Exhibit 10.2
Sterling Chemicals, Inc.
Long-Term Incentive Plan
     1. Purposes. The purposes of this Long-Term Incentive Plan (this “Plan”)
are to provide an incentive to executive officers and other designated employees
of Sterling Chemicals, Inc., a Delaware corporation (the “Corporation”) to
contribute to the growth and profitability of the Corporation, to increase
shareholder value of the Corporation, to retain such employees and to endeavor
to qualify the compensation paid such employees under this Plan for tax
deductibility under Section 162(m) of the Code.
     2. Definitions. Capitalized terms used in this Plan shall have the
following respective meanings, except as otherwise provided herein or as the
context shall otherwise require:
     “Award” means the right of a Participant to receive cash or other property
following the completion of a Performance Period based upon performance in
respect of one or more of the Performance Goals during such Performance Period,
as specified in Section 5(a).
     “Board” means the Board of Directors of the Corporation.
     “Cause” means, with respect to any Participant, any of the following:
     (i) the commission by such Participant of acts of dishonesty or gross
misconduct which are demonstrably injurious to the Corporation (monetarily or
otherwise) in any material respect;
     (ii) the failure of such Participant to observe and comply in all material
respects with the Corporation’s published policies relating to alcohol and
drugs, harassment or compliance with applicable laws;
     (iii) the failure of such Participant to observe and comply with any other
lawful published policy of the Corporation, but, in the case of any such failure
that is capable of being remedied, only if such failure shall have continued
unremedied for more than 30 days after written notice thereof is given to such
Participant by the Corporation;
     (iv) the willful failure of such Participant to observe and comply with all
lawful and ethical directions and instructions of the Board or the Chief
Executive Officer of the Corporation;
     (v) the refusal or willful failure of such Participant to perform, in any
material respect, his or her duties with the Corporation, but only if such
failure was not caused by disability or incapacity and shall have continued
unremedied for more than 30 days after written notice thereof is given to such
Participant by the Corporation;

 

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     (vi) the conviction of such Participant for a felony offense; or
     (vii) any willful conduct on the part of such Participant that prejudices,
in any material respect, the reputation of the Corporation in the fields of
business in which it is engaged or with the investment community or the public
at large, but only if such Participant knew, or should have known, that such
conduct could have such result.
     “Change in Control” means the occurrence of one of the following events:
     (i) the acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”), other than Resurgence Asset
Management, L.L.C. and/or any of its or its affiliated managed funds or accounts
(“Resurgence”), of the Corporation’s securities if, immediately thereafter, such
Person is the beneficial owner (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more of the combined voting power of the
then-outstanding voting securities of the Corporation entitled to vote generally
in the election of directors (the “Outstanding Corporation Voting Securities”);
provided, however, that the following acquisitions shall not constitute a Change
of Control: (A) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any of its affiliates; or (B) any
acquisition by any corporation pursuant to a transaction that complies with
subclauses (iii)(A), (iii)(B) and (iii)(C) of this definition;
     (ii) the time at which individuals who, within any 12 month period,
constitute the Board (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual whose
election, or nomination for election by the Corporation’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board;
     (iii) consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Corporation or any
of its subsidiaries, a disposition of assets by the Corporation or the
acquisition of assets or stock of another entity by the Corporation or any of
its subsidiaries (each, a “Business Combination”), in each case unless,
following such Business Combination, (A) all or substantially all of the
individuals and entities that were the beneficial owners of the Outstanding
Corporation Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the then-outstanding
voting securities entitled to vote generally in the election of directors of the
corporation resulting from such Business Combination (including a corporation
that, as a result of such transaction, owns the Corporation or has purchased the

