Exhibit 10.1

CABOT CORPORATION

NON-EMPLOYEE DIRECTORS’ STOCK DEFERRAL PLAN
(ADOPTED JULY 14, 2006)

PURPOSE.

The purpose of the Cabot Corporation Non-Employee Directors’ Stock Deferral 
Plan (the “Plan”) is to set forth certain terms and conditions governing the
deferral of receipt of Common Stock awarded to Non-employee Directors under the
Cabot Corporation Non-Employee Directors’ Stock Compensation Plan (the
“Non-employee Directors’ Stock Plan”).  Capitalized terms used but not defined
herein shall have the meanings assigned to them under the Non-employee
Directors’ Stock Plan.  The Plan shall be interpreted and implemented in a
manner so that eligible Non-employee Directors will not fail, by reason of the
Plan or its implementation, to be “non-employee directors” within the meaning of
Rule 16(b)3 of the Securities Exchange Act of 1934, as such Rule and such Act
may be amended.

1.                  Deferral Election.

a.                 A Non-employee Director may defer the receipt of up to 100%
of any Common Stock awarded under the Non-employee Directors’ Stock Plan as
compensation for services performed in any calendar year commencing on or after
January 1, 2006 by completing and delivering a deferral election in accordance
with Section 2(b) below not later than December 31 of the preceding year (or
such earlier date as may be specified by the Administrator).  Any individual who
becomes a Non-employee Director after January 1 of any year may elect within 30
days after becoming a Non-employee Director to defer the receipt of up to 100%
of any Common Stock awarded under the Non-employee Directors’ Stock Plan as
compensation for services performed in the remainder of such calendar year by
completing and delivering a deferral election in accordance with Section 2(b)
below within such 30-day period.

b.                Each deferral election shall be made in writing on a form
prescribed by the Administrator.  The Administrator may condition the
effectiveness of any election upon the delivery by the Non-employee Director of
such other form or forms as the Administrator may prescribe.  A deferral
election for a particular calendar year shall be irrevocable once that year has
begun or upon such earlier date as may be specified by the Administrator (or in
the case of an initial year of participation described in (a) above, once the
30-day election period has expired).

2.                  Accounts.

a.                 For each share of Common Stock deferred hereunder there shall
be credited to a memorandum account on the books of the Company (each, an
“Account”) a unit representing one share of Common Stock (each, a “Stock Unit”).

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b.                If the outstanding Common Stock shall at any time be changed
by recapitalization, consolidation, combination, stock dividend or split,
reverse stock split, conversion or similar change in capitalization, the
Administrator shall make appropriate equitable adjustments in the number and
nature of Stock Units then credited to the Account consistent with the changes
being made to the securities underlying such Stock Units.

c.                 On the payment date of any cash dividend with respect to
Common Stock, there shall be credited to the Account of each participant in the
Plan an amount in cash equal to the dividend that would have been payable on the
Stock Units then credited to the Account had such Stock Units been outstanding
shares of Common  Stock.  The cash amount credited to each Account shall be
periodically adjusted for notional interest using the “Moody’s Rate” as that
term is defined in, and as such rate is from time to time determined under, the
Company’s Deferred Compensation Plan.

d.                Stock Units do not carry voting rights and a Non-employee
Director has no rights as a stockholder of the Company by virtue of
participation in the Plan except as to Common Stock distributed to him or her
pursuant to the Plan.

3.                  Distributions.

a.                 Common Stock equal in number to the number of Stock Units
credited to the Account and cash credited to an Account shall be paid as soon as
practicable to the Non-employee Director (or his or her designated beneficiary,
in the event of death) in accordance with a payment option selected by such
Director.  The Non-employee Director shall select one of the following payment
options at the time such Director makes an election pursuant to Section 2:

(1)             A lump sum as of March 31 of any designated year within the ten
(10) year period that begins with the calendar year for which shares were
deferred; provided that such designated year may not be earlier than the third
anniversary of the beginning of the deferral period;

(2)             A lump sum as of the last day of the quarter during which the
Non-employee Director separates from service with the Company within the meaning
of Section 409A of the Internal Revenue Code of 1986, as amended, and guidance
promulgated thereunder (“Section 409A”); or

(3)             Up to ten (10) annual installments commencing  as of the last
day of the quarter during which the Non-employee Director separates from service
with the Company within the meaning of Section 409A, with subsequent
installments to be made as of January 31 of each consecutive year.

b.                If the Non-employee Director has selected installment
payments, each installment payment shall consist of (i) shares of Common Stock
equal to the number of Stock Units then credited to the Account divided by the
number of remaining installments, rounded down to the nearest whole share, plus
(ii) cash equal to the

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cash then credited to the Account divided by the number of remaining
installments.  During any period of installment payments, any Common Stock and
cash then credited to the Account shall continue to be adjusted in accordance
with Section 3.

