EXHIBIT 10.3
     
 
(STERLING CHEMICALS LOGO) [h51510h5151000.gif]
STERLING CHEMICALS
 
Sterling Chemicals, Inc.
Comprehensive Welfare Benefit Plan
(Wrap Plan)
     
 
Effective as of January 1, 2007
     
 

 

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Sterling Chemicals, Inc.
Comprehensive Welfare Benefit Plan
Article I
Establishment
          Sterling Chemicals, Inc. hereby establishes the Sterling Chemicals,
Inc. Comprehensive Welfare Benefit Plan, effective as of January 1, 2007, as set
forth herein. The Plan is a welfare benefit plan as defined in Section 3(1) of
ERISA which provides continuance of various health and welfare benefits for
eligible employees through a series of sub-plans in accordance with the terms
and conditions contained therein.
Article II
Definitions
          When used herein, the following words shall have the following
meanings unless the context clearly indicates otherwise:
     “Alternate Recipient” means any child of a Participant who has been
determined (pursuant to Section 11.05) to be eligible for coverage under a
Benefit Agreement pursuant to the terms of a qualified medical child support
order as defined under Section 609 of ERISA.
     “Benefits” means the Insurance Contract Benefits and the Self-Insured
Benefits.
     “Benefit Agreements” means the Insured Benefit Agreements, the Pre-paid
Health Plans and the Self-Insured Benefit Agreements.
     “Board of Directors” or “Board” means the board of directors of the
Company.
     “Claims Administrator” means, in the case of an Insured Benefit Agreement,
the person or entity designated therein and in all other cases (including if no
Claims Administrator is designated in the Insured Benefit Agreement) the person
or entity appointed as such in accordance with Section 7.06(a).
     “Code” means the Internal Revenue Code of 1986, as amended from time to
time.
     “Committee” means the persons appointed to administer the Plan in
accordance with the provisions of Article VII hereof. The Committee shall be the
“named fiduciary” as referred to in Section 402(a) of ERISA with respect to the
management, operation and administration of the Plan.

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     “Commonly Controlled Entity” means a corporation, trade or business if it
and an Employer are members of a controlled group of corporations as defined in
Section 414(b) of the Code, under common control as defined in Section 414(c) of
the Code, members of an affiliated service group as defined in Section 414(m) of
the Code or required to be aggregated under Section 414(o) of the Code.
     “Company” means Sterling Chemicals, Inc. or any successor entity by merger,
consolidation, purchase or otherwise unless such successor entity elects not to
adopt the Plan.
     “Dependent” means an Employee’s dependent eligible for coverage as a
dependent under any of the Benefit Agreements.
     “Effective Date” means January 1, 2007.
     “Employee” means an employee of an Employer.
     “Employer” means the Company and any and all Commonly Controlled Entities
which, pursuant to Section 11.01, elect to adopt the Plan.
     “Employer Contributions” means the payments made from time to time by an
Employer to an insurance company with respect to any appropriate Insured Benefit
Agreement or as otherwise provided under the appropriate Benefit Agreement
pursuant to Section 5.02.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder.
     “Insured Benefit Agreement” means an insured welfare benefit plan described
on Exhibit A, attached hereto and incorporated herein by reference, as amended
from time to time, and made part of the Plan, pursuant to which Insurance
Contract Benefits under the Plan are defined and payable.
     “Insurance Contract Benefits” means the benefits described in and payable
in accordance with an Insured Benefit Agreement or Pre-paid Health Plan.
     “Other Plan” means (a) any group, franchise, hospital or medical service,
insurance policy or plan or other arrangement (whether pre-paid or not)
providing the same or similar types of benefits as are provided under the Plan
arranged through any employer, trustee, union, employee benefit association or
other association, (b) any governmental program or any program of benefits
required by statute providing the same or similar types of benefits as are
provided under the Plan and (c) any arrangement providing the same or similar
types of benefits as are provided under Title XVIII of the Social Security Act,
as amended (Medicare).
     “Participant” means a person participating in the Plan as provided in
Article IV.

