Document:

Exhibit

EXHIBIT 10.32.8

Final Execution Version

MASTER SUB-ADVISORY AGREEMENT

 ADDENDUM THREE

This Master Sub-Advisory Agreement Addendum Three is made this 7th day of May, 2018 (this “Addendum”), by and among Athene Asset Management LLC (f/k/a Athene Asset Management, L.P.), a Delaware limited liability company (the “Investment Manager”), Apollo Capital Management, L.P., a Delaware limited partnership (“ACM”), Apollo Global Real Estate Management, L.P., a Delaware limited partnership (“AGREM”), ARM Manager LLC, a Delaware limited liability company (“ARM”), Apollo Longevity, LLC, a Delaware limited liability company (“ALL”) and Apollo Emerging Markets, LLC, a Delaware limited liability company (“AEM” and together with ACM, AGREM, ARM and ALL, the “Sub-Advisors), pursuant to that certain Second Amended and Restated Master Sub-Advisory Agreement, effective as of April 1, 2014 (as further amended, supplemented or modified from time to time, the “Master Sub-Advisory Agreement”) by and among the Investment Manager and the Sub-Advisors. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Master Sub-Advisory Agreement.

WHEREAS, the Investment Manager and the Sub-Advisors entered into the Master Sub-Advisory Agreement pursuant to which the Investment Manager retained the Sub- Advisors to manage an investment portfolio of one or more Accounts;

WHEREAS, Section 2(k) of the Master Sub-Advisory Agreement provides that the parties may enter into an arrangement, either pursuant to an Addendum or other written arrangement, whereby the Sub-Advisor would have discretion with respect to certain transactions other than as set forth in Section 2(a) of the Master Sub-Advisory Agreement, such as to execute transactions for the Accounts without seeking prior consent from the Investment Manager so long as they fit within, among other things, certain prescribed guidelines;

WHEREAS, one or more Accounts desire to invest in Apollo Hybrid Value Fund, (the “HV Fund”), and in connection with such investment, one or more Accounts also desire to invest on an incremental direct investment basis, following the same strategy as the HV Fund, alongside (but not through or part of) the HV Fund (the “Hybrid Value Managed Account”) via an investment in AA Direct, L.P., a Delaware limited partnership formed to facilitate the Hybrid Value Managed Account (“AA Direct”);

WHEREAS, the Investment Manager and Sub-Advisors desire to permit ACM to provide advice and execute certain transactions for the Accounts with respect to the Hybrid Value Managed Account and have agreed to the payment of certain fees for services provided by the Sub-Advisors to the Investment Manager in respect of the Hybrid Value Managed Account as set forth in Schedule 2-5 attached hereto; and

WHEREAS, this Addendum shall be attached to, amend and become a part of the Master Sub-Advisory Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1.Amendments to Schedule 2-1 of the Master Sub-Advisory Agreement. Schedule 2-1 of the Master Sub-Advisory Agreement is hereby amended and replaced in its entirety with Exhibit A attached hereto.

2.Amendments to Schedule 2 of the Master Sub-Advisory Agreement. Schedule 2 of the Master Sub-Advisory Agreement is hereby amended to include as Schedule 2-5, the form of Exhibit B attached hereto.

3.Amendments to Schedule 3 of the Master Sub-Advisory Agreement. Schedule 3 of the Master Sub-Advisory Agreement is hereby amended to include as Schedule 3-1, the form of Exhibit C hereto.

4.Addendum to Master Sub-Advisory Agreement. This Addendum constitutes an Addendum to the Master Sub-Advisory Agreement (as such term is defined in Section 1 of the Master Sub-Advisory Agreement). This Addendum shall be deemed to be attached to, amend and become a part of the Master Sub-Advisory Agreement and the terms of the Master Sub-Advisory Agreement shall be amended, supplemented or modified by the terms of this Addendum as applicable. Any reference to “this Agreement” in the Master Sub-Advisory Agreement shall be deemed to include the terms set forth in this Addendum.

5.Ratification. Except with respect to matters expressly provided for herein, all terms, provisions and conditions of the Master Sub-Advisory Agreement are hereby ratified and shall remain unchanged and continue in full force and effect.

6.Conflicts. In the event of any conflict or inconsistency between the terms of this Addendum and those of the Master Sub-Advisory Agreement, this Addendum will control.

1

EXHIBIT 10.32.8

IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed by their respective duly authorized officers as of the date and year first above written.

ATHENE ASSET MANAGEMENT LLC
                
/s/ James R. Belardi
Name: James R. Belardi
Title: Chief Executive Officer

APOLLO CAPITAL MANAGEMENT, L.P.
                
By: Apollo Capital Management, GP, LLC, 
its General Partner

/s/ Joseph D. Glatt
Name: Joseph D. Glatt
Title: Vice President

APOLLO GLOBAL REAL ESTATE MANAGEMENT, L.P.
                
