Exhibit 10.3


SEVERANCE AGREEMENT


This Agreement dated as of July 10, 2006 is by and
between Chase Corporation, a Massachusetts corporation (the “Company”), and Kenneth
L. Dumas, (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 in
accordance with its terms as in effect at the time of the Change in Control, or
the Company shall have taken or failed to take any action which would adversely
affect the Executive’s continued participation in or the benefits receivable by
the Executive under any such plan as in effect at the time of the Change in
Control;


(iii)          the Company has failed
to assign to him on a consistent basis executive duties performable at the
location at which he worked before the Change in Control which are commensurate
with the level of executive duties performed by him immediately prior to such
Change in Control;


(iv)          any failure by the Company to obtain the assumption of this Agreement
by any successor or assign of the Company.


2.             Termination of Employment Without Cause.   If
the Executive’s employment with the Company is terminated at any time without
Cause (and other than by reason of death, Disability or retirement) the
Executive shall receive the benefits set forth in Section 4 hereof.


3.             Change in Control. 
Notwithstanding Section 2 of this Agreement, this Section 3
shall apply if, within twenty-four (24) months immediately following a Change
in Control, the Executive’s employment is terminated by the Company without
Cause (and other than by reason of death, Disability or retirement) or the
Executive terminates his employment with the Company for Good Reason, the
Executive shall be entitled to the benefits set forth in Section 4.


4. (a)       payment of his base salary, in accordance
with the Company’s regular payroll practices, for a one year period commencing
on his termination date, such salary to be paid at a rate equal, on an
annualized basis, to the greater of his annual base salary in effect
immediately prior to the Change in Control or his annual base salary in effect
immediately prior to the termination of employment, provided, however, (i) no such payments shall be made until the
earlier of (A) six months and one day following the termination date or (B) the
earliest date as of which such payments may begin  without
penalty  pursuant to Section 409A(a)(2) of the  U.S. Internal Revenue Code of 1986 (the “Code”) and (ii) all such payments that are deferred
pursuant to clause (i) shall be paid in the aggregate on the first day that
such payments may be made pursuant to clause (i).  For
purposes of this subsection, the term “base salary” shall include



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shall include bonuses
which shall be computed by averaging the last two annual bonuses (annualizing
bonuses with respect to a partial year), if any;


(b)           continued participation in the benefits in effect
for Executive as of the date of termination, subject to the terms and
conditions of the respective plans and applicable law, for a period of one year
following the termination date; provided that to the extent that the Company’s
plans, programs and arrangements do not permit such continuation of Executive’s
participation following his termination, the Company shall provide the
Executive with an amount which is sufficient for him to purchase equivalent
benefits, such amount to be paid quarterly in advance;  provided, further, however, that if the
Executive becomes employed by another employer and is eligible to receive
medical or other welfare benefits under another employer-provided plan, the
Executive’s entitlement to participate in the Company’s medical or other
welfare benefit plans or to receive such alternate payments shall, to the
extent such medical or welfare benefits are offered by the other employer,
cease as of the date the Executive is eligible to participate in such plans,
and the Executive shall notify the Company of his eligibility under such other
plans.


(c)           reasonable costs of an
out-placement service used by the Executive for a period not to exceed one year
following termination of employment.


5.             Death, Disability
or Retirement.  If the Executive’s
employment is terminated by reason of death, Disability or retirement, the
Executive shall not be entitled to receive any benefits under this Agreement
pursuant to Sections 2 or 3 but may be entitled to certain death, disability or
retirement benefits offered by the Company pursuant to its employee benefit
plans.


6.             Taxes.


(a)           All payments to be made to the Executive
under this Agreement will be subject to any required withholding of federal,
state and local income and employment taxes.


(b)           Notwithstanding anything in this Agreement
to the contrary, if any of the payments provided for in this Agreement,
together with any other payments which the Executive has the right to receive
from the Company, would constitute a “parachute payment” (as defined in Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended), the payments
pursuant to this Agreement shall be reduced to the largest amount as will
result in no portion of such payments being subject to the excise tax imposed
by Section 4999 of the Code.


7.             Release.  The Executive’s entitlement to receive the
payments contemplated by Sections 3 hereof shall be contingent upon
execution by the Executive on the date of termination of a release in form and
substance reasonably satisfactory to the Company (the “Release”).  By execution of this Agreement, the Executive
hereby acknowledges and agrees that such payments are and shall be good and
sufficient consideration for such Release.


8.             No Duty to Mitigate.  In
no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and, except as contemplated by
Section 4(b) hereof, any benefits payable to the Executive hereunder shall
not be subject to reduction for any compensation received from other
employment.



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9.             Successors and Assigns.


(a)           This
Agreement is personal to the Executive and is not assignable by the Executive,
other than by will or the laws of descent and distribution, without the prior
written consent of the Company.


(b)           This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.


(c)           The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.  As used in
this Agreement, “Company” shall mean the Company as defined above and any
successor to its business and/or assets that assumes and agrees to perform this
Agreement.


10.           No Right to
Continued Employment.  Nothing
contained in this Agreement shall be considered a contract of employment or
construed as giving the Executive any right to be retained in the employ of the
Company.  Nothing in this Agreement shall
otherwise restrict in any way the rights of the Company to terminate the
Executive at any time and for any reason, with or without cause.


11.           Miscellaneous.


(a)           Applicable Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts, without giving effect to the conflict of laws
principles thereof.


(b)           Amendment; Waiver.  This
Agreement may not be modified or amended in any manner except by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.  The waiver by
either party of compliance with any provision of this Agreement by the other
party shall not operate or be construed as waiver of any other provision of
this Agreement, or of any subsequent breach by such party or a provision of
this Agreement.


(c)           Entire Understanding.  This Agreement constitutes the entire
understanding and agreement between the parties hereto with regard to the
compensation and benefits payable to the Executive in the circumstances
described herein, superseding all prior understandings and agreements, whether
oral or written.


(d)           Fees and Expenses.  The Company agrees to pay as incurred and
within 30 days after submission of supporting documentation, to the full extent
permitted by law, all legal fees and related expenses the Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, the Executive or others of the validity or enforceability of,
or liability under, any provision of this Agreement (including as a result of
any contest by the Executive about the amount of any payment pursuant to this
Agreement) following a Change in Control.



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(e)           Notices.  All notices and other
communications hereunder shall be in writing and shall be delivered by hand
delivery, by a reputable overnight courier service, or by registered or
certified mail, return receipt requested, postage prepaid, in each case
addressed as follows:


If to the Company:


Chase Corporation


26 Summer Street


Bridgewater, MA 02324


Attention: General Counsel


If to the Executive:


Kenneth L. Dumas


9 Heather Lane


Plainville,
MA 02762


or
to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Any
notice or communication shall be deemed to be delivered upon the date of hand
delivery, one day following delivery to an overnight courier service, or three
days following mailing by registered or certified mail.


(f)            Headings.  The headings of paragraphs herein are
included solely for convenience of reference and shall not control the meaning
of interpretations of any of the provisions of this Agreement.


(g)           Severability.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.


(h)           Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed an original.


IN WITNESS
WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer and the Executive has executed this Agreement as of the date
first written above.


	
  CHASE CORPORATION

  	
   

  	
  Kenneth L. Dumas

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Peter R Chase, President & CEO

  	
   

  	
   

  	
  /s/ Kenneth L. Dumas

  	
   

  
						



 



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