder.(c) With the Executive’s consent, the Company may extend the Consulting Term for additionalone year consulting assignments. The terms of any extended consulting period shall be the same asprovided herein unless otherwise agreed by the parties in writing.(d) Notwithstanding anything herein to the contrary, the Consulting Term shall end and thisAgreement shall terminate upon the death or total disability of the Executive, as determined by theCompany in its reasonable discretion.3. Confidential Information; Non-Solicitation; Noncompetition. The Executive agrees that the covenants of Section 9 of his employment agreement with theCompany shall continue in effect and shall apply to his performance of services hereunder.Further, Executive agrees that the “Restricted Period” as defined therein shall also continue untilone year after the termination of this Agreement.
 
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4. Independent Contractor.From and after the Effective Date, the Executive agrees that he shall be an independentcontractor of the Company, not an employee, and that he has no authority to represent himself as anagent or employee or to assume or create any obligation or responsibility on behalf of or in thename of the Company, unless specifically authorized by the Company in writing. Executive will bearsole responsibility to pay any taxes on his compensation and acknowledges that he will receive aForm 1099 from the Company after the end of each calendar year. Executive also agrees that heshall not knowingly take any action which would impair the value of the business or assets of theCompany or any affiliated companies, including, without limiting the generality of the foregoing,interfere with contractual relationships of the Company or any affiliated companies with customers,suppliers, executives or others, any action which disparages or diminishes the reputation of theCompany or any affiliated companies, or any action which diverts customers of the Company or anyaffiliated companies.5. Injunctive Relief.The Executive acknowledges and agrees that the Company’s remedy at law for any breach of theExecutive’s obligations under Section 3 or 4 would be inadequate and incomplete and agrees andconsents that temporary and permanent injunctive relief may be granted in any proceeding which maybe brought to enforce any provision of such Sections without the necessity of proof of actualdamage and without any requirement for the posting of any bond.6. Termination for Cause.Notwithstanding anything herein to the contrary, this Agreement shall terminate and no paymentof any fee hereunder shall be made to or on behalf of the Executive if the Executive has engaged inany willful misconduct with respect to his obligations hereunder or is involved in conduct whichviolates (excluding immaterial violations of) the Company’s Standards of Business Conduct.7. Assignment.This Agreement is personal to the Executive, and the Executive may not assign any interestherein in any manner whatsoever. Any purported assignment by the Executive shall be void. Inaddition to assignments by operation of law, the Company shall have the right to assign thisAgreement to any person, firm or corporation, controlling, controlled by or under common controlwith the Company (including, without limitation, any of its affiliated companies), or acquiringsubstantially all of its assets, but such assignment shall not release the Company from itsobligations under this Agreement. The covenants and agreements of the Executive contained inSections 3 and 4 shall survive and remain in full force and effect beyond the term of thisAgreement.
 
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8. Applicable Law.This Agreement shall be governed by, and construed in accordance with, the laws of the Stateof Delaware, without reference to principles of conflict of laws. The exclusive venue for allactions involving the enforcement and/or interpretation of this Agreement shall be Dover, Delaware.Should any action, of any type, be necessary to enforce and/or interpret the terms of thisAgreement, the prevailing party shall be entitled to an award of its/his reasonable attorney’s feesand costs, at all levels including appeals.9. Notices.All notices, requests, consents and other communications required or provided under thisAgreement shall be in writing and shall be deemed sufficient if delivered by hand, by facsimile,nationally recognized overnight courier, or certified or registered mail, return receipt requested,postage prepaid, and shall be effective upon delivery as follows:If to the Executive:Mr. John R. Schimkaitis4744 Pinnacle DriveBradenton, FL 34208If to the Company:Chesapeake Utilities Corporation909 Silver Lake Blvd.Dover, DE 19904Attn: President and CEOFacsimile: (302) 734-6750Either party may change the address and/or facsimile number to which notices are to be sent tothat party by giving written notice of such change of address to the other party in the same mannerabove provided for giving notice.10. Enforceability.Any provision of this Agreement finally determined by a court of competent jurisdiction to beprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective, butonly to the extent of such prohibition or unenforceability, without invalidating the otherprovisions hereof or without affecting the validity or unenforceability of such provision in anyother jurisdiction. Moreover, the Executive and the Company hereby agree that such court shallhave jurisdiction to reform this Agreement or any provision hereof so that it is enforceable to themaximum extent permitted by law, and the parties agree to abide by such court’s determination.
 
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11. Entire Agreement.This Agreement constitutes the entire agreement of the parties relative to the subject mattercontained herein, superseding, canceling and replacing all prior agreements, with respect thereto.No promises, covenants or representations of any character or nature other than those expresslystated herein have been made to induce either party to enter into this Agreement. This Agreementshall not be amended, modified, waived or discharged except in writing duly signed by each of theparties or their authorized assignees.12. Waiver.The Executive’s or the Company’s failure to insist upon strict compliance with any provisionof, or to assert any right under, this Agreement shall not be deemed to be a waiver of suchprovision or right or of any other provision of or right under this Agreement except to the extentany other party hereto is materially prejudiced by such failure.13. Headings.Headings used in this Agreement are provided for convenience only and shall not be used toconstrue meaning or intent.14. Section 409A Compliance.It is the intention of both the Company and Executive that the benefits and rights to whichExecutive could be entitled pursuant to this Agreement be exempt from or, to the extent that therequirements of Code Section 409A are applicable thereto, comply with Code Section 409A, and theprovisions of this Agreement shall be construed in a manner consistent with that intention. IfExecutive or the Company believes, at any time, that any such benefit or right that is subject toCode Section 409A does not so comply, it shall promptly advise the other and shall negotiatereasonably and in good faith to amend the terms of such benefits and rights such that they complywith Section 409A (with the most limited possible economic effect on Executive and on the Company).IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Company have caused thisAgreement to be executed in their name and on their behalf, all as of the day and year first abovewritten.         Executive   Chesapeake Utilities Corporation               By:     John R. Schimkaitis      Michael P. McMasters        Its: President and CEO  
 
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