By: Apollo Global Real Estate Management, GP, LLC, 
its General Partner

/s/ Joseph D. Glatt
Name: Joseph D. Glatt
Title: Vice President

ARM MANAGER LLC

                            
/s/ Joseph D. Glatt
Name: Joseph D. Glatt
Title: Vice President

APOLLO LONGEVITY, LLC
                
By: Apollo Capital Management L.P., its sole member
By: Apollo Capital Management GP, LLC, its General Partner

/s/ Joseph D. Glatt
Name: Joseph D. Glatt
Title: Vice President

APOLLO EMERGING MARKETS, LLC
                
By: Apollo Capital Management L.P., its sole member
By: Apollo Capital Management GP, LLC, its General Partner

/s/ Joseph D. Glatt
Name: Joseph D. Glatt
Title: Vice President

Signature Page to Master Sub-Advisory Agreement Addendum Three

EXHIBIT 10.32.8

Exhibit A

Schedule 2-1

Management Fee Schedule (all Sub-Advisors other than Apollo Royalties Management LLC)

		
	1.
	Management Fee. In consideration of the services performed under the Agreement, the Investment Manager shall pay to the Sub-Advisors (allocated among such Sub-Advisors as such Sub-Advisors shall determine) a management fee (the “Management Fee”), calculated and paid quarterly in arrears as a percentage of Average Month-End Net Asset Value of assets in all the Accounts managed by the Sub-Advisors (unless otherwise agreed to by the parties1), (other than Third Party CLO Equity Managed Account (as described on Schedule 2-3)2 and the Hybrid Value Managed Account (as described on Schedule 2-53)) pursuant to the following schedule, which shall take effect with respect to new and existing assets as of January 1, 2017:

1 For the avoidance of doubt but subject to Section 2(a), to the extent that a Sub-Adviser invests on behalf of the Account in an affiliate-managed CLO (a) to the extent that such investment is on a secondary basis in one of the debt and/or equity tranches of such CLO, the Account will be charged fees pursuant to this Schedule 2-1; and (b) to the extent that such investment is on a primary basis, the agreement governing the Account’s investment into the affiliate- managed CLO will govern the treatment of fees in such instance (and not, for the avoidance of doubt, this Schedule 2-1). In addition, the Investment Manager shall be responsible for any servicing fees associated with the sub-advised mortgage and mezzanine real estate loan portfolio.
2 For the avoidance of doubt, this fee schedule does not apply to future or existing investments in Apollo funds (which as of the date hereof includes but is not limited to TRF, COF 3, SCRF IV, AA Direct, EPFs, FCIs, all the ALM and ALME CLO sand related warehouses, the levered CMBS funds and APC), or to any investments made by Apollo Royalties Management LLC. Additionally, this fee schedule does not apply to investments in MCF CLO II (f/k/a Kirkwood), which is covered by Schedule 2-3 hereof). Fees with respect to the Third Party CLO Equity Managed Account are charged pursuant to Schedule 2-3, and the Project Orange Trade will be included in the Third Party CLO Equity Managed Account and charged accordingly.
3 Fees with respect to the Hybrid Value Managed Account are charged pursuant to Schedule 2-5. In addition, fees with respect to the Hybrid Value Managed Account are in addition to, and not set-off against, the fees charged by the HV Fund.

Exhibit A

EXHIBIT 10.32.8

	
			
	Assets Under Management4
	 
	Management Fee Rate5

	< $10,000,000,000
	 
	40 bps (0.40%) per annum

	≥ $10,000,000,000 and < $12,440,936,389
	 
	35 bps (0.35%) per annum

	> $12,440,936,389 and < $16,000,000,000
	 
	40 bps (0.40%) per annum

	> $16,000,000,000
	 
	35 bps (0.35%) per annum

The “Average Month-End Net Asset Value” shall be the average of the month-end aggregate net asset value of the Accounts during the calendar quarter. If the period in respect of which a Management Fee is payable is less than a calendar quarter, then the Management Fee shall be pro rated accordingly. For the avoidance of doubt, for a given month, Average Month-End Net Asset Value shall be calculated based on trade date holdings plus accrued interest.

		
	2.
	Valuation. Each Sub-Advisor, through its designee, shall (i) be responsible for determining the value of the assets that are purchased for the Accounts that it manages in accordance with such Sub-Advisor’s existing policies and procedures, and (ii) shall use commercially reasonable efforts to submit a proposed valuation of such Accounts within 5 business days (but in no event later than 6 business days) following each month-end to the Investment Manager. The parties hereto agree to negotiate in good faith as to any objections raised by the Investment Manager about the valuation of assets in the Accounts for purposes of determining the Management Fees.

