Exhibit 10.4

 

SECOND AMENDMENT OFTHE

STEPAN COMPANY SUPPLEMENTAL PROFIT SHARING PLAN

(As Amended and Restated Effective January 1, 1994)

 

WHEREAS, Stepan Company (the “Company”) has established and maintains the Stepan
Company Supplemental Profit Sharing Plan, as amended and restated effective
January 1, 1994, as heretofore amended (the “Plan”); and

 

WHEREAS, the Company reserved the right to amend the Plan in Section 6.l(a) by
action of the Board of Directors; and

 

WHEREAS, the Company now desires to amend the Plan to comply with Section 409A
of the Internal Revenue Code;

 

NOW, THEREFORE, BE IT RESOLVED, that effective January 1, 2005, the Plan is
amended as follows:

 

1.1.Section 2.1 of the Plan is hereby amended by adding after Section 2.1(b) the
following new definition:

 

 

“(b)A

“Affiliate” means any corporation, partnership, joint venture, trust,
association or other business enterprise which is a member of the same
controlled group of corporations, trades or businesses as the Company within the
meaning of Code Section 414(b) or (c); provided, however, that for purposes only
of the term “Affiliate” when used in the definition of “Separation from Service”
below, in applying Code Section l 563(a)(l), (2), and (3) in determining a
controlled group of corporations under Code Section 414(b), the language “at
least 50 percent” shall be used instead of “at least 80 percent” each place it
appears in Code Section 1563(a)(l), (2), and (3), and in applying Treasury Reg.§
l.414(c)-2 for purposes of determining trades or businesses (whether or not
incorporated) that are under common control for purposes of Code Section 414(c),
“at least 50 percent” shall be used instead of “at least 80 percent” each place
it appears in Treasury Reg. § 1.414(c)-2.”

 

2.Section 2.1(e) of the Plan is hereby amended in its entirety so that as
amended, Section 2.1(e) shall read as follows:

 

“(e)“Change in Control” shall be deemed to exist on the date on which either of
the following events will have occurred:

 

 

(1)

A third person, including a “group” as defined in Section 13(d)(3) of the
Securities Act of 1934, acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)

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shares of capital stock of the Company having 30 percent or more of the total
voting power of the Company; or

 

 

(2)

As a result of any tender or exchange offer, merger, or other business
combination, sale of assets or contested election, or any combination of the
foregoing transactions, a majority of members of the Board is replaced during a
twelve-month period by directors whose appointment or election is not endorsed
by a majority of the members of the Board prior to such appointment or
election.”

 

3.Section 2.1 of the Plan is hereby amended by adding after Section 2.l(o) the
following two new definitions:

 

 

“(o)A

“Separation from Service” means in respect of a Member, a “separation from
service” within the meaning of Code Section 409A and the regulations issued
thereunder, including a termination of employment with the Company and all its
Affiliates due to retirement, death, or other reason. For purposes of applying
the definition of “separation from service” under Section 409A, if the Member is
on a bona fide leave of absence due to any medically determinable physical or
medical impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than six months, where such impairment
causes the Member to be unable to perform the duties of his or her position of
employment or any substantially similar position of employment, a Separation
from Service shall be deemed to occur after the expiration of 29 months of sick
leave unless the Member retains the right to reemployment under an applicable
statute or by contract.”

 

 

“(o)B

“Specified Employees” means, during the 12-month period beginning on April 1st
of 2005 or of any subsequent calendar year, an employee of the Company or its
Affiliates who met the requirements of Section 416(i)(l )(A)(i), (ii) or (iii)
of the Code (applied in accordance with the regulations promulgated thereunder
and without regard to Code Section 416(i)(5)) for being a “key employee” at any
time during the 12-month period ending on the December 31st immediately
preceding such April 1st. Notwithstanding the foregoing, a Member who otherwise
would be a Specified Employee under the preceding sentence shall not be a
Specified Employee for purposes of the Plan unless, as of the date of the
Member’s Separation from Service, stock of the Company or an Affiliate is
publicly traded on an established securities market or otherwise.”

 

4.Section 4.4 of the Plan is hereby amended in its entirely so that as amended,
Section 4.4 shall read as follows:

 

“4.4 Form and Timing of Benefit Payments.

 

Benefits payable under this Article IV attributable to (i) the Member;s
Sub-Account A (if vested) and (ii) the Member’s Sub-Account B shall be payable
in a lump sum within 90 days following the earlier to occur of: (a) the Member’s
Separation from Service, or (b) a

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Change in Control. The actual date of payment within such 90-day period shall be
determined by the Company in its sole discretion, and neither the Member nor his
or her Beneficiary shall have the right to designate the taxable year of
payment.

Notwithstanding the foregoing, if payment to a Member is made on account of the
Member’s Separation from Service and the Member is a Specified Employee as of
the date of Separation from Service, then any amount that is payable to the
Member shall be paid instead to the Member in a lump sum on the earlier of (x)
the first day of the seventh month following the Member’s Separation from
Service and (y) the date of the Member’s death.”

 

5.Section 4.7 of the Plan is hereby amended by adding a new sentence at the end
thereof as follows:

 

“Notwithstanding any other provision of the Plan, the Company does not guarantee
any particular tax result for any Member or Beneficiary with respect to
participation in or payments under the Plan, and each Member or Beneficiary
shall be responsible for any taxes imposed on the Member or Beneficiary with
respect to such participation or payments under the Plan.”

 

6.Article VI of the Plan is hereby amended by adding after Section 6.10 two new
sections as follows:

 

“6.11 Section 409A of the Code

 

It is intended that the Plan (including any amendments thereto) comply with the
provisions of Section 409A of the Code so as to prevent the inclusion in gross
income of any amounts accrued hereunder in a taxable year that is prior to the
taxable year or years in which such amounts would otherwise be actually
distributed or made available to the Members. The Plan shall be interpreted,
construed and administered in a manner that will comply with Section 409A of the
Code, including proposed, temporary or final regulations or any other guidance
issued by the Secretary of the Treasury and the Internal Revenue Service with
respect thereto.”

 

“6.12 Timing of Payments

 

Notwithstanding any provision of the Plan to the contrary, if calculation of the
amount of a payment is not administratively practicable due to events beyond the
control of the Member or his or her Beneficiary or if making of a payment would
jeopardize the ability of the Company to continue as a going concern, a payment
will be treated as made on the specified date or in the specified period for
purposes of the Plan if the payment is made during the first calendar year in
which the calculation of the amount of the payment is administratively
practicable or in which the making of the payment would not have such effect on
the Company, as the case may be. In addition, payments of a Member’s account may
be delayed or accelerated by the Company upon events and conditions as may be
provided under Code Section 409A and any regulations or other guidance issued
thereunder.”

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IN WITNESS WHEREOF, the duly authorized officer of the Company has executed this
Second Amendment of the Plan on behalf of the Company and has caused its
corporate seal to be affixed this 13th day of November, 2008.

 

 

STEPAN COMPANY

 

 

By /s/ Greg Servatius

Its Vice President, Human Resources

 

 

ATTEST:

 

 

By /s/ H. Edward Wynn

Its Vice President, General Counsel and Secretary

 

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