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     “Participant Elective Contributions” means the payments made from time to
time by an Employee, a retired Employee, a disabled Employee or other eligible
individual participating in one or more of the Benefit Agreements by payroll
withholding, through salary reduction pursuant to a plan subject to Section 125
of the Code (a “cafeteria plan”) or any other method allowed by the Plan
Administrator with respect to any appropriate Benefit Agreements or as otherwise
provided under the appropriate Benefit Agreements pursuant to Section 5.03.
     “Plan” means this Sterling Chemicals, Inc. Comprehensive Welfare Benefit
Plan as set forth herein including any agreement for administrative services and
any Benefit Agreements, as such agreements may from time to time be amended.
     “Plan Administrator” means the person (or persons) designated as such in
accordance with Section 7.03.
     “Plan Year” means the 12-consecutive-month period beginning January 1 and
ending December 31.
     “Pre-paid Health Plan” means an alternative health care delivery system,
such as a health maintenance organization, which is federally qualified or is
qualified in accordance with the laws of the State in which it does business,
and which is described on Exhibit A, attached hereto and incorporated herein by
reference, as amended from time to time, and made part of the Plan, pursuant to
which Insurance Contract Benefits under the Plan are defined and payable.
     “Self-Insured Benefit Agreement” means a self-insured welfare benefit plan
described on Exhibit B, attached hereto and incorporated herein by reference, as
amended from time to time, and made part of the Plan, pursuant to which
Self-Insured Benefits under the Plan are defined and payable.
     “Self-Insured Benefits” means the benefits described in and payable in
accordance with the Self-Insured Benefit Agreements.
     “Sub-Plans” means one or more of the plans described on Exhibit A or
Exhibit B attached hereto and such other plans as the Company shall determine to
include hereunder, as each of said plans may be amended from time to time
hereafter.
     “Trust” means the trust, if any, created by the Company pursuant to a trust
agreement.
     “Trustee” means the Trustee appointed under the Trust.
     “Trust Fund” means the total contributions made pursuant to the Plan
(through the Sub-Plans) and the total of any contributions made under any other
plan or plans that may be funded through a Trust, increased by profits, gains,
income and recoveries received, and decreased by loses, depreciation, benefits
paid and expenses incurred in the administration

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of a Trust. The “Trust Fund” includes all assets acquired by investment and
reinvestment which are held in the Trust by the Trustee.
Article III
Incorporation of Sub-Plan Documents
          There are no specific benefits directly provided in this document.
Rather, all of the welfare benefits provided hereunder are set forth in the
Sub-Plans. Accordingly, all of the terms and provisions of each of the
Sub-Plans, including but not limited to the eligibility, benefits, claims
procedures, administrative procedures and contribution provisions, as the same
may be modified from time to time as provided for in each of the Sub-Plans, and
as are not inconsistent with the terms and conditions hereof, shall be
incorporated herein by reference and shall be of the same force and effect under
the Plan as if they were fully set forth herein. For purposes of the reporting
and disclosure requirements of ERISA, however, each of the Sub-Plans shall not
be treated as a separate and distinct plan, but rather shall be treated as a
separate benefit plan structure within the Plan and shall be considered a part
of the Plan.
Article IV
Eligibility and Participation
          A person who has fulfilled the eligibility requirements with respect
to any Benefit Agreement or Sub-Plan as of the Effective Date shall become a
Participant in the Plan on the Effective Date and shall remain a Participant for
as long as provided by and in accordance with the provisions of any Benefit
Agreement or Sub-Plan. A person who meets the eligibility requirements of any
Benefit Agreement or Sub-Plan after the Effective Date shall become a
Participant in the Plan as of the date the person meets the eligibility
requirements of any Benefit Agreement or Sub-Plan and shall remain a Participant
for as long as provided by and in accordance with the provisions of any Benefit
Agreement or Sub-Plan. A person shall be a Participant under the Plan only with
respect to the Benefit Agreements or Sub-Plans for which the person has
fulfilled and continues to fulfill the eligibility requirements. However, if a
Participant fulfills the eligibility requirements of one or more Sub-Plans but
does not fulfill the eligibility requirements of other Sub-Plans offered under
the Plan, such eligibility under any one Sub-Plan does not confer any rights on
a Participant with respect to any other Sub-Plan.
Article V
Plan Financing
          Section 5.01. Funding Policy. The Company shall establish and direct
the implementation of a funding policy and method for the Plan which shall be
consistent with the objectives of the Plan and which may include a policy of not
funding any or all benefits. Subject to and in accordance with the funding
policy, the Plan Administrator may enter into insurance contracts (which may be
issued to the Plan or the Company), establish general ledger accounts or

