Document:

Exhibit 10.27

Exhibit 10.27

CHESAPEAKE UTILITIES CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(As amended and restated, effective January 1, 2009)

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	PAGE NO.	 
	 
	 	 	 	 
	ARTICLE I ESTABLISHMENT AND PURPOSE
	 	 	1	 
	 
	 	 	 	 
	ARTICLE
II DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	2.1 Beneficiary
	 	 	2	 
	 
	 	 	 	 
	2.2 Change in Control
	 	 	2	 
	 
	 	 	 	 
	2.3 Committee
	 	 	3	 
	 
	 	 	 	 
	2.4 Employer
	 	 	4	 
	 
	 	 	 	 
	2.5 Excess Benefit
	 	 	4	 
	 
	 	 	 	 
	2.6 Executive
	 	 	4	 
	 
	 	 	 	 
	2.7 Maximum Benefit
	 	 	4	 
	 
	 	 	 	 
	2.8 Pension Plan
	 	 	4	 
	 
	 	 	 	 
	2.9 Plan
	 	 	4	 
	 
	 	 	 	 
	2.10 Plan Year
	 	 	4	 
	 
	 	 	 	 
	2.11 Related Company
	 	 	4	 
	 
	 	 	 	 
	2.12 Unrestricted Benefit
	 	 	4	 
	 
	 	 	 	 
	ARTICLE
III PAYMENT OF EXCESS BENEFITS
	 	 	5	 
	 
	 	 	 	 
	3.1 Group A Participants
	 	 	5	 
	 
	 	 	 	 
	3.2 Group B Participants
	 	 	5	 
	 
	 	 	 	 
	ARTICLE
IV TERMINATION OF EMPLOYMENT
	 	 	8	 
	 
	 	 	 	 
	4.1 Termination for Cause
	 	 	8	 
	 
	 	 	 	 
	4.2 Conduct After Termination
	 	 	9	 
	 
	 	 	 	 
	ARTICLE V NATURE OF INTEREST OF EXECUTIVE
	 	 	10	 
	 
	 	 	 	 
	5.1 In General
	 	 	10	 
	 
	 	 	 	 
	5.2 Funding of Plan Under Certain Circumstances
	 	 	10	 
	 
	 	 	 	 
	ARTICLE
VI ADMINISTRATION
	 	 	11	 
	 
	 	 	 	 
	6.1 Committee
	 	 	11	 
	 
	 	 	 	 
	6.2 Expenses
	 	 	11	 
	 
	 	 	 	 
	6.3 Powers of the Committee
	 	 	11	 
	 
	 	 	 	 
	6.4 Finality
	 	 	12	 
	 
	 	 	 	 
	6.5 Benefit Claims Procedure
	 	 	12	 
	 
	 	 	 	 
	ARTICLE
VII AMENDMENTS
	 	 	13	 
	 
	 	 	 	 
	ARTICLE
VIII MISCELLANEOUS
	 	 	14	 
	 
	 	 	 	 
	8.1 Participation by Affiliated Company
	 	 	14	 
	 
	 	 	 	 
	8.2 Incapacity
	 	 	14	 
	 
	 	 	 	 
	8.3 Required Information
	 	 	14	 

 

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	 	 	PAGE NO.	 
	 
	 	 	 	 
	8.4 Inability to Locate Executives
	 	 	14	 
	 
	 	 	 	 
	8.5 No Right to Employment
	 	 	15	 
	 
	 	 	 	 
	8.6 Withholding Taxes
	 	 	15	 
	 
	 	 	 	 
	8.7 Gender and Number
	 	 	15	 
	 
	 	 	 	 
	8.8 Headings
	 	 	15	 
	 
	 	 	 	 
	8.9 Severability
	 	 	16	 
	 
	 	 	 	 
	8.10 Governing Law
	 	 	16	 
	 
	 	 	 	 
	8.11 Effective Date
	 	 	16	 
	 
	 	 	 	 
	SCHEDULE A — Group A and B Participants
	 	 	17	 
	 
	 	 	 	 

 

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CHESAPEAKE UTILITIES CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

ARTICLE I

ESTABLISHMENT AND PURPOSE

(a) The Employer established the Chesapeake Utilities Corporation Executive Excess Retirement
Benefit Plan (the “Plan”) effective January 1, 2000. The purpose of the Plan is to provide benefits
that would be provided under the Chesapeake Utilities Corporation Pension Plan (the “Pension Plan”)
but for certain limitations on the benefits that may be provided under a tax-qualified plan within
the meaning of Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”). The
Plan consists of the Plan document as set forth herein and any amendments thereto.

(b) The Employer adopted a new retirement program effective January 1, 1999 (the “New
Retirement Program”). Under the New Retirement Program, participation in the Pension Plan was
frozen as of December 31, 1998. As part of the New Retirement Program, active participants in the
Pension Plan as of that date elected, among other things, either to continue accruing benefits
under the Pension Plan on and after January 1, 1999, or to cease accruing benefits under the
Pension Plan as of December 31, 1998.

(c) Effective December 31, 1998, the benefits under this Plan of an Executive who is
described as a “Group A Participant” in Schedule A shall not increase or decrease after December
31, 1998. Effective December 31, 2004, the benefits of an Executive who is described as a “Group B
Participant” in Schedule A shall not increase or decrease under this Plan after December 31, 2004.

(d) The purpose of this amendment and restatement of the Plan is to comply with the
requirements of Code Section 409A and final regulations and other rulings thereunder, and is
effective with respect to the Group B Participants only. Except as otherwise specifically provided
herein, Group A Participants and their benefits under the Plan remain subject to the terms of the
Plan as in effect on January 1, 2000. For the period from January 1, 2005 when Code Section 409A
became effective to January 1, 2009, the Plan has been operated in good faith compliance with such
Code Section and applicable transition rules
thereunder. As part of this amendment and restatement, the Employer also renames the Plan as
the Chesapeake Utilities Corporation Supplemental Executive Retirement Plan.

 

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ARTICLE II

DEFINITIONS

The following words and phrases shall have the following meanings when used in this Plan. In
addition, except for the definitions of “Committee,” “Employer,” and “Plan,” which are set forth
below, the definitions in Article I of the Pension Plan as in effect on January 1, 2005, shall
apply for the purposes of this Plan.

2.1 Beneficiary means a person who is entitled to receive a benefit as a beneficiary
(including a contingent beneficiary) or Alternate Payee with respect to an Executive pursuant to
the provisions of the Pension Plan.

