Exhibit 10.1

 

STEPAN COMPANY

2011 INCENTIVE COMPENSATION PLAN

STOCK APPRECIATION RIGHTS AGREEMENT

THIS AGREEMENT (this "Agreement"), dated as of the _____ day of ______________,
20___, is entered into by and between Stepan Company, a Delaware corporation
(the "Company"), and __________________________(the "Participant").

 

W I T N E S S E T H THAT:

 

IT IS AGREED, by and between the parties hereto, as follows:

1. Subject to the terms and conditions set forth in this Agreement and in
accordance with the provisions of the Stepan Company 2011 Incentive Compensation
Plan (the "Plan"), the Company hereby grants to the Participant as of the date
first written above ______________ free-standing Stock Appreciation Rights (the
"SARs"). The base price ("Base Price") of each SAR subject to this Agreement
shall be $_________, the Fair Market Value of a share of Stock on the date of
the grant. Upon exercise of the SARs in whole or in part, the Company will pay
to the Participant a cash payment in an amount equal in value to the excess of
the Fair Market Value on the date of exercise of one share of Stock over the
Base Price multiplied by the number of SARs exercised. Payment will be made in
United States Dollars less any applicable federal, state, local or foreign
withholding taxes. For the avoidance of doubt, in no event shall the Participant
be entitled to receive payment for the SARs in any form other than cash, and
under no circumstance shall the Participant be entitled to receive shares of
Stock or any other security under this Agreement.

2. The right to exercise these SARs shall be subject to the terms and conditions
of the Plan and this Agreement. These SARs shall not be exercisable until the
Participant completes two (2) continuous years of employment with the Company
following the date first written above, and shall expire at the earliest of ten
(10) years after the date first written above; the date established by the
Compensation and Development Committee of the Board of Directors (the
"Committee") at the time of the grant; or the date on which the Participant's
employment with the Company, including its subsidiaries, is terminated for any
reason other than by reason of the Participant becoming Disabled or the
Participant's death or retirement under the provisions of any qualified
retirement plan that may be maintained by the Company or a subsidiary. If a
Participant's employment is terminated for gross misconduct, as determined by
the Company, all rights under the Plan, including the right to exercise these
SARs, will expire upon the date of such termination.

3. These SARs may be exercised in whole or in part by filing a written or
electronic notice with the Secretary of the Company at its corporate
headquarters or with such other administrator prior to the date the SARs expire.
An exercise may be disallowed if, as determined by the Secretary of the Company,
it is not made in compliance with any applicable provisions of the Company's
Insider Trading Policy as in effect from time to time. Such notice shall specify
the number of SARs with respect to which the Participant elects to exercise such
right and the date of exercise.

4. In the event of a corporate transaction involving the Company (including,
without limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination or exchange of shares), the provisions of Section 1.5 of
the Plan shall apply.

5. Notwithstanding anything in this Agreement to the contrary, this Agreement
may be amended at any time and from time to time by the Company without the
consent or written agreement of the Participant to the extent necessary to
comply with any recapture or "clawback" policy of the Company adopted by the
Company's Board of Directors to comply with Section 10D of the Securities
Exchange Act of 1934 and any applicable rules or regulations promulgated by the
Securities and Exchange Commission or any national securities exchange or
national securities association on which the Company's Common Stock may be
traded, as determined by the Company's Board of Directors.

6. Except as otherwise provided by the Committee, these SARs are not assignable
or transferable by the Participant otherwise than by will or the laws of descent
and distribution or, to the extent not inconsistent with applicable provisions
of the Internal Revenue Code (the "Code"), pursuant to a qualified domestic
relations order, as such term is defined in the Code. The SARs may be exercised
during the lifetime of the Participant only by the Participant or an appropriate
legal representative and only as provided herein. If these SARs are exercised by
the person or persons to whom the rights of the Participant under these SARs
shall pass by will or the laws of descent and distribution, these SARs may be
exercised only in respect of the number of rights which the Participant could
have acquired under the SARs by the exercise thereof at the date of death.

7. To the extent applicable, it is intended that this Agreement and the Plan
comply with the provisions of Section 409A of the Code, so that the income
inclusion provisions of Section 409A(a)(1) of the Code do not apply to the
Participant. This Agreement and the Plan shall be administered in a manner
consistent with this intent. Reference to Section 409A of the Code is to Section
409A of the Code, as amended, and will also include any regulations or any other
formal guidance promulgated with respect to such Section by the U.S. Department
of the Treasury or the Internal Revenue Service.

8. This Agreement is subject to the terms and conditions of the Plan. In the
event of any inconsistency between the provisions of this Agreement and the
Plan, the Plan shall govern. All terms used herein with initial capital letters
and not otherwise defined herein that are defined in the Plan shall have the
meanings assigned to them in the Plan. If any provision of this Agreement or the
application of any provision hereof to any person or circumstances is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other person or circumstances shall not
be affected, and the provisions so held to be invalid, unenforceable or
otherwise illegal shall be reformed to the extent (and only to the extent)
necessary to make it enforceable, valid and legal.

9. This Agreement does not constitute a contract of employment or continued
service, and participation in the Plan will not give any employee or Participant
the right to be retained in the employ of the Company, including its
subsidiaries, or any right or claim to any benefit under the Plan unless such
right or claim has specifically accrued under the terms of the Plan prior to the
issuance of any cash payment pursuant to the exercise of any SAR thereof.

STEPAN COMPANY

 

By: ______________________________

F. Quinn Stepan, Jr.

President and Chief Executive Officer

______________________________

Participant