<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Chesapeake Utilities Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Chesapeake Utilities Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
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<PAGE>
CHESAPEAKE UTILITIES CORPORATION
909 SILVER LAKE BOULEVARD
DOVER, DELAWARE 19904
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF
CHESAPEAKE UTILITIES CORPORATION: March 30, 2000
The Annual Meeting of Stockholders of Chesapeake Utilities Corporation will
be held at 10:00 a.m. on Tuesday, May 16, 2000, in the Board Room, PNC Bank,
Delaware, 222 Delaware Avenue, Wilmington, Delaware, for the following purposes:
(a) to elect four Class I Directors for three-year terms ending in 2003,
and until their successors are elected and qualified;
(b) to consider and vote upon the ratification of the selection of
PricewaterhouseCoopers, L.L.P. as independent auditors for the fiscal
year ending December 31, 2000; and
(c) to transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on March 17, 2000 will be
entitled to vote at the meeting and any adjournment thereof.
By Order of the Board of Directors,
/s/ William C. Boyles
-------------------------
William C. Boyles
Corporate Secretary
STOCKHOLDERS ARE REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE, WHETHER OR NOT THEY ARE PERSONALLY ABLE TO ATTEND.
<PAGE>
CHESAPEAKE UTILITIES CORPORATION
909 SILVER LAKE BOULEVARD
DOVER, DELAWARE 19904
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 2000
__________________________________________
March 30, 2000
SOLICITATION OF PROXIES
The accompanying proxy is solicited by and on behalf of the Board of Directors
of Chesapeake Utilities Corporation ("Chesapeake" or the "Company") for use at
the Annual Meeting of Stockholders of Chesapeake to be held in the Board Room,
PNC Bank, Delaware, 222 Delaware Avenue, Wilmington, Delaware at 10:00 a.m. on
May 16, 2000, and at any adjournment thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. Solicitation of proxies
also may be made by personal interview, mail, telephone or e-mail by directors,
officers and regular employees of Chesapeake. Chesapeake also will request
certain banking institutions, brokerage firms, custodians, trustees, nominees
and fiduciaries to forward solicitation material to the beneficial owners of
capital stock held of record by such persons, and Chesapeake will reimburse such
entities for expenses incurred. In addition, Chesapeake may engage professional
proxy solicitors, although it has no present plans to do so. All costs of
preparing, printing, assembling and mailing the form of proxy and the material
used in the solicitation thereof and all clerical and other expenses of
solicitation will be borne by Chesapeake. Regular employees of Chesapeake will
not receive additional compensation for soliciting proxies.
REVOCATION OF PROXY
The giving of a proxy does not preclude the right to vote in person at the
meeting should the person giving the proxy so desire. In addition, the person
giving the proxy has the power to revoke the same at any time before it has been
exercised by submitting a proxy bearing a later date or by a notice in writing
that is received by the Corporate Secretary of Chesapeake prior to the meeting.
SIGNATURES OF PROXIES IN CERTAIN CASES
If a stockholder is a corporation, the accompanying proxy should be signed in
its corporate name by an authorized officer, and his or her title should be
indicated. If stock is registered in the name of two or more trustees or other
persons, the proxy should be signed by each of them. If stock is registered in
the name of a decedent, the proxy should be signed by an executor or an
administrator, there should be attached to the proxy appropriate instruments
showing his or her qualification and authority, and his or her title as such
should follow the signature. Proxies signed by a person as an agent, attorney,
administrator, executor, guardian or trustee should indicate such person's title
following his or her signature.
<PAGE>
ANNUAL REPORT
The annual report to stockholders, covering the fiscal year of Chesapeake
ended December 31, 1999, is enclosed herewith. The report, which includes
financial statements, does not form any part of the material for the
solicitation of proxies.
VOTING SECURITIES OUTSTANDING
Shares of common stock, 5,216,693 of which were outstanding as of March 17,
2000, are the only outstanding voting securities of the Company. Each share is
entitled to one vote. Only holders of common stock of record at the close of
business on March 17, 2000 will be entitled to vote at the Annual Meeting of
Stockholders.
BENEFICIAL OWNERSHIP OF THE COMPANY'S SECURITIES
By Management
The following table sets forth the number of shares of Chesapeake's common
stock beneficially owned, as of March 17, 2000, by each of Chesapeake's
directors and nominees for director, by each executive officer named in the
Summary Compensation Table, and by all directors and executive officers as a
group. Except as otherwise indicated, each individual named has sole investment
and voting power with respect to the securities shown.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name of Individual or Group Beneficial Ownership/1/ of Class
- --------------------------- ---------------------- --------
<S> <C> <C>
Ralph J. Adkins............................................... 72,263 1.36%
Richard Bernstein............................................. 2,308 *
Walter J. Coleman............................................. 3,000 *
John W. Jardine, Jr........................................... 23,437 *
Calvert A. Morgan, Jr......................................... 400 *
Rudolph M. Peins, Jr.......................................... 3,888 *
Robert F. Rider............................................... 4,965 *
John R. Schimkaitis........................................... 39,643 *
Jeremiah P. Shea.............................................. 4,402 *
William G. Warden, III........................................ 17,748 *
Michael P. McMasters.......................................... 10,095 *
Stephen C. Thompson........................................... 11,371 *
William C. Boyles............................................. 10,685 *
Executive Officers and Directors as a Group (14 persons)...... 218,122 4.12%
</TABLE>
______________________
*Less than one percent (1%)
2
<PAGE>
/1/ Includes shares of common stock subject to options that are currently
exercisable, or that will become exercisable within 60 days following March
17, 2000, as follows: Mr. Adkins - 32,940; Mr. Schimkaitis - 20,280; Mr.
