EXHIBIT 10.2

STEPAN COMPANY

NON-QUALIFIED STOCK OPTION AGREEMENT

2006 INCENTIVE COMPENSATION PLAN

THIS AGREEMENT, dated as of the ___ day of _____, 20___ and entered into by and
between Stepan Company, a Delaware corporation (the “Company”), and ______ (the
“Participant”).

WITNESSETH THAT:

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

1. In accordance with the provisions of Stepan Company 2006 Incentive
Compensation Plan (the “Plan”), the Company hereby grants to the Participant a
Non-Qualified Stock Option to purchase a total of _____shares of common stock of
the Company (“Common Stock”). The option price of each share of Common Stock
subject to this Agreement shall be $            . The right to exercise the
option shall be subject to the terms and conditions of the Plan and this
Agreement shall not be exercisable until the Participant completes two (2) years
of employment with the Company following the date first written above and shall
expire at the earliest of eight (8) 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 is terminated for any reason other
than by disability, death or normal retirement (or early retirement with the
Company’s approval).

2. This option may be exercised in whole or in part by filing a written notice
with the Secretary of the Company at its corporate headquarters prior to the
date the option expires. Such notice shall specify the number of shares of
Common Stock which the Participant elects to purchase and shall be accompanied
by payment of the option price for such shares. Subject to the provisions of the
following sentence, payment shall be cash or by check payable to the Company.
All or a portion of such required amount may be paid by delivery of shares of
Common Stock having an aggregate fair market value which is equal to the amount
of cash which would otherwise be required.

3. 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 aggregate number of shares of
Common Stock subject to this Agreement and the terms of the outstanding stock
options may be equitably adjusted by the Committee, in its sole discretion.

4. Except as otherwise provided by the Committee, the option is not assignable
or transferable by the Participant other than by will or the laws of descent and
distribution and then only as provided herein, and may be exercised during the
lifetime of the Participant only by the Participant and only as provided herein.
If the option is exercised by the person or persons to whom the

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rights of the Participant under the option shall pass by will or the laws of
descent and distribution, the option may be exercised only in respect of the
number of shares which the Participant could have acquired under the option by
the exercise thereof at the date of death.

 

STEPAN COMPANY BY:        F. Quinn Stepan, Jr.   President and Chief Executive
Officer

       Participant

 

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