Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Appointment of Chief Operating Officer
On December 20, 2021, Chesapeake Utilities Corporation (the "Company") announced
that Jeffrey S. Sylvester was appointed as Chief Operating Officer, effective
January 1, 2022. With this appointment, Mr. Sylvester will oversee the
operations of all the Company's business units, both regulated and unregulated.
Mr. Sylvester, age 51, was appointed Senior Vice President of the Company in
2019. He currently provides oversight of the Company's regulated operations,
including the interstate natural gas transmission pipeline and distribution
businesses on the Delmarva Peninsula; the intrastate natural gas pipeline and
natural gas and electric distribution businesses in Florida; the unregulated
natural gas pipeline infrastructure operation in Ohio; and customer care
operations. Mr. Sylvester has over 15 years of experience in the energy sector
and recently served as Vice President of Nebraska Gas Operations for Black Hills
Corporation. Prior to this position, Sylvester held a series of leadership
positions in the information technology, gas marketing and customer care
operations at the Company. Mr. Sylvester is a board member of the Southern Gas
Association. In Mr. Sylvester's role as Chief Operating Officer, he will assume
additional oversight responsibilities with respect to the Company's propane
operations, the operations of Marlin Gas Services, LLC, and the operations of
Eight Flags Energy, LLC.
There is no arrangement or understanding between Mr. Sylvester and any other
person pursuant to which he was selected as Chief Operating Officer.
Mr. Sylvester has no family relationships with any of the Company's directors or
executive officers, and he has no direct or indirect material interest in any
transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
The Company entered into an Executive Employment Agreement with Mr. Sylvester
(the "Sylvester Agreement"), pursuant to which, Mr. Sylvester is entitled to an
annual base salary of $360,000, which may be adjusted. The Sylvester Agreement
further provides that Mr. Sylvester is eligible for (i) an annual
performance-based compensation award pursuant to the terms of the Company's
Stock and Incentive Compensation Plan with a target award amount equal to 70% of
his base compensation and (ii) an annual cash bonus award pursuant to the terms
of the Company's Cash Bonus Incentive Plan with a target award amount equal to
40% of his base compensation. Mr. Sylvester's compensation is subject to a
claw-back provision in the event that an award calculated based upon the
achievement of certain financial results or other performance metrics were
subsequently found to be materially inaccurate. Finally, Mr. Sylvester is
eligible to participate in the Company's bonus, incentive compensation,
performance-based compensation plans, retirement plans, welfare benefits, and
other similar policies, practices, programs, and arrangements as may be
maintained by the Company from time to time.
Pursuant to the Sylvester Agreement, Mr. Sylvester is entitled to severance
equal to his then-annual base salary for a period of one year following his
termination if such termination occurs during the Current Term (as defined in
the Sylvester Agreement), other than a termination for cause, or Mr. Sylvester's
death or retirement. In such event, the Company will also provide medical,
prescription drug, vision, and dental benefits for a period of one year. If
Mr. Sylvester is terminated during the Extended Term (as defined in the
Sylvester Agreement), and such termination is without cause, then Mr. Sylvester
is entitled to (i) all accrued but unpaid salary, bonus, vacation pay, expense
reimbursements, and any other amounts, (ii) an amount equal to Mr. Sylvester's
then monthly rate of base salary multiplied by 24, (iii) an amount equal to the
aggregate of the Company's contributions to the Company's savings plan that were
not vested on the day immediately prior to the termination date but that would
have vested had Mr. Sylvester remained employed, and (iv) an amount equal to the
product of multiplying the average of the annual aggregate benefits awarded to
Mr. Sylvester under all annual bonus programs in the three calendar years
immediately preceding the calendar year in which the termination date occurs by
two. In such event, the Company will also provide medical, prescription drug,
vision, dental, and other welfare benefits for a period of two years.
The foregoing description of the Sylvester Agreement is not complete and is
qualified in its entirety by reference to the full text of the Sylvester
Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on
Form 8-K (this "Report") and is incorporated by reference herein.
Entry into Executive Employment Agreements
Chief Executive Officer - Executive Employment Agreement
On December 16, 2021, the Company entered into an Executive Employment Agreement
with Jeffry Householder (the "Householder Agreement") pursuant to which,
Mr. Householder is entitled to an annual base salary of $720,000, which may be
adjusted. The Householder Agreement further provides that Mr. Householder is
eligible for (i) an annual performance-based compensation award pursuant to the
terms of the Company's Stock and Incentive Compensation Plan with a target award
amount equal to 160% of his base compensation and (ii) an annual cash bonus
award pursuant to the terms of the Company's Cash Bonus Incentive Plan with a
target award amount equal to 90% of his base compensation. Mr. Householder's
compensation is subject to a claw-back provision in the event that an award
calculated based upon the achievement of certain financial results or other
performance metrics were subsequently found to be materially inaccurate.
Finally, Mr. Householder is eligible to participate in the Company's bonus,
incentive compensation, performance-based compensation plans, retirement plans,
welfare benefits, and other similar policies, practices, programs, and
arrangements as may be maintained by the Company from time to time.
Pursuant to the Householder Agreement, Mr. Householder is entitled to severance
equal to his then-annual base salary for a period of one year following his
termination if such termination occurs during the Current Term (as defined in
the Householder Agreement), other than a termination for cause, or
Mr. Householder's death or retirement. In such event, the Company will also
provide medical, prescription drug, vision, and dental benefits for a period of
one year. If Mr. Householder is terminated during the Extended Term (as defined
in the
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Householder Agreement), and such termination is without cause, then
Mr. Householder is entitled to (i) all accrued but unpaid salary, bonus,
vacation pay, expense reimbursements, and any other amounts, (ii) an amount
equal to Mr. Householder's then monthly rate of base salary multiplied by 36,
(iii) an amount equal to the aggregate of the Company's contributions to the
Company's savings plan that were not vested on the day immediately prior to the
. . .
Item 7.01 Regulation FD Disclosure.
On December 20, 2021, the Company issued a press release announcing the
appointment of Mr. Sylvester as Chief Operating Officer, as well as other
officer appointments. A copy of the press release is attached as Exhibit 99.1 to
this Report and is incorporated by reference herein.
The information in the press release shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or otherwise subject to the liabilities of that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act.
Item 8.01 Other Events.
On October 12, 2021, the Company filed a Current Report on Form 8-K (the
"Initial Form 8-K") under Item 5.02 to report the election of Lisa G. Bisaccia
to the Company's Board of Directors (the "Board"), effective as of October 15,
2021. The Board has appointed Lisa G. Bisaccia to the Compensation Committee.
Item 9.01 Financial Statements and Exhibits.
Exhibit
Numbers Description
10.1 Executive Employment Agreement, dated December 16, 2021, by and
between Chesapeake Utilities Corporation and Jeffrey S. Sylvester
10.2 Executive Employment Agreement, dated December 16, 2021, by and
between Chesapeake Utilities Corporation and Jeffry M. Householder
10.3 Executive Employment Agreement, dated December 16, 2021, by and
between Chesapeake Utilities Corporation and Beth W. Cooper
10.4 Executive Employment Agreement, dated December 16, 2021, by and
between Chesapeake Utilities Corporation and James F. Moriarty
10.5 Executive Employment Agreement, dated December 16, 2021, by and
between Chesapeake Utilities Corporation and Kevin J. Webber
99.1 Press Release dated December 20, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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