McMasters- 7,700; Mr. Thompson - 7,700; and Mr. Boyles - 6,637. Also
includes shares held by the following executive officers in connection with
the Company's Retirement Savings Plan as to which they have the authority to
direct the voting: Mr. Adkins - 11,848; Mr. Schimkaitis - 6,055; Mr.
McMasters - 2,310; Mr. Thompson - 3,446; and Mr. Boyles - 2,211.
ELECTION OF DIRECTORS
At the annual meeting to be held on May 16, 2000, four Class I Directors
will be elected to serve until the Annual Meeting of Stockholders in 2003, and
until their successors are elected and qualified. Chesapeake's nominees are
Richard Bernstein, John W. Jardine, Jr., Calvert A. Morgan, Jr. and Rudolph M.
Peins, Jr., of whom Messrs. Bernstein, Jardine and Peins are currently Class I
Directors of Chesapeake whose present terms expire this year.
Directors are elected by a plurality of the votes cast by the holders of
the shares present in person or represented by proxy at the meeting and entitled
to vote for the election of directors.
Unless you instruct otherwise, properly executed proxies in the enclosed
form will be voted FOR the election of each of Chesapeake's nominees. If, prior
to the election, any of the nominees shall become unable or unwilling to serve
as a director (an eventuality not currently anticipated), all proxies will be
voted for any substitute nominee who may be designated by the Board of Directors
on the recommendation of the Corporate Governance Committee.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND NOMINEES
The following information with respect to the principal occupation and
employment of each director and nominee and the name and principal business of
the organization in which such occupation and employment is carried on, and
information with respect to certain other affiliations and to business
experience during the past five years, has been furnished to the Company by the
respective directors and nominees:
Class I Directors and Nominees
Richard Bernstein (age 57)
Mr. Bernstein is President and Chief Executive Officer of BAI Aerosystems,
Inc., located in Easton, Maryland. BAI is a manufacturer of lightweight, low-
cost Unmanned Aerial Vehicles (UAVs). Mr. Bernstein is the owner of several
other companies in which he is actively involved including: Salisbury Pewter, a
manufacturer of pewter for the gift and premium markets; Frankoma Pottery, a
creator of unique designs in sculptured earthenware; and Lorch Microwave which
produces microwave filters and electronic components. He has been a director of
Chesapeake since 1994.
John W. Jardine, Jr. (age 73)
Mr. Jardine served as Chairman of the Board of Chesapeake from 1989 through
1997 and Chief Executive Officer from 1983 through 1990. Mr. Jardine has also
served as President, Executive Vice President, Vice
3
<PAGE>
President, Secretary, Treasurer, Assistant Secretary and Assistant Treasurer of
Chesapeake. He has been a director of Chesapeake since 1972.
Calvert A. Morgan, Jr. (age 52)
Mr. Morgan is Chairman of the Board, President and Chief Executive Officer of
PNC Bank, Delaware in Wilmington, Delaware. Mr. Morgan is also a director of
Delaware Business Roundtable, Wilmington Renaissance Corporation, Winterthur
Business Associates, Wilmington Country Club and Delaware State Chamber of
Commerce. He is a trustee of Christiana Care Corporation and is a former board
member of both the Delaware Bankers Association and the United Way of Delaware.
Rudolph M. Peins, Jr. (age 70)
Mr. Peins retired in February 1993 as Chief Financial Officer and Secretary of
Hunt Corp. located in Philadelphia, Pennsylvania. Hunt is a leading
international manufacturer and distributor of art/craft and office supplies,
materials and equipment. He has been a director of Chesapeake since 1993.
Class II Directors (Terms Expire 2001)
Ralph J. Adkins (age 57)
Mr. Adkins is Chairman of the Board of Directors of Chesapeake. He has served
as Chairman since 1997. Prior to January 1, 1999, Mr. Adkins served as Chief
Executive Officer, a position he had held since 1990. During his tenure with
Chesapeake Mr. Adkins has also served as President and Chief Executive Officer,
President and Chief Operating Officer, Executive Vice President, Senior Vice
President, Vice President and Treasurer of Chesapeake. He has been a director of
Chesapeake since 1989.
Robert F. Rider (age 71)
Mr. Rider is Chairman of the Board and Chief Executive Officer of O. A. Newton
& Son Company located in Bridgeville, Delaware. The company engages in
millwright work, metal fabrication and sells farm equipment and materials
handling systems. Mr. Rider is also a director of Blue Cross Blue Shield of
Wilmington, Delaware and Burris Foods. He is a trustee of the University of
Delaware. Mr. Rider also serves as a Governor and Vice Chairman of the United
States Postal Service. He has been a director of Chesapeake since 1977.
William G. Warden, III (age 68)
Mr. Warden is Chairman of the Board of Superior Group, Inc., a holding company
that is engaged through subsidiaries in metals distribution, furnace
fabrication, metal tube and pipe manufacturing and pharmaceutical packaging,
located in Radnor, Pennsylvania. He has been a director of Chesapeake since
1969.
Class III Directors (Terms Expire 2002)
Walter J. Coleman (age 65)
Mr. Coleman retired in December 1995 as the Chief Executive Officer of Pyramid
Realty and Mortgage Corporation, a diversified company involved in real estate,
mortgages, insurance and business brokerage. He is also the former Chairman of
Real Estate Title Services, Inc., a title insurance and trust company. Mr.
Coleman
4
<PAGE>
is now a professor at Florida Southern College and an international business
consultant specializing in strategic management. He has been a director of
Chesapeake since 1992.
John R. Schimkaitis (age 52)
Mr. Schimkaitis is President and Chief Executive Officer of Chesapeake and its
subsidiaries. Mr. Schimkaitis assumed the role of Chief Executive Officer on
January 1, 1999. He has served as President since 1997. His present term will
expire on May 16, 2000. Prior to his new post, Mr. Schimkaitis has also served
as President and Chief Operating Officer, Executive Vice President and Chief
Operating Officer, Senior Vice President and Chief Financial Officer, Vice
President, Treasurer, Assistant Treasurer and Assistant Secretary of Chesapeake.