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utilize any other available funding medium to provide for the payment of
benefits hereunder. The Plan Administrator may, in its discretion, rely upon the
advice of an actuary or firm of actuaries in establishing and carrying out a
funding policy and method.
          Section 5.02. Employer Contributions. The Employer shall make Employer
Contributions directly to each insurance company, Pre-paid Health Plan or other
entity, if applicable, to fund the Benefits provided under the Plan for the
Participants, including, but not limited to, contributions needed to pay current
benefits and to pay expenses, in each case, to the extent determined by the
Company and not otherwise provided through Participant Elective Contributions.
The Employer Contributions shall be in such amounts and at such times as the
Company, in accordance with the funding policy and methods of the Plan, shall
from time to time direct; provided, however, that, except as otherwise
specifically provided herein, the Employer shall have no liability to pay such
Benefits or to assure the sufficiency of any insurance company to provide such
Benefits.
          Section 5.03. Participant Elective Contributions. Each Participant
shall, in accordance with the terms of the relevant Benefit Agreement or as
directed by the Plan Administrator, make Participant Elective Contributions to
each insurance company, Pre-paid Health Plan or other entity, if applicable, to
fund the Benefits provided by such Benefit Agreement in such amounts (if any)
and at such times as the Company, in accordance with the funding policy and
methods of the Plan, shall from time to time direct, in a uniform and
non-discriminatory manner.
          Section 5.04. Order of Use of Contributions. (a) With respect to each
Insured benefit Agreement and Pre-paid Health Plan, the entire amount of the
Participant Elective Contributions for each such Benefit shall be used for the
payment of the premiums charged by the insurance company, Pre-paid Health Plan
or similar organization for the applicable coverage, before the remaining
portion of the premium for such coverage shall be paid by the Employer. Any
premium refunds or dividends with respect to such coverage shall be used to
reduce the Employer’s, and not the Participants’, portion of the premium due.
          (b) With respect to each Self-Insured Benefit Agreement, the entire
amount of the Participant Elective Contributions for each such Self-Insured
Benefit (to the extent Participant Elective Contributions are required under the
relevant Benefit Agreement) shall be used for the payment of Self-Insured
Benefits provided under such Benefit Agreement before any of the remaining
portion of the costs of such Benefits are paid by the Employer.
Article VI
Amount of Benefits
          Section 6.01. Benefits. Benefits under the Plan are those established
in, and payable in accordance with, the Benefit Agreements or Sub-Plans.

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          Section 6.02. Liability for Benefits. All Self-Insured Benefits
provided under the Self-Insured Benefit Agreements shall be paid solely as
provided for in the relevant Self-insured Benefit Agreements. All Insurance
Contract Benefits shall be paid solely by the insurance carrier or carriers
underwriting such Insurance Contract Benefits or by the Pre-paid Health Plan or
similar organization providing such Insurance Contract Benefits pursuant to the
terms of the relevant Insured Benefit Agreement or Pre-paid Health Plan. No
Employer shall be liable in any manner to pay any Benefits under the Plan. Each
Employer’s liability to pay for Benefits shall be limited to such liability as
such Employer expressly agrees in writing to provide and only for the period
specifically indicated in the pertinent Sub-Plan. Benefits shall be paid
directly to the Participant with respect to whom or to whose Dependent the
services, charges or expenses (except as provided in Section 11.09) were
incurred or the claim arose, or directly to the party who provided such
services, charges or expenses, as elected in writing by the Participant (if
permitted under the relevant Benefit Agreement) or to an Alternate Recipient or
such Alternate Recipient’s custodial parent or legal guardian (if required under
Section 609 of ERISA).
          Section 6.03. Forfeitures. Any Self-Insured Benefit payable to a
Participant which cannot be distributed (a) because of the Plan Administrator’s
inability, after a reasonable search, to locate such Participant within a period
of two years after such Benefit becomes payable, or (b) because any check issued
to pay such Benefit shall not have been presented to the Company’s financial
institution for payment within two years of issuance, shall become a forfeiture
at the end of the Plan Year in which such two-year period ends and shall revert
to the Company, unless otherwise prohibited by law or specifically provided in
the relevant Self-Insured Benefit Agreement.
Article VII
Administration
          Section 7.01. Appointment of Committee. The Board of Directors has
appointed the Sterling Chemicals, Inc. Employee Benefits Plans Committee as the
Committee to administer the Plan.
          Section 7.02. Authority and Responsibility of the Committee. The
Committee shall have overall responsibility for the establishment, amendment and
termination of the Plan and any Benefit thereunder, which responsibility shall
be discharged in part by the appointment and removal (with or without cause) of
the Plan Administrator to whom the overall responsibility for the administration
and operation of the Plan is delegated.
          Section 7.03. Plan Administrator Appointment and Removal. The Plan
Administrator shall be one or more persons appointed by the Committee and, in
the absence of such appointment, the Committee shall be the Plan Administrator.
Each person serving as the Plan Administrator shall remain in office at the will
of the Committee, and the Committee may from time to time remove any person
serving as the Plan Administrator with or without cause and shall appoint his or
her successor. The Plan Administrator shall have the general responsibility for
the administration of the Plan and for carrying out its provisions. If any
person