		
	3.
	Payment of Fees. The Management Fee will be calculated, billed, and paid quarterly in arrears, based on the Average Month-End Net Asset Value as of the last business day of each and all of the three calendar months during the relevant quarter, or in the case of any partial quarterly period, the last day of each calendar month during the relevant period and the last business day of such period. The Investment Manager will pay any Management Fees payable hereunder within 30 calendar days following receipt by the Investment Manager of an invoice for such fee, detailing the calculation of such fee. The Investment Manager and the Sub- Advisors shall agree on the form and substance of such invoice before the first Management Fee billing cycle. Upon termination of the Agreement, any outstanding Management Fee shall become immediately payable by the Investment Manager.

4 “Assets Under Management” shall be calculated in the aggregate to include the investment assets of or relating to Athene Holding Ltd. (“Athene”) and its subsidiaries, managed by ACM, AGREM, ARM, ALL, AEM or an affiliate thereof, whether under this Agreement or separate sub-advisory agreement with the Investment Manager, including cash and all assets in surplus accounts and funds withheld accounts, modified coinsurance accounts and reinsurance trusts supporting reinsurance agreements entered into by Athene (collectively, “Athene Accounts”) and managed by ACM, AGREM, ARM, ALL and AEM. For the avoidance of doubt, Assets Under Management shall not include future or existing investments in Apollo managed funds (which as of the date hereof includes but is not limited to TRF, COF 3, EPFs, FCIs, all the ALM, ALME or other affiliated CLOs or CLO-sponsored vehicles and related warehouses, APC, the levered CMBS funds) or any investments made by Apollo Royalties Management LLC; provided, that, notwithstanding the foregoing, (a) Assets Under Management shall include investment by any Athene Accounts in the Hybrid Value Managed Account (including, without limitation investment through AA Direct) and (b) to the extent that the Account invests in any affiliated CLO or CLO-sponsored vehicle pursuant to which the Account is charged fees pursuant to this Schedule 2-1, such investment in such affiliated CLO or CLO-sponsored vehicle shall be included in Assets Under Management.
5 For the avoidance of doubt, this Schedule 2-1 shall not apply to any Apollo controlled investment entities, the fee schedule of which shall be governed by a separate schedule or other governing document.

		
	4.
	Incentive Fees. For the avoidance of doubt, the provisions governing incentive fees on existing assets remain intact and shall not be deemed amended by this Agreement. The Investment Manager and each Sub-Advisor may agree in writing from time to time on an incentive fee with respect to particular investments or asset classes managed by such Sub- Advisor.

Exhibit A

EXHIBIT 10.32.8

Exhibit B

Schedule 2-5

Hybrid Value Managed Account

		
	1)
	Management Fee. In consideration of the services performed under the Agreement and pursuant to this Schedule 2-5, the Investment Manager shall pay a management fee (the “Management Fee”), calculated and paid quarterly in arrears equal to 50 bps (0.50%) per annum on the quarter end cost basis of invested securities in the Hybrid Value Managed Account.

		
	2)
	Payment of Fees. The Management Fee will be calculated, billed, and paid quarterly in arrears, as of the last business day of each and all of the four calendar quarters during the relevant calendar year, or in the case of any partial annual period, the last day of each calendar quarter during the relevant period and the last business day of such period. The Investment Manager will pay any Management Fees payable hereunder within 30 calendar days following receipt by the Investment Manager of an invoice for such fee, detailing the calculation of such fee. The Investment Manager and the Sub-Advisors shall agree on the form and substance of such invoice before the first Management Fee billing cycle. Upon termination of the Agreement, any outstanding Management Fee shall become immediately payable by the Investment Manager.

		
	3)
	Incentive Fee. In addition to the Management Fee set forth above, the Investment Manager shall pay to ACM an incentive fee equal to three percent (3%) of the realized proceeds (including principal repayments and coupon payments, “Proceeds”) in excess of the cost of each investment recommended by ACM pursuant to this Schedule 2-5 and return of the Preferred Return with respect to each investment, each as fully described below (the “Incentive Fee” and together with the Management Fee, the “Fees”). Specifically, Proceeds from each investment will be allocated as follows:

		
	(i)
	First, to the Investment Manager’s applicable clients (the “Clients”) until such Clients have received an amount equal to the aggregate amount of capital contributions made by such Clients to the Hybrid Value Managed Account (including any Management Fees paid pursuant to this Schedule 2-5 and related to the Hybrid Value Managed Account);

		
	(ii)
	Second, to the applicable Clients until such Clients have received an amount equal to interest at the rate of eight percent (8%) per annum, compounded annually, on the aggregate amount of capital contributions made by such Clients to the Hybrid Value Managed Account (including on any Management Fees paid pursuant to this Schedule 2-5 and related to the Hybrid Value Managed Account) until the relevant dates on which amounts representing such capital contributions and the priority return thereon are distributed;

		
	(iii)
	Third, 100% to ACM until ACM has received an amount equal to 3% of the sum of the allocations made pursuant to item (ii) above and amounts then and previously allocated pursuant to this item (iii); and

		
	(iv)
	Finally, 97% to the applicable Clients and 3% to ACM.