He has been a director of Chesapeake since 1996.
Jeremiah P. Shea (age 73)
Mr. Shea retired in February 1990 as the Chairman and Chief Executive Officer
of Bank of Delaware Corporation (PNC Bank - Delaware), located in Wilmington,
Delaware. He has been a director of Chesapeake since 1981.
Directors' Compensation
Pursuant to Chesapeake's Directors Stock Compensation Plan, directors who are
not officers of the Company are awarded 600 shares of the Company's common stock
annually, at the time of the Company's annual meeting. In addition, each non-
employee director who serves as the chairman of a committee of the Board of
Directors is awarded 100 additional shares of the Company's common stock
annually. Directors are also paid an attendance fee of $1,000 for each Board
and committee meeting attended. If a director attends more than one meeting on
the same day for which he has been paid a fee of $1,000, then the director is
paid an additional fee of $500.
COMMITTEES OF THE BOARD
The Audit Committee was established in 1976. It must be comprised of directors
who are not employees of the Company or any of its subsidiaries. In general, the
Audit Committee is charged with reviewing the internal auditor's reports of
practices and procedures as well as the reports of Chesapeake's independent
auditors relating to the results of their audit and the adequacy of internal
controls. The Audit Committee has the responsibility to make recommendations to
management arising from the aforementioned reviews. The Audit Committee held
four meetings during 1999. The current members of the Audit Committee are:
Rudolph M. Peins, Jr., Chairman, Robert F. Rider and William G. Warden, III.
The Plan Committee was established in 1992 for the purpose of administering
the Chesapeake Utilities Corporation Performance Incentive Plan and Cash Bonus
Plan. The Plan Committee held two meetings during 1999. On May 18, 1999, the
functions of the Plan Committee were transferred to the Compensation Committee
and the Plan Committee was abolished.
5
<PAGE>
The Compensation Committee, established in 1979, has the responsibility of
fixing the compensation of executive officers. The Compensation Committee held
five meetings during 1999. The current members of the Compensation Committee
are: John W. Jardine, Jr., Jeremiah P. Shea, Chairman, and William G. Warden,
III.
The Corporate Governance Committee was established in 1994 for the purpose of
reviewing and advising the Board on general corporate governance and structure
issues. On May 19, 1998, this Committee also assumed the functions of the
Nominating Committee. The Corporate Governance Committee will consider nominees
recommended by stockholders. The Corporate Governance Committee held four
meetings during 1999. The members of the Corporate Governance Committee are:
Richard Bernstein, Walter J. Coleman, Chairman, Rudolph M. Peins, Jr., and
Jeremiah P. Shea.
Under the Company's bylaws, stockholders are permitted to nominate candidates
for election as directors. Such nominations must be received by the Corporate
Secretary of the Company not less than 14 days nor more than 80 days prior to
the meeting at which directors are to be elected. Such nominations must be in
the form of a notice which sets forth: (a) as to each nominee, (i) the name,
age, business address and, if known, residence address of such nominee; (ii) the
principal occupation or employment of such nominee; (iii) the number of shares
of stock beneficially owned by the nominee; (iv) the consent of the nominee to
serve as a director of the Corporation if so elected; (v) a description of all
arrangements or understandings among the stockholder and the nominee and any
other person or persons pursuant to which the nomination is to be made by the
stockholder; and (vi) any other information relating to the nominee required to
be disclosed in solicitations of proxies for election of directors, or otherwise
required pursuant to Schedule 14A under the Securities and Exchange Act of 1934,
as amended, and (b) as to the stockholder giving the notice, (i) the name and
address, as they appear on the Company's books, of such stockholder; and (ii)
the number of shares beneficially owned by such stockholder.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met seven times during 1999. Each director, with the
exception of Mr. Warden, attended 75% or more of the aggregate of (i) the total
number of meetings of the Board of Directors and (ii) the total number of
meetings held by each committee of the Board on which he served. Mr. Warden
attended 50% of the aggregate number of meetings.
MANAGEMENT COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the compensation earned
for each of the Company's last three fiscal years by the Company's Chief
Executive Officer and each of the other four most highly compensated executive
officers.
6
<PAGE>
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ------------------------------
Awards Payouts
------------- -----------
Shares
Name and Underlying LTIP All Other
Principal Fiscal Salary Bonus Options/SARs Payments Compensation
Position Year ($) ($) (#) ($) ($)
- ------------------------------- -------- -------- ------- -------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Ralph J. Adkins/1/.......... 1999 150,000 44,226 0 57,780/4/ 18,915/6/
Chairman and Director 1998 300,000 0 0 21,052/4/ 12,300
1997 251,250 0 0 354,546/5/ 12,200
John R. Schimkaitis/1/...... 1999 280,000 82,555 0 70,380/4/ 10,428/6/
President, Chief Executive 1998 225,000 0 0 25,655/4/ 11,328
Officer and Director 1997 179,000 0 0 220,297/5/ 11,214
Michael P. McMasters/7/..... 1999 153,750 28,704 0 0 9,255/6/
Vice President, Treasurer 1998 135,000 0 0 0 8,549
and Chief Financial Officer 1997 105,250 3,210 14,906/2/ 0 6,492
Stephen C. Thompson/7/...... 1999 153,750 14,100 0 0 9,225/6/
Vice President 1998 135,000 0 0 0 8,390
1997 102,375 10,290 14,906/2/ 0 6,849
William C. Boyles........... 1999 127,500 24,877 5,000/3/ 0 7,846/6/
Vice President and 1998 110,000 0 0 0 4,307
Corporate Secretary 1997 90,000 8,460 12,848/2/ 0 3,505
</TABLE>
______________________
/1/ On January 1, 1999 Mr. Schimkaitis succeeded Mr. Adkins as Chief
Executive Officer.
