EXHIBIT 10.11(a)
First Amendment to the
Seventh Amended and Restated Savings and Investment Plan
          Whereas, Sterling Chemicals, Inc. (the “Corporation”) currently
maintains its Seventh Amended and Restated Savings and Investment Plan (as
amended, the “Existing Plan”);
          Whereas, Section 16.01 of the Existing Plan authorizes and empowers
the Employee Benefits Committee of the Corporation (the “Committee”) to amend
the Existing Plan in certain respects; and
          Whereas, (i) the Committee desires to amend the Existing Plan in
certain respects to reflect certain provisions of the Final Regulations under
Sections 401(k) and 401(m) of the Internal Revenue Code that were published on
December 29, 2004 (the “Final 401(k) Regulations”), (ii) this First Amendment to
the Seventh Amended and Restated Savings and Investment Plan (this “Amendment”)
is intended as good faith compliance with the requirements of the Final 401(k)
Regulations and (iii) in furtherance of that desire, the Committee has duly
authorized and approved this Amendment;
          Now, Therefore, the Existing Plan is hereby amended as follows:
          Section 1. Amendment of Section 1.03 of the Existing Plan. Effective
as of January 1, 2006, Section 1.03 of the Existing Plan is hereby amended by
amending the definition of “Eligible Earnings” contained therein by amending the
proviso thereof to read in its entirety as follows:
provided, however, that notwithstanding any other provision of this Plan to the
contrary, (i) for Plan Years beginning on or after January 1, 1997, the annual
Eligible Earnings of each Participant taken into account under this Plan shall
not exceed $160,000, as adjusted for increases in the cost of living in
accordance with Section 401(a)(17) of the Code, (ii) the cost of living
adjustment in effect for a calendar year applies to any period, not exceeding
12 months, over which Eligible Earnings is determined beginning in such calendar
year, (iii) if a determination period consists of fewer than 12 months, the
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12, and (iv) effective as of January 1, 2006, except for occasional,
bona fide administrative considerations, contributions made pursuant to an
Elective Deferral election cannot precede the earlier of (A) the performance of
services related to the contribution and (B) when the compensation that is
subject to the election would be currently available to the Eligible Employee in
the absence of an election to defer.
          Section 2. Amendment of Article IV of the Existing Plan. Effective as
of January 1, 2006, Article IV of the Existing Plan is hereby amended by adding
thereto a new Section 4.06 to read in its entirety as follows:

 

--------------------------------------------------------------------------------

 

          Section 4.06. Modifications to Actual Deferral Percentage Testing
Requirements. Except as set forth below, the following provisions will apply
effective for Plan Years beginning after December 31, 2005:
     (a) Targeted Matching Contribution Limit. A matching contribution with
respect to an Elective Deferral for a Plan Year is not taken into account under
the Actual Contribution Percentage test for a Non-Highly Compensated Participant
to the extent it exceeds the greatest of:

  (i)   five percent of the Non-Highly Compensated Participant’s 414(s)
Compensation for the Plan Year;     (ii)   the Non-Highly Compensated
Participant’s Elective Deferrals for the Plan Year; and     (iii)   the product
of two times this Plan’s Representative Matching Rate and the Non-Highly
Compensated Participant’s Elective Deferrals for the Plan Year.