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serving as the Plan Administrator is an Employee, then, upon termination of the
employment of such Employee, that person shall automatically be deemed to be
removed as Plan Administrator.
          Section 7.04. Structure. Subject to Section 7.03, any person may serve
as Plan Administrator. Any person serving as Plan Administrator may resign by
delivering his or her written resignation to the Committee, and such resignation
shall become effective upon the date specified therein. In the event more than
one person is serving as the Plan Administrator, the remaining persons serving
as the Plan Administrator shall constitute the Plan Administrator with full
power to act until said vacancy is filled.
          Section 7.05. Plan Administrator Actions. If one person is serving as
Plan Administrator, no formal action shall be required for the Plan
Administrator to act. If more than one person is serving as Plan Administrator:

          (a) the actions of the Plan Administrator shall be determined by the
vote or other affirmative expression of a majority of the persons serving as the
Plan Administrator;             (b) action may be taken by the persons serving
as the Plan Administrator at a meeting or in writing (including electronic
communications) without a meeting; and             (c)any authorized member (or
members) of the Committee may execute any certificate or other written direction
on behalf of the Plan Administrator.

The Plan Administrator shall have custody of all records and documents
pertaining to the Plan Administrator’s operations.
          Section 7.06. Plan Administrator Duties. The Plan Administrator shall
enforce the Plan in accordance with the terms of the Plan and shall have all
powers necessary to accomplish that purpose, including, but not by way of
limitation, the following:

          (a) to appoint to act, suitably compensate and remove from acting one
or more Claims Administrators as such for one or more Benefit Agreements
(including any such appointment made by entering into an administrative services
only contract with a service provider) except to the extent a Claims
Administrator is designated in the Insured Benefit Agreement (and in the event
the Plan Administrator does not appoint a Claims Administrator, and except as
otherwise provided in an Insured Benefit Agreement, the Plan Administrator shall
be the Claims Administrator);             (b) to issue rules and regulations
necessary for the proper conduct and administration of the Plan and to change,
alter or amend such rules and regulations;             (c) to construe the Plan;
            (d) to determine all questions arising in the administration of the
Plan, including those relating to coverage and participation under the Plan and
the rights of Participants and Alternate Recipients to the extent the
determination of such questions is not the

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responsibility of the Claims Administrator, and is not otherwise provided by the
Benefit Agreements, and its decisions thereon shall be final and binding upon
all persons hereunder;

          (e) to authorize all disbursements in accordance with the provisions
of the Plan or underlying Trust, if any;             (f) to employ and suitably
compensate clerical employees and such accountants, attorneys (who may but need
not be the accountants or attorneys of the Company) and other persons to render
advice as it may deem necessary to the performance of its duties;  
          (g) to hear, review and determine claims for benefits;             (h)
to communicate the Plan and its eligibility requirements to the Employees and
notify Employees when they become eligible to participate;             (i) if
the Committee determines to insure a Benefit, to acquire, in its discretion,
insurance or similar contracts with respect to such Benefit issued by an
insurance company authorized to do business in any State of the United States
which provide Benefits of the type specified under the Plan or which provide
insurance protection with respect to such Benefits;             (j) subject to
the provisions of the Benefit Agreements, to review and approve Self-Insured
Benefit payments or to provide procedures and specify amounts of Self-Insured
Benefit payments which may be reviewed and approved by the Claims Administrator,
and to authorize the Claims Administrator to draw drafts for the payment of
Self-Insured Benefits;             (k)to receive from or on behalf of any
Employer, Participant, Employee, retired Employee, Dependent, Alternate
Recipient or Claims Administrator such records and information as shall be
necessary for the proper performance of its duties under the Plan;  
          (l) to prepare and file or have prepared and filed with the United
States Department of Labor, the United States Department of Treasury and/or
other governmental agency all reports or other information required under
federal, state or local law; and             (m) to establish and maintain
procedures pursuant to Section 11.05 and, if there is no Claims Administrator
with respect to a Benefit, to establish and maintain procedures for reviewing
denials of claims for that Benefit consistent with Article IX.