/2/ Options to acquire shares of common stock pursuant to Stock Option
Agreements under the Company's Performance Incentive Plan (the "Plan"),
originally for the performance period beginning January 1, 1998 and
ending December 31, 2000 (the "1997 Option Grants"). In accordance with
the terms of each of the 1997 Option Grants, (i) 50% of the options were
to become exercisable in equal increments on December 31, 1998, 1999 and
2000 and (ii) 50% of the options were to become exercisable to the
extent that the Company achieved certain performance goals over the same
period. Through December 31, 1999, the 1997 Option Grants became
exercisable, based on the foregoing criteria, as follows: Mr. McMasters-
7,700; Mr. Thompson - 7,700; and Mr. Boyles - 6,637. In 1999, each
recipient relinquished the award opportunity remaining in 2000 under the
1997 Option Grants. In exchange, Mr. Boyles received an award of Stock
Appreciation Rights as more fully described in footnote 3. Messrs.
McMasters and Thompson each were granted the right to earn up to 5,120
shares of the Company's common stock under the Company's Performance
Incentive Plan, based on the Company's achievement of certain
performance goals (including earnings growth, growth in non-regulated
net income, and share price relative to book value) over a performance
period beginning January 1, 2000, and ending December 31, 2000.
7
<PAGE>
/3/ Stock Appreciation Rights ("SARs") granted pursuant to Stock Appreciation
Rights Agreements under the Plan for the performance period beginning
January 1, 2000, and ending December 31, 2000 (the "2000 SAR Agreements").
These SARs and the 2000 SAR Agreements are more fully described in Note 1
to the Option/SAR Grants Table.
/4/ Reflects performance shares earned under Performance Share Agreements with
each of Messrs. Adkins and Schimkaitis under the Plan for the award period
beginning January 1, 1998 and ending December 31, 2000 (the "1997
Performance Share Agreements"). These Agreements were modified in 1999 to
provide that no awards would vest for 2000 performance. Effectively, the
third year award opportunity was replaced with new Performance Share
Agreements covering the award period beginning January 1, 2000, and ending
December 31, 2000. Under the new Performance Share Agreements, awards will
be based on the Company's achievement of certain performance goals
(including earnings growth, growth in non-regulated net income, and share
price relative to book value), and any shares earned may not be sold for a
three-year period. Performance shares earned for 1998 and 1999 are valued
as of February 26, 1999 and February 25, 2000, respectively.
/5/ Reflects performance shares earned under Tandem Stock Option and
Performance Share Agreements covering the three-year performance period
from January 1, 1995 through December 31, 1997, valued as of February 27,
1998.
/6/ Consists of the Company's contribution to its Retirement Savings Plan on
behalf of such officer (Mr. Adkins - $17,625; Mr. Schimkaitis - $9,600; Mr.
McMasters - $8,950; Mr. Thompson - $8,950; and Mr. Boyles- $7,600 and term
life insurance premiums paid by the Company on behalf of such officer (Mr.
Adkins - $1,290; Mr. Schimkaitis - $828; Mr. McMasters - $305; Mr.
Thompson -$275; and Mr. Boyles- $246).
/7/ Messrs. McMasters and Thompson became executive officers of the Company on
May 20, 1997.
Option / SAR Grants During 1999 Fiscal Year
The following table sets forth information concerning SARs granted to the
named executive officer during fiscal 1999. The SARs were granted under the
Company's Performance Incentive Plan.
8
<PAGE>
<TABLE>
<CAPTION>
Individual Grants
- ------------------------------------------------------------------------------------------------
Shares % of Total Potential Realizable
Underlying Options/ Value at Assumed
Options/ SARs Annual Rates of Stock
SARs Granted to Exercise or Price Appreciation
Granted Employees in Base Price For SAR Term
-----------------------------
Name (#)/1/ Fiscal Year ($/Sh) Expiration Date 5%($)/2/ 10%($)/2/
- ----------------- ---------- ------------- ----------- ------------------ -----------------------------
<S> <C> <C> <C> <C> <C> <C>
William C. Boyles 5,000 19.0 18.375 December 31, 2005 43,824 105,105
</TABLE>
_________________
/1/ /50% of the SARs will become exercisable on December 31, 2000. The
remaining 50% will become exercisable only if the Company achieves certain
annual performance goals (including earnings growth, growth in non-
regulated net income, and share price relative to book value). In the
event of a change in control, as defined in the Plan, all SARs subject to
time vesting that have not theretofore become exercisable will become
exercisable in full and all SARs subject to performance vesting for the
award year in which the change in control occurs will become exercisable
as if all performance criteria were satisfied, but only in proportion to
the total number of days in the year that have elapsed prior to the change
in control./
/2/ These dollar amounts are the result of calculations at the 5 and 10
percent appreciation rates permitted by the Securities and Exchange
Commission to be used to determine the potential realizable value of the
SARs set forth in the table. They are not intended to forecast the
possible appreciation, if any, of the Company's stock price. There can be
no assurance that these dollar amounts or any other dollar amounts will be
realized by the SAR holder.
Aggregated Option/SAR Exercises During 1999 Fiscal Year
and Fiscal Year End Option/SAR Values
The following table sets forth information concerning options and SARs
exercised by the named executive officers during the 1999 fiscal year and the
number and value of options and SARs held by such officers at fiscal year end.