2.2 Change in Control shall be deemed to occur when and only when the first of the
following events occurs:

(a) the registration of the Company’s voting securities under the Securities
Exchange Act of 1934, as amended (the “1934 Act”), terminates or the Company shall
have fewer than 300 stockholders of record; or

(b) any person or group (within the meaning of Sections 13(d) and 14(d) of the 1934
Act), other than the Company, becomes the beneficial owner (within the meaning of
Rule 13d-3 under the 1934 Act) of 30 percent or more of the combined voting power
of the Company’s then outstanding voting securities; or

(c) a tender offer or exchange offer, other than an offer by the Company, pursuant
to which 30 percent or more of the combined voting power of the Company’s then
outstanding voting securities was purchased, expires; or

(d) the stockholders of the Company approve an agreement to merge or consolidate
with another corporation (other than a majority-controlled subsidiary of the
Company) unless the stockholders of the Company immediately before the merger or
consolidation are to own more than 70 percent of the combined voting power of the
resulting entity’s voting securities; or

 

2

 

(e) the Company’s stockholders approve an agreement (including, without limitation,
a plan of liquidation) to sell or otherwise dispose of all or substantially all of
the business or assets of the Company; or

(f) during any period of two consecutive years, individuals who, at the beginning
of the period, constituted the Board cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by the
Company’s stockholders, of each new director was approved by a vote of at least
two-thirds (2/3rds) of the directors then still in office who were directors at the
beginning of the period; or

(g) the acquisition of direct or indirect beneficial ownership of more than 15
percent of the Company’s then outstanding voting securities by any person or group
is approved over the formal objection of the Company by the Securities and Exchange
Commission pursuant to Section 9 of the Public Utility Holding Company Act of 1935,
as amended. However, no Change in Control shall be deemed to have occurred with
respect to an Executive by reason of any event involving a transaction in which (i)
the Executive or a group of persons or entities with which the Executive acts in
concert, acquires, directly or indirectly, more than 30 percent of the common stock
or the business or assets of the Company, (ii) any event involving or arising out
of a proceeding under Title 1l of the United States Code (or the provisions of any
future United States bankruptcy law), an assignment for the benefit of creditors or
an insolvency proceeding under state or local law, or (iii) any event constituting
approval by the Company’s stockholders of a merger or consolidation if a majority
of the group consisting of the president and vice presidents of the Company who are
parties to agreements conferring rights upon a Change in Control shall have agreed
in writing prior to the approval that the approval shall be deemed not to
constitute a Change in Control. For purposes of this Section 2.2, “Company” shall
mean the Employer or a Related Company.

2.3 Committee means the committee designated in Section 6.1 to administer the Plan.

 

3

 

2.4 Employer means Chesapeake Utilities Corporation and any subsidiary or affiliated
corporation of the foregoing that, with the consent of the Board, adopts the Plan; or any
corporation with which one or more of the foregoing might be consolidated by merger, by purchase of
assets, or by dissolution of a subsidiary corporation, that adopts the Plan; or any corporate
successor of one or more of the foregoing that adopts the Plan.

2.5 Excess Benefit means the excess (if any) of an Executive’s or Beneficiary’s
Unrestricted Benefit over the Executive’s or Beneficiary’s Maximum Benefit.

2.6 Executive means a person who is entitled to receive a benefit as a Member pursuant
to the provisions of the Pension Plan, and who has an Excess Benefit under the Plan. Executives
(and Beneficiaries) are further defined as either a Group A Participant or a Group B Participant.

2.7 Maximum Benefit means the benefit payable to an Executive or his Beneficiary
during any calendar month by the Pension Plan.

2.8 Pension Plan means the Chesapeake Utilities Corporation Pension Plan, as amended
from time to time.

2.9 Plan means the Chesapeake Utilities Corporation Supplemental Executive Retirement
Plan, as set forth herein and as amended from time to time.

2.10 Plan Year means the calendar year.

2.11 Related Company means the Employer, any Affiliated Company, and any other
employer the majority interest in which is held, directly or indirectly, by the Employer or an
Affiliated Company.

2.12 Unrestricted Benefit means the benefit that would be payable to an Executive or
his Beneficiary during any calendar month by the Pension Plan in the form elected by the
Participant under the Pension Plan if Code Sections 401(a)(17) and 415, and the provisions of the
Pension Plan that implement them, did not apply to the Executive and his Beneficiary.

 

4

 

ARTICLE III

PAYMENT OF EXCESS BENEFITS

3.1 Group A Participants. Subject to the provisions of Article IV, an Executive or
Beneficiary who is a Group A Participant, shall receive a monthly payment for each month for which
the Executive or Beneficiary is entitled to receive a benefit under the Pension Plan, in an amount
equal to the Executive’s or Beneficiary’s Excess Benefit.

Notwithstanding the foregoing, if the value of the immediate lump-sum payment that is the
Actuarial Equivalent (within the meaning of Section 1.2 of the Pension Plan) of the Executive’s
(and his Beneficiary’s) Excess Benefit on the date as of which the Executive’s employment with the
Employer and any Affiliated Company terminates does not exceed $3,500, the Committee shall direct
that such lump-sum payment be made to the Executive as soon as practicable after that date.
Similarly, if the Executive dies before commencing receipt of benefits under the Plan, and the
value of the immediate lump-sum payment that is the Actuarial Equivalent (within the meaning of
Section 1.2 of the Pension Plan) of his Beneficiary’s Excess Benefit on the date of his death does
not exceed $3,500, the Committee shall direct that such lump-sum payment be made to his Beneficiary
as soon as practicable after that date.

3.2 Group B Participants. Subject to the provisions of Article IV, an Executive or
Beneficiary who is a Group B Participant, shall make an election no later than December 31, 2008,
regarding the form and timing of the payment of the Executive’s or Beneficiary’s Excess Benefit.
Such election shall be in writing, in a form acceptable to the Committee, and shall specify such
information as required by the Committee and shall be irrevocable once made. If a Group B
Participant fails to make an election of a time and form of payment, his benefit shall be payable
at age 65 (Normal Retirement Age) in the form of a single life annuity for the Group B
Participant’s life (the default payment election).

 

5

 

(a) Time of Payment. A Group B Participant may elect to receive his Excess
Benefit from the Plan upon: (i) the later of “Separation from Service” (as defined
in Treasury Regulations Section 1.409A-1(h)(1) (without the application of any
elective changes to such definition) or attainment of age 55 (Early Retirement Age
under the Pension Plan); or (ii) upon attainment of Normal Retirement Age (age 65),
without regard to whether or not a
Separation from Service has yet occurred. Such payment shall be made, or commence
to be made, within 90 days of the selected distribution date. If, however, a Group
B Participant who is a “specified employee” (as defined in Code Section 409A)
elects to receive payment upon Separation from Service, no amount shall be
distributed earlier than the first business day that is at least six months after
the specified employee’s Separation from Service.

(b) Form of Payment. A Group B Participant may elect to receive his Excess
Benefit from the Plan in one of the following forms of payment, each of which shall
be the Actuarial Equivalent of payment in the form of a single life annuity for the
life of the Group B Participant:

(i) a life annuity, ceasing payments upon the death of the Group B
Participant;

(ii) a Qualified Joint and Survivor Annuity payable for the life of the
Group B Participant with a survivor annuity equal to 50% of the amount
payable during the joint annuity period continuing to his surviving spouse,
if applicable;

(iii) an annuity payable for the life of the Group B Participant with
payments guaranteed for a minimum of 10 years to the Group B Participant
and, if the Group B Participant dies before 10 years of payments, such
amount continuing to a Beneficiary until 10 years of payments have been
made;

(iv) a joint and survivor annuity payable for the life of the Group B
Participant and continued upon his death for the life of his surviving
designated beneficiary, with the designated beneficiary’s benefit to be 50
percent, 66 2/3 percent or 100 percent (as elected by the Group B
Participant) of the benefit paid or payable for each month to the Group B
Participant during his lifetime; or

 

6

 

(vi) a single, lump sum that is the “Present Value” of the single life
annuity benefit. For this purpose, “Present Value” means the lump sum
actuarial equivalent of the Group B Participant’s Excess Benefit calculated
by using the interest rate and mortality table defined as
follows: (I) The interest rate shall be based on the interest rate used
to calculate lump sum distributions from the Pension Plan, which is the
interest rate under Code Section 417(e)(3) for the month of November
preceding the calendar year in which the payment date falls; and (II) The
mortality table shall be the mortality table prescribed by the Secretary of
the Treasury under the authority of Section 417(e)(3) of the Code based
upon the prevailing commissioners’ standard table used to determine the
minimum present value of a participant’s benefit in the Pension Plan on the
date as of which the Present Value is being determined. As of the
effective date of this amendment and restatement of the Plan, this
mortality table for 2008 is the table prescribed by Rev. Rul. 2007-67,
which shall be updated annually thereafter by the Internal Revenue Service.