For purposes of this Section, this Plan’s “Representative Matching Rate” is the
lowest Matching Rate for any eligible Non-Highly Compensated Participant among a
group of Non-Highly Compensated Participants that consists of half of all
eligible Non-Highly Compensated Participants in this Plan for the Plan Year who
make Elective Deferrals for the Plan Year (or, if greater, the lowest Matching
Rate for all eligible Non-Highly Compensated Participants in this Plan who are
employed by the Employer on the last day of the Plan Year and who make Elective
Deferrals for the Plan Year).
     For purposes of this Section, the “Matching Rate” for a Participant
generally is the matching contributions made for such Participant divided by the
Participant’s Elective Deferrals for the Plan Year. If the matching rate is not
the same for all levels of Elective Deferrals for a Participant, then the
Participant’s Matching Rate is determined assuming that a Participant’s Elective
Deferrals are equal to 6% of 414(s) Compensation.
     If this Plan provides a match with respect to the sum of the Participant’s
After-Tax Contributions and Elective Deferrals, then for purposes of this
Section, that sum is substituted for the amount of the Participant’s Elective
Deferrals in subsections (ii) and (iii) above and in determining the Matching
Rate, and Participants who make either After-Tax Contributions or Elective
Deferrals are taken into account in determining this Plan’s Representative
Matching Rate. Similarly, if this Plan provides a match with respect to the
Participant’s After-Tax Contributions, but not Elective Deferrals, then for
purposes of this subsection, the Participant’s After-Tax Contributions are
substituted for the amount of the Participant’s Elective Deferrals in
subsections (ii) and (iii) above and in determining the Matching Rate and
Participants who

-2-

--------------------------------------------------------------------------------

 

make After-Tax Contributions are taken into account in determining this Plan’s
Representative Matching Rate.
     (b) Targeted QNEC limit. Qualified Non-Elective Contributions (as defined
in Section 1.401(k)-6 of the Regulations) cannot be taken into account under the
Actual Contribution Percentage test for a Plan Year for a Non-Highly Compensated
Participant to the extent such contributions exceed the product of that
Non-Highly Compensated Participant’s Section 414(s) Compensation and the greater
of 5% or two times this Plan’s Representative Contribution Rate. Any Qualified
Non-Elective Contribution taken into account under an Actual Deferral Percentage
test under Section 1.401(k)-2(a)(6) of the Regulations (including the
determination of the Representative Contribution Rate for purposes of Section
1.401(k)-2(a)(6)(iv)(B) of the Regulations) is not permitted to be taken into
account for purposes of this Section (including the determination of the
Representative Contribution Rate for purposes of subsection (i) below). For
purposes of this Section:

  (i)   The Plan’s “Representative Contribution Rate” is the lowest Applicable
Contribution Rate of any eligible Non-Highly Compensated Participant among a
group of eligible Non-Highly Compensated Participants that consists of half of
all eligible Non-Highly Compensated Participants for the Plan Year (or, if
greater, the lowest Applicable Contribution Rate of any eligible Non-Highly
Compensated Participant who is in the group of all eligible Non-Highly
Compensated Participants for the Plan Year and who is employed by the Employer
on the last day of the Plan Year); and     (ii)   The “Applicable Contribution
Rate” for an eligible Non-Highly Compensated Participant is the sum of the
matching contributions (as defined in Section 1.401(m)-1(a)(2) of the
Regulations) taken into account in determining the Actual Contribution Ratio for
the eligible Non-Highly Compensated Participant for the Plan Year and the
Qualified Non-Elective Contributions made for that Non-Highly Compensated
Participant for the Plan Year, divided by that Non-Highly Compensated
Participant’s 414(s) Compensation for the Plan Year.

Notwithstanding the above, Qualified Non-Elective Contributions that are made in
connection with an Employer’s obligation to pay prevailing wages under the
Davis-Bacon Act (46 Stat. 1494), Public Law 71-798, Service Contract Act of 1965
(79 Stat. 1965), Public Law 89-286, or similar legislation can be taken into
account for a Plan Year for a Non-Highly Compensated Participant to the extent
such contributions do not exceed 10% of that Non-Highly Compensated
Participant’s 414(s) Compensation.
     (c) Actual Contribution Ratio of Highly Compensated Employees Multiple
plans. The Actual Contribution Ratio for any Participant who is a

-3-

--------------------------------------------------------------------------------

 