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Corporation’s assets in a disposition of assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Corporation
Voting Securities, (B) no Person (excluding Resurgence or any employee benefit
plan (or related trust) of the Corporation or such corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 50% or
more of the combined voting power of the then-outstanding voting securities of
such corporation, except to the extent that such ownership existed prior to the
Business Combination, and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board providing for such Business Combination;
or
     (iv) approval by the stockholders or other relevant stakeholders of the
Corporation of a complete liquidation or dissolution of the Corporation.
     “Code” means the Internal Revenue Code of 1986, as amended from time to
time, including regulations thereunder and successor provisions thereto.
     “Committee” means a committee composed of at least two members of the Board
who qualify as “outside directors” within the meaning of Section 162(m) of the
Code.
     “Corporation” means Sterling Chemicals, Inc., a Delaware corporation, and
any entity that succeeds to all or substantially all of its business.
     “Disability” means, with respect to any Participant, either (i) such
Participant is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, or (ii) such Participant is, by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than
three months under an accident and health plan covering employees of the service
provider’s employer.
     “Effective Date” means August 7, 2009.
     “Eligible Employee” means the Chief Executive Officer, the President and
each Senior Vice President of the Corporation and other key employees of the
Corporation or any of its subsidiaries selected by the Committee.
     “GAAP” means accounting principles generally accepted in the United States.
     “Good Reason” means, with respect to any Participant, the occurrence, and a
failure by the Corporation to cure within 30 days after receiving notice (which
notice must be within 30 days of such occurrence), of any of the following:

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     (i) a material and adverse change in such Participant’s reporting
responsibilities, titles or elected or appointed offices as in effect
immediately prior to the effective date of such change, including any change
caused by the removal of such Participant from, or the failure to re-elect such
Participant to, any material corporate office of the Corporation held by such
Participant immediately prior to such effective date but excluding any such
change that occurs in connection with such Participant’s death, disability or
retirement;
     (ii) the assignment to such Participant of duties or responsibilities that
are materially inconsistent with such Participant’s status, positions, duties,
responsibilities and functions with the Corporation immediately prior to the
effective date of such assignment;
     (iii) a material reduction by the Corporation in such Participant’s base
compensation and bonus opportunity in effect immediately prior to the effective
date of such reduction;
     (iv) the failure of the Corporation to maintain employee benefit plans,
programs, arrangements and practices entitling such Participant to benefits
that, in the aggregate, are at least as favorable to such Participant as those
available to such Participant under the benefit plans in which he or she was a
participant immediately prior to the effective date of such failure: provided,
however, that the amendment, modification or discontinuance of any or all such
employee benefit plans, programs, arrangements or practices by the Corporation
shall not constitute “Good Reason” hereunder if such amendment, modification or
discontinuance applies generally to the Corporation’s salaried work force and
does not single out such Participant for disparate treatment; or
     (v) any change of more than 75 miles (or, in the case of any Participant
for whom the Compensation Committee has approved a shorter distance, such
shorter distance) in the location of the principal place of employment of such
Participant immediately prior to the effective date of such change.
     “Participant” means an Eligible Employee designated by the Committee to
participate in this Plan for a designated Performance Period.
     “Performance Goals” means or may be expressed in terms of any of the
following business criteria: revenue, earnings before interest, taxes,
depreciation and amortization (“EBITDA”), free cash flow, funds from operations,
funds from operations per share, operating income (loss), pre or after tax
income (loss), cash available for distribution, cash available for distribution
per share, cash and/or cash equivalents available for operations, net earnings
(loss), earnings (loss) per share, return on equity, return on assets, share
price performance, improvements in the Corporation’s attainment of expense
levels, implementing or completion of critical projects, including, without
limitation,