          Section 7.07. Allocations and Delegations of Responsibility. The
Committee and the Plan Administrator, respectively, shall have the authority to
delegate, from time to time, all or any part of its, his or her responsibilities
under the Plan to such person or persons as it, he or she may deem advisable
(and may authorize such persons, upon receiving written consent of the Committee
or the Plan Administrator, to delegate such responsibilities to such other
person or persons as the Committee or the Plan Administrator shall authorize)
and to revoke any such

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delegation of responsibility. Any action of the delegate in the exercise of such
delegated responsibilities shall have the same force and effect for all purposes
hereunder as if such action had been taken by the Committee or the Plan
Administrator. Neither the Employer nor the Committee nor the Plan Administrator
shall be liable for any acts or omissions of any such delegate. The delegate
shall periodically report to the Committee or the Plan Administrator, as
applicable, concerning the discharge of the delegated responsibilities.
          Section 7.08. Claims Administrator’s Powers and Duties with Respect to
the Plan. The Claims Administrator shall have such powers as may be necessary to
discharge its duties hereunder subject to the provisions of the Benefit
Agreements under which the Claim Administrator was appointed, and subject to
such restrictions as the Plan Administrator may from time to time specify,
including but not limited to, the following:
     (a) to determine the amount, manner and payment of Benefits in accordance
with the Benefit Agreement;
     (b) to receive from or on behalf of any Employer, Participant, Employee,
Dependent or Alternate Recipient or the Plan Administrator, such records and
information as shall be necessary for the proper performance of his duties under
the Plan;
     (c) to prepare and maintain such records and information as are necessary
for the proper and expeditious payment of Self-Insured Benefits and Insurance
Contract Benefits;
     (d) to provide the Plan Administrator with any and all reports, documents
and information which may be needed by the Plan Administrator in order for it to
prepare and file or have prepared and filed with the United States Department of
Labor, the United States Department of the Treasury and/or other governmental
agency all reports or other information required under federal, state or other
law;
     (e) to provide the Plan Administrator or its delegate with any other
documents or records which the Plan Administrator or its delegate may request
from time to time so as to allow it to evaluate claims and losses under the Plan
or the Sub-Plans; and
     (f) to establish and maintain procedures for handling and paying claims and
to establish procedures for reviewing denials of claims consistent with
Article IX, Section 11.05 and the Benefit Agreements.
          Section 7.09. Plan Administrator Bonding and Expenses. The Plan
Administrator shall serve without bond (except as otherwise required by federal
law) and without compensation for services as such; but all expenses of the Plan
Administrator shall be paid in accordance with any Benefit Agreements hereunder,
except to the extent paid by an Employer.
          Section 7.10. Information to be Furnished to Plan Administrator and
Claims Administrator. The Employer, the Plan Administrator and the Claims
Administrator shall furnish to the Plan Administrator or the Claim Administrator
such data and information as the Plan Administrator or Claims Administrator may
reasonably request. Participants, Employees,

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Dependents and Alternate Recipients shall furnish to the Plan Administrator or
the Claims Administrator such evidence, data or information as the Plan
Administrator or the Claims Administrator may request.
          Section 7.11. Records. The regularly kept records of the Plan
Administrator, the Employer and the Claims Administrator shall be considered
evidence of the status of a Participant and all other matters contained therein
applicable to this Plan.
          Section 7.12. Fiduciary Capacity. Any person or group of persons may
serve in more than one fiduciary capacity with respect to the Plan.
          Section 7.13. Confidentiality. All records of the Plan with respect to
participant specific information shall be considered confidential material to
the extent provided by law.
          Section 7.14. Administrator Decisions Final. Subject to the review
procedures outlined in Article IX, the decision of the Plan Administrator or
Claims Administrator in matters within their respective powers shall be final,
binding and conclusive upon the Employer and upon each Employee, eligible
retired Employee, Alternate Recipient, Dependent, Participant, former
Participant and every other person or party.
          Section 7.15. Committee as Agent. The Committee and/or the Plan
Administrator shall act as agent for the Employer in the administration of the
Plan.
          Section 7.16. Action by the Committee. All actions of the Committee
shall be taken pursuant to the decisions of a majority of the then members of
the Committee.
          Section 7.17. Sub-Plan Administration. Notwithstanding any provision
of this document to the contrary, each Sub-Plan shall specify the manner of
supervision of the administration and enforcement of that Sub-Plan, according to
the terms and provisions of said Sub-Plan, and the Plan Administrator specified
therein shall have all of the powers necessary to accomplish these purposes,
including but not limited to the power:
     (a) to make rules, regulations and bylaws for the administration of the
Sub-Plan which are not inconsistent with the terms and provisions hereof;
provided such rules, regulations and bylaws are evidenced in writing;
     (b) to construe all terms, provisions, conditions and limitations of the
Sub-Plan;
     (c) to determine all questions relating to eligibility for participation in
the Sub-Plan;
     (d) to determine the amount, manner and time of any payment of any benefit
thereunder;
     (e) to maintain records required for proper administration of the Sub-Plan;
and