Highly Compensated Employee and who is eligible to have matching contributions
or After-Tax Contributions allocated to his or her account under two or more
plans described in Section 401(a) of the Code, or arrangements described in
Section 401(k) of the Code that are maintained by the same Employer, shall be
determined as if the total of such contributions was made under each plan and
arrangement. If a Highly Compensated Employee participates in two or more such
plans or arrangements that have different plan years, then all matching
contributions and After-Tax Contributions made during the Plan Year being tested
under all such plans and arrangements shall be aggregated, without regard to the
plan years of the other plans. For plan years beginning before January 1, 2006,
all such plans and arrangements ending with or within the same calendar year
shall be treated as a single plan or arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if mandatorily disaggregated under
the Regulations promulgated under Section 401(m) of the Code.
     (d) Plans Using Different Testing Methods for the Actual Contribution Ratio
and Actual Deferral Percentage. Except as otherwise provided in this Section,
this Plan may use the current year testing method or prior year testing method
for the Actual Contribution Percentage test for a Plan Year without regard to
whether the current year testing method or prior year testing method is used for
the Actual Deferral Percentage test for that Plan Year; provided, however, that
if different testing methods are used, then this Plan cannot use:

  (i)   the recharacterization method of Section 1.401(k)-2(b)(3) of the
Regulations to correct excess contributions for a Plan Year;     (ii)   the
rules of Section 1.401(m)-2(a)(6)(ii) of the Regulations to take Elective
Deferrals into account under the Actual Contribution Percentage test (rather
than the Actual deferral Percentage test); or     (iii)   the rules of
Section 1.401(k)-2(a)(6) of the Regulations to take Qualified Matching
Contributions into account under the Actual Deferral Percentage test (rather
than the Actual Contribution Percentage test).

     (e) Distribution of Income Attributable to Excess Aggregate Contributions.
This Section 4.06(e) shall only be effective between January 1, 2006 and
December 31, 2007. Distributions of Excess Contributions must be adjusted for
income (gain or loss), including an adjustment for income for the period between
the end of the Plan Year and the date of the distribution (the “gap period”).
For purposes of this Section, “income” shall be determined and allocated in
accordance with the provisions of Section 5.10(e), except that such Section
shall be applied by substituting “Excess Contributions” with “Excess Aggregate
Contributions” and by substituting amounts taken into account under the Actual
Contribution Percentage test for amounts taken into account under the Actual
Deferral Percentage test.

-4-

--------------------------------------------------------------------------------

 

     (f) Corrective Contributions. If a failed Actual Contribution Percentage
test is to be corrected by making an Employer contribution, then the provisions
of this Plan for the corrective contributions shall be applied by limiting the
contribution made on behalf of any Non-Highly Compensated Participant pursuant
to such provisions to an amount that does not exceed the targeted contribution
limits of Sections 4.06(a) and 4.06(b) hereof.
This Section 4.06 shall supersede the provisions of this Plan to the extent
those provisions are inconsistent with the provisions of this Section 4.06.
          Section 3. Amendment of Article V of the Existing Plan. Effective as
of January 1, 2006, Article V of the Existing Plan is hereby amended by adding
thereto a new Section 5.10 to read in its entirety as follows:
       Section 5.10. Modifications to Actual Deferral Percentage Testing
Requirements. Except as set forth below, the following provisions will apply
effective for Plan Years beginning after December 31, 2005. This Section 5.10
shall supersede the provisions of this Plan to the extent those provisions are
inconsistent with the provisions of this Section 5.10.
        (a) Targeted Contribution Limit. Qualified Non-Elective Contributions
(as defined in Section 1.401(k)-6 of the Regulations) cannot be taken into
account in determining the Actual Deferral Ratio for a Plan Year for a
Non-Highly Compensated Participant to the extent such contributions exceed the
product of that Non-Highly Compensated Participant’s Section 414(s) Compensation
and the greater of 5% or two times this Plan’s Representative Contribution Rate.
Any Qualified Non-Elective Contribution taken into account under an Actual
Contribution Percentage test under Section 1.401(m)-2(a)(6) of the Regulations
(including the determination of the representative contribution rate for
purposes of Section 1.401(m)-2(a)(6)(v)(B) of the Regulations), is not permitted
to be taken into account for purposes of this Section (including the
determination of the Representative Contribution Rate under this Section). For
purposes of this Section:

  (i)   The Plan’s “Representative Contribution Rate” is the lowest Applicable
Contribution Rate of any eligible Non-Highly Compensated Participant among a
group of eligible Non-Highly Compensated Participants that consists of half of
all eligible Non-Highly Compensated Participants for the Plan Year (or, if
greater, the lowest Applicable Contribution Rate of any eligible Non-Highly
Compensated Participant who is in the group of all eligible Non- Highly
Compensated Participants for the Plan Year and who is employed by the Employer
on the last day of the Plan Year); and

  (ii)   The “Applicable Contribution Rate” for an eligible Non-Highly
Compensated Participant is the sum of the Qualified Matching

-5-

--------------------------------------------------------------------------------

 

      Contributions (as defined in Section 1.401(k)-6 of the Regulations) taken
into account in determining the Actual Deferral Ratio for the eligible
Non-Highly Compensated Participant for the Plan Year and the Qualified
Non-Elective Contributions made for the eligible Non-Highly Compensated
Participant for the Plan Year, divided by the eligible Non-Highly Compensated
Participant’s 414(s) Compensation for the same period.

Notwithstanding the above, Qualified Non-Elective Contributions that are made in
connection with an Employer’s obligation to pay prevailing wages under the
Davis-Bacon Act (46 Stat. 1494), Public Law 71-798, Service Contract Act of 1965
(79 Stat. 1965), Public Law 89-286, or similar legislation can be taken into
account for a Plan Year for a Non-Highly Compensated Participant to the extent
such contributions do not exceed 10% of that Non-Highly Compensated
Participant’s 414(s) Compensation.
     Qualified Matching Contributions may only be used to calculate an Actual
Deferral Ratio to the extent that such Qualified Matching Contributions are
matching contributions that are not precluded from being taken into account
under the Actual Contribution Percentage test for the Plan Year under the rules
of Section 1.401(m)-2(a)(5)(ii) of the Regulations and as set forth in
Section 4.06.
     (b) Limitation on QNECs and QMACs. Qualified Non-Elective Contributions and
Qualified Matching Contributions cannot be taken into account to determine an
Actual Deferral Ratio to the extent such contributions are taken into account
for purposes of satisfying any other Actual Deferral Percentage test, any Actual
Contribution Percentage test, or the requirements of Section 1.401(k)-3,
1.401(m)-3 or 1.401(k)-4 of the Regulations. Thus, for example, matching
contributions that are made pursuant to Section 1.401(k)-3(c) of the Regulations
cannot be taken into account under the Actual Deferral Percentage test.
Similarly, if a plan switches from the current year testing method to the prior
year testing method pursuant to Section 1.401(k)-2(c) of the Regulations,
Qualified Non-Elective Contributions that are taken into account under the
current year testing method for a year may not be taken into account under the
prior year testing method for the next year.
     (c) Actual Deferral Ratio of HCE if Multiple Plans. The Actual Deferral
Ratio of any Participant who is a Highly Compensated Employee for the Plan Year
and who is eligible to have Elective Contributions (as defined in
Section 1.401(k)-6) of the Regulations (and Qualified Non-Elective Contributions
and/or Qualified

-6-

--------------------------------------------------------------------------------

 