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implementation of strategic plan(s), improvement in investor relations,
marketing and manufacturing of key products, improvement in cash-flow (before or
after tax), development of critical projects or product development, or progress
relating to research and development. A Performance Goal may be measured over a
Performance Period on a periodic, annual, cumulative or average basis and may be
established on a corporate-wide basis or established with respect to one or more
operating units, divisions, subsidiaries, acquired businesses, minority
investments, partnerships or joint ventures. Unless otherwise determined by the
Committee by no later than the earlier of the date that is ninety days after the
commencement of the Performance Period or the day prior to the date on which 25%
of the Performance Period has elapsed, the Performance Goals will be determined
by not accounting for a change in GAAP during a Performance Period.
     “Performance Objective” means the level or levels of performance required
to be attained with respect to specified Performance Goals in order that a
Participant shall become entitled to specified rights in connection with an
Award.
     “Performance Period” means one or more periods of time, as the Committee
may select, over which the attainment of one or more Performance Goals will be
measured for the purpose of determining a Participant’s right to, and the
payment of, an Award.
     “Plan” means this Long-Term Incentive Plan, as amended from time to time.
     3. Administration. (a) Authority. This Plan shall be administered by the
Committee. The Committee is authorized, subject to the provisions of this Plan,
in its sole discretion, from time to time to (i) select Participants, (ii) grant
Awards under this Plan, (iii) determine the type, terms and conditions of, and
all other matters relating to, Awards, (iv) prescribe Award agreements (which
need not be identical) or otherwise communicate the terms of Awards,
(v) establish, modify or rescind such rules and regulations as it deems
necessary for the proper administration of this Plan and (vi) make such
determinations and interpretations and to take such steps in connection with
this Plan or the Awards granted thereunder as it deems necessary or advisable.
All such actions by the Committee under this Plan or with respect to the Awards
granted thereunder shall be final and binding on all persons.
     (b) Manner of Exercise of Committee Authority. The Committee may delegate
its responsibility with respect to the administration of this Plan to one or
more officers of the Corporation, to one or more members of the Committee or to
one or more members of the Board; provided, however, that the Committee may not
delegate its responsibility (i) to make Awards to executive officers of the
Corporation, (ii) to make Awards that are intended to constitute “qualified
performance-based compensation” under Section 162(m) of the Code or (iii) to
certify the satisfaction of Performance Objectives pursuant to Section 5(g) in
accordance with Section 162(m) of the Code. The Committee may also appoint
agents to assist in the day-to-day administration of this Plan and may delegate
the authority to execute documents under this Plan to one or more members of the
Committee or to one or more officers of the Corporation.

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     (c) Limitation of Liability. The Committee may appoint agents to assist it
in administering this Plan. The Committee and each member thereof shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or employee of the Corporation, the
Corporation’s independent certified public accountants, consultants or any other
agent assisting in the administration of this Plan. Members of the Committee and
any officer or employee of the Corporation acting at the direction or on behalf
of the Committee shall not be personally liable for any action or determination
taken or made in good faith with respect to this Plan, and shall, to the extent
permitted by law, be fully indemnified and protected by the Corporation with
respect to any such action or determination.
     4. Types of Awards. Subject to the provisions of this Plan, the Committee
has the discretion to grant Awards described in Section 5 to Participants.
     5. Awards. (a) Form of Award. The Committee is authorized to grant Awards
pursuant to this Section 5. An Award shall represent the conditional right of
the Participant to receive cash or other property based upon achievement of one
or more pre-established Performance Objectives during a Performance Period,
subject to the terms of this Section 5 and the other applicable terms of this
Plan. Awards shall be subject to such conditions as shall be specified by the
Committee. Awards may be granted as cash awards, units or other property as the
Committee may determine.
     (b) Performance Objectives. The Committee shall establish the Performance
Objective(s) for each Award, consisting of one or more Performance Goals, and
the amount or amounts payable or other rights that the Participant will be
entitled to upon achievement of such Performance Objective(s). The Performance
Objective(s) shall be established by the Committee prior to, or reasonably
promptly following the inception of, a Performance Period but, to the extent
required by Section 162(m) of the Code, by no later than the earlier of the date
that is 90 days after the commencement of the Performance Period or the day
prior to the date on which 25% of the Performance Period has elapsed (or, if
longer or shorter, within the maximum period allowed under Section 162(m) of the
Code).
     (c) Additional Provisions Applicable to Awards. A Performance Objective may
incorporate one or more Performance Goals, in which case achievement with
respect to each Performance Goal may be assessed individually or in combination
with each other. The Committee may, in connection with establishing Performance
Objectives for a Performance Period, establish a matrix setting forth the
relationship between performance on two or more Performance Goals and the amount
of the Award payable for that Performance Period. The Performance Objectives
with respect to a Performance Goal may be established as absolute terms, as
relative to performance in prior periods, as compared to the performance of one
or more comparable companies or an index covering multiple companies, or as
otherwise determined by the Committee. Performance Objectives shall be objective
and shall otherwise meet the requirements of Section 162(m) of the Code.
Performance Objectives may differ for Awards granted to any one Participant or
to different Participants.