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs Options/SARs
Shares at FY-End (#) At FY-End ($)
Acquired on Value ------------------------------------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ralph J. Adkins 0 0 32,940 0 185,288 0
John R. Schimkaitis 0 0 20,280 0 114,075 0
Michael P. McMasters 0 0 7,700 0 0 0
Stephen C. Thompson 0 0 7,700 0 0 0
William C. Boyles 0 0 6,637 5,000 0 0
</TABLE>
9
<PAGE>
Pension Plan Table
<TABLE>
<CAPTION>
Final Years of Service at Normal Retirement Age
Average ---------------------------------------------------------------------------
Earnings 15 20 25 30 35 40
-------- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$100,000 $ 25,775 $ 34,367 $ 42,958 $ 51,550 $ 60,142 $ 60,142
$125,000 $ 32,994 $ 43,992 $ 54,990 $ 65,988 $ 76,986 $ 76,986
$150,000 $ 40,213 $ 53,617 $ 67,021 $ 80,425 $ 93,829 $ 93,829
$175,000 $ 47,431 $ 63,242 $ 79,052 $ 94,863 $110,673 $110,673
$200,000 $ 54,650 $ 72,867 $ 91,083 $109,300 $127,517 $127,517
$225,000 $ 61,869 $ 82,492 $103,115 $123,738 $144,361 $144,361
$250,000 $ 69,088 $ 92,117 $115,146 $138,175 $161,204 $161,204
$275,000 $ 76,306 $101,742 $127,177 $152,613 $178,048 $178,048
$300,000 $ 83,525 $111,367 $139,208 $167,050 $194,892 $194,892
$325,000 $ 90,744 $120,992 $151,240 $181,488 $211,736 $211,736
$350,000 $ 97,963 $130,617 $163,271 $195,925 $228,579 $228,579
$375,000 $105,181 $140,242 $175,302 $210,363 $245,423 $245,423
$400,000 $112,400 $149,867 $187,333 $224,800 $262,267 $262,267
</TABLE>
The above table sets forth the estimated annual retirement benefits payable
under the Company's retirement plan to its regular employees, including
officers, in the final average earnings and years of service classifications
indicated. The retirement plan is funded solely by the Company. Benefits
normally are paid in the form of a straight life annuity or joint and survivor
annuity and are not subject to any deduction for Social Security or other offset
amounts.
Annual compensation used to determine final average earnings under the plan
includes salary, as set forth in the Summary Compensation Table, commissions,
and, with respect to employees earning a salary less than a stated amount (which
for 1999 was $80,000), bonus payments. Compensation covered by the plan for 1999
was as follows: Mr. Schimkaitis - $280,000; Mr. McMasters - $153,750; Mr.
Thompson - $153,750; and Mr. Boyles - $127,500. The calculation of benefits
under the plan generally is based on average earnings for the highest five
consecutive years of the ten years preceding retirement.
For 1999, the Internal Revenue Code of 1986, as amended, generally limits the
annual benefits which may be paid under the plan to $130,000 and limits the
amount of annual compensation that may be taken into account in determining
final average earnings to $160,000. The table above does not reflect these
limits. However, these limits may increase in future years. Furthermore,
benefits earned before the limits went into effect generally are not affected by
the limits. The Company has adopted a plan that is not a tax-qualified plan
under which it provides to plan participants the benefits that would have been
provided under the Company's retirement plan but for these limits. The plan was
effective January 1, 1995. The plan is unfunded but is required to be funded in
the event of a change in control of the Company.
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As of December 31, 1999, the number of years of credited service under the
retirement plan for each of the named executive officers were as follows: Mr.
Adkins - 37 years; Mr. Schimkaitis - 15 years; Mr. McMasters - 18 years; Mr.
Thompson - 16 years; and Mr. Boyles - 11 years.
As of December 31, 1998, the Company amended its pension plan so that current
participants in the plan, including executive officers, could elect either (1)
to continue their participation in the plan or, alternatively, (2) to receive a
one-time payout, plus an increase in the Company's matching contributions to the
employee's account in the Company's Section 401(k) retirement savings plan.
Based on this election, Mr. Adkins ceased accruing benefits under the plan after
December 31, 1998.
Employment Contracts and Change in Control Provisions
Chesapeake has entered into employment agreements with Messrs. Schimkaitis,
McMasters, Thompson and Boyles. These agreements are designed to help retain
such officers who are essential to the proper supervision of Chesapeake's
business by assuring them of equitable treatment in the event of a termination
of employment following a change in control of the Company. Under the
agreements, if a change in control occurs, the failure to elect or re-elect the
officer to, or the removal of the officer from, the office held by the officer,
or the failure to elect or re-elect the officer to, or the removal of the
officer from, the Board of Directors of the Company (if the officer shall have
been a member of the Board immediately prior to a change in control) would
entitle the officer to terminate his employment and to receive certain
termination payments as described below. An officer's good faith determination
that the nature or scope of his duties has been significantly altered subsequent
to a change in control also would entitle the officer to elect to terminate his
employment and to receive the termination payments provided in the agreement.
The agreement with Mr. Schimkaitis was entered into on March 26, 1997, and
provides for Mr. Schimkaitis' employment in his current position at a current
salary of $280,000 and in the future such greater or lesser amounts as the
Company's Board of Directors may determine. This agreement is operative for an
initial term of five years, ending March 26, 2002, and provides that if a change
in control occurs prior to that date, the agreement will be automatically
extended for a maximum of five years commencing on the date the change in
control occurred (the "extension period"). The agreements with Messrs.
McMasters, Thompson and Boyles were entered into on March 26, 1997, each for a
term of three years, and provided for the employment of Messrs. McMasters,
Thompson and Boyles as Vice Presidents of the Company, also at salaries
determined by the Company's Board of Directors. These agreements were renewed on
March 26, 2000 with the same terms and conditions as the original agreements,
and provide that if a change in control occurs prior to that date, an extension
period of three years will automatically be effectuated.