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     (f) to make a determination as to the right of any person to a benefit
under the Sub-Plan.
Notwithstanding the foregoing provisions of this Section 7.17, the Committee
shall be responsible for all reporting requirements relating to the Sub-Plans
and shall take all actions hereunder consistent with the treatment of this Plan
and all of the Sub-Plans as one employee welfare benefit plan under ERISA.
Article VIII
Coordination of Benefits With Other Plans
          The coordination of Benefits with benefits under Other Plans in order
to avoid the payment of multiple benefits shall be as provided in the applicable
Benefit Agreements. If not otherwise provided in a Benefit Agreement, amounts to
which a Participant or Alternate Recipient is entitled with respect to health,
sickness or disability Benefits under the Plan shall be reduced by the amount
payable under such Other Plan. Notwithstanding this Article VIII, the rights of
each Participant and Alternate Recipient are subrogated as provided in
Section 11.06.
Article IX
Claims Procedure
          The payment of a Benefit under a Benefit Agreement is subject to the
submission by the Participant or by or on behalf of an Alternate Recipient (a
“Claimant” for purposes of this Article) of such information, evidence and
releases as are required by the Benefit Agreement under which the payment is
sought. A claim for payment under a Benefit Agreement shall be submitted to the
Claims Administrator and the Claims Administrator shall evaluate such claim and
notify the Claimant of claim approval or disapproval in accordance with the
provisions of the applicable Benefit Agreement. A Claimant’s right of review
with respect to any denied claim shall be as provided in the applicable Benefit
Agreement.
Article X
Amendment and Termination of the Plan
          Section 10.01. Discontinuance of Contributions. It is the expectation
of the Employer that it will continue the Plan and the payment of contributions
hereunder indefinitely; provided, however, that the continuation of the Plan and
the payment of Employer Contributions hereunder is not assumed as a contractual
obligation of the Employer, and the right is reserved by the Employer at any
time to reduce, suspend or discontinue its contributions hereunder, subject to
such terms and conditions as the Committee may impose.
          Section 10.02. Amendments and Termination. The Committee may amend,
modify, change, revise, discontinue or terminate the Plan or any Benefit
Agreement at any time; provided, however, that (a) except as otherwise provided
under the terms of the Plan or any

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Benefit Agreement, no amendment shall have any retroactive effect so as to
deprive any Participant of any benefit accrued prior to the date of the
amendment, modification, change, revision or discontinuance and (b) no amendment
made in conformance with the provisions of the Code or ERISA, any official
regulations or rulings issued pursuant thereto, shall be considered prejudicial
to the rights of any Participant.
Article XI
Miscellaneous Provisions
          Section 11.01. Employer Joinder and Withdrawal. Any Commonly
Controlled Entity may, with the approval of the Company and under such terms and
conditions as the Company may prescribe, adopt the Plan. While it is not the
present intention of any Employer to withdraw from the Plan, any Employer, other
than the Company, shall have the right, at any time, under such terms and
conditions as the Company may provide (including but not limited to requiring
the Employer to make additional payments with respect to the Employer’s share of
claims or expenses), to withdraw from the Plan by delivering to the Company and
the Plan Administrator written notice of its election so to withdraw.
          Section 11.02. Employer Successor. Any successor entity to an
Employer, by merger, consolidation, purchase or otherwise, shall be substituted
hereunder for such Employer.
          Section 11.03. Indemnification. Each Employer shall indemnify and hold
harmless the Company, the Committee, the Plan Administrator, and to the extent
not otherwise provided, each officer and employee of any Employer to whom are
delegated duties, responsibilities and authority with respect to the Plan
against all claims, liabilities, fines and penalties, and all expenses
reasonably incurred by or imposed upon him or her (including but not limited to
reasonable attorney’s fees) which arise as a result of his or her good faith
actions or failure to act in connection with the operation and administration of
the Plan to the extent lawfully allowable and to the extent that such claims,
liabilities, fines, penalties, or expenses are not paid for by liability
insurance purchased or paid for by an Employer. Notwithstanding the foregoing,
an Employer shall not indemnify any person for any such amount incurred through
any settlement or compromise of any action made by such person unless the
Company consents in writing to such settlement or compromise.
          Section 11.04. Nonalienation of Benefits. Except as provided in
Sections 6.02 and 11.05 and the Benefit Agreements, amounts payable under the
Plan and any Benefit Agreement shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, either voluntary or
involuntary, including any liability which is for alimony or other payments for
the support of a spouse or former spouse, or for any other relative of a
Participant, prior to actually being received by the person entitled to the
Benefits under the terms of the Plan; and any attempt (except as provided in
Article VI) to anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge, garnish, execute or levy upon, or otherwise dispose of any right to
Benefits payable hereunder, shall be void. No Insured Benefit Agreement,
Pre-paid Health Plan or Self-Insured