Upon the termination of the Agreement, a clawback calculation will be completed based on the aggregate Proceeds received from all realized investments recommended by ACM pursuant hereto, and ACM shall be required to repay any Incentive Fee previously paid to ACM to the extent that any realized losses from investments recommended by ACM pursuant to this Schedule 2-5 remain unreturned to the applicable Clients upon such termination.

		
	4)
	Incentive Fee Payment. Incentive Fee will be paid quarterly in arrears. As referenced in Schedule 2.1, provisions governing incentive fees on existing assets remain intact and shall not be deemed amended by this Agreement. The Investment Manager and each Sub- Advisor may in addition agree in writing from time to time on an incentive fee with respect to particular investments or asset classes managed by such Sub-Advisor.

Exhibit B

EXHIBIT 10.32.8

Exhibit C

Schedule 3-1

Hybrid Value Managed Account - Investment Guidelines

The Investment Guidelines related to the Hybrid Value Managed Account shall be consistent with those contained in the governing documents of AA Direct. Furthermore, each investment made by the Accounts in respect of the HV Fund, shall also be made by the Accounts with respect to the Hybrid Value Managed Account on pro rata based on the amount of capital in the HV Fund and the Hybrid Value Managed Account by clients of the Investment Manager. Notwithstanding the foregoing, the Investment Manager may revoke such investment discretion at any time upon notice to ACM. This Schedule 3-1 and the Schedule 4 attached to the Agreement may otherwise be amended, supplemented or modified from time to time as agreed to in writing solely by the Investment Manager and ACM without a formal amendment to the Agreement.

Exhibit Cscl-ex102_739.htm

Exhibit 10.2

 

 

 

 

 

 

 

 

 

 

Stepan Company Supplemental Profit 

Sharing Plan

(Restated Effective as of January 1, 1994)

 

 

 

 

 

 

Stepan Company Supplemental Profit Sharing Plan

(Restated Effective as of January 1, 1994)

 

Contents

 

 

	
Section
	
 
	
 
	
Page

	
 
	
 
	
 
	
 

	
 
	
Article I. The Plan
	
 
	
 

	
1.1
	
Establishment and Amendment of the Plan
	
 
	
1

	
1.2
	
Applicability of Plan
	
 
	
1

	
1.3
	
Purpose of the Plan
	
 
	
1

	
1.4
	
Nonqualified Plan
	
 
	
1

	
 
	
 
	
 
	
 

	
 
	
Article II. Definitions
	
 
	
 

	
2.1
	
Definitions
	
 
	
2

	
2.2
	
Gender and Number
	
 
	
2

	
 
	
 
	
 
	
 

	
 
	
Article Ill. Participation and Service
	
 
	
 

	
3.1
	
Participation
	
 
	
3

	
3.2
	
Duration of Participation
	
 
	
3

	
 
	
 
	
 
	
 

	
 
	
Article IV. Supplemental Profit Sharing Benefit
	
 
	
 

	
4.1
	
Supplemental Benefit
	
 
	
4

	
4.2
	
Discretionary Benefits
	
 
	
4

	
4.2
	
Vesting of Accounts
	
 
	
4

	
4.3
	
Earnings on Account
	
 
	
4

	
4.4
	
Form and Timing of Benefit Payments
	
 
	
4

	
4.5
	
Beneficiary
	
 
	
5

	
4.6
	
Accounts
	
 
	
5

	
4.7
	
Withholding Taxes
	
 
	
5

	
 
	
 
	
 
	
 

	
 
	
Article V. Administration
	
 
	
 

	
5.1
	
Plan Administrator
	
 
	
6

	
5.2
	
Plan Committee
	
 
	
6

	
5.3
	
Compensation and Expenses
	
 
	
6

i

Stepan Company Supplemental Profit Sharing Plan

(Restated Effective as of January 1, 1994)

 

Contents

 

 

	
Section
	
 
	
 
	
Page

	
 
	
 
	
 
	
 

	
5.4
	
Manner of Action 
	
 
	
6

	
5.5
	
Employment of Specialists
	
 
	
6

	
5.6
	
Allocation and Delegation of Committee Responsibilities and Powers
	
 
	
6

	
5.7
	
Records
	
 
	
7

	
5.8
	
Rules
	
 
	
7

	
5.9
	
Administration
	
 
	
7

	
5.10
	
Accounts and Records
	
 
	
7

	
5.11
	
No Enlargement of Employee Rights
	
 
	
7

	
5.12
	
Appeals from Denial of Claims 10
	
 
	