(c) Death Benefit. The death benefit, if any, payable to a Group B
Participant’s Beneficiary shall be determined based on the form of payment elected
by such Group B Participant and, if no form is elected, the default payment shall
be a single life annuity under which no death benefit shall be payable. If a Group
B Participant dies after benefit payments have commenced, the Beneficiary of the
deceased Group B Participant shall receive the remaining payments due under the
form of payment selected, if any. If a Group B Participant dies before benefit
payments have commenced, the amount payable to the Beneficiary of the Group B
Participant shall be based on the method of payment elected, with a single life
annuity providing no death benefit, a joint and survivor or Qualified Joint and
Survivor Annuity providing the stated level of survivor annuity as though the Group
B Participant had Separated from Service on the date of his death (or as of the
actual date of Separation from Service if earlier), and a lump sum payment being
payable in full to the Beneficiary in lieu of the Group B Participant. In the case
of a Group B Participant who dies before benefit payments have commenced, the death
benefit shall be paid, or commence to be paid, as applicable, within 90 days after
the date of death and shall be the Actuarial
Equivalent of the benefit otherwise payable at the selected payment commencement
date if the Group B Participant’s death precedes when benefits otherwise would have
commenced. Notwithstanding the foregoing, if the Group B Participant was at least
age 55 at his death, the factors set forth in Section 5.3 of the Pension Plan (as
of December 31, 2004) shall be used to determine the reduction in the amount
payable due to death prior to the scheduled distribution date, if any.

 

7

 

ARTICLE IV

TERMINATION OF EMPLOYMENT

4.1 Termination for Cause. No payments shall be made under the Plan to or in respect
of an Executive whose employment is terminated as a result of conduct determined by the Committee
in its sole discretion to have had an adverse effect on the Employer or a Related Company, provided
that:

(a) an Executive’s employment shall not be deemed to have terminated as a result of
conduct that had an adverse effect on the Employer or a Related Company unless the
Executive: (i) engaged in unlawful acts intended to result in the substantial
personal enrichment of the Executive at the expense of the Employer or a Related
Company; or (ii) engaged (except by reason of incapacity due to illness or injury)
in a material violation of his responsibilities to the Employer and the Related
Companies that resulted in a material injury to the Employer or a Related Company;
and

(b) the Executive’s employment shall not be deemed to have terminated as a result
of conduct that had an adverse effect on the Employer or a Related Company for
purposes of subsection (a) of this Section 4.1 unless and until there has been
delivered to him a Notice of Termination, consisting of a copy of a resolution duly
adopted by the affirmative vote of not less than three-fourths (3/4ths) of the
entire membership of the Board at a duly held meeting of the Board (with reasonable
notice to the Executive and an opportunity for the Executive, together counsel, to
be heard before the Board), finding that the Executive has engaged in the conduct
set forth above in this Section 4.1 and specifying the particulars thereof in
detail. The Board may not delegate or assign its duties under this Section 4.1.

 

8

 

4.2 Conduct after Termination.

(a) No additional payments shall be made under the Plan to or in respect of an
Executive who, before the second anniversary of the termination of his employment,
renders services for any organization or engages directly or indirectly in any
business that, in the judgment of the Committee, competes directly with, or that is
otherwise prejudicial to or conflicts with the interests
of, the Employer or a Related Company. The Executive may be required to certify to
the above condition in a format acceptable to the Committee from time to time
before receiving any subsequent payments under the Plan. The Executive shall be
free, however, to purchase, as an investment or otherwise, stock or other
securities of such organizations so long as they are listed upon a recognized
securities exchange or traded over-the-counter, and such investment does not
represent a substantial investment to the Executive or a greater than 10 percent
equity interest in the organization. The Committee shall direct that any remaining
payments to or in respect of the Executive be terminated and forfeited upon a
determination by the Committee that the Executive has engaged in conduct that
requires the forfeiture of payments to or in respect of the Executive pursuant to
this Section 4.2. Further, the Committee may pursue the return to the Employer of
any payments made under the Plan after the commencement of such conduct, together
with interest at a rate determined by the Committee in its sole discretion.

(b) After a Change in Control, subsection (a) of this Section 4.2 shall no longer
apply to any Executive unless, before the Change in Control, the Committee has
determined that the Executive has engaged in conduct that requires the forfeiture
of payments to or in respect of the Executive pursuant to that subsection.

 

9

 

ARTICLE V

NATURE OF INTEREST OF EXECUTIVE

5.1 In General. Participation in this Plan shall not create, in favor of any
Executive or Beneficiary, any interest in or lien against any of the assets of the Employer. An
Executive’s or Beneficiary’s rights to benefits payable under the Plan are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge, or encumbrance. Except to
the extent required by Section 5.2, 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 Employer and an Executive or any other person, and the promise of the
Employer to pay benefits hereunder shall at all times remain unfunded as to the Executive or
Beneficiary, whose rights hereunder shall be limited to those of a general and unsecured creditor
of the Employer.

5.2 Funding of Plan Under Certain Circumstances. In the event of a Change in Control,
the Committee shall fund fully all benefits accrued under the Plan through that date through the
purchase of fully-paid annuity or life insurance contracts or deposits to a “rabbi” trust, as
described below. In addition, the Committee may fund the benefits accrued under the Plan, in whole
or in part, in the same manner in its sole discretion under any other circumstances. The Committee
shall cause any annuity or life insurance contracts purchased pursuant to this Section 5.2 and any
other assets set aside or otherwise accumulated pursuant to this Section 5.2 to be held by a
“rabbi” trust that conforms to the standards prescribed by Internal Revenue Service Revenue
Procedures 92-64, as amended from time to time, or any successor thereto. Any annuity or life
insurance contracts purchased pursuant to this Section 5.2 and any other assets set aside or
otherwise accumulated pursuant to this Section 5.2 shall not be assets of the Plan. Executives and
Beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any such
contracts or other assets, and such contracts or other assets shall be subject to the claims of the
Employer’s general creditors in the event of the insolvency of the Employer.

 

10

 

ARTICLE VI

ADMINISTRATION

6.1 Committee. The Plan shall be administered by the Employee Benefits Committee of
Chesapeake Utilities Corporation. The Committee 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.

6.2 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 Employer.

6.3 Powers of the Committee. In addition to any implied powers 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;

 

11

 

(c) to compute the amount of benefits that shall be payable to any Executive,
former Executive, 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.