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     (d) Duration of the Performance Period. The Committee shall establish the
duration of each Performance Period at the time that it sets the Performance
Objectives applicable to that Performance Period. The Committee shall be
authorized to permit overlapping or consecutive Performance Periods.
     (e) Adjustment. To the extent necessary to preserve the intended economic
effects of this Plan to the Corporation and the Participants, the Committee
shall adjust Performance Objectives, the Awards or both to take into account
(i) a change in corporate capitalization, (ii) a corporate transaction, such as
any merger of the Corporation or any subsidiary into another corporation, any
consolidation of the Corporation or any subsidiary into another corporation, any
separation of the Corporation or any subsidiary (including a spinoff or the
distribution of stock or property of the Corporation or any subsidiary), any
reorganization of the Corporation or any subsidiary or a large, special and
non-recurring dividend paid or distributed by the Corporation (whether or not
such reorganization comes within the definition of Section 368 of the Code),
(iii) any partial or complete liquidation of the Corporation or any subsidiary
or (iv) a change in accounting or other relevant rules or regulations (any
adjustment pursuant to this clause (iv) shall be subject to the timing
requirements of the last sentence of Section 5(b) of this Plan); provided,
however, that no adjustment hereunder shall be authorized or made if and to the
extent that the Committee determines that such authority or the making of such
adjustment would cause the Awards to fail to qualify as “qualified
performance-based compensation” under Section 162(m) of the Code.
     (f) Maximum Amount Payable Per Participant Under This Section 5. With
respect to Awards to be settled in cash or property, a Participant shall not be
granted Awards for all of the Performance Periods commencing in a calendar year
that permit such Participant in the aggregate to earn a cash payment or payment
in other property, in excess of $5,000,000.
     (g) Payment of Performance Compensation Awards.
     (i) Condition to Receipt of Payment. Except as otherwise provided at the
time of grant, a Participant must be employed by the Corporation on the last day
of a Performance Period to be eligible for payment in respect of an Award for
such Performance Period.
      (ii) Limitation. Except as otherwise provided at the time of grant, a
Participant shall be eligible to receive payment in respect of an Award only to
the extent that the threshold level of the Performance Objectives for such
Performance Period are achieved.
     (iii) Certification. Following the completion of a Performance Period, the
Committee shall review and certify in writing whether, and to what extent, the
Performance Objectives for the Performance Period have been achieved and, if so,
calculate and certify in writing that amount of the Awards earned for such
Performance Period. The Committee shall then determine the amount of each
Participant’s Award actually payable for the Performance Period.
     (iv) Timing of Award Payments. Except as otherwise provided at the time of
grant, Awards granted for a Performance Period shall be paid to Participants as
soon as

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administratively practicable, but in no event later than 15 days following
completion of the certifications required by this Section 5; which certification
and payment will occur no later than February 27 of the calendar year
immediately following the last day of the relevant Performance Period.
     (v) Change In Control. In the event of a Change in Control, any incomplete
Performance Periods applicable to Awards under this Section 5 in effect on the
date the Change in Control occurs shall end on the date of such change, and the
Committee shall pay each Participant an Award as provided for at the time of
grant. Notwithstanding Section 5(e), in the event of a Change in Control, the
Committee shall not be authorized to reduce or eliminate the Award. Any
resulting amount hereunder due to a Participant shall be paid in a cash lump sum
no later than 15 days after the relevant Change in Control.
     (vi) Death/Disability of the Participant. In the event of the death or
Disability of a Participant, any incomplete Performance Period applicable to
such Participant in effect on the date of his or her death or Disability shall
end on the date of such death or Disability, and the Committee shall pay each
Participant an Award as provided for at the time of grant.
     6. General Provisions. (a) Termination of Employment. Except as otherwise
provided at the time of grant, in the event a Participant’s employment
terminates for any reason prior to the end of a Performance Period, he or she
(or his or her beneficiary, in the case of death) shall not be entitled to
receive any Award for such Performance Period unless the Committee, in its sole
and absolute discretion, elects to pay an Award to such Participant.
     (b) Death of the Participant. Subject to Section 6(a), in the event of the
death of a Participant, any payments hereunder due to such Participant shall be
paid to his or her beneficiary as designated in writing to the Committee or,
failing such designation, to his or her estate. No beneficiary designation shall
be effective unless it is in writing and received by the Committee prior to the
date of death of the Participant.
     (c) Taxes. The Corporation is authorized to withhold from any Award
granted, any payment relating to an Award under this Plan, or any payroll or
other payment to a Participant, amounts of withholding and other taxes due in
connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Corporation and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority for the Corporation to withhold or receive other property and to make
cash payments in respect thereof in satisfaction of a Participant’s tax
obligations, either on a mandatory or elective basis in the discretion of the
Committee.
     (d) Limitations on Rights Conferred under Plan and Beneficiaries. Neither
status as a Participant nor receipt or completion of a deferral election form
shall be construed as a commitment that any Award will become payable under this
Plan. Nothing contained in this Plan or in any documents related to this Plan or
to any Award shall confer upon any Eligible Employee or Participant any right to
continue as an Eligible Employee or Participant for any