7

	
5.13
	
Notice of Address and Missing Persons
	
 
	
8

	
5.14
	
Data and Information for Benefits
	
 
	
8

	
5.15
	
Indemnity for Liability
	
 
	
8

	
5.16
	
Effect of a Mistake
	
 
	
9

	
5.17
	
Self Interest
	
 
	
9

	
 
	
 
	
 
	
 

	
 
	
Article VI. Miscellaneous
	
 
	
 

	
6.1
	
Amendment and Termination
	
 
	
10

	
6.2
	
Incompetency
	
 
	
10

	
6.3
	
Nonalienation
	
 
	
10

	
6.4
	
Applicable Law
	
 
	
10

	
6.5
	
Severability
	
 
	
10

	
6.6
	
Notice 
	
 
	
11

	
6.7
	
Costs of the Plan
	
 
	
11

	
6.8
	
Successors
	
 
	
11

	
6.9
	
Source of Payments
	
 
	
11

	
6.10
	
Counterparts
	
 
	
11

 

 

 

ii

Article I. The Plan

 

1.1Establishment and Amendment of the Plan

Stepan Company, a Delaware corporation, hereby establishes a supplemental profit sharing plan for the benefit of certain of its Employees, effective as of January l, 1994, known as the “Stepan Company Supplemental Profit Sharing Plan.”

 

1.2Applicability of Plan

The provisions of this Plan as set forth herein are applicable only to the Employees of a Company in current employment on or after January 1, 1994.

 

1.3Purpose of the Plan

The purpose of the Plan is to enable Participants to receive profit sharing benefits to which such Participants would have been entitled under the Stepan Company Profit Sharing Plan but for the limitations of sections 401(a)(17) and 415 of the Internal Revenue Code.

 

1.4Nonqualified Plan

This Plan is intended to be an unfunded deferred compensation plan for a select group of highly compensated Employees and is not intended to be a qualified plan under section 401(a) of the Internal Revenue Code. All benefits payable hereunder shall be paid from the general assets of the Company, and Members and Beneficiaries shall not have any greater rights to such assets than other general creditors of the Company.

 

1

Article II. Definitions

 

2.1Definitions

Whenever used in the Plan, the following terms shall have the respective meanings set forth below unless otherwise expressly provided herein, and when the defined meaning is intended the term is capitalized.

	
(a)
	
“Account” means the separate bookkeeping account maintained for each Member which represents the Member’s total credits under the Plan as of any Valuation Date.

	
(b)
	
“Act” means the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

	
(c)
	
“Beneficiary” means a Beneficiary as described in section 4.5. 

	
(d).
	
“Board” means the Board of Directors of the Company.

	
(e)
	
“Change in Control” shall be deemed to exist when 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 Exchange Act of 1934, acquires shares of capital stock of the Company having 25 percent or more of the total number of votes that may be cast for the election of directors 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, the persons who were directors of the Company before the transaction shall during any two consecutive years thereafter cease to constitute a majority of the Board.

	
(f)
	
“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time.

	
(g)
	
“Committee” means the person or persons appointed to administer the Plan as described in section 5.2.

	
(h)
	
“Effective Date” means January 1, 1994.

	
(i)
	
“Employee” means any person who is employed by the Company.

	
(j)
	
“Member” means a Participant, or a former Participant who still has an Account balance in the Plan.

	
(k)
	
“Participant” means any Employee of a Company who has met and continues to meet the eligibility requirements of the Plan as set forth in section 3.1.

	
(1)
	
“Plan” means the Stepan Company Supplemental Profit Sharing Plan, as provided herein and as subsequently amended from time to time.

	
(m)
	
“Plan Administrator” means the Company.

(n)“Plan Year” means the 12-consecutive-month period ending each December 31.

	
(o)
	
“Qualified Plan” means the Stepan Company Profit Sharing Plan, as amended from time to time.

	
(p)
	
“Valuation Date” means the last business day of each calendar quarter, and such other dates as determined by the Company pursuant to a nondiscriminatory policy.

 

2.2Gender and Number

Unless the context clearly requires otherwise, the masculine pronoun whenever used shall include the feminine and neuter pronoun, and the singular shall include the plural.

 

2

Article III. Participation and Service

 

3.1Participation

A salaried Employee of the Company shall become a Participant in the Plan as of the first day he becomes both (a) a Company officer, a departmental vice president, and (b) a Participant in the Qualified Plan.

 

3.2Duration of Participation

A Participant shall continue to be a Participant until the Participant terminates employment with the Company; thereafter, the Participant shall be a Member for as long as the Participant has an Account balance in the Plan.