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Benefit Agreement shall in any manner be liable for, or subject to, the debts,
contracts, liabilities, engagements or torts of any person entitled to benefits
hereunder.
          Section 11.05. Alternate Recipients. (a) If a medical child support
order (as defined under Section 609(a)(2)(B) of ERISA) is received by the Plan
with respect to coverage of an Alternate Recipient under a Benefit Agreement,
the Plan Administrator shall promptly notify the parent Participant and each
Alternate Recipient of the receipt of such order and the Plan’s procedures for
determining whether the order is a qualified medical child support order
(“QMCSO”) (as defined under Section 609(a)(2)(A) of ERISA).
     (b) The Plan Administrator shall establish reasonable procedures to
determine whether medical child support orders are QMCSOs and to administer the
provision of benefits under QMCSOs. Such procedures shall be in writing, shall
provide for notification as described in Section 11.05(a) and shall permit an
Alternate Recipient to designate a representative for receipt of copies of
notices sent to the Alternate Recipient with respect to a medical child support
order.
     (c) Within a reasonable period after receipt of a medical child support
order, the Plan Administrator shall determine whether such order is a QMCSO and
shall notify the parent Participant and each Alternate Recipient of such
determination.
          Section 11.06. Subrogation and Repayment. Each Employee, Participant,
former Participant, Dependent, Alternate Recipient, eligible retired Employee or
other person having an interest in the Plan, as a condition of participating in
and receiving benefits from the Plan, and subject to the provisions of the
Benefit Agreements, assigns to the Plan his or her rights to damages for illness
or injury caused by any third person and agrees to execute such documents as the
Plan Administrator or the Claims Administrator may require conferring such
assignment; provided, however, that such assignments of rights to the Plan are
and shall be deemed to be made only to the extent of Benefits paid in connection
with such illness or injury. In addition, as a condition of participating in or
receiving Benefits from the Plan, each Employee, eligible retired Employee,
Participant, former Participant, Dependent, Alternate Recipient or other person
having an interest in the Plan agrees that in the event he receives payment or
reimbursement of an expense or benefit from both the Plan and any Other Plan or
third party, then the Employee, Participant, former Participant, Dependent,
Alternate Recipient or other person shall repay to the Plan the amount that has
been paid twice. Notwithstanding the foregoing, the subrogation provisions set
forth in each Sub-Plan shall control the specific procedures relating to
subrogation.
          Section 11.07. No Contract of Employment. Nothing contained herein
shall be construed to constitute a contract of employment between the Employer
and any Employee or Participant.
          Section 11.08. Source of Benefits. All Benefits shall be paid or
provided for by such insurance carrier or carriers underwriting any Insured
Benefit Agreements, a Pre-paid Health Plan or other such provider or as provided
under a Self-Insured Benefit Agreement. The Employer assumes no other liability
or responsibility therefor.

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          Section 11.09. Facility of Payment. Except as otherwise provided in a
Benefit Agreement, if a Participant is declared an incompetent or is a minor,
and a conservator, guardian or other person legally charged with his or her care
has been appointed, any benefits to which such individual is entitled shall be
payable to such conservator, guardian or other person legally charged with his
or her care. Except as otherwise provided in the relevant Benefit Agreement, if
a Participant is incompetent, a minor or, in the opinion of the Plan
Administrator, for any other reason would fail to derive benefit from
distribution of funds, and if a conservator, guardian or other person charged
with his or her care has not been appointed, the Plan Administrator, in its sole
and exclusive discretion, may (a) require the appointment of a conservator or
guardian, (b) distribute amounts to relatives of such individual for the benefit
of such individual or (c) distribute such amounts directly to or for the benefit
of such individual, and shall have no liability to any person or entity for
electing to require such appointment or making such distribution.
          Section 11.10. Effect on Workers’ Compensation. The Plan is not
intended to be and is not in lieu of any Workers’ Compensation Act insurance and
does not affect any requirements for Workers’ Compensation Act insurance
coverage, except as may be provided in the Benefit Agreements or as provided in
Section 11.06.
          Section 11.11. Gender and Number. Except when the context indicates to
the contrary, when used herein, masculine terms shall be deemed to include the
feminine and neuter, and terms in the singular shall be deemed to include the
plural, and the plural the singular.
          Section 11.12. Headings. The headings of Articles and Sections are
included solely for convenience of reference, and if there is any conflict
between such headings and the text of this Plan, the text shall control.
          Section 11.13. Invalidity of Certain Provisions. If any provision of
this Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof and the Plan shall
be construed and enforced as if such provisions had not been included.
          Section 11.14. Law Governing. The Plan shall be construed and enforced
according to the laws of the State of Texas other than its laws respecting
choice of law, to the extent not preempted by federal law.
           Executed this 12th day of November, 2007 but effective as of
January 1, 2007.