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future Performance Period or in the employ of the Corporation or constitute any
contract or agreement of employment, or interfere in any way with the right of
the Corporation to reduce such person’s compensation, to change the position
held by such person or to terminate the employment of such Eligible Employee or
Participant, with or without cause, but nothing contained in this Plan or any
document related thereto shall affect any other contractual right of any
Eligible Employee or Participant. No benefit payable under, or interest in, this
Plan shall be transferable by a Participant except by will or the laws of
descent and distribution or otherwise be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge.
     (e) Changes to this Plan and Awards. Notwithstanding anything herein to the
contrary, the Board, or a committee designated by the Board, may, at any time,
terminate or, from time to time, amend, modify or suspend this Plan; provided,
however, that no termination or amendment or modification of this Plan shall
affect the rights or benefits of any Participant or the obligations of the
Corporation under this Plan under any Awards made prior to the effective date of
such termination or amendment or modification. No Award may be granted during
any suspension of this Plan or after its termination. Any such amendment may be
made without stockholder approval.
     (f) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to
constitute an “unfunded” plan for incentive and deferred compensation. With
respect to any amounts payable to a Participant pursuant to an Award, nothing
contained in this Plan (or in any documents related thereto), nor the creation
or adoption of this Plan, the grant of any Award, or the taking of any other
action pursuant to this Plan shall give any such Participant any rights that are
greater than those of a general creditor of the Corporation; provided, however,
that the Committee may authorize the creation of trusts and deposit therein cash
or other property or make other arrangements, to meet the Corporation’s
obligations under this Plan. Such trusts or other arrangements shall be
consistent with the “unfunded” status of this Plan unless the Committee
otherwise determines with the consent of each affected Participant. The trustee
of such trusts may be authorized to dispose of trust assets and reinvest the
proceeds in alternative investments, subject to such terms and conditions as the
Committee may specify in accordance with applicable law.
     (g) Non-Exclusivity of this Plan. Neither the adoption of this Plan by the
Board (or a committee designated by the Board) nor submission of this Plan or
provisions thereof to the stockholders of the Corporation for approval shall be
construed as creating any limitations on the power of the Board to adopt such
other incentive arrangements as it may deem necessary.
     (h) Governing Law. The validity, construction, and effect of this Plan, any
rules and regulations relating to this Plan, and any Award shall be determined
in accordance with the laws of the State of Delaware, without giving effect to
principles of conflicts of laws, and applicable Federal law.
     (i) Exemption Under Section 162(m) of the Code. The Plan, and all Awards
issued thereunder, are intended to be exempt from the application of Section
162(m) of the Code, which

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restricts under certain circumstances the Federal income tax deduction for
compensation paid by a public corporation to named executives in excess of
$1 million per year. The Committee may, without stockholder approval, amend this
Plan retroactively or prospectively to the extent it determines necessary in
order to comply with any subsequent clarification of Section 162(m) of the Code
required to preserve the Corporation’s Federal income tax deduction for
compensation paid pursuant to this Plan.
     (j) Effective Date. The Plan is effective on the Effective Date and shall
remain in effect until it has been terminated pursuant to Section 6(e).
     (k) ERISA. The Plan is not intended and shall not be construed to be a
retirement, welfare or other employee benefit plan and shall not be governed by
the Employee Retirement Income Security Act of 1974, as amended.
     (l) Headings. The titles and headings of the sections in this Plan are for
convenience of reference only, and in the event of any conflict, the text of
this Plan, rather than such titles or headings shall control.

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