5.02 Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Appointment of Certain Officers
and a Director.
On February 24, 2010, the Board of Directors
of Chesapeake Utilities Corporation (the “Company”) approved the
appointment of John R. Schimkaitis to serve as Vice Chairman of the Board of
Directors, effective March 1, 2010. He will continue to serve in his
current role as Chief Executive Officer. The Board also promoted Michael P.
McMasters to President of the Company, effective March 1, 2010.
Mr. McMasters will continue in his current role as Chief Operating
Officer. On the same date, the Board of Directors increased the size of the
board from twelve to thirteen directors and appointed Mr. McMasters to
fill the resulting vacancy, effective March 1, 2010.
Mr. McMasters will not serve as a member of any Committee of the Board of
Directors. He will serve as a Class III director until the Company’s
next Annual Meeting of Stockholders. Mr. McMasters is an executive officer
of the Company and, as such, will receive no additional compensation for his
service as a director.
Mr. Schimkaitis, age 62, was
appointed to serve as Chief Executive Officer in January 1999. He served
as the Company’s President since 1997 and as a director of the Company
since 1996. Mr. Schimkaitis previously served as the Company’s
President and Chief Operating Officer, and prior thereto as Executive Vice
President, Senior Vice President, Chief Financial Officer, Vice President,
Treasurer, Assistant Treasurer, and Assistant Secretary of the Company. Mr.
Schimkaitis has thirty-seven years of experience in the utilities industry.
Mr. McMasters, age 51, was
appointed as the Company’s Executive Vice President and Chief Operating
Officer in September of 2008. Previously, he served as the Company’s
Chief Financial Officer since 1997 and as Senior Vice President since 2004.
Mr. McMasters is responsible for the oversight of each of the
Company’s business units as well as the Human Resources and Information
Technology departments. Prior to his current position, he held the positions of
Vice President, Treasurer, Director of Accounting and Rates, and Controller of
the Company. In addition to his tenure with Chesapeake, Mr. McMasters also
served as Director of Operations Planning for Equitable Gas Company. He has
twenty-seven years of experience in the utilities industry.
Messrs. Schimkaitis and McMasters
have employment agreements with the Company, which were included as exhibits to
the Company’s Form 8-K filed with the Securities and Exchange Commission
(“SEC”) on January 7, 2010.
A copy of the Company’s press
release related to the matter described above, which was distributed on
February 24, 2010, is attached as Exhibit 99.1.
Effective April 1, 2010, the base
salaries of Messrs. Schimkaitis and McMasters are increasing $18,300 and
$21,750, respectively. The remaining terms of their employment agreements and
their current compensatory arrangements are unaffected by their appointments.
Messrs. Schimkaitis and McMasters will continue to participate in the
various compensation plans applicable to executive officers of the Company, as
previously described in the Company’s periodic reports filed with the
SEC. Their compensatory arrangements have been disclosed in the
“Executive Compensation” section of the Company’s Proxy
Statement dated March 27, 2009, filed with the SEC on that same date.
Their awards and award targets under the Company’s Performance Incentive
Plan (“PIP”) and Cash Bonus Incentive Plan (“CBIP”)
remain as disclosed in the Company’s Form 8-K filed with the SEC on
January 12, 2010.
The terms of the PIP are fully
described in the Company’s Proxy Statement dated March 28, 2005. The
2005 Proxy Statement, with a copy of the PIP attached as Exhibit B
thereto, was filed with the SEC on April 5, 2005. The CBIP was adopted by
the Company on January 1, 2005, and was included as an exhibit to the
Company’s Annual Report on Form 10-K for the year ended December 31,
2004, filed with the SEC on March 16, 2005. Performance Share Awards are
granted to Messrs. Schimkaitis and McMasters in accordance with
Performance Share Agreements pursuant to the PIP.
On February 24, 2010, the
Compensation Committee of the Board of Directors of the Company recommended and
the Board of Directors approved one-time cash bonus awards to three executive
officers of the Company. The cash bonus awards were issued under the
Company’s Cash Bonus Incentive Plan to the following executive officers:
John R. Schimkaitis, $66,541; Michael P. McMasters, $35,190; and Beth W.
Cooper, $19,467. In determining the amounts of the awards, the Committee authorized additional
cash bonuses equal to the difference between what the officers would have earned under the CBIP based upon Chesapeake's
standalone earnings per share (excluding Florida Public Utilities Companys
(FPU) earnings post-merger as well as merger-related costs) and Chesapeakes
actual EPS (including FPUs post-merger earnings and merger-related costs).
Mrs. Cooper was also granted an award of $10,566 for her efforts related to
the merger. The merger between the Company and FPU was consummated on October 28, 2009.
Item 9.01. Exhibits.
Exhibit 99.1 — Press Release
of Chesapeake Utilities Corporation, dated February 24, 2010.