The agreements are intended to maintain compensation and benefits following a
change in control at levels generally comparable to those that such officers
could reasonably have expected in the absence of a change in control. The
agreements provide for the payment of compensation during the extension period
at a level equal to the rate existing immediately prior to the change in
control, adjusted throughout such period to reflect increases in the consumer
price index. Each agreement also provides for the officer's continued
eligibility during such extension period under the Company's employee benefit
plans. In the event of a
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termination of employment other than for cause, an officer would receive under
his agreement a termination payment equal to an amount approximating the
compensation and the value of certain benefits under the Company's retirement,
savings and stock option plans that he would have received had he continued to
be employed by the Company for the lesser of 24 months (12 in the case of
Messrs. McMasters, Thompson and Boyles) or the number of months remaining under
the extended term of the agreement. However, such termination payment could not
exceed the maximum amount that the Company could pay the officer without some
part of the amount being nondeductible by the Company under Section 280G of the
Internal Revenue Code. Each agreement also provides that the Company will
indemnify the officer for any expenses he incurs in successfully enforcing his
right to payments or benefits under his agreement and that the Company, upon the
request of the officer, will provide the officer with an irrevocable letter of
credit from a bank in the amount of $100,000 against which the officer may draw
to pay any expenses he incurs in attempting to enforce any of his rights under
his agreement following a change in control.
Prior to January 1, 1999, Chesapeake had an agreement with Mr. Adkins
providing for his employment as President and Chief Executive Officer. This
agreement was substantially the same as the current agreement with Mr.
Schimkaitis except that the initial salary specified in Mr. Adkins' agreement
was $255,000. As of January 1, 1999, Mr. Adkins assumed a new executive office
entitled Chairman of the Board of Directors and signed a new agreement with the
Company employing him in that capacity on a part-time basis until December 31,
2000. This agreement does not provide for an extension of Mr. Adkins' term of
employment in the event of a change in control of the Company, but the agreement
does provide for a significantly narrower set of circumstances that would permit
his termination for cause following any change in control. The agreement also
provides a severance payment for Mr. Adkins if he is terminated without cause,
either before or after a change in control, equal to the balance of the base
compensation that he would have earned if he had remained employed with the
Company pursuant to the agreement until December 31, 2000.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors hereby provides the
following report on executive compensation for the year ended December 31, 1999.
Policies and Goals
The Company's compensation goal is to enhance the profitability of the
Company, and thus increase stockholder value, by attracting high-quality
executive talent and closely aligning the financial interests of its senior
managers with those of its stockholders. To this end, the Company's executive
compensation program has been designed to provide competitive compensation
levels based upon the successful achievement of specific annual and long-term
objectives drawn from the Company's strategic plan.
Components
The Company's executive compensation program relies on three interrelated
components, consisting of base salary, annual bonus and long-term equity-based
rewards.
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Base Salary
The base salary structure for the Chief Executive Officer and the other
executives was determined by means of a study prepared by independent
compensation consultants, using comparison data from the same group of
diversified natural gas organizations which the Company uses in its stock
performance review (the "Industry Peer Group") and from the general industry
using companies of a similar size and nature to Chesapeake. The midpoints of the
recommended structure are set at or reasonably close to comparison averages,
thereby providing marketplace priced compensation guidelines for executives.
Annual salary adjustments are subjectively made after giving consideration to
the individual's performance and contributions to the success of the Company.
Executive base salaries generally fall below, but close to, the comparison
averages. Salaries for the Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, and other executive officers named in the Summary
Compensation Table are originally set by employment contracts (see "Management
Compensation - Employment Contracts and Change in Control Provisions"), but are
adjusted annually pursuant to the process described above.
Annual Incentive Bonus
Annual bonuses are paid under the Company's performance-based cash bonus plan,
adopted in January, 1992, based on the attainment of financial and non-financial
objectives relative to pre-established performance targets. At the beginning of
each year, the Committee selects the executives eligible to receive bonuses
based on the executives' seniority and responsibilities. The Committee
designates a target bonus amount for each executive, which is a percentage of
that executive's base salary ranging from 20% to 30%. Target bonus amounts are
determined separately for each of the Chief Executive Officer and other selected
executives to conform with the median prevailing practices for individuals in
similar positions in a peer group of approximately 1,000 organizations of
comparable size. Because size rather than line of business was the primary
consideration in choosing this group, it includes some but not all of the
companies in the Industry Peer Group. The Committee also identifies performance
goals for the year for each selected executive, relating to one or more business
segments, to the Company as a whole, or both, and an aggressive target net
income range for the Company or designated segments. Bonus awards for the year
are made to each selected executive, based on successful attainment of the
relevant goals, adjusted by applying a payout factor (which may vary for each
executive) that is determined by the relationship between the actual net income
of the Company or relevant segments and the relevant aggressive target net
income range. In the case of the Chief Executive Officer, 50% of the target
bonus is subjected to the foregoing calculation and the other 50% is directly
proportionate to the attainment of the aggressive target net income. For 1999,
most of the performance goals were achieved, either entirely or to a significant
extent, including, approximately in order of relative weight: (1) aggressive
growth and expansion of existing service territories; (2) implementation of
certain cost containment and cost reduction programs; (3) development of
underground propane systems; (4) expansion and enhancement of the marketing and
sales effort; (5) successful Year 2000 compliance testing; and (6) entry and
expansion into the water business. Based on these achievements, the Committee
determined that between 76% and 94% of the goals have been met. Even though the
Company exceeded the low end of the aggressive target net income range, relevant
segments did not. Therefore, a payout factor of 50% to 104% was applied,
depending on each executive's responsibilities.
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Long-Term Performance Incentive Plan
Long-term equity-based awards are granted under the Company's Performance
Incentive Plan, adopted in 1992, which permits the Compensation Committee
flexibility in providing different forms and levels of equity-based awards to
key employees.
