EXECUTIVE
EMPLOYMENT AGREEMENT
AN EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement")
dated this 4 th day of August, 2003, by and between
Chesapeake Utilities Corporation, a Delaware corporation (the
"Company"), and Paul M. Barbas ("Executive").
WITNESSETH:
WHEREAS, the Company is currently obtaining the
benefit of Executive's services as a full-time executive employee
in the capacity of Vice President;
WHEREAS, the Company's Board of Directors (the
"Board") has authorized the Company to agree to provide for
Executive's continued employment pursuant to the terms of this
Agreement; and
WHEREAS, Executive is willing, in consideration
of the covenants hereinafter provided, to continue to be employed
by the Company in the capacity of Vice President and to render
services incident to such position during the term of this
Agreement.
NOW, THEREFORE, in consideration of the mutual
promises and covenants contained herein, the Company and Executive
hereby agree as follows:
1. Employment . The Company agrees to employ Executive, and
Executive agrees to accept employment, as an executive officer of
the Company in the capacity of Vice President, with such reasonable
duties and responsibilities as are consistent with the By-laws of
the Company as of the date hereof, including, but not limited to,
responsibility for formulating financial policy and plans.
Responsible for providing overall direction for the accounting,
tax, credit and treasury functions.
(a) Term of Agreement . The term of this Agreement ("Term") shall be
the Initial Term (as defined in Paragraph 2(b) hereof), and, if
applicable, the Extended Term (as defined in Paragraph 2(c)
hereof).
(b) Initial Term . Subject to Paragraph 2(c) hereof, the Initial
Term of this Agreement shall extend for three (3) years commencing
on the date of this Agreement.
(c) Extended Term . Upon the occurrence of a Change in Control (as
defined in Paragraph 2(d) hereof), the Initial Term shall end and
the Term of this Agreement shall thereupon automatically be
extended, commencing on the date of such Change in Control, for the
shorter of three (3) years or the period until Executive attains
the earliest age, if any, at which his compulsory retirement is
permitted under section 12(c) of the Age Discrimination in
Employment Act of 1967, as amended, 29 U.S.C. § 631(c),
or its successor (such extended three-year or shorter term
constituting the "Extended Term").
(d) Change In Control . For the purposes of this Agreement, Change in
Control shall mean a change in the control of the Company during
the Term of this Agreement, which shall be deemed to have occurred
if:
(i) 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
(ii) 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
(iii) 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
(iv) 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
(v) 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
(vi) during any period of two consecutive years,
individuals who, at the beginning of such 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
(vii) 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 by reason of any
event involving a transaction in which Executive, or a group of
persons or entities with which Executive acts in concert, acquires,
directly or indirectly, more than 30 percent of the common stock or
the business or assets of the Company; 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 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 such approval that approval shall be deemed not to constitute a
Change in Control.
3. Time .
Executive agrees to devote all reasonable full time and best
efforts for the benefit of the Company and any subsidiary of the
Company, and not to serve any other business enterprise or
organization in any capacity during the Term hereof without the
prior written consent of the Company, which consent shall not be
unreasonably with-held.
(a) Initial Term . During the Initial Term, the Company shall
elect Executive as its Vice President.
(b) Extended Term . During the Extended Term of this
Agreement:
(i) Executive shall hold and perform an office with
the responsibility, importance and scope within the Company at
least equal to that of the office described and contemplated in
Paragraph 1 hereof; and
(ii) Executive's office shall be located in Dover,
Delaware, and Executive shall not be required, without his written
consent, to change his office location or to be absent therefrom on
business for more than 60 working days in any year.
(a) Initial Term . The Company shall
compensate Executive for his services hereunder during the Initial
Term at a rate of $255,000 per annum, payable in equal semi-monthly
installments, or such greater or lesser amount as the Board may
determine ("Base Compensation"). The Base Compensation rate shall
be reviewed annually and may be increased or decreased from time to
time.
(b) Extended Term . During the Extended Term, the Company shall
compensate Executive for his services hereun-der at a rate per
annum, payable in equal semi-monthly installments, equal to his
Base Compensation at the time the Extended Term commences,
increased:
(i) effective on each anniversary of the date of
this Agreement during the Extended Term by an amount equal to the
product of such Base Compensation times the increase in the
preceding calendar year of the Consumer Price Index for Urban Wage
Earners and Clerical Workers for the Philadelphia metropolitan
region as reported by the U.S. Department of Labor (or, if such
index is no longer reported, the corresponding increase in a
comparable index); and
(ii) by such additional amounts as the Board may
determine from time to time based, in part, on an annual review of
Executive's compensation.
6. Expenses . During the Term of this Agreement, the Company
shall pay all necessary and reasonable business expenses incurred
by Executive on behalf of the Company in the course of his
employment hereunder, including, without limitation, expenses
incurred in the conduct of the Company's business while away from
his domicile and expenses for travel, meals, lodging, entertainment
and related expenses that are for the benefit of the
Company.
(a) Executive shall be entitled to participate in
all profit-sharing, insurance, medical and retirement benefit
plans, together with vacation and other employee benefits of the
Company, now in effect or as hereafter amended or established, in
which the Company executive employees are permitted to participate.
The Executive’s participation shall be in accordance with the
terms and provisions of such plans.
(b) The Company shall furnish Executive with a
suitable office, necessary administrative support and customary
furniture and furnishings for such office. The Company further
agrees that Executive shall have the use of a Company-owned or
Company-leased and Company-maintained automobile, new every three
years, of a kind and model appropriate to his position with the
Company.
(c) Nothing in this Agreement shall preclude the
Company from amending or terminating any employee benefit plan or
practice, but, it being the intent of the parties that the
Executive shall continue to be entitled during the Extended Term to
benefits and perquisites as set forth in Paragraphs 7(a) and 7(b)
hereof at least equal to those attached to his position on the date
of this Agreement, nothing in this Agreement shall operate as, or
be construed to authorize, a reduction during the Extended Term
without Executive's written consent in the level of such benefits
or perquisites as in effect on the date of a Change in Control. If
and to the extent that such benefits or perquisites are not payable
or provided to Executive under any such plan or practice by reason
of an amendment theret