6.4 Finality. Subject to the provisions of Section 6.5, 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 personal representatives.

6.5 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 in Section 12.13 of the
Pension P1an.

 

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ARTICLE VII

AMENDMENTS

Chesapeake Utilities Corporation reserves the right to amend the Plan, retroactively or
prospectively, at any time; provided that no such amendment shall result in the reduction or
forfeiture of benefits already accrued under the Plan (including, without limitation, the right to
the funding of those benefits in the event of a Change in Control). The right to amend the Plan
shall be exercised by the Board pursuant to a written resolution adopted in accordance with the
by-laws of the Employer; provided that the Committee may amend the Plan to the extent necessary to
comply with the requirements of law or the purpose of the Plan as set forth in Article I. The
Committee shall have the right by written resolution to amend the Plan from time to time, for the
purpose of meeting the requirements of Code Section 409A.

 

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ARTICLE VIII

MISCELLANEOUS

8.1 Participation by Affiliated Company. Subject to the consent of the Committee, an
Affiliated Company was permitted to become an Employer under the Plan by delivering to the
Committee a resolution of its board of directors approving such action. With the consent of the
Committee, such Affiliated Company became an Employer as of an effective date approved by the
Committee and is subject to the provisions of the Plan. No new participating Affiliated Companies
shall be permitted to join the Plan after December 31, 2008.

8.2 Incapacity. If the Committee determines that any person entitled to benefits
hereunder 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, sibling, or other party deemed by the Committee to
have incurred expenses for such person.

8.3 Required Information. Any person eligible to receive benefits hereunder 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 person’s 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.

8.4 Inability to Locate Executives. Each Executive 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 an Executive or Beneficiary to whom a benefit is payable under the
Plan for a period of thirty-six (36) months, commencing with the first day of the month as of which
such benefit becomes payable, the total amount payable to such Executive or Beneficiary shall be
forfeited.

 

14

 

8.5 No Right to Employment. Nothing herein contained shall be deemed to give any
employee the right to be retained in the service of the Employer or the Affiliated Companies or to
interfere with the right of the Employer and the Affiliated Companies to discharge any employee at
any time without regard to the effect that such discharge might have upon the employee under the
Plan.

8.6 Withholding Taxes. The Committee may make any appropriate arrangements for the
deduction of any taxes required to be withheld by any government or government agency, from all
amounts provided under the Plan or from cash compensation or other sources if the amounts provided
under the Plan are subject to tax before they are paid. The Executive and/or his Beneficiary shall
bear all taxes on amounts paid under the Plan to the extent that no taxes are withheld,
irrespective of whether withholding is required.

In addition to the foregoing and in accordance with Code Section 409A and the regulations
issued thereunder, the Plan shall permit the withholding from any payment of any amounts necessary
to (a) satisfy federal and applicable state or city employment tax withholding obligations that
arise under the Plan prior to the date that payment may otherwise be made under the Plan and/or (b)
satisfy the excise tax or underpayment penalties owed under Code Section 409A in the event of a
violation of Code Section 409A under the Plan.

8.7 Gender and Number. In order to shorten and to improve the understandability of
the Plan document by eliminating the repeated usage of such phrases as “his or her,” any masculine
terminology herein shall also include the feminine and neuter, except when otherwise indicated by
the context.

8.8 Headings. Any headings used in this instrument are for convenience of reference
only and are to be ignored in the construction of any provision hereof.

 

15

 

8.9 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
inserted herein.

8.10 Governing Law. The Plan shall be construed, administered, and regulated in
accordance with the laws of the State of Delaware, except to the extent that such laws are
preempted by Federal law.

8.11 Effective Date. The Plan, as hereby amended and restated, shall be effective as
of January 1, 2009.

	 	 	 	 	 	 	 
	 	 	Chesapeake Utilities Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	Its:	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	Date:	 	 	 
	 

	 	 	 	 	 	 

 

16

 

SCHEDULE A — Group A and B Participants

GROUP A PARTICIPANTS:

Ralph Adkins

GROUP B PARTICIPANTS:

Mike McMasters

John Schimkaitis

Steve Thompson

 

17Exhibit 10.28

Exhibit 10.28

 

CHESAPEAKE UTILITIES CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT

SAVINGS PLAN

Amended and Restated as of January 1, 2009

 

 

 

 

			
	 	 	 
	Chesapeake Utilities Corporation 

Supplemental Executive Retirement Savings Plan
	 	Table of Contents

TABLE OF CONTENTS

	 	 	 	 	 
	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
	 	 	7	 
	 
	 	 	 	 
	Section 3. Participation
	 	 	8	 
	 
	 	 	 	 
	3.01. Election of Benefits
	 	 	8	 
	 
	 	 	 	 
	3.02. Election Requirements
	 	 	8	 
	 
	 	 	 	 
	3.03. Form and Time of Payment
	 	 	9	 
	 
	 	 	 	 
	Section 4. Accounts
	 	 	11	 
	 
	 	 	 	 
	4.01. Accounts
	 	 	11	 
	 
	 	 	 	 
	4.02. Participant Subaccount
	 	 	11	 
	 
	 	 	 	 
	4.03. Employer Match Subaccount
	 	 	11	 
	 
	 	 	 	 
	4.04. Investment Returns
	 	 	11	 
	 
	 	 	 	 
	4.05. Vesting of Accounts
	 	 	13	 
	 
	 	 	 	 
	Section 5. Distributions
	 	 	14	 
	 
	 	 	 	 
	5.01. Exclusive Entitlement to Payment
	 	 	14	 
	 
	 	 	 	 
	5.02. Payment
	 	 	14	 
	 
	 	 	 	 
	5.03. Death Benefits
	 	 	14	 
	 
	 	 	 	 
	5.04. Hardship Distributions
	 	 	15	 
	 
	 	 	 	 
	5.05. Disability
	 	 	15	 
	 
	 	 	 	 
	5.06. Change in Control
	 	 	16	 
	 
	 	 	 	 
	5.07. Acceleration of Payment
	 	 	16	 
	 
	 	 	 	 
	5.08. Delay of Payment
	 	 	17	 
	 
	 	 	 	 
	5.09. Assignment and Assumption of Liabilities
	 	 	17	 

 

 

 

			
	 	 	 