In 1997 the Company granted performance share awards to Messrs. Adkins and
Schimkaitis and option awards to Messrs. McMasters, Thompson and Boyles, among
others, under the Performance Incentive Plan. In 1999 the Company granted
performance share awards to Messrs. Adkins, Schimkaitis, McMasters and Thompson
and stock appreciation rights awards to Mr. Boyles, and others, also under the
Performance Incentive Plan. These awards are intended to align the interests of
the executives with those of the Company's stockholders by providing the
executives with equity-based incentives. The performance period for the 1997
grants commenced January 1, 1998 and ended December 31, 1999. The performance
period for the 1999 grants commences January 1, 2000 and ends December 31, 2000.
The 1997 Performance Share Agreements and Option Agreements under which these
awards were made are described earlier in this Proxy Statement in footnotes 4
and 2, respectively, to the Summary Compensation Table. The Stock Appreciation
Rights Agreements are more fully described in footnote 1 to the Option/SAR
Grants Table.
Under the Performance Share Agreements, at the end of each calendar year
during the performance period, the recipient is entitled to earn performance
shares based on the Company's achievement of certain performance goals -
including earnings growth, growth in non-regulated net income and share price
relative to book value. Under the Option Agreements and the Stock Appreciation
Rights Agreements, one-half of the options or SARs vest automatically, and the
remaining one-half become exercisable based on the Company's achievement of the
same three goals. A certain number of performance shares, options and SARs are
allocated to the achievement of each goal. In 1999, the Company achieved the
performance goals relating to earnings growth and growth in non-regulated net
income, but did not achieve the other performance goal. Accordingly, the
performance shares allocated to the achievement of the earnings growth and non-
regulated net income goals were awarded, and the options allocated to those
goals became exercisable.
Compensation of the Chief Executive Officer
During 1999, the compensation of the Company's Chief Executive Officer, John
R. Schimkaitis, was determined pursuant to the three-part program described
above. First, Mr. Schimkaitis' base salary was set to approximate the midpoint
of chief executive salaries paid by companies in the Industry Peer Group.
Second, Mr. Schimkaitis was awarded a bonus of $82,555, or 29% of his base
salary, determined in accordance with the policies described under "Annual
Incentive Bonus" above. Mr. Schimkaitis' target bonus was $84,000 or 30% of
salary. The Committee determined that 89% of his performance goals had been met
by virtue of the accomplishment of goals set forth for executive officers under
"Annual Incentive Bonus" above and that 100% of his income goal had been
attained. The payout factor applied to both components of Mr. Schimkaitis' bonus
was 104%. Finally, the long-term performance incentive component of Mr.
Schimkaitis' compensation was determined as described under "Long-Term
Performance Incentive Plan" above. Mr. Schimkaitis received
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<PAGE>
3,910 performance shares based on the Company's achievement of its performance
goals related to earnings growth and non-regulated net income.
Compliance with Internal Revenue Code Section 162(m)
Internal Revenue Code Section 162(m), enacted in 1993, precludes any public
corporation from taking a deduction for compensation in excess of $1 million
paid to its chief executive officer and any of its other named executive
officers. Certain performance-based compensation is specifically exempted from
the deduction limit. No formal policy has been adopted by the Company with
respect to qualifying compensation paid to its executive officers from the
deduction limit. The Company does not anticipate that compensation paid to any
of its executive officers in 2000 will exceed the dollar limit.
THE COMPENSATION COMMITTEE
John W. Jardine, Jr.
Jeremiah P. Shea (Chairman)
William G. Warden, III
Stock Performance Chart
The following chart compares the yearly percentage change in the cumulative
total stockholder return on the Company's common stock during the five fiscal
years ended December 31, 1999, with the cumulative total return on the S&P 500
Index and an industry index consisting of 20 diversified natural gas companies
as published by Edward D. Jones & Co. The 20 companies in the Edward D. Jones &
Co. industry index are as follows: Chesapeake Utilities Corporation, Columbia
Energy Group, Inc., Consolidated Natural Gas Company, Eastern Enterprises,
Energen Corporation, Equitable Resources, Inc., Kinder Morgan, Inc., Keyspan
Corp., MCN Energy Group, Inc., MDU Resources Group, Inc., National Fuel Gas
Company, NICOR, Inc., Oneok, Inc., Questar Corporation, SEMCO Energy, Inc.,
Southwest Gas Corporation, Southwestern Energy Company, UGI Corporation, Valley
Resources, Inc., and WICOR, Inc. The comparison assumes $100 was invested on
December 31, 1994 in the Company's common stock and in each of the foregoing
indices and assumes reinvestment of dividends.
15
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[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Cumulative Total Stockholder Return
----------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Chesapeake 100.0 122.4 149.2 191.1 180.4 192.0
S&P 500 100.0 137.5 169.1 225.6 290.1 351.1
Industry Index 100.0 132.4 166.8 209.0 192.5 196.9
</TABLE>
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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Board's Compensation Committee are Mr. Jardine, Mr. Shea
and Mr. Warden. Mr. Jardine was formerly Chief Executive Officer of the Company
from 1983 to 1990.
CERTAIN TRANSACTIONS
William P. Schneider, who during 1999 beneficially owned more than 5% of the
Company's outstanding common stock, serves as an executive officer of Tri-County
Gas Company, Inc., a subsidiary of the Company of which he formerly was co-
owner, pursuant to a five-year employment agreement entered into on March 6,
1997, which provides for a current salary of $125,000 per year, together with
retirement and other benefits.
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected the firm of PricewaterhouseCoopers, L.L.P.
to serve as the independent auditors of Chesapeake and its consolidated
subsidiaries for the fiscal year ending December 31, 2000. The Board is
submitting the selection of PricewaterhouseCoopers, L.L.P. for ratification by
stockholders.
PricewaterhouseCoopers, L.L.P. has served as independent auditors of
Chesapeake and its subsidiaries since 1982. The firm has wide experience in
accounting and auditing for public utilities and other companies.