 

3

Article IV. Supplemental Profit Sharing Benefit

 

4.1Supplemental Benefit

For each Plan Year in which an Employee is a Participant, the Company will credit to each Participant’s Account an amount equal to (a) minus (b) where—

	
(a)
	
is the amount which would have been credited to the Member’s account under the Qualified Plan from employer contributions for such Year had the amounts not been limited by sections 415 and 401(a)(17) of the Code; and

	
(b)
	
is the amount which actually is credited to the Member’s account under the Qualified Plan.

 

4.2Discretionary Benefits

The Board (or its delegate) shall have the authority to provide any discretionary supplementary or additional benefit pursuant to the Plan to a Member at any time after the Member ceases to be an Employee.

 

4.2Vesting of Accounts

Each Member shall at all times be fully vested in such Member’s Account.

 

4.3Earnings on Account

A Member’s Account under this Article IV will be credited with the same rate(s) of earnings as are Company contributions under the Qualified Plan.

 

The Company shall not be required to direct that any amount credited to a Member’s Account actually be invested in the same funds as Company contributions under the Qualified Plan. Rather, such accruals shall be tracked as bookkeeping accounts, as if the investments corresponding to those made by each Member under the Qualified Plan were actually made under this Plan, at the same time, and in the same proportionate amounts as elected under the Qualified Plan.

 

The administration of such accruals under this Plan shall be the responsibility of the Committee or its designate, and shall be conducted according to such rules, procedures, and determinations as the Committee (or the Committee’s designate), at its sole discretion, deems appropriate. Members and their beneficiaries shall have no right to direct the actual investment of any funds subject to this Plan.

 

4.4Form and Timing of Benefit Payments

Benefit payments under this Article IV shall be payable in the same form, and at the same time, as the corresponding tax-qualified contributions payable to the Member under the Qualified Plan; provided, however, that the Committee shall have the authority, at its sole discretion, to accelerate the payout of such benefit payments upon (a) the termination of a Member’s employment or (b) upon a Change in Control; and further provided, that a Member may request that the Committee permit distribution in a form other than that provided in the Qualified Plan. The Committee, in its sole discretion, shall determine whether to allow such alternate form of distribution and the terms under which such alternate form of distribution may be made.

 

4

4.5Beneficiary

Each Member shall be entitled to designate one or more beneficiaries of the Member under this Plan. Such beneficiary may or may not be the same as those named by the Member under the Qualified Plan. All designations shall be signed by the Member and shall be in such form as prescribed by the Committee or its designate. Each designation shall be effective as of the date received by the Company.

 

Members may change their designations of beneficiary on such form as prescribed by the Committee or its designate. The payment of account balances under the Plan shall be in accordance with the last unrevoked written designation of beneficiary that has been signed by the Member and delivered by the Member to the Company prior to the Member’s death.

 

In the event that all the beneficiaries named by a Member pursuant to this section 4.5 predecease the Member, the amounts that would have been paid to the Member or the Member’s beneficiaries under this Plan shall be paid to the Member’s estate.

 

In the event a Member does not designate a beneficiary, or for any reason such designation is ineffective, in whole or in part, the amounts that otherwise would have been paid to the Member or the Member’s beneficiaries under the Plan shall be paid to the Member’s estate.

 

4.6Accounts

The Company shall establish and maintain separate individual bookkeeping accounts for Company benefits accrued hereunder and earnings accruals corresponding to such Company credits attributable to the Member pursuant to section 4.1 herein. Such accounts shall be administered according to such rules and procedures as the Committee (or its designate), at is sole discretion, deems appropriate.

 

4.7Withholding Taxes

A Company may withhold from a Member’s compensation and from any payment under this Plan any taxes required to be withheld with respect to contributions or benefits under this Plan.

 

5

Article V. Administration

 

5.1Plan Administrator

The Company shall be the Plan Administrator, responsible for the general administration of the Plan and for carrying out the provisions thereat except to the extent that such responsibility has been allocated or delegated in or pursuant to any other provision hereof or by action of the Board of the Company.

 

5.2Plan Committee

The authority to control and manage the operation and administration of the Plan is vested in an administrative Committee. The Committee shall consist of one or more individual members as the Board may appoint from time to time. Any member of the Committee may resign by delivering his written resignation 30 days in advance to the Board and other Committee members. The Company may at any time, by resolution of its Board, appoint a successor member or remove and replace a member of such Committee, with or without cause. If there are no members of the Committee, the Board shall constitute the Committee.

 

5.3Compensation and Expenses

A member of the Committee shall serve without compensation for services as such if he is receiving full-time pay from the Company (or other employer affiliated with the Company) as an Employee. Any other member of the Committee may receive reasonable compensation for services as a member, to be paid by the Company. Any member of the Committee may receive reimbursement by the Company of reasonable expenses properly and actually incurred in the performance of a Committee function.