	Chesapeake Utilities Corporation 

Supplemental Executive Retirement Savings Plan
	 	Table of Contents

	 	 	 	 	 
	Section 6. Nature of Participant’s Interest in Plan
	 	 	18	 
	 
	 	 	 	 
	6.01. No Right to Assets
	 	 	18	 
	 
	 	 	 	 
	6.02. No Right to Transfer Interest
	 	 	18	 
	 
	 	 	 	 
	6.03. No Right to Employment
	 	 	19	 
	 
	 	 	 	 
	6.04. Withholding and Tax Liabilities
	 	 	19	 
	 
	 	 	 	 
	Section 7. Administration
	 	 	20	 
	 
	 	 	 	 
	7.01. Committee
	 	 	20	 
	 
	 	 	 	 
	7.02. Meetings
	 	 	20	 
	 
	 	 	 	 
	7.03. Quorum
	 	 	20	 
	 
	 	 	 	 
	7.04. Expenses
	 	 	20	 
	 
	 	 	 	 
	7.05. Responsibilities of the Committee
	 	 	20	 
	 
	 	 	 	 
	7.06. Finality of Committee Determinations
	 	 	21	 
	 
	 	 	 	 
	7.07. Benefit Claims Procedure
	 	 	21	 
	 
	 	 	 	 
	7.08. Arbitration of Denied Claims
	 	 	22	 
	 
	 	 	 	 
	Section 8. Amendment, Suspension, and Termination
	 	 	23	 
	 
	 	 	 	 
	8.01. By The Compensation Committee
	 	 	23	 
	 
	 	 	 	 
	8.02. By the Committee
	 	 	23	 
	 
	 	 	 	 
	Section 9. Miscellaneous
	 	 	24	 
	 
	 	 	 	 
	9.01. Participation by Affiliate
	 	 	24	 
	 
	 	 	 	 
	9.02. Designation of Beneficiary
	 	 	24	 
	 
	 	 	 	 
	9.03. Incapacity
	 	 	24	 
	 
	 	 	 	 
	9.04. Required Information
	 	 	25	 
	 
	 	 	 	 
	9.05. Inability to Locate Participants and Beneficiaries
	 	 	25	 
	 
	 	 	 	 
	9.06. Headings
	 	 	25	 
	 
	 	 	 	 
	9.07. Severability
	 	 	25	 
	 
	 	 	 	 
	9.08. Governing Law
	 	 	26	 
	 
	 	 	 	 
	9.09. Complete Statement of Plan
	 	 	26	 
	 
	 	 	 	 
	EXHIBIT A
	 	 	27	 
	 
	 	 	 	 
	APPENDIX A
	 	 	29	 
	 
	 	 	 	 

 

 

 

			
	 	 	 
	Chesapeake Utilities Corporation 

Supplemental Executive Retirement Savings Plan
	 	Page 1

SECTION
1. ESTABLISHMENT AND PURPOSE

	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

SECTION 2. DEFINITIONS AND CONSTRUCTION

	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 Company’s 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 Company’s 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 Company’s 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

However, no Change in Control shall be deemed to have occurred with respect to a
Participant by reason of (i) any event involving a transaction in which the
Participant or a group of persons or entities with which the Participant acts in
concert, acquires, directly or indirectly, more than 30 percent of the common stock
or the business or assets of the Company; (ii) any event involving or arising out of
a proceeding under Title 11 of the United States Code (or the provisions of any
future United States bankruptcy law), an assignment for the benefit of creditors or
an insolvency proceeding under state or local law; or (iii) any event constituting
approval by the Company’s stockholders of a merger or consolidation if a majority of
the group consisting of the president and vice presidents of the Company who are
parties to agreements conferring rights upon a Change in Control shall have agreed
in writing prior to the approval that the approval shall be deemed not to constitute
a Change in Control.

The term “Change in Control” is intended to comply with Section 409A of the Code and
shall be interpreted such that a Change in Control (1) shall occur for purposes of
the Plan in any circumstance that would constitute a “Change in Control Event”
(within the meaning of Treasury Regulations under Code Section 409A) and (2) shall
not occur for purposes of the Plan in any circumstance that would not constitute
such a Change in Control Event.

	 	(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 employee’s 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 Participant’s 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 Participant’s Account or
paid on a Participant’s behalf in excess of the amount that properly should have been
credited to the Participant’s Account or paid on the Participant’s 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

SECTION 3. PARTICIPATION

	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
Participant’s 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 Participant’s 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 Participant’s 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
Participant’s 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;

(4) does not accelerate payment of the 409A Amount; and

	 	(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.

For purposes of the Plan, an election to receive benefits as five or ten annual
installments shall be treated as the entitlement to a single payment as further
described in Treas. Reg. Section 1.409A-2(b)(iii).

	 	(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
Participant’s Account as an annual benefit payable over the installment period.

 

 

 

			
	 	 	 
	Chesapeake Utilities Corporation 

Supplemental Executive Retirement Savings Plan
	 	Page 11

SECTION 4. ACCOUNTS

	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 Participant’s 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.

 

 

 

			
	 	 	 
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	 	(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 Participant’s
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 Participant’s 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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	 	(c)	 	Crediting of Investment Return. The balance credited to the
Participant’s 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 Company’s creditors as
provided in Section 6.

 

 

 

			
	 	 	 
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SECTION 5. DISTRIBUTIONS

	5.01.	 	Exclusive Entitlement to Payment.
	 
	 	 	A Participant’s 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 Participant’s 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 Participant’s Account that is
subject to each election shall be distributed in accordance with the applicable
election. The Participant’s Account shall be debited to reflect each distribution
pursuant to this Section 5.

	 	(b)	 	Payment Medium. All amounts credited to a Participant’s 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 Participant’s
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 Participant’s 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
Participant’s Account that is unpaid at the time of the Participant’s 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 Participant’s Beneficiary within 30 days after the Valuation Date that is
coincident with or next follows the date of the Participant’s 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 Participant’s 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 Participant’s 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 Participant’s 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 Participant’s 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 Participant’s 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 Participant’s 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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	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 Participant’s
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
Participant’s 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 Participant’s 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 employer’s
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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Supplemental Executive Retirement Savings Plan
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SECTION 6. NATURE OF PARTICIPANT’S INTEREST IN PLAN

	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 Participant’s or Beneficiary’s 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
Participant’s 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 Participant’s 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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SECTION 7. ADMINISTRATION

	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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Supplemental Executive Retirement Savings Plan
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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 Plan’s claim review procedure as contained in this Plan.

In the event the request is rejected or modified, the Participant or his representative may
within 60 days following receipt by the Participant or representative of such rejection or
modification, submit a written request for review by the Company of its initial decision.
Within 60 days following such request for review (120 days if extraordinary circumstances
exist), the Company shall render its final decision in writing to the Participant or
representative stating specific reasons for such decision. If the Participant or
representative is not satisfied with the Company’s final decision, the Participant or
representative can institute an action in a Federal court of competent jurisdiction; for
this purpose, process would be served on the Company.

	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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SECTION 8. AMENDMENT, SUSPENSION, AND TERMINATION

	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 Participant’s
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.

Except as provided in the preceding sentence, any modification, amendment,
suspension, or termination of the Plan may reduce or eliminate a benefit under the
Plan. Although the Plan is not subject to Section 204(g) of ERISA, the accrued
benefits that are protected by this Section 8 shall include those accrued benefits
that would be protected by Section 204(g) of ERISA if the Plan were subject to said
Section 204(g) and the rights specified in items (1) through (4), above.

	 	(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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SECTION 9. MISCELLANEOUS

	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 Participant’s 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 Participant’s surviving spouse, or if the Participant has no surviving spouse, the
Participant’s 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,

until and unless the Participant revokes and designates a Beneficiary in accordance
with this Section 9.02, it being the intent of the Plan that any change in the
designation of a Beneficiary under the Plan may be made by the Participant only in
accordance with the provision of this Section 9.02.

