Exhibit 10(a)(3)
FIRST AMENDMENT
OF THE
STEPAN COMPANY DIRECTORS DEFERRED
COMPENSATION PLAN
(Amended and Restated as of
January 1, 2005)
WHEREAS, Stepan Company (the “Company”) has
established and maintains the Stepan Company Directors Deferred
Compensation Plan, as amended and restated as of January 1,
2005 (the “Plan”); 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. Section 6(c) of
the Plan is hereby amended by adding at the end of the second
sentence thereof the following:
“or for such other reasons as
the Board determines necessary or desirable for the administration
of the Plan.”
2. Section 8(b) of
the Plan is hereby amended by adding the following new sentence at
the end thereof:
“The amount of each such
installment payment shall be calculated by dividing the balance
credited to the Participant’s Deferred Compensation Accounts
to which the election applies at the time of each such payment by
the number of remaining installments (including the current
installment). For purposes of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), each
such installment payment shall be a separate payment and not one of
a series of payments treated as a single payment.”
3. Section 8(g) of
the Plan is hereby amended in its entirety so that as amended,
Section 8(g) shall read as follows:
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“g.
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Delay for Specified Employees.
Notwithstanding anything in the Plan to the contrary, no payment
that is paid by reason of a director’s separation of service
from the Company shall be made to any director who is a
“Specified Employee” as of the date of such
director’s separation from service until the earlier of
(i) the first day of the seventh month after the date of the
director’s separation from service, or (ii) the date of
the director’s death. Any payment that would otherwise have
been made during this period shall instead be aggregated and paid
to the director (or, in the case of the director’s death, his
or her surviving spouse, if there be one, or if not, to the
director’s estate) in the form of a single lump sum upon the
earlier of the dates specified in the preceding sentence.
“Specified Employee” for purposes of the Plan means,
during the 12-month period beginning on April 1st of 2005 or
of any subsequent
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calendar year, a director who met
the requirements of Section 416(i)(1)(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 director 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 director’s separation from service, stock of the
Company (or any other entity treated as a single employer with the
Company under Code Section 414(b) or (c)) is publicly traded
on an established securities market or otherwise.”
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4. Section 8(h) of
the Plan is hereby amended in its entirety so that as amended,
Section 8(h) shall read as follows:
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“h.
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Permitted
Delays in Payment. Payments to a director under the Plan will be
delayed under any of the circumstances specified in Subsections
(i) through (ii) below or as provided in
Section 16.
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i.
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Payments that
would violate Applicable Law. Payment of a
director’s Deferred Compensation Account will be delayed
where the Board reasonably anticipates that the making of the
payment would violate Federal securities laws or other applicable
law; provided that such payment will be made at the earliest date
at which the Directors reasonably anticipates that the making of
the payment would not cause such violation. For purposes of this
subsection (i), the making of a payment that would cause inclusion
in the director’s gross income or the application of any
penalty or other provision of the Code is not treated as a
violation of applicable law.
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ii.
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Other
Payments. The Board shall be permitted to
delay a payment of a director’s Deferred Compensation Account
upon such other events and conditions as may be prescribed under
Code Section 409A and any regulations or other generally
applicable official guidance issued thereunder.”
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5. Section 8(j) of
the Plan is hereby amended by deleting the last sentence thereof
and inserting in lieu thereof the following:
“Any amount credited to a
director’s Deferred Compensation Account after the last to
die of the director or his spouse shall be continued to be paid on
the same basis as provided above to such person’s
estate.”
6. Section 9(d) of
the Plan is hereby amended in its entirety so that as amended,
Section 9(d) shall read as follows:
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“d.
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Notwithstanding
Section 8 of the Plan, the Stock Award shall be payable to the
non-employee director on his or her separation from service from
the Company, in a single lump sum payment, and shall be made only
in shares of Stepan Company Common Stock. In the event of the
non-employee director’s death before all such amounts have
been so paid or in the event of the non-employee director’s
death occurs before the director has incurred a separation from
service, the unpaid balance of the Common Stock Account
attributable to Stock Awards shall be paid on the non-employee
director’s death to the non-employee director’s
surviving spouse, if there be one, or if not, to the
director’s estate in a single lump sum payment made in shares
of Stepan Company Common Stock.”
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7. Section 11 of the
Plan is hereby amended
