Exhibit 10.1
SEVERANCE
AGREEMENT
This Agreement dated as of
October 1, 2008 is by and between Chase Corporation, a
Massachusetts corporation (the “Company”), and Gregory
A. Pelagio, (the “Executive”),
WHEREAS, the Company has determined
that it is desirable, to induce the Executive to remain in the
employ of the Company and also to place him in a position to act in
the best interests of the Company and its stockholders in the event
of a proposal for transfer of control of the Company, to provide
certain severance benefits to the Executive if his employment with
the Company terminates under the circumstances described
below.
NOW, THEREFORE, the Company and the
Executive hereby agree as follows:
1.
Definitions
. For purposes of this
Agreement only, the following definitions shall apply:
(a)
“Cause” for termination
of the Executive’s employment by the Company shall mean and
be limited to
(i)
the Executive’s willful and continued failure to
substantially perform his duties to the Company (other than any
such failure resulting from the Employee’s incapacity due to
physical or mental illness), provided that the Company has
delivered a written demand for substantial performance to the
Executive specifically identifying the manner in which the Company
believes that the Executive has not substantially performed his
duties and that the Executive has not cured such failure within 30
days after such demand;
(ii)
willful conduct by the Executive which is demonstrably and
materially injurious to the Company;
(iii)
material violation of any Company policy, including any code of
conduct or standard of ethics of the Company applicable to the
Executive;
(iv)
the Executive’s conviction of, or pleading of guilty or
nolo contendere to, a felony; or
(v)
the Executive’s willful violation of any material provision
of any confidentiality, nondisclosure, assignment of invention,
noncompetition or similar agreement entered into by the Executive
in connection with his employment by the Company.
For purposes of this definition, no
act or failure to act on the Executive’s part shall be deemed
“willful” unless done or omitted to be done by the
Executive not in good faith and without reasonable belief that his
action or omission was in the best interests of the
Company.
(b)
“Change in Control”
means the occurrence of any of the following events:
(i) any “person”
(as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company becomes the
“beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Company representing 45% or more of the combined voting power
of the Company’s then outstanding securities;
(ii) during any period of
twenty-four (24) consecutive months (not including any period prior
to the date of this Agreement), individuals who at the beginning of
such period constitute the Board and any new director (other than a
director designated by a person who has entered into an agreement
with the Company to effect a transaction described in subparagraphs
(i), (ii) or (iii)) whose election by the Board or nomination
for election by the Board or by the stockholders of the Company was
approved by a vote of at least a majority of the directors then
still in office who either were directors at the beginning of such
period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority thereof;
or
(iii) the stockholders of the
Company approve a merger or consolidation of the Company with any
other corporation, other than (i) a merger or consolidation
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 50% of the combined
voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which
no “person” (as hereinabove defined) acquires 45% or
more of the combined voting power of the Company’s then
outstanding securities; or
(iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets.
(c)
“Disability” means such
physical or mental incapacity as to make the Executive unable to
perform the essential functions of his employment duties for a
period of at least six months with or without reasonable
accommodation. If any question shall arise as to whether
during any period the Executive is so disabled as to be unable to
perform the essential functions of his employment duties with or
without reasonable accommodation, the Executive may, and at the
request of the Company shall, submit to the Company a certification
in reasonable detail by a physician selected by the Company to whom
the Executive or the Executive’s guardian has no reasonable
objection as to whether the Executive is so disabled or how long
such disability is expected to continue, and such certification
shall for the purposes of this Agreement be conclusive of the
issue. The Executive shall cooperate with any reasonable
request of the physician in connection with such
certification. If such question shall arise and the
Executive
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shall fail to submit such certification, the
Company’s determination of such issue shall be binding on the
Executive.
(d)
“Good Reason” means
shall mean the occurrence, in connection with a Change in Control,
of any of the following events (provided that the Executive shall
have given the Company prior written notice describing such event
and the matter shall not have been fully remedied by the Company
within 30 days after receipt of such notice) :
(i)
any reduction of the Executive’s then existing annual base
salary, bonus and/or other short-term incentives;
(ii)
the Company has failed to continue in effect any health, welfare,
retirement, vacation and other fringe benefit plans of the Company
in which the Executive participated at the time of the Change in
Control (or plans providing substantially equivalent benefits)
other than as a result of the normal expiration of any such
plan