	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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	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 person’s 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 Participant’s or
Beneficiary’s 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 Participant’s 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
	 
	 	 
	ADOPTED:

	 	ATTESTED:
	 
	 	 
	 

	 	 
	Executive Vice President and

	 	Senior Vice President and CFO
	Chief Operating Officer
	 	 
	 
	 	 
	DATE: December                     , 2008
	 	 

 

 

 

			
	 	 	 
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EXHIBIT A

Rate of Return Indices

Effective January 1, 2009

1. BlackRock Money Market Portfolio (PINXX)

2. BlackRock Core Bond Total Return II Portfolio (CMCBX)

3. BlackRock Intermediate Government Bond Portfolio (PIGSX)

4. Calvert Income Fund (CFICX)

5. T. Rowe Price Retirement Income Fund (PARIX)

6. American Funds — Balanced Fund (ABALX)

7. T. Rowe Price Retirement 2010 Fund (PARAX)

8. T. Rowe Price Retirement 2020 Fund (PARBX)

9. T. Rowe Price Retirement 2030 Fund (PARCX)

10. T. Rowe Price Retirement 2040 Fund (PARDX)

11. T. Rowe Price Retirement 2050 Fund (PARFX)

12. American Funds  — Growth Fund of America (AGTHX)

13. American Funds — Investment Company of America (AIVSX)

14. T. Rowe Price Equity Income Fund (PAFDX)

 

 

 

			
	 	 	 
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15. Fidelity Spartan U.S. Equity Index Fund (FUSEX)

16. Federated Kaufmann Fund (KAUAX)

17. T. Rowe Price Mid Cap Value Fund (TAMVX)

18. Federated Mid-Cap Index Fund (FMDCX)

19. AIM Small Cap Growth Fund (GTSAX)

20. American Century Small Cap Value Fund (ASVIX)

21. American Funds — EuroPacific Growth Fund (AEPGX)

22. American Funds — Capital World Growth & Income Fund (CWGIX)

 

 

 

			
	 	 	 
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APPENDIX A

The following Plan provisions apply only to amounts deferred and vested (within the meaning of
Section 409A of the Code) before January 1, 2005, and any earnings on such amounts, to the full
extent permitted by Section 409A of the Code. Amounts deferred or vested after December 31, 2004,
and any earnings thereon, are subject to the provisions of the Plan as amended and restated,
effective January 1, 2005, or any subsequent amendment and restatement of the Plan.

Section 1. Establishment and Purpose

1.1 Establishment.

There is hereby 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.”

1.2 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 that portion of their Compensation that, but
for the Limitations, as defined herein, could be contributed to the Chesapeake Utilities
Corporation Retirement Savings Plan.

 

 

 

			
	 	 	 
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Section 2. Definitions

The following words and phrases as used in the Plan have the following meanings:

“Account” means the Employer Match Account, the Participant Account, or both.

“Affiliate” means any employer that has not adopted the Plan and that is a 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).

“Beneficiary” means the person or persons (including a contingent beneficiary except
where the context indicates otherwise) designated by a Participant pursuant to Section 9.2
hereof to receive death benefits under the Plan.

“Board of Directors” or “Board” means the Board of Directors of Chesapeake Utilities
Corporation.

“Change in Control” means the first of the following events occurs:

(a) the registration of the Company’s voting securities under the Securities
Exchange Act of 1934, as amended (the “1934 Act”), terminates or the Company shall
have fewer than 300 stockholders of record; or

(b) any person or group (within the meaning of Sections 13(d) and 14(d) of the
1934 Act), other than the Company or any of its majority-controlled subsidiaries,
becomes the beneficial owner (within the meaning of Rule 13d-3 under the 1934 Act)
of 30 percent or more of the combined voting power of the Company’s then outstanding
voting securities; or

(c) a tender offer or exchange offer, other than an offer by the Company (or a
majority-controlled subsidiary) pursuant to which 30 percent or more of the combined
voting power of the Company’s then outstanding voting securities was purchased,
expires; or

(d) the stockholders of the Company approve an agreement to merge or
consolidate with another corporation (other than a majority-controlled subsidiary of
the Company) unless the stockholders of the Company immediately
before the merger or consolidation are to own more than 70 percent of the
combined voting power of the resulting entity’s voting securities; or

 

 

 

			
	 	 	 
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(e) the Company’s stockholders approve an agreement (including, without
limitation, a plan of liquidation) to sell or otherwise dispose of all or
substantially all of the business or assets of the Company; or

(f) during any period of two consecutive years, individuals who, at the
beginning of the period, constituted the Board cease for any reason to constitute at
least a majority thereof, unless the election or the nomination for election by the
Company’s stockholders of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the beginning
of the period; or

(g) the acquisition of direct or indirect beneficial ownership of more than 15
percent of the Company’s then outstanding voting securities by any person or group
is approved over the formal objection of the Company by the Securities and Exchange
Commission pursuant to Section 9 of the Public Utility Holding Company Act of 1935,
as amended.

However, no Change in Control shall be deemed to have occurred with respect to a
Participant by reason of any event involving a transaction in which (i) the
Participant or a group of persons or entities with which the Participant acts in
concert, acquires, directly or indirectly, more than 30 percent of the common stock
or the business or assets of the Company; (ii) any event involving or arising out of
a proceeding under Title 11 of the United States Code (or the provisions of any
future United States bankruptcy law), an assignment for the benefit of creditors or
an insolvency proceeding under state or local law; or (iii) any event constituting
approval by the Company’s stockholders of a merger or consolidation if a majority of
the group consisting of the president and vice presidents of the Company who are
parties to agreements conferring rights upon a Change in Control shall have agreed
in writing prior to the approval that the approval shall be deemed not to constitute
a Change in Control.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” means the Committee designated in Section 7.1 hereof to administer the
Plan.

“Compensation” means an employee’s compensation as determined for purposes of the
Chesapeake Utilities Corporation Retirement Savings Plan, plus amounts deferred
hereunder, except that any dollar limit that the Chesapeake Utilities Corporation Retirement
Savings Plan imposes on the compensation that is taken into account thereunder shall be
disregarded hereunder.

 

 

 

			
	 	 	 
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“Compensation Committee” means the Compensation Committee of the Board of Directors.

“Eligible Employee” means an employee of an Employer who is designated by the
Compensation Committee to be eligible to participate in the Plan; provided that, on and
after a Change in Control, each employee of an Employer who was an Eligible Employee
immediately before the Change in Control shall remain an Eligible Employee as long as the
employee is employed by an Employer. For purposes of the Plan, any person whose
compensation is paid by an Employer shall be deemed to be an employee of the Employer,
notwithstanding that the person renders all or part of his services to a Related Company.

“Employer” means Chesapeake Utilities 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.

“Employer Match” means the amount accrued in accordance with Section 4.2 hereof with
respect to a Participant’s Salary Reduction Contributions and Excess Contributions, based on
the rate or rates of Matching Contributions contributed for the Participant under the
Chesapeake Utilities Corporation Retirement Savings Plan.

“Employer Match Account” means the bookkeeping account to which the Employer Match on
behalf of a Participant and interest are credited pursuant to Section 4 hereof.

“Excess Contribution” means that portion of the total amount (up to a maximum of 15% or
such other percentage of Compensation as specified in Section 6(a) of the Adoption Agreement
to the Chesapeake Utilities Corporation Retirement Savings Plan) by which the Participant
elects to have his Compensation reduced that the Limitations prevent from being made to the
Chesapeake Utilities Corporation Retirement Savings Plan.