 

5.4Manner of Action

A majority of the members of the Committee at the time in office shall constitute a quorum for the transaction of business. All resolutions adopted and other actions taken by the Committee at any meeting shall be by a majority vote of those present at any such meeting. Upon the concurrence in writing of a majority of the members at the time in office, action of the Committee may be taken otherwise than at a meeting.

 

5.5Employment of Specialists

The Committee may authorize one or more of their number or any agent to execute or deliver any instrument, instruments, or direction on their behalf, and may employ such counsel, auditors, and other specialists, and such clerical, actuarial, and other services as they may require in carrying out the provisions of the Plan. Such expenses shall be paid by the Company.

 

5.6Allocation and Delegation of Committee Responsibilities and Powers

In exercising its authority to control and manage the operation and administration of the Plan, the Committee may allocate all or any part of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation and the acceptance thereof by the Committee member or delegate shall be in writing and may be revoked at any time.

 

6

5.7Records

All resolutions, proceedings, acts, and determinations of the Committee shall be recorded, and all such records, together with such documents and instruments as may be necessary for the administration of the Plan, shall be preserved.

 

5.8Rules

Subject to the limitations contained in the Plan, the Committee shall be empowered from time to time in its discretion to adopt bylaws and establish rules for the conduct of its affairs and the exercise of the duties imposed upon it under the Plan.

 

5.9Administration

The Committee shall be responsible for the administration of the Plan. The Committee shall have all such powers as may be necessary or appropriate to carry out the provisions hereof and may, from time to time, establish rules for the administration of the Plan and the transaction of the Plan’s business. In making any such determination or rule, the Committee shall pursue uniform policies as from time to time established by the Committee and shall not discriminate in favor of or against any Member. The Committee shall have the exclusive and absolute discretion to make any finding of fact necessary or appropriate for any purpose under the Plan including, but not limited to, the determination of the eligibility for and the amount of any benefit payable under the Plan. The Committee shall have the exclusive and absolute discretion to interpret the terms and provisions of the Plan and to determine any and all questions arising under the Plan or in connection with the administration thereof including, without limitation, the right to remedy or resolve possible ambiguities, inconsistencies, or omissions, by general rule or particular decision. All findings of fact, determinations, interpretations, and decisions of the Committee shall be final, conclusive, and binding upon all persons having or claiming to have any interest or right under the Plan.

 

5.10 Accounts and Records

The Accounts and records of the Plan shall be maintained by the Committee and shall accurately disclose the status of the Accounts of each Member or each Member’s beneficiary in the Plan.

 

Each Member shall be advised from time to time, at least once annually during each Plan Year, as to the status of the Member’s Account.

 

5.11No Enlargement of Employee Rights

Nothing contained in the Plan shall be deemed to give any Employee the right to be retained in the service of a Company or to interfere with the right of the Company to discharge or retire any Employee at any time.

 

5.12Appeals from Denial of Claims

If any claim for benefits under the Plan is wholly or partially denied, the claimant shall be given notice in writing within a reasonable period of time after receipt of the claim by the Plan (not to exceed 90 days after receipt of the claim or, if special circumstances require an extension of time, written notice of the extension shall be furnished to the claimant and an additional 90 days will be considered reasonable) by registered or certified mail of such denial, written in a manner calculated to be understood by the claimant, setting forth the following information:

7

	
(a)
	
the specific reasons for such denial;

	
(b)
	
specific reference to pertinent Plan provisions on which the denial is based;

	
(c)
	
a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and

	
(d)
	
an explanation of the Plan’s claim review procedure.

The claimant also shall be advised that he or his duly authorized representative may request a review by the Committee of the decision denying the claim by filing with the Committee, within 60 days after such notice has been received by the claimant, a written request for such review, and that he may review pertinent documents, and submit issues and comments in writing within the same 60-day period. If such request is so filed, such review shall be made by the Committee within 60 days after receipt of such request, unless special circumstances require an extension of time for processing, in which case the claimant shall be so notified and a decision shall be rendered as soon as possible, but not later than 120 days after receipt of the request for review. The Member or Beneficiary shall be given written notice of the decision resulting from such review, which notice shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, and specific references to the pertinent Plan provisions on which the decision is based.

 

5.13Notice of Address and Missing Persons

Each person entitled to benefits under the Plan must file with the Committee, in writing, his post office address and each change of post office address. Any communication, statement, or notice addressed to such a person at his latest reported post office address will be binding upon him for all purposes of the Plan and neither the Plan Administrator, the Committee, nor the Company shall be obliged to search for or ascertain his whereabouts. In the event that such person cannot be located, the Committee may direct that payment of such benefit with respect to such person shall be discontinued and all liability for the payment thereof shall terminate; provided, however, that in the event of the subsequent reappearance of the Member or Beneficiary prior to termination of the Plan, the benefits shall be paid in accordance with Article IV.