Matching Contributions, if treated as Elective Contributions for purposes of the
Actual Deferral Percentage test) allocated to such Participant’s accounts under
two or more cash or deferred arrangements described in Section 401(k) of the
Code, that are maintained by the same Employer, shall be determined as if such
Elective Contributions (and, if applicable, such Qualified Non-Elective
Contributions and/or Qualified Matching Contributions) were made under a single
arrangement. If a Highly Compensated Employee participates in two or more cash
or deferred arrangements of the Employer that have different Plan Years, then
all Elective Contributions made during the Plan Year being tested under all such
cash or deferred arrangements shall be aggregated, without regard to the plan
years of the other plans. However, for Plan Years beginning before January 1,
2006, if the plans have different plan years, then all such cash or deferred
arrangements ending with or within the same calendar year shall be treated as a
single cash or deferred arrangement. Notwithstanding the foregoing, certain
plans shall be treated as separate if mandatorily disaggregated under the
Regulations under Section 401(k) of the Code.
     (d) Plans Using Different Testing Methods for the Actual Deferral
Percentage and Actual Contribution Percentage Tests. Except as otherwise
provided in this Section, this Plan may use the current year testing method or
prior year testing method for the Actual Deferral Percentage test for a Plan
Year without regard to whether the current year testing method or prior year
testing method is used for the Actual Contribution Percentage test for that Plan
Year. However, if different testing methods are used, then this Plan cannot use:

  (i)   the recharacterization method of Section 1.401(k)-2(b)(3) of the
Regulations to correct excess contributions for a Plan Year;     (ii)   the
rules of Section 1.401(m)-2(a)(6)(ii) of the Regulations to take Elective
Contributions into account under the Actual Contribution Percentage test (rather
than the Actual Deferral Percentage test); or     (iii)   the rules of
Section 1.401(k)-2(a)(6)(v) of the Regulations to take Qualified Matching
Contributions into account under the Actual Deferral Percentage test (rather
than the Actual Contribution Percentage test).

     (e) Distribution of Income Attributable to Excess Contributions. This
Section 5.10(e) shall only be effective between January 1, 2006 and December 31,
2007. Distributions of Excess Contributions must be adjusted for income (gain or
loss), including an adjustment for income for any gap period (i.e., the period
between the end of the Plan Year and the date of the distribution). The
Corporation has the discretion to determine and allocate income using any of the
methods set forth below:

  (i)   Reasonable Method of Allocating Income. The Corporation may use any
reasonable method for computing the income allocable to Excess Contributions;
provided, however, that the method does not violate Section 401(a)(4) of the
Code, is used consistently for all Participants and for all corrective
distributions under this Plan for the Plan Year, and is used by this Plan for
allocating income to Participant’s accounts. This Plan will not fail to use a
reasonable

-7-

--------------------------------------------------------------------------------

 

      method for computing the income allocable to Excess Contributions merely
because the income allocable to Excess Contributions is determined on a date
that is no more than seven days before the distribution.

  (ii)   Alternative Method of Allocating Income. The Corporation may allocate
income to Excess Contributions for the Plan Year by multiplying the income for
the Plan Year allocable to the Elective Contributions and other amounts taken
into account under the Actual Deferral Percentage test (including contributions
made for the Plan Year), by a fraction, the numerator of which is the Excess
Contributions for the Participant for the Plan Year, and the denominator of
which is the sum of the:

  (A)   Account balance attributable to Elective Contributions and other amounts
taken into account under the Actual Deferral Percentage test as of the beginning
of the Plan Year, and     (B)   any additional amount of such contributions made
for the Plan Year.

     (f) Safe Harbor Method of Allocating Gap Period Income. This Section
5.10(f) shall only be effective between January 1, 2006 and December 31, 2007.
The Corporation may use the safe harbor method in this paragraph (f) to
determine income on Excess Contributions for the gap period. Under this safe
harbor method, income on Excess Contributions for the gap period is equal to 10%
of the income allocable to Excess Contributions for the Plan Year that would be
determined under Section 5.10(e)(ii) above, multiplied by the number of calendar
months that have elapsed since the end of the Plan Year. For purposes of
calculating the number of calendar months that have elapsed under the safe
harbor method, a corrective distribution that is made on or before the fifteenth
(15th) day of a month is treated as made on the last day of the preceding month
and a distribution made after the fifteenth day of a month is treated as made on
the last day of the month.
     (g) Alternative method for allocating Plan Year and gap period income. This
Section 5.10(g) shall only be effective between January 1, 2006 and December 31,
2007. The Corporation may determine the income for the aggregate of the Plan
Year and the gap period, by applying the alternative method provided by
Section 5.10(e)(ii) to this aggregate period. This is accomplished by (I)
substituting the income for the Plan Year and the gap period, for the income for
the Plan Year and (ii) substituting the amounts taken into account under the
Actual Deferral Percentage test for the Plan Year and the gap period, for the
amounts taken into account under the Actual Deferral Percentage test for the
Plan Year in determining the fraction that is multiplied by that income.