 

 

 

			
	 	 	 
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“Limitations” mean

	 	(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.

“Matching Contributions” mean the contributions made by the Employer pursuant to
Section 7(c) of the Adoption Agreement to the Chesapeake Utilities Corporation Retirement
Savings Plan, as it may be amended from time to time.

“Participant” means an Eligible Employee who becomes a participant in the Plan in
accordance with Section 3.1 hereof and whose Accounts hereunder have a positive balance.

“Participant Account” means the bookkeeping account to which the Excess Contributions
of a Participant and interest are credited pursuant to Section 4 hereof.

“Plan” means the “Chesapeake Utilities Corporation Supplemental Executive Retirement
Savings Plan” as set forth herein and as amended from time to time.

“Plan Year” means the calendar year, provided however that the first Plan Year shall be
the period from March 1, 1999 to December 31, 1999.

 

 

 

			
	 	 	 
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Supplemental Executive Retirement Savings Plan
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“Related Company” means an Employer, any Affiliate, and any other employer the majority
interest in which is held, directly or indirectly, by an Employer or an Affiliate.

“Salary Reduction Contribution” means that portion of the total amount (up to a maximum
of 15% or such other percentage of Compensation as specified in Section 6(a) of the Adoption
Agreement to the Chesapeake Utilities Corporation Retirement Savings Plan) by which a
Participant elects to have his Compensation reduced
that may be contributed by his Employer to the Chesapeake Utilities Corporation Retirement
Savings Plan without violating the Limitations.

“Valuation Date” means the last business day of each calendar month.

 

 

 

			
	 	 	 
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Supplemental Executive Retirement Savings Plan
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Section 3. Participation

3.1 Election of Excess Contributions.

An Eligible Employee shall participate in this plan if (a) he elects to participate in the
Plan and (b) the contributions made on his behalf under the Chesapeake Utilities Corporation
Retirement Savings Plan are reduced by the Limitations.

3.2 Election Filing Deadline.

An Eligible Employee may elect to participate in the Plan only if, prior to the beginning of
the first Plan Year in which he participates in the Plan, he files an election with the
Committee, in a form satisfactory to the Committee, irrevocably deferring receipt of an
amount equal to his Excess Contributions for the Plan Year (or partial Plan Year, if
applicable), which amount shall be designated as a percentage of his compensation.
Notwithstanding the foregoing sentence, (i) an Eligible Employee may file the requisite
election to defer Compensation earned thereafter before the expiration of 30 days from the
initial effective date of the Plan, and (ii) 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 his initial date of employment, if the Eligible Employee
is a new hire, or his initial date of eligibility, if the Eligible Employee is newly
eligible to participate in the Plan.

3.3 Irrevocable Election.

The designated percentage of Compensation shall be irrevocable, regardless of whether the
rate of Salary Reduction Contributions to the Chesapeake Utilities Corporation Retirement
Savings Plan is changed during the Plan Year. Such election shall automatically apply to
each subsequent Plan Year unless the Participant, before the beginning of a Plan Year,
revokes his prior election. In that event, he may file a new election with the Committee
before the beginning of the Plan Year in accordance with the preceding provisions of this
Section 3. No participant may elect to have his Compensation reduced hereunder by a greater
percentage than the percentage that, when added to the percentage of his Compensation that
is being contributed as Salary Reduction Contributions on his behalf to the Chesapeake
Utilities Corporation Retirement Savings Plan, will equal the maximum allowable rate at
which Salary Reduction Contributions may be made under the Chesapeake Utilities Corporation
Retirement Savings Plan (determined without regard to the Limitations and without regard to
the provisions of the Chesapeake Utilities Corporation Retirement Savings Plan that
implement the Limitations). If an Eligible Employee does not elect to become a Participant
before the first Plan Year (or partial Plan Year) in which he is eligible to
participant in the Plan, he may, if he remains an Eligible Employee, elect to participate in
the Plan before the beginning of any subsequent Plan Year.

 

 

 

			
	 	 	 
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Supplemental Executive Retirement Savings Plan
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3.4 Form and Time of Payment.

Amounts credited to a Participant’s Account shall be paid in the form of annual installments
over a period of five years beginning as of the Valuation Date coincident with or next
following the date on which the Participant’s employment with the Employer and the Related
Companies terminates. At the time an Eligible Employee first elects to become a Participant
in accordance with Section 3.1 hereof, he may file an election with the Committee, in a form
satisfactory to the Committee, irrevocably specifying that the installments shall begin on
any subsequent Valuation Date that occurs not later than the last Valuation Date of the
calendar year in which the Participant attains age 70. At any time after making his first
election, a Participant may file an election with the Committee, in a form satisfactory to
the Committee, irrevocably specifying that the amount credited to his Account is to be paid
in a single lump sum as of the date specified for the first installment payment, provided
that such election is filed with the Committee at least one year (365 days) prior to the
payment date.

 

 

 

			
	 	 	 
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Supplemental Executive Retirement Savings Plan
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Section 4. Accounts

4.1 Participant Account.

The Employer shall maintain a Participant Account in the name of each Participant. During
each Plan Year, each Participant Account shall be credited with the Participant’s Excess
Contributions.

4.2 Employer Match Account.

The Employer shall maintain a separate Employer Match Account in the name of each
Participant for purposes of accrual of the Employer Match. The Employer Match shall accrue
monthly, at a rate or rates with respect to the eligible portion of the Excess Contribution
(and any Salary Reduction Contributions for which the Limitations prohibit Matching
Contributions) equal to the rate or rates at which Matching Contributions are made with
respect to the Salary Reduction Contributions for the Participant under the Chesapeake
Utilities Corporation Retirement Savings Plan. The portion of a Participant’s Excess
Contributions eligible for the Employer Match shall be that portion that, when added to the
Participant’s Salary Reduction Contributions under the Chesapeake Utilities Corporation
Retirement Savings Plan, does not exceed six percent of the Participant’s Compensation, or
such higher or lower percentage as is provided in Section 7(c)(iii) of the Adoption
Agreement to the Chesapeake Utilities Corporation Retirement Savings Plan, as it may be
amended from time to time; provided that in no event shall any portion of a Participant’s
Excess Contribution be eligible for an Employer Match unless the Limitations prevent the
Participant’s Salary Reduction Contributions and related Matching Contributions from being
made to the Chesapeake Utilities Corporation Retirement Savings Plan.

4.3 Interest.

Each Participant’s Accounts shall be credited monthly with interest at a rate to be
determined by the Committee annually.

 

 

 

			
	 	 	 
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Supplemental Executive Retirement Savings Plan
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Section 5. Distributions

5.1 Payment.

The Participant shall receive an amount equal to the sum of the balances in his Accounts at
the time(s) and in the manner specified or elected by him in accordance with Section 3.4
hereof. Subject to Section 5.3 hereof, no amount shall be distributed until a Participant’s
employment with the Employer and the Affiliates is terminated. The Participant’s Accounts
shall be debited to reflect each distribution pursuant to this Section 5. If the
Participant receives installments, the amount of the first installment shall be equal to the
value of the Participant’s Accounts determined as of the Valuation Date as of which the
installments commence (the “applicable Valuation Date”), multiplied by a fraction, the
numerator of which shall be one and the denominator of which shall be five; and the amount
of each succeeding installment shall be equal to the value of the Participant’s Accounts on
the next succeeding anniversary of the applicable Valuation Date, multiplied by a fraction,
the numerator of which shall be one and the denominator of which shall be the number of
installments remaining to be paid.