 

5.14Data and Information for Benefits

The Company shall furnish to the Committee such data and information as may be required. The records of the Company as to a Participant’s period of employment, termination of employment and reasons therefor, leave of absence, reemployment, and Compensation shall be presumed to be accurate unless determined to be incorrect. All persons claiming benefits under the Plan must furnish to the Committee or its designated agent such documents, evidence, or information as the Committee or its designated agent consider necessary or desirable for the purpose of administering the Plan; and such person must furnish such information promptly and sign such documents as the Committee or its designated agent may require before any benefits become payable under the Plan.

 

5.15Indemnity for Liability

The Committee and the individual members thereof and any employees to whom the Committee has delegated responsibility in accordance with section 5.6 shall be indemnified by the Company against any and all liabilities, losses, costs, and expenses (including legal fees and expenses) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against the 

8

Committee, its members, or such Employees by reason of the performance of a Committee function if the Committee, such members, or Employees did not act dishonestly or in willful violation of the law or regulation under which such liability, loss, cost, or expense arises.

 

5.16Effect of a Mistake

In the event of a mistake or misstatement as to the eligibility, participation, or service of any Member, or the amount of payments made or to be made to a Member or Beneficiary, the Committee shall, if possible, cause to be withheld or accelerated or otherwise make adjustment of such amounts of payments as will in its sole judgment result in the Member or Beneficiary receiving the proper amount of payments under this Plan.

 

5.17Self Interest

A member of the Committee who is also a Member shall not vote on any question relating specifically to himself.

 

9

Article VI. Miscellaneous

 

6.1Amendment and Termination

	
(a)
	
The Company does hereby expressly and specifically reserve the sole and exclusive right at any time by action of the Board to amend, modify, or terminate the Plan.

	
(b)
	
While the Company contemplates carrying out the provisions of the Plan indefinitely with respect to its Employees, the Company shall not be under any obligation or liability whatsoever to maintain the Plan for any minimum or other period of time.

 

6.2Incompetency

Every person receiving or claiming benefits under the Plan shall be conclusively presumed to be mentally competent and of age until the Committee receives written notice, in a form and manner acceptable to it, that such person is incompetent or a minor, and that a guardian, conservator, or other person legally vested with the care of such person’s estate has been appointed. In the event that the Committee finds that any person to whom a benefit is payable under the Plan is unable to properly care for such person’s affairs, or is a minor, then any payment due (unless a prior claim therefor shall have been made by a duly appointed legal representative) may be paid to the spouse, a child, a parent, a brother, or a sister, or to any person deemed by the Committee to have incurred expense for such person otherwise entitled to payment.

 

In the event a guardian or conservator of the estate of any person receiving or claiming benefits under the Plan shall be appointed by a court of competent jurisdiction, payments shall be made to such guardian or conservator, provided that proper proof of appointment is furnished in a form and manner suitable to the Committee.

 

To the extent permitted by law, any payment made under the provisions of this section 6.2 shall be a complete discharge of liability under the Plan.

 

6.3Nonalienation

The benefits payable at any time under the Plan shall not be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment, garnishment, or encumbrance of any kind. Any attempt to alienate, sell, transfer, assign, pledge, or otherwise encumber any such benefit, whether presently or thereafter payable, shall be void. No benefit shall in any manner be liable for or subject to the debts or liabilities of any Member or of any other person entitled to any benefit.

 

6.4Applicable Law

The Plan and all rights hereunder shall be governed by and construed in accordance with the laws of the State of Illinois to the extent such laws have not been preempted by applicable federal law.

 

6.5Severability

If a provision of this Plan shall be held illegal or invalid, the illegality or invalidity shall not affect the remaining parts of the Plan and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included in this Plan.

 

10

6.6Notice

Any notice or filing required or permitted to be given to the Company under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail to the Corporate Secretary of the Company. Notice to the Corporate Secretary of the Company, if mailed, shall be addressed to the principal executive offices of the Company. Notice mailed to a Participant shall be at such address as is given in the records of the Company. Notices shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

 

6.7Costs of the Plan

All costs of implementing and administering the Plan shall be borne by the Company.

 

6.8Successors

All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

 

6.9Source of Payments

This Plan is unfunded, and the Company will make Plan benefit payments solely on a current disbursement basis.

 

6.10 Counterparts

This Plan has been established by the Company and may be executed in any number of counterparts, each of which shall be considered as the original, and no requirements to produce another counterpart shall exist.

 

 

* * * * * * * * * *

 

In Witness Whereof, Stepan Company has caused this instrument to be executed by its duly authorized officers effective as of January 1, 1994.

 

	
 
	
Stepan Company

	
 
	
 

	
Attest:
	
By 
	
/s/ Jeffrey W. Bartlett

	
 
	
Its 
	
Secretary & General Counsel

 

By /s/ Dianna F. Gullott

     Its Benefits Supervisor

 

11

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