c.                 A Non-employee Director may change an election regarding the
time and form of distributions made pursuant to Section 4(a), provided, however,
that such change (i) does not take effect until at least twelve months after the
date on which the election is made, (ii) is made on or before the date one year
prior to the Director’s separation from service within the meaning of Section
409A, (iii) is made on or before the date one year prior to the termination of a
deferral period elected pursuant to Section 4(a)(1), if any, and (iv) except
with respect to payments upon the death of such Director, defers for a period of
not less than five years the payment of a lump sum or the commencement of
installment payments from the date a lump sum payment would otherwise have been
made or installment payments would otherwise have commenced.  Notwithstanding
the foregoing, a Non-employee Director may have only one form of payment
election in effect at any time, and it shall control the manner in which the
entirety of his or her Account will be paid.  The provisions of this Section
4(c) are intended to comply with and shall be construed to comply with Section
409A.

d.                Immediately prior to and contingent on the consummation of a
change of control within the meaning of Section 409A, the Administrator shall
distribute to each participant a single payment of shares of Common  Stock equal
in number to the number of Stock Units then credited to such participant’s
Account plus a single lump sum payment of cash equal to the cash amounts, if
any, then credited to the Account.  Notwithstanding the foregoing, if the Change
of Control is one in which stockholders of the Company will receive upon
consummation of the Change of Control a payment (whether cash, non-cash or a
combination of the foregoing), the Administrator may provide for payment, with
respect to some or all of the Common Stock represented by the Stock Units
credited to a participant’s Account, equal to the fair market value of such
Common Stock, as determined by the Administrator in good faith, on such payment
terms (which need not be the same as the terms of payment to stockholders) and
other terms, and subject to such conditions, as the Administrator determines.

4.                  Beneficiary Designation.

Any beneficiary designation for purposes of this Plan shall be made on such form
and pursuant to such administrative rules as the Administrator may prescribe. 
In the absence of a valid beneficiary designation, a Non-employee Director’s
beneficiary for purposes of this Plan shall be deemed to be his or her estate.

5.                  General Provisions.

a.                 No Non-employee Director and no beneficiary or other person
claiming under or through such Non-employee Director shall have any right, title
or interest by

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reason of this Plan to any particular assets of the Company.  The Company shall
not be required to establish any fund or make any other segregation of assets to
assure the payment of any Common Stock or cash credited to an Account under the
Plan. No right under the Plan shall be subject to anticipation, sale,
assignment, pledge, encumbrance or charge except by will or the law of descent
and distribution.

b.                Notwithstanding any other provision of the Plan or agreements
made pursuant hereto, the Company will not be obligated to deliver any shares of
Common Stock pursuant to the Plan until (i) the Company is satisfied that all
legal matters in connection with the issuance and delivery of such shares have
been addressed and resolved; (ii) if the outstanding Common Stock is at the time
of delivery listed on any stock exchange or national market system, the shares
to be delivered have been listed or authorized to be listed on such exchange or
system upon office notice of issuance; and (iii) all conditions of the award
have been satisfied or waived.

c.                 In no event shall the Company be required to issue a
fractional share hereunder.

d.                The issuance of shares to Non-employee Directors or to their
legal representatives shall be subject to any applicable taxes or other laws or
regulations of the United States of America or any state or commonwealth having
jurisdiction thereover.

e.                 With respect to Common Stock deferred by a Non-employee
Director for services in calendar year 2005 and in subsequent years, including
any dividends credited with respect thereto, the Plan is intended to comply with
the requirements of Section 409A of the Code and shall be construed
accordingly.  With respect to Common Stock deferred (within the meaning of
Section 409A) by a Non-employee Director on or before December 31, 2004
(including any dividends credited with respect thereto) under the Non-Employee
Directors’ Stock Compensation Plan adopted in 1992, such deferrals are intended
to be grandfathered for purposes of Section 409A and therefore exempt from
Section 409A.

f.                   Limitation of Liability.  Notwithstanding anything to the
contrary in the Plan, no Employer, nor the Administrator, nor any person acting
on behalf of any Employer or the Administrator, shall be liable to any
Non-employee Director or to the estate or beneficiary of such Director by reason
of any acceleration of income, or any additional tax, asserted by reason of the
failure of any deferral to satisfy the requirements of Section 409A of the
Code..

6.                  Administration.

The Plan is administered by the Governance and Nominating Committee of the Board
of Directors (the “Administrator”).  The Administrator shall have the authority
to establish, amend and revoke from time to time rules and regulations relating
to the Plan.  The Administrator has the complete authority to construe the terms
of the Plan and make all

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other determinations and take all other actions assigned to the Administrator
under the Plan.  The Administrator has the authority to interpret the Plan and
decide any questions and settle all controversies and disputes that may arise in
connection with the Plan.  Determinations of the Administrator are conclusive
and binding on all parties.  No member of the Administrator shall be personally
liable for any action or determination under the Plan to the extent permitted by
law.

7.                  Effective Date; Termination and Amendment.

a.                 The Plan shall become effective on the date of its adoption
by the Board of Directors.

b.                The Administrator may terminate the Plan or make such
modifications or amendments to the Plan as it may deem advisable. 
Notwithstanding anything contained herein to the contrary, however, no amendment
may be made and no distribution may be made upon termination of the Plan, or
otherwise, if such amendment or such distribution would constitute an
impermissible acceleration of payment under Section 409A of the Code.

 

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