5.2 Death Benefits.

If a Participant dies before the balance credited to his Accounts has been distributed in
full, the Participant’s Beneficiary shall be entitled to receive the balance credited to the
Participant’s Accounts. If the Beneficiary dies before receiving the entire amount due, any
remaining amount shall be paid to the Beneficiary’s estate. If the Beneficiary predeceases
the Participant, the contingent Beneficiary, if any, shall receive the entire amount due
under this Section 5.2. If the contingent Beneficiary dies before receiving the entire
amount due, any remaining amount shall be paid to the contingent Beneficiary’s estate.
Distributions to a Participant’s Beneficiary pursuant to this Section 5.2 shall be paid in
annual installments over a five-year period. The amount of each installment distribution
shall be determined in the same manner that installment distributions are determined in
Section 5.1 hereof; provided that the applicable Valuation Date for purposes of this Section
5.2 shall be the Valuation Date that is coincident with or next follows the date on which
the Committee receives the written notification of the Participant’s death together with any
additional information or documentation that the Committee determines to be necessary or
appropriate before it makes a distribution. Distributions shall commence within 30 days of
the applicable Valuation Date.

 

 

 

			
	 	 	 
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5.3 Committee Discretion to Accelerate Certain Payments.

At any time, upon the written application of the Participant (or, after his death, his
Beneficiary) the Committee may (a) reduce or eliminate the Participant’s future deferrals of
Compensation hereunder, or (b) accelerate and pay in a lump sum to the Participant (or,
after his death, to his Beneficiary) all or part of the balance of the Participant’s
Accounts, or both, if the Committee finds, in its sole discretion, that such person has
incurred or will incur a severe financial hardship resulting from an accident, illness or
other event beyond his control. In such event, the Committee shall reduce or eliminate
future deferrals and accelerate payments only to the extent reasonably necessary to
eliminate or avoid the severe financial hardship.

 

 

 

			
	 	 	 
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Section 6. Nature of Interest of Participant

6.1 Plan Participation.

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 Employer. A Participant’s or
Beneficiary’s rights to benefits payable under Plan are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, or encumbrance. All payments
hereunder shall be paid in cash from the general funds of the Employer, 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 Employer and a Participant or any other
person, and the promise of the Employer 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 Employer.

 

 

 

			
	 	 	 
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Supplemental Executive Retirement Savings Plan
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Section 7. Administration

7.1 Committee.

The Plan shall be administered by the Pension and Savings Plan Committee of Chesapeake
Utilities Corporation. The Committee 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 person other than its
members to carry out its responsibilities under the Plan.

7.2 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.

7.3 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 those 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.

7.4 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 Employer.

7.5 Powers of the Committee.

In addition to any implied powers 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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	 	(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.

7.6 Finality.

Subject to the provisions of Section 7.8 hereof, 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.

7.7 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 in Section 6.7 of the Chesapeake Utilities Corporation
Retirement Savings Plan, as it may be amended from time to time.

7.8 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 6.7 of the Chesapeake Utilities Corporation
Retirement Savings Plan, as it may be amended from time to time, that denies a claim for
benefits under the Plan shall be settled by arbitration under three arbitrators in
accordance with the Commercial Arbitration Rules of the America 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 the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”). The site of any such arbitration shall be Delaware.

 

 

 

			
	 	 	 
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Supplemental Executive Retirement Savings Plan
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Section 8. Amendment, Suspension and Termination

The Compensation Committee of the Board of Directors may modify, amend, suspend, or
terminate the Plan at any time; provided that no such modification, amendment, suspension,
or termination shall reduce a Participant’s accrued benefits under the Plan as of the date
of such modification, amendment, suspension, or termination, except to the extent that the
affected Participant’s (or, with respect to deceased Participants, the affected
Beneficiaries of the 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 (or, with
respect to deceased Participants, the affected Beneficiaries of the deceased Participants)
consent in writing to the modification, amendment, suspension, or termination:

	 	(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.

Except as provided in the preceding sentence, any modification, amendment, suspension, or
termination of the Plan may reduce or eliminate a benefit under the Plan. Although the Plan
is not subject to Section 2.04(g) of ERISA, the accrued benefits that are protected by this
Section 8 shall include those accrued benefits that would be protected by Section 204(g) of
ERISA if the Plan were subject to said Section 204(g) and the rights specified in paragraphs
(a) through (d), above.

 

 

 

			
	 	 	 
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Supplemental Executive Retirement Savings Plan
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Section 9. Miscellaneous

9.1 Participation by Affiliate.

Subject to the consent of the Compensation Committee, an Affiliate may become an Employer
under the Plan by delivering to the Compensation Committee a resolution of its board of
directors approving such action. Such Affiliate shall become an Employer as of an effective
date approved by the Compensation Committee and shall be subject to the provisions of the
Plan.

9.2 Designation of Beneficiary.

	 	(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 Participant’s 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 Participant’s surviving spouse, or if the Participant has
no surviving spouse, the Participant’s 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 spouse’s 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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9.3 Incapacity.

If the Committee determines that any person entitled to benefits hereunder 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.

9.4 Required Information.

Any person eligible to receive benefits hereunder 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 person’s claim for benefits, the Committee may offset
against future payments any amount paid to such person to which such person was entitled
under the provisions of the Plan.

9.5 Inability to Locate Participants.

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.

9.6 No Right to Employment.

Nothing herein contained shall be deemed to give any person the right to be retained in the
service of the Employer and the Affiliates or to interfere with the right of the Employer
and the Affiliates to discharge any employee at any time without regard to the effect that
such discharge may have upon the employee under the Plan.

 

 

 

			
	 	 	 
	Chesapeake Utilities Corporation 

Supplemental Executive Retirement Savings Plan
	 	Page 46

9.7 Withholding Taxes.

The Committee may make any appropriate arrangements to deduct from all amounts paid under
the Plan any taxes required to be withheld by any government or government agency. The
Participant and/or his Beneficiary shall bear all taxes on amounts paid under the Plan to
the extent that no taxes are withheld, irrespective of whether withholding is required.

9.8 Gender and Number.

In order to shorten and to improve the understandability of the Plan document by eliminating
the repeated usage of such phrases as “his or her” and “Employee or Employees,” any
masculine terminology herein shall also include the feminine and neuter, and the definition
of any term herein in the singular shall also include the plural, except when otherwise
indicated by the context.

9.9 Heading.

Any headings used in this instrument are for convenience of reference only and are to be
ignored in the construction of any provision hereof.

9.10 Severability.

If any provision of the Plan shall be held illegal or invalid for any reasons, 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
inserted herein.

9.11 Governing Law.

The Plan shall be construed, administered, and regulated in accordance with the laws of the
State of Delaware, except to the extent that such laws are pre-empted by Federal law.

9.12 Effective Date.

The Plan shall be effective as of March 1, 1999. It shall not apply to any employee who
terminated employment with the Employer before that date.

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