PricewaterhouseCoopers, L.L.P. is a member of the Securities and Exchange
Commission Practice Section of the American Institute of Certified Public
Accountants. By virtue of their membership in this Section, they have agreed to
undergo a review by an independent accounting firm once every three years. All
of the professional services provided by PricewaterhouseCoopers, L.L.P. are
furnished at customary rates and terms.
Based upon the recommendation of the Audit Committee, the Board of Directors
selected this firm to act as Chesapeake's independent auditors for the year
2000, subject to ratification by the stockholders, in the belief that
PricewaterhouseCoopers, L.L.P. is well qualified. Should the selection of
PricewaterhouseCoopers, L.L.P. as independent auditors of Chesapeake not be
ratified by the stockholders, the Board of Directors will reconsider the matter.
SUBMISSION OF STOCKHOLDERS PROPOSALS
Any stockholder who wishes to submit a proposal for possible inclusion in
Chesapeake's proxy statement for the annual meeting to be held in 2001 must
submit the proposal in writing to the Board of Directors on or before December
1, 2000. Written proposals should be directed to William C. Boyles, Corporate
Secretary, Chesapeake Utilities Corporation, 909 Silver Lake Boulevard, Dover,
Delaware 19904.
Under the Company's bylaws, a stockholder wishing to bring an item of business
before an annual meeting of stockholders must provide timely notice in writing
to the Corporate Secretary of the Company. To be timely, the stockholder's
notice must be received by the Company at its principal executive offices not
less
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<PAGE>
than 60 days nor more than 90 days prior to the date of this meeting (unless
less than 75 days' notice or prior public disclosure of the date of the meeting
is given or made, in which case a notice will be timely if received no later
than the close of business on the 15/th/ day following the day on which such
notice or public disclosure is given).
ANNUAL REPORT TO SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K
CHESAPEAKE WILL PROVIDE WITHOUT CHARGE TO ANY PERSON, UPON THE WRITTEN REQUEST
OF SUCH PERSON, A COPY OF CHESAPEAKE'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 13a-1 UNDER THE SECURITIES
EXCHANGE ACT OF 1934 FOR CHESAPEAKE'S FISCAL YEAR ENDED DECEMBER 31, 1999.
WRITTEN REQUESTS SHOULD BE DIRECTED TO WILLIAM C. BOYLES, CORPORATE SECRETARY,
CHESAPEAKE UTILITIES CORPORATION, 909 SILVER LAKE BOULEVARD, DOVER, DELAWARE
19904.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires each of the Company's directors and executive
officers, and any beneficial owner of more than 10% of the Company's common
stock, to file with the Securities and Exchange Commission (the "SEC") initial
reports of beneficial ownership of Chesapeake's common stock and reports of
changes in such beneficial ownership. Such persons also are required by SEC
regulations to furnish Chesapeake with copies of such reports. To Chesapeake's
knowledge, based solely on its review of the copies of such reports furnished to
Chesapeake and on the written representations made by such persons that no other
reports were required, during the fiscal year ending December 31, 1999, no
director, officer or 10% beneficial owner failed to file on a timely basis the
reports required by Section 16(a).
OTHER MATTERS
The Board of Directors knows of no other matter to be presented at the
meeting. If, however, any other business properly comes up for action at the
meeting or any adjournment thereof, it is intended that the persons acting under
the proxies in the form enclosed will vote in regard thereto according to their
discretion.
By Order of the Board of Directors,
William C. Boyles
Corporate Secretary
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<PAGE>
Chesapeake Utilities Corporation March 30, 2000
A Diversified Utility Company
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Chesapeake Utilities Corporation to be held at 10:00 A.M. on May 16, 2000, in
the Board Room, PNC Bank, Delaware, 222 Delaware Avenue, Wilmington, Delaware.
Your Board of Directors looks forward to greeting personally those stockholders
able to attend. The Secretary's formal Notice of Annual Meeting of Stockholders
and the Proxy Statement appear on the enclosed pages and describe the matters
that will be submitted to a vote of stockholders at the meeting.
Whether or not you plan to attend, it is important that your shares are
represented at the meeting. Accordingly, you are requested to promptly sign,
date and mail the attached proxy in the envelope provided.
Thank you for your consideration and continued support.
Sincerely,
/s/ Ralph J. Adkins
RALPH J. ADKINS
Chairman of the Board
DETACH HERE
[_] Please mark your
votes as in this
example.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2.
<TABLE>
<S> <C>
FOR AGAINST ABSTAIN
1. Election of Directors 2. For ratification of the selection of [_] [_] [_]
Nominees: Richard Bernstein, John W. Jardine, Jr., independent auditors.
Calvert A. Morgan, Jr., Rudolph M. Peins, Jr.
FOR WITHHELD
[_] [_]
3. In their discretion, the proxies are authorized to vote upon such
other matters as may properly come before the meeting or any
adjournment thereof.
[_] ________________________________
For all nominees except as noted above MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY CARD
PROMPTLY, USING THE ENCLOSED ENVELOPE.
Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give the full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Signature:______________________ Date: _______________ Signature: ________________________ Date: _________________
</TABLE>
<PAGE>
DETACH HERE
PROXY
CHESAPEAKE UTILITIES CORPORATION
909 SILVER LAKE BOULEVARD
DOVER, DELAWARE 19904
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 2000 IN THE BOARD ROOM
PNC BANK, DELAWARE
222 DELAWARE AVENUE
WILMINGTON, DELAWARE 19899
The undersigned stockholder hereby appoints Ralph J. Adkins and John R.
Schimkaitis and each one of them, with power of substitution and revocation, the
attorneys of the undersigned to vote all shares in the name of the undersigned
on all matters set forth in the proxy statement and such other matters as may
properly come before the Annual Meeting and all adjournments thereof.
The shares represented by this proxy will be voted as directed by the
stockholder. If no direction is given, shares will be voted FOR Items 1 and 2.
The Board of Directors Recommends a Vote FOR Items 1 and 2.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