-8-

--------------------------------------------------------------------------------

 

     (h) Corrective Contributions. If a failed Actual Deferral Percentage test
is to be corrected by making an Employer contribution, then the provisions of
the Plan for the corrective contributions shall be applied by limiting the
contribution made on behalf of any Non-Highly Compensated Participant pursuant
to such provisions to an amount that does not exceed the targeted contribution
limits of Section 5.10(a), or in the case of a corrective contribution that is a
Qualified Matching Contribution, the targeted contribution limit of
Section 4.06.
          Section 4. Amendment of Section 10.6 of the Existing Plan. Effective
as of January 1, 2006, Section 10.6 of the Existing Plan is hereby amended by
adding thereto a new paragraph (e) to read in its entirety as follows:
     (e) This Section 10.06(e) shall only be effective with respect to Plan
Years beginning after December 31, 2005. This Section 10.06(e) shall supersede
the provisions of this Plan to the extent those provisions are inconsistent with
the provisions of this Section 10.06(e). This Plan shall disregard Elective
Deferrals in applying the vesting provisions of this Plan to other contributions
or benefits under Section 411(a)(2) of the Code; provided, however, that this
Plan shall otherwise take a Participant’s Elective Deferrals into account in
determining the Participant’s vested benefits under this Plan. Thus, for
example, this Plan shall take Elective Deferrals into account in determining
whether a Participant has a nonforfeitable right to contributions under this
Plan for purposes of forfeitures, and for applying provisions permitting the
repayment of distributions to have forfeited amounts restored, and the
provisions of Sections 410(a)(5)(D)(iii) and 411(a)(6)(D)(iii) of the Code
permitting a plan to disregard certain service completed prior to
breaks-in-service (sometimes referred to as “the rule of parity”).
          Section 5. Effect of Amendments. Except as amended and modified by
this Amendment, the Existing Plan shall continue in full force and effect. The
Existing Plan and this Amendment shall be read, taken and construed as one and
the same instrument. Upon the effectiveness of this Amendment, each reference in
the Existing Plan to “this Plan” shall mean and be a reference to the Existing
Plan as amended hereby.
          Section 6. Binding Effect. This Amendment shall inure to the benefit
of, and shall be binding upon the Employers (as defined in the Existing Plan)
and their successors and assigns and upon the Participants and their
Beneficiaries (as such terms are defined in the Existing Plan) and their
respective heirs, executors, personal representatives, administrators,
successors and assigns.
          Section 7. Severability. Should any clause, sentence, paragraph,
subsection or Section of this Amendment be judicially declared to be invalid,
unenforceable or void, such decision will not have the effect of invalidating or
voiding the remainder of this Amendment, and the part or parts of this Amendment
so held to be invalid, unenforceable or void will be deemed to have been
stricken herefrom as if such stricken part or parts had never been included
herein.

-9-

--------------------------------------------------------------------------------

 

          Section 8. Governing Law. To The Extent Not Superseded By The Laws Of
The United States, This Amendment Shall Be Construed and Enforced in Accordance
With, and the Rights of the Parties Shall Be Governed By, the Internal Laws of
the State of Texas, Without Reference to Principles of Conflicts of Law.
          In Witness Whereof, the Committee has caused this Amendment to be duly
executed in its name and on its behalf by its proper officer thereunto duly
authorized on December 28, 2006.

         
 
  Sterling Chemicals, Inc.    
 
       
 
  /s/ Richard K. Crump    
 
 
 
Richard K. Crump, President and Chief    
 
     Executive Officer    

-10-