         
 
            Sterling Chemicals, Inc.
 
       
 
  By:   /s/ Richard K. Crump 
 
       
 
  Printed Name:   Richard K. Crump 
 
       
 
  Title:   President and Chief Executive Officer 
 
       

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Exhibit A
Insured Benefit Agreements and Pre-Paid Health Plans

     
 
   
Description
  Policy or Group Numbers
 
   
Sterling Chemicals, Inc. Medical Benefits Plan for Hourly-Paid Employees (HMO
Component Only)
  Cigna HealthCare of Texas Group Policy No. 3164728 Insured portion of hourly
employees’ medical plan
 
   
Sterling Chemicals, Inc. Medical Benefits Plan for Salaried Employees (HMO
Component Only)
  Cigna HealthCare of Texas Group Policy No. 3164728 Insured portion of salaried
employees’ medical plan
 
   
Sterling Chemicals, Inc. Medical Benefits Plan for Retirees (HMO Component Only)
  Cigna HealthCare of Texas Group Policy No. 3164728 Insured portion of retiree
medical plan
 
   
Sterling Chemicals, Inc. Disability Plan for Hourly-Paid Employees
  Unum Group Policy No.                                        
 
   
Sterling Chemicals, Inc. Salaried Disability Income Plan
  Unum Group Policy No.                                        
 
   
Sterling Chemicals, Inc. Group Life Insurance Plan for Salaried Employees
  MetLife Group Policy No. 102890
 
   
Sterling Chemicals, Inc. Group Life Insurance Plan for Hourly-Paid Employees
  MetLife Group Policy No. 102890
 
   
Sterling Chemicals, Inc. Group Life Insurance Plan for Retirees
  MetLife Group Policy No. 102890
 
   
Sterling Chemicals, Inc. Business Travel Plan
  CIGNA Group Policy No. ABL960140
 
   

A-i

 

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Exhibit B
Self-Insured Benefit Agreements
          The following documents shall be Self-Insured Benefit Agreements under
the Plan, and the terms and conditions of each are herein incorporated into the
Plan by reference:

      Plan   Description
 
   
Sterling Chemicals, Inc. Salaried Employees’ Flexible Spending Account Plan
  Self-funded Health FSA
 
   
Sterling Chemicals, Inc. Hourly Employees’ Flexible Spending Account Plan
  Self-funded Health FSA
 
   
Sterling Chemicals, Inc. Dental Assistance Plan for Hourly-Paid Employees
  Self- funded dental benefit for hourly employees.
 
   
Sterling Chemicals, Inc. Dental Assistance Plan for Salaried Employees
  Self- funded dental benefit for salaried employees.
 
   
Sterling Chemicals, Inc. Key Employee Protection Plan
  Self- funded benefit for key employees.
 
   
Sterling Chemicals, Inc. Medical Benefits Plan for Hourly-Paid Employees (PPO
Component Only)
  Self-funded portion of hourly medical plan
 
   
Sterling Chemicals, Inc. Medical Benefits Plan for Salaried Employees (PPO
Component Only)
  Self-funded portion of salaried medical plan
 
   
Sterling Chemicals, Inc. Medical Benefits Plan for Retirees (PPO Component Only)
  Self-funded portion of retiree medical plan
 
   
Sterling Chemicals, Inc. Prescription Drug Benefits Plan for Hourly-Paid
Employees (PPO Component Only)
  Self-funded portion of hourly prescription drug plan
 
   
Sterling Chemicals, Inc. Prescription Drug Benefits Plan for Salaried Employees
(PPO Component Only)
  Self-funded portion of salaried employees’ prescription drug plan
 
   
Sterling Chemicals, Inc. Prescription Drug Benefits Plan for Retirees (PPO
Component Only)
  Self-funded portion of retiree prescription drug plan

B-i