CHESAPEAKE UTILITIES CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT SAVINGS PLAN

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Title: CHESAPEAKE UTILITIES CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT SAVINGS PLAN
Governing Law: Delaware Date: 3/9/2009
Industry: Natural Gas Utilities Sector: Utilities

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.



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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.



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(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.



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	(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.



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(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.



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(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.



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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.



Chesapeake Utilities Corporation Supplemental Executive Retirement Savings Plan		Page 15

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 Disabili

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